Document:

Exhibit 10.1

 

TENTH
AMENDMENT

 

THIS TENTH AMENDMENT (the “Amendment”) is made and entered into as of the
             
day of
                      ,
2003, by and between EOP-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company (“Landlord”), and CLICK2LEARN, INC., a Delaware
corporation (“Tenant”).

 

 

RECITALS

 

A.                                   Landlord (as successor in interest to Dean Witter
Realty Income Partnership II, L.P., a Delaware limited partnership) and Tenant
(as successor in interest to Asymetrix Corporation, a Washington corporation)
are parties to that certain lease dated May 24, 1991 (the “Original Lease”),
which lease has been previously amended by instruments dated April 16, 1992
(the “First Amendment”), May 20, 1992 (the “Second Amendment”), September 29,
1992 (the “Third Amendment”), August 27, 1993 (the “Fourth Amendment”), April
29, 1995 (the “Fifth Amendment”), January 26, 1996 (the “Sixth Amendment”),
March 31, 1996 (the “Seventh Amendment’), August 15, 1998 (the “Conditional
Partial Lease Termination Agreement”), October 16, 1998 (the “Eighth
Amendment”), and April 16, 2002 (the “Ninth Amendment”) (collectively, the
“Lease”).  Pursuant to the Lease,
Landlord has leased to Tenant space currently containing approximately 36,649
rentable square feet (the “Premises”) on the 6th and 7th floors of the building
commonly known as Atrium Place located at 110-110th Avenue N.E., Bellevue,
Washington (the “Building”).

 

B.                                     Landlord has remeasured the Premises and the
Building using the current ANSI\BOMA Z 65.1-1996 standard and as a result of
such remeasurement, during the Second Extended Term (as hereinafter defined),
the Premises shall consist of 39,363 rentable square feet and the Building
shall consist of 224,285 rentable square feet.

 

C.                                     The Lease by its terms shall expire on
October 31, 2003 (“Prior Extended Termination Date”), and the parties
desire to extend the Lease Term, provide for Landlord Work (as hereinafter
defined) and make certain other changes to the Lease, all on the following
terms and conditions.

 

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
agree as follows:

 

I.                                         Premises.

 

A.                                   Remeasurement.  Effective (retroactively) as of January 1, 2003, the net rentable square feet of
the Premises shall be amended from “36,649 square feet” to “39,363 square
feet”, consisting of approximately 3,863 rentable square feet for Suites 680
and 690 and approximately 35,500 rentable square feet for Suite 700, and the
net rentable square feet of the building shall be amended from “213,000 square
feet” to “224,285 square feet”. 
Landlord and Tenant acknowledge that such increase is a result of a
remeasurement of the Premises and the Building and not the result of an
expansion or addition of space.  The
Rent and all other charges under the Lease shall remain payable as provided
therein with respect to the Premises up to and including December 31,
2002.

 

B.                                     Temporary Premises.  If: (1) the Landlord Work (as
defined in Exhibit B attached hereto) is or will be materially
disruptive to the conduct of Tenant’s business in the Premises, and (2) Tenant
has delivered the final approved Plans (as defined in Exhibit B attached
hereto) to Landlord on or before March 15, 2003, and has otherwise
complied with Exhibit B attached hereto in all material respects, then
Tenant shall be permitted to occupy space selected by Landlord (in Landlord’s
reasonable discretion) on the 2nd, 4th or 6th
floors of the Building (the “Temporary Premises”).  At any time after Tenant has delivered the final approved Plans
and subject to the conditions in the previous sentence, Tenant may notify
Landlord of its need for the Temporary Premises.  Within 5 Business Days of such notice, Landlord shall
advise Tenant (the “Temporary Premises Advice”) of the temporary space Landlord
is prepared to permit Tenant to occupy as the Temporary Premises, and Landlord
shall make reasonable efforts to provide such space on the 6th floor
of the Building.  Tenant may occupy the
Temporary

 

1

 

 

Premises by providing Landlord with written notice within 5 days after
the date of the Temporary Premises Advice. 
The term for the Temporary Premises shall commence upon the commencement
date stated in the Temporary Premises Advice and end on the date Landlord substantially completes (as determined by
Landlord in Landlord’s reasonable discretion) Landlord’s Work (the “Temporary
Premises Term”).  Tenant shall accept
the Temporary Premises in its “as is” condition, and Landlord shall have no
obligation to provide any improvement allowance, leasehold improvements, or
other work to the Temporary Premises. 
During the Temporary Premises Term, Tenant shall occupy the Temporary
Premises under all terms and provisions of the Lease (including, but not
limited to, the indemnity and insurance provisions thereunder), except those
provisions requiring payment of Base Rent or Additional Rent as to the
Temporary Premises.  During the
Temporary Premises Term, Landlord shall have the right to relocate Tenant from
the Temporary Premises to another space substantially similar to the Temporary
Premises (the “Relocation Temporary Premises”) at Landlord’s sole cost and
expense.  After such relocation, the
Relocation Temporary Premises shall be considered the “Temporary Premises” for
the purposes of this Section I.B. 
During the Temporary Premises Term, Tenant shall continue to pay Base
Rent and Additional Rent for the Premises pursuant to the terms of the Lease
and this Amendment.

 

II.                                     Extension.  The Lease Term is hereby extended for a
period of 61 months and shall expire on December 31, 2008 (“Second
Extended Termination Date”), unless sooner terminated in accordance with the
terms of the Lease.  That portion of the
Lease Term commencing the day immediately following the Prior Termination Date
(“Second Extension Date”) and ending on the Second Extended Termination Date shall
be referred to herein as the “Second Extended Term”.

 

III.                                 Base Rent.  Retroactively as of
January 1, 2003, the schedule of Base Rent payable with respect to the
Premises during the remaining portion of the Lease Term and the Second Extended
Term is the following:

 

	
  Period

  	
   

  	
  Annual
  Rate

  Per Square

  Foot

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Base Rent

  	
   

  
	
  01/01/03 – 10/31/03*

  	
   

  	
  $

  	
  20.25

  	
   

  	
  $

  	
  797,100.72

  	
   

  	
  $

  	
  66,425.06

  	
   

  
	
  11/01/03 – 12/31/05

  	
   

  	
  $

  	
  20.25

  	
   

  	
  $

  	
  797,100.72

  	
   

  	
  $

  	
  66,425.06

  	
   

  
	
  01/01/06 – 12/31/08

  	
   

  	
  $

  	
  22.50

  	
   

  	
  $

  	
  885,667.56

  	
   

  	
  $

  	
  73,805.63

  	
   

  

 

*covers months
50-60 of the current Lease Term and supercedes the schedule set forth in
Section 7(a) of the Eighth Amendment

 

All such Base Rent
shall be payable by Tenant in accordance with the terms of the Lease.

 

Notwithstanding
the Base Rent schedules set forth above, as long as Tenant is not in default,
Tenant shall be entitled to an abatement of Base Rent for: (a) the period
commencing January 1, 2003, and ending January 31, 2003 (the “First
Rent Abatement Period”), and (b) the period commencing January 1, 2004,
and ending January 31, 2004 (the “Second Rent Abatement Period”, and
collectively with the First Rent Abatement Period, the “Rent Abatement
Period”).  The total amount of Base Rent
abated during the Rent Abatement Period shall equal One Hundred Thirty-two
Eight Hundred Fifty and 12/100 Dollars ($132,850.12) (the “Abated Base
Rent”).  During the Rent Abatement
Period, all other costs and charges specified in the Lease shall remain as due
and payable pursuant to the provisions of the Lease.  In the event Tenant defaults in any monetary obligations under
the Lease at any time during the remaining portion of the current Lease Term or
the Second Extended Term, and as a result of such default Landlord obtains a
judgment against Tenant in an amount greater than the total of the Abated Base
Rent and the amount of any rent credits applied to Base Rent pursuant to
paragraph 7 of the Work Letter attached hereto as Exhibit B, then Landlord
may add the amount of all such Abated Base Rent and rent credits to such
judgment.  The addition of the Abated
Base Rent and rent credits in the event of Landlord obtains a judgment against
Tenant shall not limit or affect any of Landlord’s other rights, pursuant to
this Lease or at law or in equity.

 

2

 

IV.                                 Security Deposit.

 

A.                                   Generally.  Within 10 Business Days after execution of
this Amendment by Tenant, Tenant shall pay Landlord the sum of $73,805.63 as a
security deposit (the “Security Deposit”). 
Landlord shall hold the Security Deposit without liability for interest
(unless required by law) as security for the performance of Tenant’s
obligations.  The Security Deposit is
not an advance payment of Rent or a measure of Tenant’s liability for damages.  Landlord may, from time to time, without
prejudice to any other remedy, use all or a portion of the Security Deposit to
satisfy past due (i.e., beyond the applicable notice and cure period) Rent or
to cure any uncured default by Tenant. 
If Landlord uses the Security Deposit, Tenant shall on demand restore
the Security Deposit to its original amount. Landlord shall return any
unapplied portion of the Security Deposit to Tenant within 45 days after the
later to occur of: (1) the date Tenant surrenders possession of the
Premises to Landlord in accordance with this Lease; or (2) the termination
date of the Lease Term.  If Landlord
transfers its interest in the Premises, Landlord may assign the Security
Deposit to the transferee and, following the assignment, Landlord shall have no
further liability for the return of the Security Deposit.  Landlord shall not be required to keep the
Security Deposit separate from its other accounts.

 

B.                                     Letter of Credit.  The Security Deposit may be in the form of
an irrevocable letter of credit (the “Letter of Credit”), which Letter of
Credit shall:  (a) be in the amount of $73,805.63; (b) be issued on the form attached hereto as Exhibit A;
(c) name Landlord as its beneficiary; and (d) be drawn on an FDIC insured
financial institution satisfactory to the Landlord.  The Letter of Credit (and any renewals or replacements thereof)
shall be for a term of not less than 1 year. 
Tenant agrees that it shall from time to time, as necessary, whether as
a result of a draw on the Letter of Credit by Landlord pursuant to the terms hereof
or as a result of the expiration of the Letter of Credit then in effect, renew
or replace the original and any subsequent Letter of Credit so that a Letter of
Credit, in the amount required hereunder, is in effect until a date which is at
least 60 days after the Second Extended Termination Date of the Lease.  If Tenant fails to furnish such renewal or
replacement at least 60 days prior to the stated expiration date of the Letter
of Credit then held by Landlord, Landlord may draw upon such Letter of Credit
and hold the proceeds thereof (and such proceeds need not be segregated) as a
Security Deposit pursuant to the terms of Section IV.A. above.  Any renewal or replacement of the original
or any subsequent Letter of Credit shall meet the requirements for the original
Letter of Credit as set forth above, except that such replacement or renewal
shall be issued by a national bank satisfactory to Landlord at the time of the
issuance thereof.

 

If Landlord draws on the Letter
of Credit as permitted in this Amendment or the Letter of Credit, then, upon
demand of Landlord, Tenant shall restore the amount available under the Letter
of Credit to its original amount by providing Landlord with an amendment to the
Letter of Credit evidencing that the amount available under the Letter of
Credit has been restored to its original amount.  In the alternative, Tenant may provide Landlord with cash, to be
held by Landlord in accordance with Section IV.A. above, equal to the
restoration amount required under the Letter of Credit.

 

V.                                     Operating Costs.  For the
period commencing (retroactively) on January 1, 2003, and ending on the
Second Extended Termination Date, Tenant shall pay for Operating Costs
Allocable to the Premises in accordance with the terms of the Lease, provided, however,
during such period, the Base Year for the computation of Operating Costs
Allocable to the Premises is 2003, and
Tenant’s Allocable Share with respect to the Premises is 17.5504% (i.e., 39,363
RSF/224,285 RSF).

 

VI.                                 Improvements to Premises.

 

A.                                   Condition of Premises.  Tenant is in possession of
the Premises and accepts the same “as is” without any agreements,
representations, understandings or obligations on the part of Landlord to
perform any alterations, repairs or

 

3

 

improvements, except as may be expressly provided
otherwise in this Amendment or Paragraph 4 of the Original Lease.

 

B.                                     Responsibility for Improvements to Premises.  Landlord
shall undertake, perform and complete the improvements to the Premises
described in and in accordance with the Work Letter attached hereto as Exhibit B.  All repairs and improvements undertaken by
or under the direction of Landlord, including all Landlord Work, shall be done
in a good and workmanlike manner.

 

VII.                             Other Pertinent Provisions.  Landlord
and Tenant agree that, effective as of the date of this Amendment (unless
different effective date(s) is/are specifically referenced in this Section),
the Lease shall be amended in the following additional respects:

 

A.                                   Parking.  Effective as of January 1, 2003, Paragraph 3 of Attachment I to the
Original Lease (as modified by the Fourth Amendment and the Sixth Amendment)
and Section 11 of the Eighth Amendment are hereby deleted and replaced with Exhibit C
attached hereto and made a part hereof.

 

B.                                     Building
Square Footage.  Effective as
of January 1, 2003, the
rentable square footage of the Building is deemed to be 224,285 square feet.

 

C.                                     Renewal
Option.  Section 8 of the
Seventh Amendment, Renewal Option, is hereby deleted and replaced with the
following:

 

1.                                       Grant
of Option; Conditions.  Tenant shall
have the right to extend the Term beyond the Second Extended Termination Date
(the “Renewal Option”) for one additional period of 5 years commencing on the
day following the Second Extended Termination Date and ending on the 5th
anniversary of the Second Extended Termination Date (the “Renewal Term”), if:

 

a.                                       Landlord
receives notice of exercise (“Initial Renewal Notice”) not less than 12 full
calendar months prior to the expiration of the Second Extended Term and not
more than 15 full calendar months prior to the expiration of the Second
Extended Term; and

 

b.                                      Tenant
is not in default in any monetary obligations under the Lease beyond any
applicable cure periods at the time that Tenant delivers its Initial Renewal
Notice or at the time Tenant delivers its Binding Notice (as defined below);
and

 

c.                                       No
more than 15% of the Premises is sublet (other than to an Affiliate, as defined
in the Original Lease) at the time that Tenant delivers its Initial Renewal
Notice or at the time Tenant delivers its Binding Notice; and

 

d.                                      The
Lease has not been assigned (other than to an Affiliate, as defined in the
Original Lease) prior to the date that Tenant delivers its Initial Renewal Notice
or prior to the date Tenant delivers its Binding Notice.

 

2.                                       Terms
Applicable to Premises During Renewal Term.

 

a.                                       The
initial Base Rent rate per rentable square foot for the Premises during the
Renewal Term shall equal the Prevailing Market (hereinafter defined) rate per
rentable square foot for the Premises.  Base Rent during the Renewal Term shall increase,
if at all, in accordance with the increases assumed in the determination of
Prevailing Market rate.  Base Rent
attributable to the Premises shall be payable in monthly installments in
accordance with the terms and conditions of Paragraph 3 of the Lease.

 

b.                                      Tenant
shall pay Additional Rent (i.e. Operating Costs) for the Premises during the
Renewal Term in accordance with

 

4

 

Paragraph 9 of the Lease, and the manner and method in which
Tenant reimburses Landlord for Tenant’s Allocable Share of Operating Costs and
the Base Year, if any, applicable to such matter, shall be some of the factors
considered in determining the Prevailing Market rate for the Renewal Term.

 

3.                                       Procedure
for Determining Prevailing Market. 
Within 30 days after receipt of Tenant’s Initial Renewal Notice,
Landlord shall notify Tenant in writing of the applicable Base Rent rate for the
Premises for the Renewal Term (“Landlord’s Notice”).  Tenant, within 30 days after the date on which Tenant receives
Landlord’s Notice, shall either (i) give Landlord final binding written
notice (“Binding Notice”) of Tenant’s exercise of its Renewal Option, or
(ii) if Tenant disagrees with Landlord’s determination, provide Landlord
with written notice of rejection (the “Rejection Notice”).  If Tenant fails to provide Landlord with
either a Binding Notice or Rejection Notice within such 30 day period, Tenant’s
Renewal Option shall be null and void and of no further force and effect.  If Tenant provides Landlord with a Binding
Notice, Landlord and Tenant shall enter into the Renewal Amendment (as defined
below) upon the terms and conditions set forth herein.  If Tenant provides Landlord with a Rejection
Notice, Landlord and Tenant shall work together in good faith to agree upon the
Prevailing Market rate for the Premises during the Renewal Term.  Upon agreement, Tenant shall provide
Landlord with Binding Notice and Landlord and Tenant shall enter into the
Renewal Amendment in accordance with the terms and conditions hereof.  Notwithstanding the foregoing, if Landlord
and Tenant are unable to agree upon the Prevailing Market rate for the Premises
within 30 days after the date on which Tenant provides Landlord with a
Rejection Notice, Tenant, by written notice to Landlord (the “Arbitration
Notice”) within 5 days after the expiration of such 30 day period, shall have
the right to have the Prevailing Market rate determined in accordance with the
arbitration procedures described in Section D below.  If Landlord and Tenant fail to agree upon
the Prevailing Market rate within the 30 day period described and Tenant fails
to timely exercise its right to arbitrate, Tenant’s Renewal Option shall be
deemed to be null and void and of no further force and effect.

 

4.                                       Arbitration
Procedure.

 

1.                                       If
Tenant provides Landlord with an Arbitration Notice, Landlord and Tenant,
within 10 Business Days after the date of the Arbitration Notice, shall each
simultaneously submit to the other, in a sealed envelope, its good faith
estimate of the Prevailing Market rate for the Premises during the Renewal Term
(collectively referred to as the “Estimates”). 
If the higher of such Estimates is not more than 105% of the lower of
such Estimates, then Prevailing Market rate shall be the average of the two
Estimates.  If the Prevailing Market
rate is not resolved by the exchange of Estimates, then, within 7 days after
the exchange of Estimates, Landlord and Tenant shall each select an appraiser
to determine which of the two Estimates most closely reflects the Prevailing
Market rate for the Premises during the Renewal Term.  Each appraiser so selected shall be certified as an MAI appraiser
or as an ASA appraiser and shall have had at least 5 years experience within
the previous 10 years as a real estate appraiser working in Bellevue,
Washington, with working knowledge of current rental rates and practices.  For purposes hereof, an “MAI” appraiser means
an individual who holds an MAI designation conferred by, and is an independent
member of, the American Institute of Real Estate Appraisers (or its successor
organization, or in the event there is no successor organization, the
organization and designation most similar), and an “ASA” appraiser means an
individual who holds the Senior Member designation conferred by, and is an
independent member of, the American Society of Appraisers (or its successor
organization, or, in the event there is no successor organization, the
organization and designation most

 

5

 

similar).

 

2.                                       Upon
selection, Landlord’s and Tenant’s appraisers shall work together in good faith
to agree upon which of the two Estimates most closely reflects the Prevailing
Market rate for the Premises.  The
Estimate chosen by such appraisers shall be binding on both Landlord and Tenant
as the Base Rent rate for the Premises during the Renewal Term.  If either Landlord or Tenant fails to
appoint an appraiser within the 7 day period referred to above, the appraiser
appointed by the other party shall be the sole appraiser for the purposes
hereof.  If the two appraisers cannot
agree upon which of the two Estimates most closely reflects the Prevailing
Market within 20 days after their appointment, then, within 10 days after the
expiration of such 20 day period, the two appraisers shall select a third
appraiser meeting the aforementioned criteria. 
Once the third appraiser (i.e. arbitrator) has been selected as provided
for above, then, as soon thereafter as practicable but in any case within 14
Business Days, the arbitrator shall make his determination of which of the two
Estimates most closely reflects the Prevailing Market rate and such Estimate
shall be binding on both Landlord and Tenant as the Base Rent rate for the
Premises.  If the arbitrator believes
that expert advice would materially assist him, he may retain one or more
qualified persons to provide such expert advice.  The parties shall share equally in the costs of the arbitrator
and of any experts retained by the arbitrator. 
Any fees of any appraiser, counsel or experts engaged directly by
Landlord or Tenant, however, shall be borne by the party retaining such
appraiser, counsel or expert.

 

3.                                       If
the Prevailing Market rate has not been determined by the commencement date of
the Renewal Term, Tenant shall pay Base Rent upon the terms and conditions in
effect during the last month of the initial Term for the Premises until such
time as the Prevailing Market rate has been determined.  Upon such determination, the Base Rent for
the Premises shall be retroactively adjusted to the commencement of the Renewal
Term for the Premises.  If such
adjustment results in an underpayment of Base Rent by Tenant, Tenant shall pay
Landlord the amount of such underpayment within 30 days after the determination
thereof.  If such adjustment results in
an overpayment of Base Rent by Tenant, Landlord shall credit such overpayment
against the next installment of Base Rent due under the Lease and, to the
extent necessary, any subsequent installments, until the entire amount of such
overpayment has been credited against Base Rent.

 

5.                                       Renewal
Amendment.  If Tenant is entitled to
and properly exercises its Renewal Option, Landlord shall prepare an amendment
(the “Renewal Amendment”) to reflect changes in the Base Rent, Lease Term,
Termination Date and other appropriate terms. 
The Renewal Amendment shall be sent to Tenant within a reasonable time
after receipt of the Binding Notice (not to exceed 30 days) and Tenant shall
execute and return the Renewal Amendment to Landlord within 15 days after
Tenant’s receipt of same, but, upon final determination of the Prevailing
Market rate applicable during the Renewal Term as described herein, an
otherwise valid exercise of the Renewal Option shall be fully effective whether
or not the Renewal Amendment is executed.

 

6.                                       Definition
of Prevailing Market.  For purposes
of this Renewal Option, “Prevailing Market” shall mean the arms length fair market
annual rental rate per rentable square foot under renewal leases and amendments
for reasonably comparable lengths of time entered into on or about the date on
which the Prevailing Market is being determined hereunder for space comparable
to the Premises in the Building with improvements comparable to those existing
in the Premises on the date Tenant exercises the Renewal Option and that
reflect what a willing, comparable

 

6

 

tenant would pay, and a willing, comparable landlord would accept.  The determination of Prevailing Market shall
take into account any material economic differences between the terms of this
Lease and any comparison lease or amendment, such as rent abatements,
construction costs and other concessions and the manner, if any, in which the
landlord under any such lease is reimbursed for operating expenses and
taxes.  The determination of Prevailing
Market shall also take into consideration any reasonably anticipated changes in
the Prevailing Market rate from the time such Prevailing Market rate is being
determined and the time such Prevailing Market rate will become effective under
this Lease.

 

C.                                     After Hours
HVAC.  Paragraph 17 of
Attachment I to the Original Lease (which section was added to the Original
Lease pursuant to the Fourth Amendment) shall be deleted in its entirety and
replaced with the following:

 

Landlord
agrees to provide after hours HVAC to Tenant upon request provided such request
is made by Tenant not later than 1:00 p.m. on a normal business day, not later
than 1:00 p.m. on the day preceding a recognized holiday or not later than 1:00
p.m. on Friday for additional service on a Saturday or Sunday.  To compensate Landlord for the cost of
providing such after hours HVAC service, Tenant agrees to reimburse Landlord at
the rate of $30.00 per hour for such service, as such rate may be adjusted from
time to time, but no more frequently than once every six months, to reflect any
actual increases to Landlord in providing such services.

 

D.                                    Signage.  So long as Tenant occupies the entire 7th
floor of the Building, Tenant shall have the right to (i) place and maintain
during the Term a sign on the 7th floor adjacent to the elevator
lobby, and (ii) continue during the Term Tenant’s existing signage on the
exterior monument sign.  Nothing herein
ins intended to be in lieu of or to replace any other signage rights granted to
Tenant under the Lease.

 

E.                                      Right of First Offer.

 

1.                                       Grant
of Option; Conditions.  Tenant shall
have an on-going right of first offer (the “Right of First Offer”) with respect
to any space contiguous to the Premises on the 6th floor of the
Building, as more particularly shown on Exhibit D hereto (any portion of such
space or collectively, the “Offering Space”). 
Tenant’s Right of First Offer shall be exercised as follows: at any time
after Landlord has determined that the existing tenant in the Offering Space
will not extend or renew the term of its lease for the Offering Space (but
prior to leasing such Offering Space to a party other than the existing
tenant), Landlord shall notify Tenant (the “Offer”) of the terms under which
Landlord is prepared to lease the Offering Space to Tenant for the remainder of
the Lease Term, which terms shall reflect the Prevailing Market (hereinafter
defined) rate for such Offering Space as reasonably determined by
Landlord.  Tenant may lease such
Offering Space in its entirety only, under such terms, by delivering written
notice of exercise to Landlord (the “Notice of Exercise”) within 10 days after
Tenant’s receipt of the Offer, except that Tenant shall have no such Right of
First Offer and Landlord need not provide Tenant with an Offer, if:

 

a.                                       Tenant
is in default in any monetary obligations under the Lease beyond any applicable
cure periods at the time that Landlord would otherwise deliver the Advice; or

 

b.                                      more
than 15% of the Premises is sublet (other than to an Affiliate, as defined in
the Original Lease) at the time Landlord would otherwise deliver the Advice; or

 

c.                                       the
Lease has been assigned (other than to an Affiliate, as defined in the Original
Lease) prior to the date Landlord would otherwise deliver the Advice; or

 

d.                                      Tenant
is not occupying the Premises on the date Landlord would otherwise deliver the
Advice; or

 

7

 

e.                                       the
Offering Space is not intended for the exclusive use of Tenant during the Lease
Term; or

 

f.                                         the
existing tenant in the Offering Space is interested in extending or renewing
its lease for the Offering Space or entering into a new lease for such Offering
Space.

 

2.                                       Terms
for Offering Space.

 

a.                                       The
term for the Offering Space shall commence upon the commencement date stated in
the Offer and thereupon such Offering Space shall be considered a part of the
Premises, provided that all of the terms stated in the Offer shall govern
Tenant’s leasing of the Offering Space and only to the extent that they do not
conflict with the Offer, the terms and conditions of this Lease shall apply to
the Offering Space.

 

b.                                      Tenant
shall pay Base Rent and Additional Rent for the Offering Space in accordance
with the terms and conditions of the Offer, which terms and conditions shall
reflect the Prevailing Market rate for the Offering Space as determined in
Landlord’s reasonable judgment.

 

c.                                       The
Offering Space (including improvements and personalty, if any) shall be
accepted by Tenant in its condition and as-built configuration existing on the
earlier of the date Tenant takes possession of the Offering Space or as of the
date the term for such Offering Space commences, unless the Offer specifies any
work to be performed by Landlord in the Offering Space, in which case Landlord
shall perform such work in the Offering Space. 
If Landlord is delayed delivering possession of the Offering Space due
to the holdover or unlawful possession of such space by any party, Landlord
shall use reasonable and diligent efforts to obtain possession of the space,
and the commencement of the term for the Offering Space shall be postponed
until the date Landlord delivers possession of the Offering Space to Tenant
free from occupancy by any party.

 

3.                                       Termination
of Right of First Offer.  The rights
of Tenant hereunder with respect to the Offering Space shall terminate on the
earlier to occur of: (i) Tenant’s failure to exercise its Right of First
Offer within the 10 day period provided in subsection 1 above; and
(ii) the date Landlord would have provided Tenant an Advice if Tenant had
not been in violation of one or more of the conditions set forth in subsection 1
above.

 

4.                                       Offering
Amendment.  If Tenant exercises its
Right of First Offer, Landlord shall prepare an amendment (the “Offering
Amendment”) adding the Offering Space to the Premises on the terms set forth in
the Advice and reflecting the changes in the Base Rent, rentable square footage
of the Premises, Tenant’s Allocable Share and
other appropriate terms.  A copy of the
Offering Amendment shall be sent to Tenant within a reasonable time after
Landlord’s receipt of the Notice of Exercise executed by Tenant, and Tenant
shall execute and return the Offering Amendment to Landlord within 15 days
thereafter, but an otherwise valid exercise of the Right of First Offer shall
be fully effective whether or not the Offering Amendment is executed.

 

5.                                       Definition
of Prevailing Market.  For purposes
of this Right of First Offer provision, “Prevailing Market” shall mean the
annual rental rate per square foot for space comparable to the Offering Space
in the Building under leases and renewal and expansion amendments being entered
into at or about the time that Prevailing Market is being determined, giving
appropriate consideration to tenant concessions, brokerage commissions, tenant
improvement allowances, existing improvements in the space in

 

8

 

question, and the method of allocating operating expenses and
taxes.  Notwithstanding the foregoing,
space leased under any of the following circumstances shall not be considered
to be comparable for purposes hereof: (i) the lease term is for materially
less than the lease term of the Offering Space, (ii) the space is
encumbered by the option rights of another tenant, or (iii) the space has
a lack of windows and/or an awkward or unusual shape or configuration.  The foregoing is not intended to be an
exclusive list of space that will not be considered to be comparable.

 

6.                                       Subordination.  Notwithstanding anything herein to the
contrary, Tenant’s Right of First Offer is subject and subordinate to the
expansion rights (whether such rights are designated as a right of first offer,
right of first refusal, expansion option or otherwise) set forth in the lease
of any tenant of the Building existing on the date hereof.

 

VIII.                         Miscellaneous.

 

A.                                   This Amendment sets forth the entire agreement
between the parties with respect to the matters set forth herein.  There have been no additional oral or
written representations or agreements. 
Under no circumstances shall Tenant be entitled to any Rent abatement,
improvement allowance, leasehold improvements, or other work to the Premises,
or any similar economic incentives that may have been provided Tenant in
connection with entering into the Lease, unless specifically set forth in this
Amendment or the Lease.

 

B.                                     Except as herein modified or amended, the
provisions, conditions and terms of the Lease shall remain unchanged and in
full force and effect.

 

C.                                     In the case of any inconsistency between the
provisions of the Lease and this Amendment, the provisions of this Amendment
shall govern and control.

 

D.                                    Submission of this Amendment by Landlord is not
an offer to enter into this Amendment but rather is a solicitation for such an
offer by Tenant.  Landlord shall not be
bound by this Amendment until Landlord has executed and delivered the same to
Tenant.

 

E.                                      The capitalized terms used in this Amendment
shall have the same definitions as set forth in the Lease to the extent that
such capitalized terms are defined therein and not redefined in this Amendment.

 

F.                                      Tenant hereby represents to Landlord that Tenant
has dealt with no broker in connection with this Amendment other than Leo
Backer of Washington Partners (“Tenant’s Broker”).  Tenant agrees to indemnify and hold Landlord, its members,
principals, beneficiaries, partners, officers, directors, employees,
mortgagee(s) and agents, and the respective principals and members of any such
agents (collectively, the “Landlord Related Parties”) harmless from all claims
of any brokers other than Tenant’s Broker, claiming to have represented Tenant
in connection with this Amendment. 
Landlord hereby represents to Tenant that Landlord has dealt with no
broker in connection with this Amendment other than Shawn Jackson of Equity
Office Properties Management Corp. (“Landlord’s Broker”).  Landlord agrees to pay all fees, commissions
and other amounts owed to Tenant’s broker in connection with this Amendment and
shall indemnify and hold Tenant, its members, principals, beneficiaries,
partners, officers, directors, employees, and agents, and the respective
principals and members of any such agents (collectively, the “Tenant Related
Parties”) harmless from all claims of any brokers claiming to have represented
Landlord in connection with this Amendment.

 

G.                                     Each signatory of this Amendment represents
hereby that he or she has the authority to execute and deliver the same on
behalf of the party hereto for which such signatory is acting.

 

9

 

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Amendment as of the day and year first above written.

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WA-110 ATRIUM PLACE, L.L.C.,

  a
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Equity Office
  Management, L.L.C.,

  a Delaware limited liability company,

  its non-member manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  M. Patrick Callahan

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President – 

  
	
   

  	
   

  	
   

  	
  Seattle Region

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CLICK2LEARN, INC., a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

10

 

THIS PAGE IS REQUIRED IF PROPERTY IS IN DELAWARE,

MICHIGAN, OHIO, UTAH, WASHINGTON, D.C. OR WASHINGTON STATE

 

LANDLORD
ACKNOWLEDGMENTS

 

STATE OF                           )

COUNTY OF                       )  ss:

 

I, the undersigned, a
Notary Public, in and for the County and State aforesaid, do hereby certify
that M. Patrick Callahan, personally known to me to be the Vice President,
Seattle Region, of Equity Office Management, L.L.C., a Delaware limited
liability company, and personally known to me to be the same person whose name
is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that as such officer of said entity being authorized so
to do, (s)he executed the foregoing instrument on behalf of said entity, by
subscribing the name of such entity by himself/herself as such officer, as a
free and voluntary act, and as the free and voluntary act and deed of said
entity, for the uses and purposes therein set forth.

 

GIVEN under my hand and official
seal this          day of                      , 2003.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

My Commission Expires:

 

TENANT ACKNOWLEDGMENTS

 

STATE OF                           )

COUNTY OF                       )  ss:

 

On this the
         day of
                     ,
2003, before me a Notary Public duly authorized in and for the said County in
the State aforesaid to take acknowledgments personally appeared
                                                                
known to me to be                               
President of
                                                                ,
one of the parties described in the foregoing instrument, and acknowledged that
as such officer, being authorized so to do, (s)he executed the foregoing
instrument on behalf of said corporation by subscribing the name of such
corporation by himself/herself as such officer and caused the corporate seal of
said corporation to be affixed thereto, as a free and voluntary act, and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth.

 

IN WITNESS WHEREOF, I hereunto
set my hand and official seal.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

My Commission Expires:

 

11

 

EXHIBIT
A

 

LETTER
OF CREDIT

 

	
   

  
	
  [Name of Financial
  Institution]

  
	
   

  	
   

  
	
   

  	
  Irrevocable Standby

  
	
   

  	
  Letter of Credit

  
	
   

  	
  No. 

  	
   

  	
   

  
	
   

  	
  Issuance Date:

  	
   

  	
   

  
	
   

  	
  Expiration Date:

  	
   

  	
   

  
	
   

  	
  Applicant:

  	
  Click2Learn, Inc.

  
								

 

Beneficiary

 

WA-110 Atrium Place,
L.L.C.

411-108th
Avenue NE, Suite 1980

Bellevue, WA  98004

 

Ladies/Gentlemen:

 

We hereby
establish our Irrevocable Standby Letter of Credit in your favor for the
account of the above referenced Applicant in the amount of
                                                                
U.S. Dollars ($                          )
available for payment at sight by your draft drawn on us when accompanied by
the following documents:

 

1.             An original copy of this Irrevocable Standby Letter of
Credit.

 

2.                                       Beneficiary’s
dated statement purportedly signed by one of its officers reading: “This draw
in the amount of
                                           
U.S. Dollars
($                       )
under your Irrevocable Standby Letter of Credit No.
                                               
represents funds due and owing to us as a result of the Applicant’s failure to
comply with one or more of the terms of that certain lease by and between
WA-110 Atrium Place, L.L.C., as landlord, and Click2Learn, Inc., as tenant.”

 

It is a condition
of this Irrevocable Standby Letter of Credit that it will be considered
automatically renewed for a one year period upon the expiration date set forth
above and upon each anniversary of such date, unless at least 60 days prior to
such expiration date or applicable anniversary thereof, we notify you in
writing by certified mail, return receipt requested, that we elect not to so renew
this Irrevocable Standby Letter of Credit. 
A copy of any such notice shall also be sent to:  Equity Office Properties Trust, 2 North
Riverside Plaza, Suite 2100, Chicago, Illinois 60606, Attention: Treasury
Department.  In addition to the
foregoing, we understand and agree that you shall be entitled to draw upon this
Irrevocable Standby Letter of Credit in accordance with 1 and 2 above in the
event that we elect not to renew this Irrevocable Standby Letter of Credit and,
in addition, you provide us with a dated statement purportedly signed by one of
Beneficiary’s officers stating that the Applicant has failed to provide you
with an acceptable substitute irrevocable standby letter of credit in
accordance with the terms of the above referenced lease.  We further acknowledge and agree that:  (a) upon receipt of the documentation
required herein, we will honor your draws against this Irrevocable Standby
Letter of Credit without inquiry into the accuracy of Beneficiary’s signed
statement and regardless of whether Applicant disputes the content of such
statement; (b) this Irrevocable Standby Letter of Credit shall permit
partial draws and, in the event you elect to draw upon less than the full
stated amount hereof, the stated amount of this Irrevocable Standby Letter of
Credit shall be automatically reduced by the amount of such partial draw; and
(c) you shall be entitled to transfer your interest in this Irrevocable
Standby Letter of Credit from time to time without our approval and without
charge.  In the event of a transfer, we
reserve the right to require reasonable evidence of such transfer as a
condition to any draw hereunder.

 

This Irrevocable
Standby Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 revision) ICC Publication No. 500.

 

We hereby engage
with you to honor drafts and documents drawn under and in compliance with the
terms of this Irrevocable Standby Letter of Credit.

 

1

 

All communications
to us with respect to this Irrevocable Standby Letter of Credit must be
addressed to our office located at
                                                                                                                     
to the attention of
                                                                       .

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [name]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [title}

  	
   

  
	
   

  

 

2

 

EXHIBIT B

 

WORK
LETTER 

 

This Exhibit is attached to and
made a part of the Amendment by and between WA-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company (“Landlord”), and CLICK2LEARN, INC., a Delaware
corporation (“Tenant”), for space in the Building located at 110-110th
Avenue N.E., Bellevue, Washington.

 

As used in this
Workletter, the “Premises” shall be deemed to the Premises, as defined in the
attached Amendment.

 

1.                                       This
Work Letter shall set forth the obligations of Landlord and Tenant with respect
to the improvements to be performed in the Premises for Tenant’s use.  All improvements described in this Work
Letter to be constructed in and upon the Premises by Landlord are hereinafter
referred to as the “Landlord Work.” 
Landlord and Tenant shall each work diligently to complete Landlord’s
Work by September 30, 2003, and Landlord shall use all reasonable
diligence to obtain all of the permits required for Landlord’s Work as soon as
possible.  It is agreed that
construction of the Landlord Work is intended to be “turn-key” and will be
completed at Landlord’s sole cost and expense, using Building Standard methods,
materials, and finishes, unless Landlord and Tenant mutually agree in writing
to use other than Building Standard methods, materials and finishes.  Notwithstanding the foregoing, Landlord and
Tenant acknowledge that Plans (hereinafter defined) for the Landlord Work have
not yet been prepared and, therefore, Landlord and Tenant are unable to
determine the exact cost of the Landlord Work at this time.  Accordingly, Landlord and Tenant agree that
Landlord’s obligation to pay for the cost of Landlord Work (inclusive of the
cost of preparing Plans [which cost shall be limited to $59,044.50 (i.e., $1.50
per rentable square foot of the Premises) of the Maximum Amount], obtaining
permits, a construction management fee equal to 5% of the total construction
costs, and other related costs) shall be limited to $629,808.00 (i.e., $16.00
per rentable square foot of the Premises) (the “Maximum Amount”) and that
Tenant shall be responsible for the cost of Landlord Work, plus any applicable
state sales or use tax, if any, to the extent that it exceeds the Maximum
Amount.  Landlord shall enter into a
direct, fixed-sum contract for the Landlord Work with a general contractor
selected by Landlord, which general contractor shall use commercially
reasonable cost control measures.  In
addition, Landlord shall have the right to select and/or approve of any
subcontractors used in connection with the Landlord Work, all of which
subcontractors (except for the mechanical subcontractor) shall be selected on a
competitive bid basis.  Landlord agrees
to keep Tenant reasonably apprised of the status of the Landlord Work.

 

2.                                       Tenant
shall be solely responsible for the timely preparation and submission to
Landlord of the final architectural, electrical and mechanical construction
drawings, plans and specifications (called “Plans”) necessary to construct the
Landlord Work, which plans shall be subject to approval by Landlord and
Landlord’s architect and engineers and shall comply with their reasonable
requirements to avoid aesthetic or other conflicts with the design and function
of the balance of the Building. 
Landlord shall provide all information reasonably required to
efficiently and timely complete the Plans. 
Tenant shall be entitled, but not obligated, to retain Marvin Stein
& Associates to prepare the Plans and represent Tenant with regard to all
Landlord Work.  Tenant shall be
responsible for all elements of the design of Tenant’s plans (including,
without limitation, compliance with law, functionality of design, the
structural integrity of the design, the configuration of the Premises and the
placement of Tenant’s furniture, appliances and equipment), and Landlord’s
approval of Tenant’s plans shall in no event relieve Tenant of the
responsibility for such design. 
Landlord shall, and shall cause its architect and engineers to respond
promptly to all requests and plan submittals related to the preparation of the
Plans.  If requested by Tenant,
Landlord’s architect will prepare the Plans necessary for such construction at
Tenant’s cost.  Landlord acknowledges
that it has no objections to the improvements described generally in the space
plans prepared by Marvin Stein & Associates and dated January 3, 2003;
provided that Landlord’s final consent shall be subject to Landlord’s receipt
of the final Plans and the other terms and conditions set forth in this Work
Letter.  Whether or not the layout and
Plans are prepared with the help (in whole or in part) of Landlord’s architect,
Tenant agrees to remain solely responsible for the timely preparation and
submission of the Plans and for all elements of the design of such Plans and
for all costs related thereto.  Tenant
will deliver the final approved Plans to Landlord on or before March 15,
2003  (the
“Plans Due

 

1

 

Date”), provided that Tenant promptly furnishes
complete information concerning its requirements to said architect and
engineers as and when requested by them. 
Landlord and Tenant agree to devote such time as may be reasonably
necessary in consultation with the architect and engineers to enable them to
complete and submit the Plans within the required time limit.  Time is of the essence in respect of
preparation and submission of Plans by Tenant. 
(The word “architect” as used in this Exhibit shall include an interior
designer or space planner.)  Landlord
shall pay Tenant’s architect within 30 days of receiving a written invoice from
Tenant or Tenant’s architect.

 

3.                                       If
Landlord’s estimate and/or the actual cost of the Landlord Work shall exceed
the Maximum Amount, Landlord, prior to commencing any construction of Landlord
Work, shall submit to Tenant a written estimate setting forth the anticipated
cost of the Landlord Work, including but not limited to labor and materials,
contractor’s fees and permit fees.  Within
10 days thereafter, Tenant shall either notify Landlord in writing of its
approval of the cost estimate, or specify its objections thereto and any
desired changes to the proposed Landlord Work. 
If Tenant notifies Landlord of such objections and desired changes,
Tenant shall work with Landlord to reach a mutually acceptable alternative cost
estimate.

 

4.                                       If
Landlord’s estimate and/or the actual cost of construction shall exceed the
Maximum Amount (such amounts exceeding the Maximum Amount being herein referred
to as the “Excess Costs”), Tenant shall pay to Landlord such Excess Costs, plus
any applicable state sales or use tax thereon, upon demand.  The statements of costs submitted to
Landlord by Landlord’s contractors shall be conclusive for purposes of
determining the actual cost of the items described therein.  The amounts payable by Tenant hereunder
constitute Rent payable pursuant to the Lease, and the failure to timely pay
same constitutes an event of default under the Lease.

 

5.                                       If
Tenant shall request any material change, addition or alteration in any of the
Plans after approval by Landlord, Landlord shall have such revisions to the
drawings prepared, and Tenant shall reimburse Landlord for the reasonable cost
thereof, plus any applicable state sales or use tax thereon, upon demand to the
extent that the cost of performing such revisions cause the cost of Landlord
Work to exceed the Maximum Amount. 
Promptly upon completion of the revisions and prior to undertaking any
requested material change, addition or alteration, Landlord shall notify Tenant
in writing of the estimated increased cost, if any, which will be chargeable to
Tenant by reason of such change, addition or deletion.  Tenant, within 1 Business Day, shall notify
Landlord in writing whether it desires to proceed with such change, addition or
deletion.  In the absence of such
written authorization, Landlord shall have the option to continue work on the
Premises disregarding the requested change, addition or alteration, or Landlord
may elect to discontinue work on the Premises until it receives notice of
Tenant’s decision, in which event Tenant shall be responsible for any Tenant
Delay in completion of the Premises resulting therefrom.  If such revisions result in a higher
estimate of the cost of construction and/or higher actual construction costs
which exceed the Maximum Amount, such increased estimate or costs shall be
deemed Excess Costs pursuant to Paragraph 4 hereof and Tenant shall pay
such Excess Costs, plus any applicable state sales or use tax thereon, upon
demand.

 

6.                                       Following
approval of the Plans and the payment by Tenant of the required portion of the
Excess Costs, if any, Landlord shall cause the Landlord Work to be constructed
substantially in accordance with the approved Plans.  Landlord shall notify Tenant of substantial completion of the
Landlord Work.

 

7.                                       Any
portion of the Maximum Amount or the Cabling Allowance (as defined in paragraph
9 below) which exceeds the cost of the Landlord Work or is otherwise remaining
after June 30, 2003, shall accrue to the sole benefit of Landlord, it
being agreed that Tenant shall not be entitled to any credit, offset, abatement
or payment with respect thereto. 
Notwithstanding the foregoing, Tenant may apply the remaining Cabling
Allowance as a credit towards Base Rent accruing under the Lease on or after
July 1, 2003.  In addition,
provided that at least 50% of the Maximum Amount was applied toward the cost of
the Landlord Work, Tenant may apply the remaining Maximum Amount toward Base
Rent accruing under the Lease during the months of January 2005, January 2006,
and February 2006 only.  Any portion of
the Maximum Amount remaining after February 2006 shall accrue to the sole
benefit of Landlord and shall not be applicable to any Base Rent accruing under
the Lease after February 28, 2006. 
For example, if $100,000 of the

 

2

 

Maximum Amount remained after June 30, 2003, Tenant could apply
$66,425.06 of such remainder towards the Base Rent due for the period
January 1, 2005, through January 31, 2005, and could apply the
remaining $33,574.94 balance towards the Base Rent due for the period
January 1, 2006, through January 31, 2006.

 

8.                                       Tenant
acknowledges that some of the Landlord Work may be performed by Landlord in the
Premises during Normal Business Hours subsequent to the Second Extension Date.  Landlord and Tenant agree to cooperate with
each other in order to enable the Landlord Work to be performed in a timely
manner and with as little inconvenience to the operation of Tenant’s business
as is reasonably possible, including without limitation making the Temporary
Premises available to Tenant as provided in Section I.B. of the attached
Amendment.  Notwithstanding anything
herein to the contrary, any delay in the completion of the Landlord Work or
inconvenience suffered by Tenant during the performance of the Landlord Work
shall not delay the Second Extension Date  nor shall it subject Landlord to any liability for any
loss or damage resulting therefrom or entitle Tenant to any credit, abatement
or adjustment of Rent or other sums payable under the Lease.

 

9.                                       Provided
Tenant is not in default under the terms of the Lease and in addition to the
Maximum Amount, Landlord agrees to pay Tenant the sum of $50,000.00 (the
“Cabling Allowance”) to be used for the cost of installing cabling in the
Premises.  If the cost of installing
cabling exceeds the Cabling Allowance, Tenant shall pay any and all costs in
excess of the Cabling Allowance, plus any applicable state sales or use tax
thereon.  The Cabling Allowance (or a
portion thereof if the total cost of installing cable in the Premises does not
equal or exceed the Cabling Allowance) shall be paid within twenty (20) days of
Tenant providing written invoices or billing statements for the cost of such
installation and cabling.  Any portion
of the Cabling Allowance remaining after June 30, 2003, shall be applied
pursuant to the terms of paragraph 7 above.

 

10.                                 In
addition to that portion of the Landlord Work set forth in the Plans, Landlord
shall also complete, at Landlord’s sole cost and expense in addition to the
Maximum Amount, the following work in the elevator lobby of the Premises, using
Building standard methods, materials and finishes (the “Lobby Work”):

 

(a)                                  install
five (5) 2x4 light fixtures;

 

(b)                                 install
two (2) light sconces;

 

(c)                                  remove
existing recessed lighting; and

 

(d)                                 install
four (4) new recessed can lights.

 

The Lobby Work shall be considered a part of Landlord
Work under this Work Letter.

 

11.                                 This
Exhibit shall not be deemed applicable to any additional space added to the
Premises at any time or from time to time, whether by any options under the
Lease or otherwise, or to any portion of the original Premises or any additions
to the Premises in the event of a renewal or extension of the Second Extended
Term, whether by any options under the Lease or otherwise, unless expressly so
provided in the Lease or any amendment or supplement to the Lease.

 

3

 

EXHIBIT C

 

PARKING

 

This Exhibit is attached to and
made a part of the Amendment by and between WA-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company (“Landlord”), and CLICK2LEARN, INC., a Delaware
corporation (“Tenant”), for space in the Building located at 110-110th
Avenue N.E., Bellevue, Washington.

 

1.                                       During
the Lease Term, Landlord shall lease to Tenant, or cause the operator (the
“Operator”) of the garage servicing the Building (the “Garage”) to lease to
Tenant, and Tenant shall have the right to lease from Landlord or such Operator,
up to a maximum of 117 unreserved parking spaces (collectively, the “Unreserved
Spaces”) and 1 reserved parking space (the “Reserved Space”) in the Garage
(collectively, the “Spaces”) for the use of Tenant and its employees.  The Spaces shall be leased at the rate of
$0.00 per Space, per month, from the period commencing as of January 1,
2003, and ending December 31, 2003. 
Commencing as of January 1, 2004, through December 31, 2008,
the Unreserved Spaces shall be leased at the rate of $50.00 per Space, per
month, plus applicable tax thereon, and the Reserved Spaces shall be leased at
the rate of $100.00 per Space, per month, plus applicable tax thereon.  Such rates may be adjusted from time-to-time
after December 31, 2008, to reflect the then current rate for parking in
the Garage.  If requested by Landlord,
Tenant shall execute and deliver to Landlord the standard parking agreement
used by Landlord or the Operator (the “Parking Agreement”) in the Garage for
such Spaces provided the same does not conflict with the Lease and is
reasonable and customary.  Tenant shall
have the right to suspend its right to use any Spaces not needed and thereby
not be obligated to pay any fees or charges for such Spaces.

 

2.                                       No
deductions or allowances shall be made for days when Tenant or any of its
employees does not utilize the parking facilities or for Tenant utilizing less
than all of the Spaces.  Tenant shall
have the right to lease or otherwise use more than the number of reserved and
unreserved Spaces set forth above at the rates set forth above if such
additional Spaces are available in Landlord’s sole discretion.

 

3.                                       Except
for particular spaces and areas designated by Landlord or the Operator for
reserved parking, including Tenant’s 1 Reserved Space (in its current
location), all parking in the Garage shall be on an unreserved, first-come,
first-served basis.

 

4.                                       Neither
Landlord nor the Operator shall be responsible for money, jewelry, automobiles
or other personal property lost in or stolen from the Garage regardless of
whether such loss or theft occurs when the Garage or other areas therein are
locked or otherwise secured.  Except as
caused by the negligence or willful misconduct of Landlord and without limiting
the terms of the preceding sentence, Landlord shall not be liable for any loss,
injury or damage to persons using the Garage or automobiles or other property
therein, it being agreed that, to the fullest extent permitted by law, the use
of the Spaces shall be at the sole risk of Tenant and its employees.

 

5.                                       Landlord
or its Operator shall have the right from time to time to designate the
location of the Spaces and to promulgate reasonable rules and regulations
regarding the Garage, the Spaces and the use thereof, including, but not
limited to, rules and regulations controlling the flow of traffic to and from
various parking areas, the angle and direction of parking and the like.  Tenant shall comply with and cause its
employees to comply with all such rules and regulations, all reasonable
additions and amendments thereto, and the terms and provisions of the Parking
Agreement.

 

6.                                       Tenant
shall not store or permit its employees to store any automobiles in the Garage
without the prior written consent of Landlord. 
Except for emergency repairs, Tenant and its employees shall not perform
any work on any automobiles while located in the Garage or on the
Property.  If it is necessary for Tenant
or its employees to leave an automobile in the Garage overnight, Tenant shall provide
Landlord with prior notice thereof designating the license plate number and
model of such automobile.

 

7.                                       Landlord
or the Operator shall have the right to temporarily close the Garage or certain
areas therein in order to perform necessary repairs, maintenance and
improvements to the Garage.

 

1

 

8.                                       Tenant
shall not assign or sublease any of the Spaces without the consent of
Landlord.  Landlord shall have the right
to terminate this Parking Agreement with respect to any Spaces that Tenant
desires to sublet or assign. The foregoing shall not pertain to any rights
granted in connection with any assignment or sublease of the Premises.

 

9.                                       Landlord
may elect to provide parking cards or keys to control access to the
Garage.  In such event, Landlord shall
provide Tenant with one card or key for each Space that Tenant is leasing
hereunder, provided that Landlord shall have the right to require Tenant or its
employees to place a deposit on such access cards or keys and to pay a fee for
any lost or damaged cards or keys.

 

2

 

EXHIBIT D

 

OFFERING SPACE

 

 

WCW\4382\060\1211647.07

 

1Exhibit 4.2

 

EXECUTION COPY

 

 

INDENTURE

 

Between

 

WATSON PHARMACEUTICALS, INC.

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

1.75% CONVERTIBLE CONTINGENT SENIOR
DEBENTURES

DUE MARCH 15, 2023

 

 

Dated as of March 7, 2003

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
   

  	
  5.11

  
	
  (a)(2)

  	
   

  	
   

  	
  5.11

  
	
  (a)(3)

  	
   

  	
   

  	
  n/a

  
	
  (a)(4)

  	
   

  	
   

  	
  n/a

  
	
  (a)(5)

  	
   

  	
   

  	
  5.11

  
	
  (b)

  	
   

  	
   

  	
  5.3; 5.11

  
	
  (c)

  	
   

  	
   

  	
  n/a

  
	
  311(a)

  	
   

  	
   

  	
  5.12

  
	
  (b)

  	
   

  	
   

  	
  5.12

  
	
  (c)

  	
   

  	
   

  	
  n/a

  
	
  312(a)

  	
   

  	
   

  	
  2.9

  
	
  (b)

  	
   

  	
   

  	
  14.3

  
	
  (c)

  	
   

  	
   

  	
  14.3

  
	
  313(a)

  	
   

  	
   

  	
  5.7

  
	
  (b)(1)

  	
   

  	
   

  	
  n/a

  
	
  (b)(2)

  	
   

  	
   

  	
  5.7

  
	
  (c)

  	
   

  	
   

  	
  5.7; 14.2

  
	
  (d)

  	
   

  	
   

  	
  5.7

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

  	
   

  	
   

  	
  9.4; 14.2

  
	
  (a)(4)

  	
   

  	
   

  	
  9.5; 14.6

  
	
  (b)

  	
   

  	
   

  	
  n/a

  
	
  (c)(1)

  	
   

  	
   

  	
  14.5

  
	
  (c)(2)

  	
   

  	
   

  	
  14.5

  
	
  (c)(3)

  	
   

  	
   

  	
  n/a

  
	
  (d)

  	
   

  	
   

  	
  n/a

  
	
  (e)

  	
   

  	
   

  	
  14.6

  
	
  (f)

  	
   

  	
   

  	
  n/a

  
	
  315(a)

  	
   

  	
   

  	
  5.1(a)

  
	
  (b)

  	
   

  	
   

  	
  5.6; 14.2

  
	
  (c)

  	
   

  	
   

  	
  5.1(b)

  
	
  (d)

  	
   

  	
   

  	
  5.1(c)

  
	
  (e)

  	
   

  	
   

  	
  4.14

  
	
  316(a)(last sentence)

  	
   

  	
   

  	
  7.2

  
	
  (a)(1)(A)

  	
   

  	
   

  	
  4.5

  
	
  (a)(1)(B)

  	
   

  	
   

  	
  4.4

  
	
  (a)(2)

  	
   

  	
   

  	
  n/a

  
	
  (b)

  	
   

  	
   

  	
  4.7

  
	
  (c)

  	
   

  	
   

  	
  7.4

  
	
  317(a)(1)

  	
   

  	
   

  	
  4.8

  
	
  (a)(2)

  	
   

  	
   

  	
  4.9

  
	
  (b)

  	
   

  	
   

  	
  2.6

  
	
  318(a)

  	
   

  	
   

  	
  14.1

  
	
  (b)

  	
   

  	
   

  	
  n/a

  
	
  (c)

  	
   

  	
   

  	
  14.1

  

 

“n/a” means not applicable.

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

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE
  1   DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  
	
   

  	
   

  
	
  Section 1.2.

  	
  Incorporation by Reference of Trust
  Indenture Act

  
	
   

  	
   

  
	
  Section 1.3.

  	
  Rules of Construction

  
	
   

  	
   

  
	
  ARTICLE 2  
  THE
  SECURITIES

  
	
   

  
	
  Section 2.1.

  	
  Title and Terms

  
	
   

  	
   

  
	
  Section 2.2.

  	
  Form of Securities

  
	
   

  	
   

  
	
  Section 2.3.

  	
  Legends

  
	
   

  	
   

  
	
  Section 2.4.

  	
  Execution,
  Authentication, Delivery and Dating of the Securities

  
	
   

  	
   

  
	
  Section
  2.5.

  	
  Registrar and Paying Agent

  
	
   

  	
   

  
	
  Section 2.6.

  	
  Paying
  Agent to Hold Assets in Trust

  
	
   

  	
   

  
	
  Section 2.7.

  	
  General Provisions Relating to
  Registration, Transfer and Exchange

  
	
   

  	
   

  
	
  Section 2.8.

  	
  Book-Entry Provisions for the Global
  Securities

  
	
   

  	
   

  
	
  Section 2.9.

  	
  Holder Lists

  
	
   

  	
   

  
	
  Section 2.10.

  	
  Persons Deemed Owners

  
	
   

  	
   

  
	
  Section 2.11.

  	
  Mutilated,
  Destroyed, Lost or Stolen Securities

  
	
   

  	
   

  
	
  Section 2.12.

  	
  Treasury Securities

  
	
   

  	
   

  
	
  Section 2.13.

  	
  Temporary Securities

  
	
   

  	
   

  
	
  Section 2.14.

  	
  Cancellation

  
	
   

  	
   

  
	
  Section 2.15.

  	
  CUSIP Numbers

  
	
   

  	
   

  
	
  Section 2.16.

  	
  Defaulted Interest

  
	
   

  	
   

  
	
  Section 2.17.

  	
  Transfer Provisions

  
	
   

  	
   

  
	
  ARTICLE 3  
  DISCHARGE
  OF INDENTURE

  
	
   

  	
   

  
	
  Section 3.1.

  	
  Discharge
  of Liability on Securities

  
	
   

  	
   

  
	
  Section 3.2.

  	
  Repayment to the Company

  
	
   

  	
   

  
	
  ARTICLE 4  
  DEFAULTS
  AND REMEDIES

  
	
   

  	
   

  
	
  Section 4.1.

  	
  Events
  of Default

  
	
   

  	
   

  
	
  Section 4.2.

  	
  Acceleration
  of Maturity; Rescission and Annulment

  
	
   

  	
   

  
	
  Section 4.3.

  	
  Other
  Remedies

  

 

ii

 

	
  Section 4.4.

  	
  Waiver
  of Past Defaults

  
	
   

  	
   

  
	
  Section 4.5.

  	
  Control
  by Majority

  
	
   

  	
   

  
	
  Section 4.6.

  	
  Limitation
  on Suit

  
	
   

  	
   

  
	
  Section 4.7.

  	
  Unconditional
  Rights of Holders to Receive Payment and to Convert

  
	
   

  	
   

  
	
  Section 4.8.

  	
  Collection
  of Indebtedness and Suits for Enforcement by the Trustee

  
	
   

  	
   

  
	
  Section 4.9.

  	
  Trustee
  May File Proofs of Claim

  
	
   

  	
   

  
	
  Section 4.10.

  	
  Restoration
  of Rights and Remedies

  
	
   

  	
   

  
	
  Section 4.11.

  	
  Rights
  and Remedies Cumulative

  
	
   

  	
   

  
	
  Section 4.12.

  	
  Delay
  or Omission Not Waiver

  
	
   

  	
   

  
	
  Section 4.13.

  	
  Priorities

  
	
   

  	
   

  
	
  Section 4.14.

  	
  Undertaking
  for Costs

  
	
   

  	
   

  
	
  Section 4.15.

  	
  Waiver
  of Stay or Extension Laws

  
	
   

  	
   

  
	
  ARTICLE 5  
  THE
  TRUSTEE

  
	
   

  	
   

  
	
  Section 5.1.

  	
  Certain
  Duties and Responsibilities

  
	
   

  	
   

  
	
  Section 5.2.

  	
  Certain Rights of Trustee

  
	
   

  	
   

  
	
  Section 5.3.

  	
  Individual Rights of Trustee

  
	
   

  	
   

  
	
  Section 5.4.

  	
  Money Held in Trust

  
	
   

  	
   

  
	
  Section 5.5.

  	
  Trustee’s Disclaimer

  
	
   

  	
   

  
	
  Section 5.6.

  	
  Notice of Defaults

  
	
   

  	
   

  
	
  Section 5.7.

  	
  Reports by Trustee to Holders

  
	
   

  	
   

  
	
  Section 5.8.

  	
  Compensation and Indemnification

  
	
   

  	
   

  
	
  Section 5.9.

  	
  Replacement
  of Trustee

  
	
   

  	
   

  
	
  Section 5.10.

  	
  Successor Trustee by Merger, Etc.

  
	
   

  	
   

  
	
  Section 5.11.

  	
  Corporate Trustee Required; Eligibility

  
	
   

  	
   

  
	
  Section 5.12.

  	
  Collection of Claims Against the Company

  
	
   

  	
   

  
	
  ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, SALE, LEASE OR OTHER
  DISPOSITION

  
	
   

  	
   

  
	
   

  	
   

  
	
  Section 6.1.

  	
  Company
  May Consolidate, Etc., Only on Certain Terms

  
	
   

  	
   

  
	
  Section 6.2.

  	
  Successor Corporation Substituted

  
	
   

  	
   

  
	
  ARTICLE 7   AMENDMENTS, SUPPLEMENTS
  AND WAIVERS

  
	
   

  	
   

  
	
  Section 7.1.

  	
  Without Consent of Holders of Securities

  
	
   

  	
   

  
	
  Section 7.2.

  	
  With Consent of Holders of Securities

  

 

iii

 

	
  Section 7.3.

  	
  Compliance with Trust Indenture Act

  
	
   

  	
   

  
	
  Section 7.4.

  	
  Revocation of Consents and Effect of
  Consents or Votes

  
	
   

  	
   

  
	
  Section 7.5.

  	
  Notation on or Exchange of Securities

  
	
   

  	
   

  
	
  Section 7.6.

  	
  Trustee
  to Sign Amendment, Etc.

  
	
   

  	
   

  
	
  Section 7.7.

  	
  Effect of Amendment

  
	
   

  	
   

  
	
  ARTICLE 8  
  [INTENTIONALLY
  OMITTED]

  
	
   

  	
   

  
	
  ARTICLE 9  
  COVENANTS

  
	
   

  	
   

  
	
  Section 9.1.

  	
  Payment
  of Principal, Redemption Price, Repurchase Price and Interest

  
	
   

  	
   

  
	
  Section 9.2.

  	
  Maintenance of Offices or Agencies

  
	
   

  	
   

  
	
  Section 9.3.

  	
  Corporate Existence

  
	
   

  	
   

  
	
  Section 9.4.

  	
  Reports

  
	
   

  	
   

  
	
  Section 9.5.

  	
  Compliance Certificate

  
	
   

  	
   

  
	
  Section 9.6.

  	
  Resale of Certain Securities

  
	
   

  	
   

  
	
  ARTICLE 10   REDEMPTION OF SECURITIES

  
	
   

  	
   

  
	
  Section 10.1.

  	
  Optional Redemption

  
	
   

  	
   

  
	
  Section 10.2.

  	
  Notice to Trustee

  
	
   

  	
   

  
	
  Section 10.3.

  	
  Selection of Securities to Be Redeemed

  
	
   

  	
   

  
	
  Section 10.4.

  	
  Notice of Redemption

  
	
   

  	
   

  
	
  Section 10.5.

  	
  Effect of Notice of Redemption

  
	
   

  	
   

  
	
  Section 10.6.

  	
  Deposit and Payment of Redemption Price

  
	
   

  	
   

  
	
  Section 10.7.

  	
  Securities Redeemed in Part

  
	
   

  	
   

  
	
  ARTICLE 11 PURCHASE AT THE OPTION OF A HOLDER UPON SPECIFIC
  REPURCHASE DATES OR CHANGE OF CONTROL

  
	
   

  
	
  Section 11.1.

  	
  Purchase Right

  
	
   

  	
   

  
	
  Section 11.2.

  	
  Repurchase Event Notice

  
	
   

  	
   

  
	
  Section 11.3.

  	
  Delivery of Repurchase Event Purchase
  Notice; Form of Repurchase Event Purchase Notice; Withdrawal of Repurchase
  Event Purchase Notice

  
	
   

  	
   

  
	
  Section 11.4.

  	
  Exercise of Purchase Rights

  
	
   

  	
   

  
	
  Section 11.5.

  	
  Deposit and Payment of the Purchase Price

  
	
   

  	
   

  
	
  Section 11.6.

  	
  Effect of Delivery of Repurchase Event
  Purchase Notice and Purchase

  
	
   

  	
   

  
	
  Section 11.7.

  	
  Physical Securities Purchased in Part

  

 

iv

 

	
  Section 11.8.

  	
  Covenant to Comply With Securities Laws
  Upon Purchase of Securities

  
	
   

  	
   

  
	
  Section 11.9.

  	
  Repayment to the Company

  
	
   

  	
   

  
	
  ARTICLE 12   CONVERSION OF SECURITIES

  
	
   

  	
   

  
	
  Section 12.1.

  	
  Conversion Right; Expiration of Conversion
  Right; Conversion Price

  
	
   

  	
   

  
	
  Section 12.2.

  	
  Exercise of Conversion Right

  
	
   

  	
   

  
	
  Section 12.3.

  	
  Fractions of Shares

  
	
   

  	
   

  
	
  Section 12.4.

  	
  Adjustment of Conversion Price

  
	
   

  	
   

  
	
  Section 12.5.

  	
  Consolidation
  or Merger of the Company

  
	
   

  	
   

  
	
  Section 12.6.

  	
  Notice
  of Adjustments of Conversion Price

  
	
   

  	
   

  
	
  Section 12.7.

  	
  Notice
  Prior to Certain Actions

  
	
   

  	
   

  
	
  Section 12.8.

  	
  Company to Reserve Common Stock

  
	
   

  	
   

  
	
  Section 12.9.

  	
  Common Stock to be Fully Paid and
  Nonassessable

  
	
   

  	
   

  
	
  Section 12.10.

  	
  Taxes on Conversions

  
	
   

  	
   

  
	
  Section 12.11.

  	
  Cancellation of Converted Securities

  
	
   

  	
   

  
	
  Section 12.12.

  	
  Responsibility of Trustee for Conversion
  Provisions

  
	
   

  	
   

  
	
  ARTICLE 13   [INTENTIONALLY OMITTED]

  
	
   

  	
   

  
	
  ARTICLE 14   OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  	
   

  
	
  Section 14.1.

  	
  Trust Indenture Act Controls

  
	
   

  	
   

  
	
  Section 14.2.

  	
  Notices

  
	
   

  	
   

  
	
  Section 14.3.

  	
  Communication
  by Holders with Other Holders

  
	
   

  	
   

  
	
  Section 14.4.

  	
  Acts of Holders of Securities

  
	
   

  	
   

  
	
  Section 14.5.

  	
  Certificate
  and Opinion as to Conditions Precedent

  
	
   

  	
   

  
	
  Section 14.6.

  	
  Statements
  Required in Certificate or Opinion

  
	
   

  	
   

  
	
  Section 14.7.

  	
  Effect
  of Headings and Table of Contents

  
	
   

  	
   

  
	
  Section 14.8.

  	
  Successors
  and Assigns

  
	
   

  	
   

  
	
  Section 14.9.

  	
  Separability
  Clause

  
	
   

  	
   

  
	
  Section 14.10.

  	
  Benefits
  of Indenture

  
	
   

  	
   

  
	
  Section 14.11.

  	
  Governing
  Law

  
	
   

  	
   

  
	
  Section 14.12.

  	
  Counterparts

  
	
   

  	
   

  
	
  Section 14.13.

  	
  Legal
  Holidays

  
	
   

  	
   

  
	
  Section 14.14.

  	
  Recourse
  Against Others

  

 

v

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Form
  of Security

  
	
  EXHIBIT
  B

  	
  Form
  of Repurchase Event Purchase Notice

  
	
  EXHIBIT
  C

  	
  Form
  of Conversion Notice

  

 

vi

 

INDENTURE, dated as of March 7, 2003 (this “Indenture”), between Watson Pharmaceuticals, Inc., a
corporation duly organized and existing under the laws of the State of Nevada,
having its principal office at 311 Bonnie Circle, Corona, California 92880 (the
“Company”) and Wells Fargo Bank,
National Association, a federally chartered banking organization, as Trustee
(the “Trustee”), having its
principal corporate trust office at 707 Wilshire Boulevard, 17th
Floor, Los Angeles, California 90017.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has duly authorized the creation of an issue of
its 1.75% Convertible Contingent Senior Debentures due March 15, 2023 (the “Securities”) of substantially the terms,
tenor, amount and other provisions hereinafter set forth, and, to provide
therefor, the Company has duly authorized the execution and delivery of this
Indenture; and

 

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

 

NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders (as defined below) thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders, as follows:

 

ARTICLE 1         DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.           Definitions.

 

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

 

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

 

“Additional Amounts” means
all amounts, if any, payable pursuant to Section 3 of the Registration Rights
Agreement.

 

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

 

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

 

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

 

 

will equal most closely the average Trading Price of a Security for the
20 Trading Days preceding the date of such public announcement; provided that the Adjusted Interest Rate
shall not be less than 1.75% per annum.

 

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

 

“Agent Member” has the
meaning specified in Section 2.8.

 

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

 

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

 

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

 

“Business Day” means, with
respect to any Security, a day that in the City of New York is not a day on
which banking institutions are authorized by law or regulation to close.

 

“Calculation Agent” means
any Person authorized by the Company to obtain market bid quotations on the
Securities for purposes of calculating the Trading Price of the
Securities.  Initially, the Calculation
Agent shall be Wells Fargo Bank, National Association.

 

“Capital Stock” means,
with respect to any Person, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests (however
designated) in equity of such Person, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all common stock and
preferred stock.

 

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

 

(i)            the
acquisition by any “person” or “group” (within the meaning of Sections 13(d)(3)
and 14(d)(2), respectively, of the Exchange Act) deemed to be a “beneficial
owner” (as defined in Rule 13d-3 and Rule 13d-5 of the Exchange Act), directly
or indirectly, through a purchase, merger or other acquisition transaction or
series of purchases, mergers or other acquisition transactions of shares of the
Company’s Capital Stock entitling such person to exercise 50% or more of the
total voting power of all shares of the Company’s Capital Stock entitled to
vote generally in elections of directors, other than any acquisition by the
Company, any of its Subsidiaries or any of its employee benefit plans (except
that such person shall be deemed to have beneficial ownership of all securities

 

1

 

that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
subsequent condition);

 

(ii)           the
first day on which a majority of members of the Board of Directors are not
Continuing Directors;

 

(iii)          any
consolidation or merger of the Company with or into any other person (which for
purposes of this definition has the meaning set forth in Section 13(d)(3) of
the Exchange Act), or any merger of another person into the Company, or any
conveyance, transfer, sale, lease or other disposition of all or substantially
all of the properties and assets of the Company to another person,  other than (a) any transaction (i) that does
not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Capital Stock of the Company and (ii) pursuant to which
holders of Capital Stock of the Company immediately prior to such transaction
have the right to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of Capital Stock of the Company entitled to vote
generally in the election of directors of the continuing or surviving person
immediately after such transaction or (b) any such merger solely for the
purpose of changing the jurisdiction of incorporation of the Company and
resulting in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of the common stock of the surviving entity;

 

provided, however, that a Change of Control shall not be
deemed to have occurred if (A) the Market Price per share of Common Stock for
any five Trading Days within the period of 10 consecutive Trading Days ending
immediately after the later of the Change of Control or the public announcement
of the Change of Control, in the case of a Change of Control under clause (i)
above, or the period of 10 consecutive Trading Days ending immediately before
the Change of Control, in the case of a Change of Control under clause (ii) or
(iii) above, equals or exceeds 110% of the Conversion Price of the Securities
in effect on each such Trading Day or (B) at least 90% of the
consideration in the transaction or transactions constituting a Change of
Control consists of shares of Common Stock traded or to be traded immediately
following such Change of Control on a national securities exchange or the
Nasdaq National Market and, as a result of the transaction or transactions, the
Securities become convertible solely into such Common Stock (and any rights
attached thereto).

 

“Change of Control Purchase Date”
has the meaning specified in Section 11.1 hereof.

 

“Closing Date” means March
7, 2003 or such later date on which the Securities may be delivered pursuant to
the Purchase Agreement.

 

“Commission” means the
Securities and Exchange Commission or any successor agency.

 

“Common Stock” means
any stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or

 

2

 

involuntary liquidation, dissolution or winding up of the Company and
which is not subject to redemption by the Company.  However, subject to the provisions of Section 12.10 hereof,
shares issuable on conversion of the Securities shall include only shares of
the class designated as Common Stock, par value $.0033 per share, of the
Company at the date of execution of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company, provided that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such reclassifications.

 

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

 

“Company Order” means a
written order signed in the name of the Company by any Officer.

 

“Contingent Interest” has
the meaning specified in Section 2.1(d).

 

“Continuing Director”
means, as of any date of determination, any member of the Board of Directors
who (i) was a member of the Board of Directors on the date hereof, (ii) was
nominated for election or elected to the Board of Directors with the approval
of a majority of the Continuing Directors who were members of the Board of Directors
at the time of such new director’s nomination or election.

 

“Conversion Agent” means
any Person authorized by the Company to convert Securities in accordance with
Article 12.  Initially, the Conversion
Agent shall be Wells Fargo Bank, National Association.

 

“Conversion Date” means,
with respect to any Holder, the date on which such Holder has satisfied all the
requirements to convert its Securities pursuant to Section 12.2.

 

“Conversion Price” has the
meaning specified in Section 12.1(c).

 

“Conversion Rate” has the
meaning specified in Section 12.1(b).

 

“Conversion Record Date”
has the meaning specified in Section 12.4(g).

 

“Corporate Trust Office”
means for purposes of presentation or surrender of Securities for payment,
registration, transfer, exchange or conversion or for service of notices or
demands upon the Company or for any other purpose of this Indenture, the office
of the Trustee located in the Borough of Manhattan, The City of New York, at
which at any particular time its corporate trust business shall be
administered, which at the date of this Indenture is located at 45 Broadway, 12th
Floor, New York, New York 10006.

 

3

 

 

“corporation” means any
corporation, association, limited liability company, company and business
trust.

 

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

 

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

 

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

 

“Defaulted Payment” has
the meaning specified in Section 4.1(b).

 

“Defaulted Interest” has
the meaning specified in Section 2.16

 

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

 

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

 

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

 

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

 

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

 

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

 

“Fair Market Value” has
the meaning set forth in Section 12.4(g).

 

“GAAP” has the meaning
specified in Section 1.3.

 

“Global Security” has the
meaning specified in Section 2.2(b)

 

“guarantee” means any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) 

 

4

 

or (ii) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part); provided that the term “guarantee” shall
not include endorsements for collection or deposit in the ordinary course of
business.  The term “guarantee” used as
a verb has a corresponding meaning.

 

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

 

“Indebtedness”  means, with respect to any Person, at any
date of determination (without duplication):

 

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

 

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

 

(3)                                  all obligations and
liabilities (contingent or otherwise) in respect of (A) all obligations as
lessee which are capitalized in accordance with GAAP, and (B) any lease or
related documents (including a purchase agreement) in connection with the lease
of real property or improvements thereon which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed residual value of the leased property to the
lessor and the obligations of such Person under such lease or related document
to purchase or to cause a third party to purchase the leased property whether
or not such lease is characterized as an operating lease or a capital lease in
accordance with GAAP, including, without limitation, synthetic lease
obligations;

 

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

 

(5)                                  all direct or
indirect guarantees or similar agreements by that Person in respect of, and
obligations or liabilities (contingent or otherwise) of that Person to purchase

 

5

 

or otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another Person of the
kind described in clauses (1) through (4) of this definition;

 

(6)                                  any indebtedness or
other obligations described in clauses (1) through (4) of this definition
secured by any mortgage, pledge, lien or other encumbrance existing on property
which is owned or held by such Person, regardless of whether the Indebtedness or
other obligation secured thereby shall have been assumed by such Person; and

 

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

 

The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided that (i) the amount outstanding
at any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP and (ii) Indebtedness shall not include any liability for
federal, state, local or other taxes.

 

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

 

“Initial Purchasers” mean
Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, CIBC World Markets
Corp., Wachovia Securities, Inc., Banc of America Securities LLC, Comerica
Securities, Inc. and Wells Fargo Securities, LLC, as initial purchasers under
the Purchase Agreement.

 

“Interest” means, with
respect to any Security, the interest payable on such Security based upon the
applicable Interest Rate and, if applicable, any Defaulted Interest.

 

“Interest Payment Date”
means each of March 15 and September 15, provided, however, that, if any such date
is not a Business Day, the Interest Payment Date shall be the next succeeding
Business Day.

 

“Interest Rate” has the
meaning specified in Section 2.1(c).

 

“Issue Price” of any
Security means, in connection with the original issuance of such Security, the
initial issue price at which the Security is sold as set forth on the face of
the Security.

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

(6)                                  if
such security is not so quoted, the average of the last bid and ask prices for
such security on such date from a dealer engaged in the trading of convertible
securities selected by the Company for this purpose.

 

 “Maturity” means the date on which the Principal with respect
to any Outstanding Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by acceleration, conversion, call
for redemption, exercise of a purchase right or otherwise.

 

“Moody’s” means
Moody’s Investors Service, Inc. or any successor Person to such entity.

 

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

 

“Non-Electing Share” has
the meaning specified in Section 12.5.

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

(iii)          which
have been paid in exchange for or in lieu of other Securities which have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the Company;

 

provided, however,
that in determining whether the Holders of the requisite principal amount of
Outstanding Securities have consented to or voted in favor of any request,
demand, authorization, direction, notice, consent, waiver, amendment or
modification hereunder, Securities held for the account of the Company or of
any of its Affiliates shall be disregarded and deemed not to be Outstanding,
except that in determining whether the Trustee shall be protected in making
such a determination or relying upon any such consent or vote, only Securities
which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded.

 

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

 

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

 

“Physical Securities”
means Securities issued in definitive, fully registered form without interest
coupons, substantially in the form of Exhibit A hereto, with the
applicable legends as provided in Section 2.3.

 

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

 

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

 

“Predecessor Security” of
any particular Security, means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular

 

8

 

Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.11 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” means, with
respect to any Outstanding Security, the principal amount of that Security,
including the Redemption Price, if applicable, and the Repurchase Price, if
applicable, payable with respect to that Security.

 

“Purchase Agreement” means
the Purchase Agreement, dated March 4, 2003, among the Company and the Initial
Purchasers relating to the offering and sale of the Securities.

 

“Purchase Right” has the
meaning specified in Section 11.1.

 

“Purchased Shares” has the
meaning specified in Section 12.4(f).

 

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

 

“Redemption Date”, when
used with respect to any Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.

 

“Redemption Price”, when
used with respect to any Security to be redeemed, means the price per Security
at which such Security may be redeemed pursuant to Section 10.1.

 

“Reference Dealer” means a
dealer engaged in the trading of convertible securities selected by the Company
or its successor for the purpose for which such dealers are quoted or otherwise
to which they are referred herein.

 

“Reference Period” has the
meaning specified in Section 12.4(d).

 

“Register” has the meaning
specified in Section 2.5.

 

“Registrar” has the
meaning specified in Section 2.5.

 

“Registration Rights Agreement”
means the Resale Registration Rights Agreement, dated as of the date hereof,
among the Company and the Initial Purchasers.

 

“Regular Record Date” for
the Interest payable on the Securities means the March 1 and the September 1
(whether or not a Business Day), as applicable, next preceding the
corresponding Interest Payment Date.

 

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

 

“Repurchase Event Notice”
has the meaning specified in Section 11.2.

 

“Repurchase Event Purchase Notice”
has the meaning specified in Section 11.2 hereof.

 

“Repurchase Events”
has the meaning specified in Section 11.1.

 

9

 

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

 

“Reset Transaction” means
any of (1) a merger, consolidation or statutory share exchange to which the
entity that is the issuer of the shares of the common stock into which the
Securities are then convertible is a party, (2) a sale of all or substantially
all the assets of that entity, (3) a recapitalization of those shares of common
stock or (4) a distribution contemplated by Section 12.4(d), in any case, after
the effective date of which transaction or distribution the Securities would be
convertible into either:

 

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

 

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

 

“Responsible Officer”, when
used with respect to the Trustee, means any officer of the Trustee, including
any vice president, assistant vice president, any treasurer, any assistant
treasurer, 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 such officer’s
knowledge of and familiarity with the particular subject.

 

“Restricted Securities”
means the Securities defined as such in Section 2.3.

 

“Restricted Securities Legend”
has the meaning specified in Section 2.3(a).

 

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

 

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

 

“Securities” has the
meaning ascribed to it in the first paragraph under the caption “Recitals of
the Company”.

 

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

 

“Significant Subsidiary”
has the meaning assigned to it under Rule 405 of the Securities Act.

 

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

 

10

 

“Standard & Poor’s”
means Standard & Poor’s Rating Services or any successor Person to such entity.

 

“Stated Maturity” has the
meaning assigned to it in Section 2.1.

 

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

 

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

 

“Trading Day” means:

 

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

 

(2)                                  if
that security is not listed on the New York Stock Exchange, a day on which
trades may be made on the Nasdaq National Market;

 

(3)                                  if
that security is not so listed on the New York Stock Exchange and not quoted on
the Nasdaq National Market, a day on which the principal U.S. securities
exchange on which the securities are listed is open for business; or

 

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

 

“Trading Price” of
the Securities on any date of determination means the average of the secondary
market bid quotations per Security obtained by the Company or the Calculation
Agent for $10,000,000 principal amount of the Securities at approximately 4:00
p.m., New York City time, on such determination date from three independent
nationally recognized securities dealers selected by the Company, provided that, if at least three such bids
cannot reasonably be obtained by the Company or the Calculation Agent, but two
such 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 Company or the Calculation
Agent, the one bid shall be used.  If
either the Company or the Calculation Agent cannot reasonably obtain at least
one bid for $10,000,000 principal amount of the Securities from a nationally
recognized securities dealer or, in the reasonable judgment of the Company, the
bid quotations are not indicative of the secondary market value of the
Securities, then the Trading Price of the Securities will equal (a) the
then-applicable Conversion Rate of the Securities multiplied by (b) the Market
Price of the Common Stock on such determination date.

 

11

 

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

 

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

 

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

 

“Voting Stock” means with
respect to any Person, Capital Stock of any class or kind ordinarily having the
power to vote for the election of directors, managers or other voting members
of the governing body of such Person.

 

Section 1.2.           Incorporation by Reference of Trust
Indenture Act.

 

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

 

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

 

“indenture securities”
means the Securities;

 

“indenture security holder”
means a Holder;

 

“indenture to be qualified”
means this Indenture;

 

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

 

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

 

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

 

Section 1.3.           Rules of Construction.

 

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

 

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

 

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

 

12

 

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

 

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

 

ARTICLE 2                         THE SECURITIES

 

Section
2.1.           Title
and Terms.

 

(a)           The Securities shall be designated as
the “1.75% Convertible Contingent Senior Debentures due March 15, 2023” of the
Company.  The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is
limited to $500.0 million (or $575.0 million if the Initial Purchasers’ option
to purchase additional Securities as set forth in Section 2 of the Purchase
Agreement is exercised in full), except for Securities authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of
other Securities pursuant to Sections 2.7, 2.8, 2.12, 7.5, 10.7, 11.1 or 12.2
hereof.  The Securities shall be issuable
in denominations of $1,000 or integral multiples thereof.

 

(b)           The Securities shall mature on March
15, 2023 (the “Stated Maturity”).

 

(c)           The Securities shall bear Interest
from the date of their original issuance until the principal amount thereof is
paid or made available for payment, or until such date on which the Securities
are converted, redeemed or purchased as provided herein, (i) prior to the
occurrence of a Reset Transaction, at a rate of 1.75% per annum, and (ii)
following the occurrence of a Reset Transaction, at the Adjusted Interest Rate
related to such Reset Transaction to, but not including, the effective date of
any succeeding Reset Transaction (as adjusted, if at all, the “Interest Rate”). 
Interest shall be payable semi-annually in arrears on each Interest
Payment Date.

 

(d)           In addition, interest (the “Contingent Interest”) will accrue on each Security during
any six-month period from March 15 to September 14 and from September 15 to
March 14, as appropriate, commencing with the six-month period beginning
September 15, 2003, if the average Trading Price of a Security for the five
Trading Days ending on the second Trading Day immediately preceding the
beginning of the relevant six-month period equals 120% or more of the Principal
of such Security.  The rate of
Contingent Interest payable in respect of any six-month period will equal the
greater of (i) a per annum rate equal to 5.00% of the Company’s then-current
estimated per annum borrowing rate for senior non-convertible fixed-rate Indebtedness
with a Maturity and other terms comparable to the Securities and (ii) 0.33% per
annum, in each case based on the Outstanding principal amount of the
Securities.  Contingent Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.  Upon determination that Holders will be
entitled to receive Contingent Interest during any relevant six-month period,
on or prior to the start of the relevant six-month period, the Company shall issue
a press release and publish information with respect to any Contingent Interest
on its web site.  The Company shall pay
Contingent Interest, if any, in the same manner as it shall pay Interest
pursuant to Section 2.1(c) hereof and the obligations of Holders in respect of
the

 

13

 

payment of Contingent Interest in connection
with the conversion of any Securities will also be the same as described in
Section 2.1(f) hereof.

 

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

 

(f)            Interest (including Contingent
Interest) shall be due and payable on a Security as follows:

 

(i)            A registered Holder
as of the close of business on a Regular Record Date shall be entitled to
receive and shall receive (except as otherwise indicated in this Section
2.1(f)), accrued and unpaid Interest (including Contingent Interest) on such
Security from the preceding Interest Payment Date (or such earlier date on
which Interest was last paid) to the Interest Payment Date next succeeding such
Regular Record Date, other than any Security whose Stated Maturity is prior to
such Interest Payment Date.

 

(ii)           In the event that a
Security becomes subject to redemption pursuant to Article 10 and the
Redemption Date occurs after a Regular Record Date but on or prior to the next
succeeding Interest Payment Date, the Person whose Security becomes subject to
redemption (and only such Person rather than the Holder as of such Regular
Record Date) shall be entitled to receive and shall receive accrued and unpaid
Interest (including Contingent Interest) from the preceding Interest Payment
Date (or such earlier date on which Interest was last paid) to, but excluding,
the Redemption Date of such Security, even if such Person is not the Holder of
such Security.

 

(iii)          In the event that a
Security becomes subject to purchase pursuant to Article 11, a Holder who
exercises a Purchase Right with respect to such Security shall be entitled to
receive and shall receive accrued and unpaid Interest (including Contingent
Interest) on such Security from the preceding Interest Payment Date (or such
earlier date on which Interest was last paid) to, but excluding the applicable
Repurchase Date for such Security, which amount shall be included in the
applicable Repurchase Price thereof pursuant to Article 11.

 

(iv)          In the event that a
Security is converted pursuant to Article 12, the Holder who converts such
Security on any date other than an Interest Payment Date shall not be entitled
to receive unpaid Interest (including Contingent Interest) on such Security
from the preceding Interest Payment Date until the Conversion Date, such
amounts being deemed to have been paid by receipt of shares of Common Stock in
full rather than canceled, extinguished or forfeited.  As a result, a Holder which converts a Security after a Regular
Record Date but prior to the next succeeding Interest Payment Date will receive
accrued and unpaid Interest (including Contingent Interest) on such Security
for 

 

14

 

such period on
such Interest Payment Date but will be required to remit to the Company an amount
equal to that Interest (including Contingent Interest) at the time such Holder
surrenders the Security for conversion, pursuant to Article 12; provided, however,
that such Holder will not be required to remit such Interest (including
Contingent Interest) if, prior to conversion or the delivery of a notice of
conversion pursuant to Article 12, the Company has either delivered a
notice of redemption as contemplated by Article 10 on or prior to the
third Business Day after such Interest Payment Date or redeemed such Security
pursuant to Article 10 and the Holder converts such Security after a Regular
Record Date but prior to the next succeeding Interest Payment Date pursuant to
Article 12.

 

(g)           In addition to the amounts set forth
in Section 2.1(d) and (f), Holders shall be entitled to receive Additional
Amounts, if any, on such Security pursuant and subject to the Registration
Rights Agreement, but in no event shall a Holder be required to repay any
amounts of Additional Amounts such Holder receives following the remittance of
Interest as specified in Section 2.1(f)(iv). 
Any amounts related to Additional Amounts shall be received or paid on
dates corresponding to the payment date of Interest on such Security pursuant
to the Registration Rights Agreement.

 

(h)           Payment of any Principal or Interest
(to the extent paid in cash), Contingent Interest or Additional Amounts, if
any, on Global Securities shall be payable by the Company to the Depositary in
immediately available funds.

 

(i)            Payment of any Principal on Physical
Securities shall be made at the office or agency of the Company maintained for
such purpose, initially the Corporate Trust Office of the Trustee.  Interest, Contingent Interest and Additional
Amounts, if any, on Physical Securities will be payable by (i) a U.S. Dollar
check drawn on a bank in The City of New York mailed to the address of the
Person entitled thereto as such address shall appear in the Register, or (ii)
upon application to the Registrar not later than the relevant Regular Record Date
by a Holder of an aggregate Principal amount of Securities in excess of
$5,000,000, wire transfer in immediately available funds, which application
shall remain in effect until the Holder notifies, in writing, the Registrar to
the contrary.

 

(j)            The Securities may be redeemable at
the option of the Company as provided in and subject to Article 10.

 

(k)           The Securities shall be purchased by
the Company at the option of Holders as provided in and subject to Article 11.

 

(l)            The Securities shall be convertible
at the option of the Holders as provided in and subject to Article 12.

 

Section 2.2.          
Form of Securities.

 

(a)           Except as otherwise provided pursuant
to this Section 2.2, the Securities are issuable in fully registered, without
coupons, in denominations of $1,000 and integral multiples of $1,000 above that
amount with applicable legends as are provided for in Section 2.3 and in
the form of one or more permanent global securities, except as provided herein
(each a 

 

16

 

“Global
Security” and, collectively, the “Global
Securities”), the form of which is contained in Exhibit A
hereto.  The Securities shall not be
issuable in bearer form.  The terms and
provisions contained in the form of Security shall constitute, and are hereby
expressly made, a part of this Indenture and to the extent applicable, the
Company, and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.

 

(b)           The Securities are being offered and
sold by the Company pursuant to the Purchase Agreement.  Securities offered and sold to QIBs in
accordance with Rule 144A, as provided in the Purchase Agreement, shall be
issued initially in the form of one or more permanent global Securities in
fully registered form without interest coupons, substantially in the form of Exhibit
A hereto, with the applicable legends as provided in Section 2.3 (each a “Global Security” and collectively the “Global
Securities”).  Each Global
Security shall be duly executed by the Company and authenticated and delivered
by the Trustee, and shall be registered in the name of the Depositary or its
nominee and retained by the Trustee, as Custodian, at its Corporate Trust
Office.  The aggregate Principal Amount
at Maturity of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as Custodian, and
of the Depositary or its nominee, as hereinafter provided.

 

(c)           Physical Securities acquired by QIBs
in accordance with Rule 144A may be exchanged for interests in Global
Securities pursuant to Sections 2.8(e) and 2.17(a) only.  Physical Securities shall be duly executed
by the Company and authenticated and delivered by the Trustee.

 

Section
2.3.           Legends.

 

(a)           Restricted
Securities Legends.

 

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

 

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

 

(i)            Restricted
Securities Legend for Securities.

 

Except as provided in Section 2.3(a)(iii), until two years after the
original issuance date of any Security, any certificate evidencing such
Security (and all Securities issued in exchange therefor or substitution
thereof, other than share of Common Stock, if any, issued

 

17

 

upon conversion thereof which shall bear the legend set forth in
Section 2.3(a)(ii), if applicable) shall bear a Restricted Securities Legend in
substantially the following form:

 

THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

 

(1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT;

 

(2) REPRESENTS THAT IT IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS IN ACCORDANCE WITH RULE 144A.

 

(3) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A)
TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER; AND

 

(4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 3(D)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 3(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE

 

18

 

(OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS
PURSUANT TO CLAUSE 3(B) OR 3(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE 3(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF
THE SECURITY EVIDENCED HEREBY.

 

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

 

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

 

THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF WHICH
THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED:

 

(1) IT WILL NOT OFFER, SELL, ASSIGN, TRANSFER, PLEDGE, ENCUMBER OR
OTHERWISE DISPOSE OF THE SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER;

 

(2) PRIOR TO ANY SUCH TRANSFER OTHER THAN A TRANSFER PURSUANT TO CLAUSE
1(D) ABOVE, IT WILL FURNISH TO

 

19

 

SUCH TRANSFER AGENT, (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE)
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRANSFER AGENT
OR THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND

 

(3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(D) ABOVE OR THE EXPIRATION
OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED. AS USED HEREIN, THE TERMS
“UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION
S UNDER THE SECURITIES ACT.

 

(iii)          Removal of the
Restricted Securities Legends.

 

Each Security or share of Common Stock issued upon conversion of any
Security (other than shares of Common Stock issued upon conversion of a
Security that previously were sold pursuant to a registration statement that
has been declared effective under the Securities Act and which continues to be
effective at the time of such sale) shall bear the applicable Restricted
Securities Legend set forth in Section 2.3(a)(i) or 2.3(a)(ii), as applicable,
until the earlier of:

 

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

 

(B)                                the
date such Security has, or such shares of Common Stock have been sold pursuant
to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such sale).

 

The Holder must give notice thereof to the Trustee, as applicable.

 

In the event Rule 144(k) as promulgated under the Securities Act is
amended to shorten the two-year period under Rule 144(k), then, the references
in the restrictive legends set forth above to “TWO YEARS”, and in the
corresponding transfer restrictions described above, the Securities and the
shares of Common Stock will be deemed to refer to such shorter period, from and
after receipt by the Trustee of an Officers’ Certificate and an Opinion of
Counsel to

 

20

 

that effect.  As soon as
reasonably practicable after the Company knows of the effectiveness of any such
amendment to shorten the two-year period under Rule 144(k), unless such changes
would otherwise be prohibited by, or would cause a violation of, the federal
securities laws applicable at the time, the Company will provide to the Trustee
an Officers’ Certificate and an Opinion of Counsel as to the effectiveness of
such amendment and the effectiveness of such change to the restrictive legends
and transfer restrictions.

 

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

 

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

 

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

 

(b)           Global Security
Legend.

 

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

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF

 

21

 

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. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS 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.

 

(c)           Legend for Physical
Securities.

 

Physical Securities, in addition to the legend set forth in Section
2.3(a)(i), will also bear a legend substantially in the following form:

 

THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT AND IS SUBJECT TO
THE RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY
REGULATION § 1.1275-4(b). FOR INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, THE YIELD TO MATURITY, THE COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD SUBMIT
A WRITTEN REQUEST FOR IT TO THE COMPANY AT THE COMPANY’S ADDRESS SPECIFIED IN
SECTION 14 OF THE INDENTURE.

 

Section
2.4.           Execution,
Authentication, Delivery and Dating of the Securities.

 

(a)           Two Officers shall execute the
Securities on behalf of the Company by manual or facsimile signature.  Securities bearing the manual or facsimile
signatures of individuals who were at the time of the execution of the
Securities 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.

 

(b)           At any time and from time to time
after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with such Company Order shall authenticate and
deliver such Securities as in this Indenture provided and not otherwise.  No Security shall be

 

22

 

entitled to any benefit under this Indenture,
or be valid or obligatory for any purpose, unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.  The Trustee may appoint an
authenticating agent or agents reasonably acceptable to the Company with
respect to the Securities.  Unless
limited by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. 
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent.

 

(c)           Each Security shall be dated the date
of its authentication.  The Trustee
shall authenticate and deliver Securities for original issue in an aggregate
principal amount of up to $500.0 million (or $575.0 million if the Initial
Purchases’ option to purchase additional Securities as forth in Section 2 of
the Purchase Agreement is exercised in full) upon one or more Company Orders
without any further action by the Company. 
The aggregate principal amount of Securities Outstanding at any time may
not exceed the amount set forth in the foregoing sentence.

 

Section 2.5.           Registrar
and Paying Agent.

 

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

 

The Company will cause each Paying Agent (other than Wells Fargo Bank,
National Association) 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:

 

(a)           hold all sums of
money or Common Stock held by it for the payment of any amounts due and payable
in respect of the Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as provided in this Indenture;

 

(b)           give the Trustee
notice of any Default by the Company in the making of any such payment; and

 

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

 

The Company shall give prompt written notice to the Trustee of the name
and address of any Paying Agent who is not a party to this Indenture.  If the Company fails to appoint

 

23

 

or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any
Affiliate of the Company may act as Paying Agent or Registrar; provided,
however, that none of the Company, its Subsidiaries or the
Affiliates of the foregoing shall act:

 

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

 

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

 

The Company hereby initially appoints Wells Fargo Bank, National
Association, as Registrar and Paying Agent for the Securities.

 

Section
2.6.           Paying
Agent to Hold Assets in Trust.

 

Not later than 11:00 a.m. (New York City time) on or prior to each due
date of payments in respect of any Security, the Company shall deposit with one
or more Paying Agents a sum of money in immediately available funds or Common
Stock sufficient to make such payments when so becoming due.  The Company at any time may require a Paying
Agent to pay all money or Common Stock held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company) shall have no further liability for the money
or Common Stock so paid over to the Trustee.

 

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 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 shall act as a Paying Agent, it shall, prior to or on
each such due date, segregate and hold in trust for the benefit of the Holders
a sum sufficient with monies held by all other Paying Agents, to pay such
amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as provided in this Indenture, and shall promptly notify
the Trustee of its action or failure to act.

 

Section 2.7.           General
Provisions Relating to Registration, Transfer and Exchange.

 

The Securities are issuable only in registered form.  A Holder may transfer a Security only by
written application to the Registrar stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture.  No such transfer shall be effected until,
and such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the
Register.  Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security
(or its agent) and that ownership of a beneficial interest in the Global
Security shall be required to be reflected in a book-entry.   Notwithstanding the

 

24

 

foregoing, in the case of a Restricted Security, a beneficial interest
in a Global Security that is transferred in reliance on an exemption from the
registration requirements of the Securities Act other than in accordance with
Rule 144 or Rule 144A may only be transferred for a Physical Security.

 

When Securities are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if the requirements hereunder for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder).  Subject to Section 2.4, to permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Sections 2.14, 7.5 or 10.7).

 

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

 

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

 

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

 

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

 

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

 

Section 2.8.           Book-Entry
Provisions for the Global Securities.

 

(a)           The Global
Securities initially shall:

 

(i)            be registered in
the name of the Depositary;

 

(ii)           be delivered to the
Trustee as custodian for such Depositary, for credit to the accounts of the
members of, participants in, the Depositary (the “Agent Members”) holding the Securities evidenced thereby;
and

 

25

 

(iii)          bear the Restricted
Securities Legend set forth in Section 2.3(a)(i) until such time as such
Restricted Securities Legend may be removed in accordance with
Section 2.3.

 

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

 

(c)           The registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members 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.

 

(d)           A Global Security
may not be transferred, in whole or in part, to any Person other than the
Depositary, and no such transfer to any such other Person may be
registered.  Beneficial interests in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 2.17 hereof.

 

(e)           If at any time:

 

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

 

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

 

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

 

then the Depositary shall surrender such Global Security or Global
Securities to the Trustee for cancellation and the Company shall execute, and
the Trustee, upon receipt of an Officers’ Certificate and Company Order for the
authentication and delivery of Securities, shall authenticate and deliver in
exchange for such Global Security or Global Securities, Physical Securities in
an aggregate principal amount equal to the aggregate principal amount of such
Global Security or Global Securities. 
Such Physical Securities shall be registered in such names

 

26

 

as the Depositary shall identify in writing as the beneficial owners of
the Securities represented by such Global Security or Global Securities (or any
nominee thereof).

 

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

 

Section
2.9.           Holder
Lists.

 

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

 

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 or Repurchase Price in
respect thereof and Interest (including Contingent Interest) thereon, if any,
or Additional Amounts, if any for any purpose under this Indenture, 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.        Mutilated,
Destroyed, Lost or Stolen Securities.

 

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

 

If there is delivered to the Company and the Trustee

 

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

 

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

 

27

 

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

 

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

 

Every new Security issued pursuant to this Section 2.11 in lieu of any
destroyed, lost or stolen Security shall constitute an original contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and such new Security
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

 

The provisions of this Section 2.11 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

Section 2.12.        Treasury
Securities.

 

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

 

Section 2.13.        Temporary
Securities.

 

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

 

28

 

Securities shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Securities in
definitive form authenticated and delivered hereunder.

 

Section
2.14.        Cancellation.

 

All Securities surrendered for payment, redemption, purchase,
conversion, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee.  All Securities so delivered shall be
canceled promptly by the Trustee, and no Securities shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture.  Upon written instructions of
the Company, the Trustee shall dispose of canceled Securities in accordance
with its procedures for the disposition of cancelled securities in effect as of
the date of such disposition.  If the
Company shall acquire any of the Securities, such acquisition shall not operate
as a redemption or satisfaction of the Indebtedness represented by such
Securities unless the same are delivered to the Trustee for cancellation.

 

Section 2.15.                        CUSIP
Numbers.

 

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

 

Section 2.16.        Defaulted
Interest.

 

If the Company fails to make a payment of Principal of or Interest,
Contingent Interest and Additional Amounts, if any, on any Security when due
and payable, it shall pay such Interest on such amounts (to the extent lawful),
which shall be calculated using the applicable Interest Rate (such amounts, the
“Defaulted Interest”).  It may elect to pay such Defaulted Interest,
plus any other Interest (including Contingent Interest) payable on it, to the
Persons who are Holders on which the Interest (including Contingent Interest)
is due on a subsequent special record date. 
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest the Company proposes to pay on each such Security. The
Company shall fix any such special record date and payment date for such
payment.  At least 15 days before any
such special record date, the Company shall mail to Holders affected thereby a
notice that states the special record date, the Interest Payment Date and
amount to be paid.

 

Section 2.17.        Transfer
Provisions.

 

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

 

(a)           Transfer of Securities.

 

29

 

The following provisions shall apply with respect to the registration
of any proposed transfer of Securities to a QIB:

 

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

 

(ii)           If the Securities
to be transferred consist of Physical Securities, the Registrar shall register
the transfer if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Security stating (or has otherwise
advised the Company and the Registrar in writing) that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Security stating or has otherwise
advised the Company and the Registrar in writing that:

 

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

 

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

 

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

 

(D)                               it
acknowledges that it has received such information regarding the Company as it
has requested pursuant to Rule 144A or has determined not to request such
information; and

 

(E)                                 it
is aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A.

 

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

 

(b)           Other Exchanges.

 

In the event that Global Securities are exchanged for Securities in
definitive registered form pursuant to Section 2.7 prior to the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with the provisions of clauses
(a) and (b) above (including the certification requirements intended to ensure
that such transfers comply with Rule 144A) and such other procedures as may
from time to time be adopted by the Company.

 

(c)           General.

 

By its acceptance of any Security or shares of Common Stock issuable
upon conversion of the Securities bearing the Restricted Securities Legend,
each Holder of such

 

30

 

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

 

The Registrar shall retain copies of all certifications, letters,
notices and other written communications received pursuant to Section 2.8
hereof or this Section 2.17 in accordance with its customary procedures for the
retention of records relating to the transfer of securities.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.

 

ARTICLE 3                              DISCHARGE OF INDENTURE

 

Section
3.1.           Discharge of Liability on
Securities.  When (a) the Company delivers to the Trustee all Outstanding Securities
(other than Securities replaced pursuant to Section 2.11) for cancellation, (b)
all Outstanding Securities have become due and payable at their scheduled
maturity within one year or all Outstanding Securities are scheduled for
redemption within one year and the Company deposits with the Trustee cash or,
in the event of a conversion pursuant to Article 12, Common Stock, sufficient
to pay all amounts due and owing on all Outstanding Securities on the date of
their scheduled maturity or the scheduled date of redemption (other than
Securities replaced pursuant to Section 2.11) or (c) when no Securities are
Outstanding, and if in any such case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 5.8,
cease to be of further effect.  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 Officers’ Certificate and Opinion of Counsel and at
the cost and expense of the Company.

 

Section 3.2.           Repayment to the
Company.  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 and the Trustee and the Paying Agent
shall have no further liability to the Holders with respect to such money or
securities for that period commencing after the return thereof.

 

31

 

ARTICLE 4                               DEFAULTS AND REMEDIES

 

Section
4.1.           Events
of Default.  An “Event of Default”, wherever used herein,
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 or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

 

(a)           the Company fails to convert
Securities into shares of its Common Stock in accordance with the provisions of
Article 12;

 

(b)           the Company defaults in the payment
of the Principal amount (a “Defaulted
Payment”) on any Outstanding Security when the same becomes due and
payable at its Stated Maturity, upon redemption, upon exercise of a Purchase
Right, upon declaration when due for purchase by the Company or otherwise;

 

(c)           the Company defaults in the payment
of Interest (including Contingent Interest) and Additional Amounts, if any, on
any Security when it becomes due and payable and such default continues for a
period of 30 days;

 

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

 

(e)            the Company defaults under any
Indebtedness for money borrowed by the Company or any of its Subsidiaries that
is a Significant Subsidiary or any group of two or more Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, the aggregate
outstanding principal amount of which is in an amount in excess of $25  million, for a period of 30 days after written notice to
the Company by the Trustee or to the Company and the Trustee by Holders of at
least 25% in aggregate principal amount of the Outstanding Securities, which
default (i) is caused by the Company’s or any such Significant Subsidiary’s
failure to pay when due principal or premium of or interest on such
Indebtedness by the end of the applicable grace period, if any, unless such
Indebtedness is discharged or (ii) results in the acceleration of such
Indebtedness because of a default with respect to such Indebtedness without
such Indebtedness having been discharged or such non-payment or acceleration
having been cured, waived, rescinded or annulled;

 

(f)            the entry by a court having
jurisdiction in the premises of (i) a decree or order for relief in respect of
the Company or any of its Subsidiaries that is a Significant Subsidiary or any
group of two or more Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, in an involuntary case or proceeding under any
applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) a decree or order adjudging the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization,

 

32

 

arrangement, adjustment or composition of or
in respect of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of two or more Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, under any applicable U.S. 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;
or

 

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

 

A Default under clause (d) or (e) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% of the
principal amount of the Securities at the time Outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (d) or (e)
above after actual receipt of such notice. Any such notice must specify the
Default, demand that it be remedied and state that such notice is a “Notice of
Default”.

 

The Trustee shall, within 90 days of the occurrence of a Default, give
to the Holders notice of all uncured Defaults known to it and written notice of
any event which with the giving of notice or the lapse of time, or both, would
become an Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto; provided,
however, the Trustee shall be protected in withholding such notice
if it, in good faith, determines that the withholding of such notice is in the
best interest of such Holders, except in the case of a Default

 

33

 

in the payment of the Principal of or Interest (including Contingent
Interest) on any of the Securities when due or in the payment of any redemption
or Purchase Right.

 

Section
4.2.           Acceleration
of Maturity; Rescission and Annulment.

 

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

 

If an Event of Default specified in Section 4.1(f) and 4.1(g) occurs,
the Principal and accrued and unpaid Interest (including Contingent Interest)
or Additional Amounts, if any, on the Outstanding Securities shall become and
be immediately due and payable, without any declaration or other act on the
part of the Trustee or any Holder.

 

The Holders of not less than a majority of the principal amount of the
Outstanding Securities, may, through notice to the Trustee on behalf of the
Holders of all of the Securities, rescind and annul an acceleration and its
consequences (including waiver of any defaults) if:

 

(a)           all existing Events
of Default, other than the nonpayment of a Defaulted Payment on the Securities
which have become due solely because of the acceleration, have been remedied,
cured or waived, and

 

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

 

provided, however,
that in the event such declaration of acceleration has been made based on the
existence of an Event of Default under Section 4.1(d) and the default with
respect to Indebtedness for money borrowed which gave rise to such Event of
Default has been remedied, cured or waived, then, without any further action by
the Holders, such declaration of acceleration shall be rescinded automatically
and the consequences of such declaration shall be annulled.  No such rescission or annulment shall affect
any subsequent Default or impair any right consequent thereon.

 

Section
4.3.           Other Remedies.

 

If an Event of Default with respect to Outstanding Securities occurs
and is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the Defaulted Payment or Interest (including
Contingent Interest) due and payable on the Securities or to enforce the
performance of any provision of the Securities.

 

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

 

34

 

Section
4.4.           Waiver of Past Defaults.

 

The Holders, through the written consent of not less than a majority of
the principal amount of the Outstanding Securities, may, on behalf of the
Holders of all of the Securities, waive an existing Default or Event of
Default, except a Default or Event of Default:

 

(a)           set forth in
Sections 4.1(b) and (c), provided, however,
that subject to Section 4.7, the Holders of a majority of the principal amount
of the Outstanding Securities may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration); or

 

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

 

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

 

Section
4.5.           Control by Majority.

 

The Holders of a majority of the 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. 
However, the Trustee may refuse to follow any direction that:

 

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

 

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

 

(c)            may expose the
Trustee to personal liability.

 

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

 

Section
4.6.           Limitation on Suit.

 

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

 

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

 

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

 

35

 

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

 

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

 

(e)           during such 60-day
period, no direction inconsistent with such written request has been given to
the Trustee by the Holders of a majority of the principal amount of the Outstanding
Securities;

 

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

 

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

 

Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the Principal on and Interest (including Contingent
Interest) and Additional Amounts, if any, in respect of the Securities held by
such Holder, on or after the respective due dates, to convert the Securities in
accordance with Article 12 or to bring suit for the enforcement of any such
payment on or after such respective dates or the right to convert, and such
rights shall not be impaired or affected adversely without the consent of such
Holder.

 

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

 

The Company covenants that if:

 

(a)           a Default or Event
of Default is made in the payment of Interest (including Contingent Interest)
and Additional Amounts, if any, on any Security when such Interest (including
Contingent Interest) and Additional Amounts, if any, becomes due and payable
and such Default or Event of Default continues for a period of 30 days; or

 

(b)           a Default or Event
of Default is made in the payment of 
the Principal on any Security when the same becomes due and payable at
its Stated Maturity, upon redemption, upon declaration when due for purchase by
the Company or otherwise,

 

then the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the entire Principal then due and
payable (as expressed therein or as a result of any acceleration effected
pursuant to Section 4.2 hereof) on such Securities for any such amounts and, to
the extent legally enforceable, Interest (including Contingent Interest) or
Additional Amounts, if any, on such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

 

If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company and collect the monies adjudged or

 

36

 

decreed to be payable in the manner provided by law out of the property
of the Company, wherever situated.

 

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

 

Section
4.9.           Trustee
May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the Principal, Interest
(including Contingent Interest) and Additional Amounts, if any, 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:

 

(a)           to file and prove a
claim for the whole amount of the Principal or Interest (including Contingent
Interest)  and Additional
Amounts, 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

 

(b)           to collect and
receive any monies, Common Stock or other property payable or deliverable on
any such claim and to distribute the same,

 

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

 

Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept, or adopt on behalf of any Holder, 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
4.10.        Restoration
of Rights 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

 

37

 

rights and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.

 

Section
4.11.        Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 2.11, no right or remedy conferred in this Indenture 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
hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

 

Section
4.12.        Delay or Omission Not Waiver.

 

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

 

Section
4.13.        Priorities.

 

Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee:

 

FIRST: to the payment of all amounts due to the Trustee under Section
5.8;

 

SECOND: to Holders for amounts due and unpaid
on the Securities for the Principal or Interest (including Contingent Interest)
or Additional Amounts, if any, as applicable, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Securities; and

 

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

 

The Trustee may fix a special record date and payment date for any
payment to Holders pursuant to this Section 4.13.  At least 15 days before such special record date, the Trustee
shall mail to each Holder and the Company a notice that states the special
record date, the payment date and the amount to be paid.

 

Section
4.14.        Undertaking
for Costs.

 

All parties to this Indenture agree, and each Holder of any Security by
such Holder’s acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may

 

38

 

in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant;  but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit instituted
by any Holder, or group of Holders, holding in the aggregate more than 10% of
the principal amount of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of (i) payments pursuant to Section 4.7, (ii)
Purchase Rights in accordance with Article 11 or (iii) conversion rights in
accordance with Article 12.  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 to take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

ARTICLE 5                              THE
TRUSTEE

 

Section
5.1.           Certain
Duties and Responsibilities.

 

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

 

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

 

(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
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided, however, that in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates or opinions to determine whether or not, on their face, they
conform to the requirements to this Indenture (but need not investigate or
confirm the accuracy of any facts stated therein).

 

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

 

39

 

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

 

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

 

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

 

(iii)          The Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with a direction received by it of the Holders of a
majority of the principal amount of the Outstanding Securities relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

(j)            The Trustee may request that the
Company deliver an Officers’ 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 Officers’ Certificate may be signed by any
person authorized to sign an Officers’ Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.

 

Section 5.2.           Certain
Rights of Trustee.

 

Subject to the provisions of Section 5.1 hereof and subject to Section
315(a) through (d) of 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 an Officers’ Certificate or an Opinion of Counsel,
or both.  The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers’ Certificate or Opinion of Counsel.

 

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

 

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

 

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

 

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

 

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

 

Section 5.3.           Individual
Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee.  However, in the event that the
Trustee

 

41

 

acquires any conflicting interest (as such term is defined in Section
310(b) of the TIA), it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue as trustee (to the extent permitted
under Section 310(b) of the TIA) or resign. 
Any agent may do the same with like rights and duties.  The Trustee is also subject to Sections 5.11
and 5.12 hereof.

 

Section 5.4.           Money
Held in Trust.

 

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

 

Section 5.5.           Trustee’s
Disclaimer.

 

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

 

Section 5.6.           Notice
of Defaults.

 

Within 90 days after the occurrence of any Default or Event of Default
hereunder of which a Responsible Officer of the Trustee has received written
notice, the Trustee shall give notice to Holders, unless such Default or Event
of Default shall have been cured or waived; provided, however, that, except in the
case of a Default or Event of Default described in Sections 4.1(b) or (c), the
Trustee shall be protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.  The second sentence of this Section 5.6
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.  The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default.

 

Section 5.7.           Reports
by Trustee to Holders.

 

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

 

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

 

Section 5.8.           Compensation
and Indemnification.

 

The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as agreed to in
writing by the Trustee and the Company (which shall not be limited by any
provision of law in regard to the compensation of a

 

42

 

trustee of an express trust) and the Company covenants and agrees to
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
agents and other persons not regularly in its employ), except to the extent
that any such expense, disbursement or advance is due to its negligence or bad
faith.  When the Trustee incurs expenses
or renders services in connection with an Event of Default specified in Section
4.1, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.  The Company also covenants to indemnify the Trustee and its
officers, directors, employees and agents for, and to hold such Persons
harmless against, any loss, liability or expense incurred by them, arising out
of or in connection with the acceptance or administration of this Indenture or
the trusts hereunder or the performance of their duties hereunder, including
the costs and expenses of defending themselves against or investigating any
claim of liability in the premises, except to the extent that any such loss,
liability or expense was due to the negligence or willful misconduct of such
Persons.  The obligations of the Company
under this Section 5.8 to compensate and indemnify the Trustee and its
officers, directors, employees and agents and to pay or reimburse such Persons
for expenses, disbursements and advances shall constitute additional
Indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the earlier resignation or removal of the Trustee.  Such additional Indebtedness shall be a lien
prior to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Securities, and the Securities are hereby subordinated to
such senior claim.  “Trustee” for purposes of this Section 5.8
shall include any predecessor Trustee, in its capacity as Trustee, but the
negligence or willful misconduct of any Trustee shall not affect the
indemnification of any other Trustee.

 

Section
5.9.           Replacement
of Trustee.

 

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

 

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

 

(a)           the Trustee fails to
comply with Section 5.10 hereof or Section 310 of the TIA;

 

(b)           the Trustee becomes
incapable of acting;

 

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

 

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

 

43

 

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

 

Any Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee if the
Trustee fails to comply with Section 5.10.

 

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

 

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The Company shall issue a notice of the
successor Trustee’s succession to the Holders. 
Upon payment of its charges, the retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject
nevertheless to its lien, if any, provided for in Section 5.8 hereof.  Notwithstanding replacement of the Trustee
pursuant to this Section 5.9 hereof, the Company’s obligations under Section
5.8 hereof shall continue for the benefit of the retiring Trustee with respect
to expenses, losses and liabilities incurred by it prior to such replacement.

 

Section 5.10.        Successor
Trustee by Merger, Etc.

 

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

 

Section 5.11.        Corporate
Trustee Required; Eligibility.

 

The Trustee shall at all times satisfy the requirements of Section
310(a)(1), (2) and (5) of the TIA.  The
Trustee shall at all times have (or, in the case of a corporation included in a
bank holding company system, the related bank holding company shall at all
times have), a combined capital and surplus of at least $50 million as set
forth in its (or its related bank holding company’s) most recent published
annual report of condition.  The Trustee
is subject to Section 310(b) of the TIA.

 

Section 5.12.        Collection
of Claims Against the Company.

 

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

 

44

 

ARTICLE 6                              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, SALE,
LEASE OR OTHER DISPOSITION

 

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

 

The Company shall not consolidate with or merge into any other Person
or convey, transfer, sell, lease or otherwise dispose of all or substantially
all of its properties and assets to any Person, and the Company shall not
permit any Person to consolidate with or merge into the Company or convey,
transfer, sell, lease or otherwise dispose of all or substantially all of its
properties and assets to the Company, unless:

 

(a)           in the event that the
Company shall consolidate with or merge into another Person or convey,
transfer, sell, lease or otherwise dispose of all or substantially all of its
properties or assets to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by such
conveyance, transfer, sale, lease or disposition all or substantially all of
the properties and assets of the Company shall be a Person organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia;

 

(b)           in the event that
the Company shall consolidate with or merge into another Person or convey,
transfer, sell, lease or otherwise dispose of all or substantially all of its
properties or assets to any Person, and the entity surviving such transaction
or transferee entity is not the Company, then such surviving or transferee
entity shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the Trustee,
the due and punctual payment of all and any amounts when due on all the
Securities and the performance of every covenant of this Indenture, the
Securities and the Registration Rights Agreement (to the extent any obligations
of the Company thereunder remain outstanding) on the part of the Company to be
performed or observed and shall have provided for conversion rights provided in
Article 12;

 

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

 

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

 

Section 6.2.           Successor
Corporation Substituted.

 

Upon any consolidation or merger by the Company with or into any other
Person or any conveyance, transfer, sale, lease or other disposition of all or
substantially all of the

 

45

 

properties and assets of the Company to any Person, in accordance with
Section 6.1 hereof, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer, sale, lease
or disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company
herein.  In the event of any such
conveyance, transfer, sale or disposition to the Company (which term shall for
this purpose mean the Person named as the “Company” in the first paragraph of
this Indenture or any successor Person which shall theretofore become such in
the manner described in Section 6.1 hereof), except in the case of a lease to
another Person, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities and may be dissolved and
liquidated.

 

ARTICLE 7                               AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 7.1.           Without
Consent of Holders of Securities.

 

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

 

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

 

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

 

(c)           provide for
conversion rights of Holders if any reclassification or change of the Company’s
Common Stock or any consolidation, merger or sale of all or substantially all
of the Company’s assets occurs;

 

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

 

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

 

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

 

(g)           make any changes or
modifications to this Indenture necessary in connection with the registration
of any Securities under the Securities Act as contemplated in the Registration
Rights Agreement; provided, however, that such change or modification pursuant
to this clause (g) does not, in the good faith opinion of the Board of Directors
(as evidenced by a Board Resolution) and the Trustee, adversely affect the
interests of the Holders in any material respect;

 

(h)           cure any ambiguity
or correct or supplement any provision herein which may be inconsistent with
any other provision herein or which is otherwise defective, or

 

46

 

make any other
provisions with respect to matters or questions arising under this Indenture
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of this Indenture; provided, however, that such
action pursuant to this clause (h) does not, in the good faith opinion of the
Board of Directors (as evidenced by a Board Resolution) and the Trustee,
adversely affect the interests of the Holders in any material respect;

 

(i)            add guarantees with
respect to the Securities; or

 

(j)            add or modify any
other provisions herein with respect to matters or questions arising hereunder
which the Company and the Trustee may deem necessary or desirable and which
will not adversely affect the interests of the Holders.

 

Section 7.2.           With
Consent of Holders of Securities.

 

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

 

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

 

(a)           change the Stated
Maturity of the Principal of or the date any installment of Interest,
Contingent Interest or Additional Amounts, if any, is due on any Security;

 

(b)           reduce the Principal
or any premium, Repurchase Price or Redemption Price of or Interest (including
Contingent Interest) or Additional Amounts, if any, on any Security;

 

(c)            change the currency
of any amount owed or owing under the Security or any Interest (including
Contingent Interest) or Additional Amounts thereon from U.S. Dollars;

 

(d)            impair the right of
any Holder to institute suit for the enforcement of any payment in or with
respect to any Security;

 

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

 

(f)            except as otherwise
permitted or contemplated by the Indenture, adversely affect the Purchase Right
of the Holders as provided in Article 11 or the right of the Holders to convert
any Security as provided in Article 12;

 

(g)           modify the
provisions of Article 10 in a manner adverse to the Holders;

 

47

 

(h)           modify any of the
provisions of this Section, or reduce the percentage of voting interests
required to waive a default, except 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;

 

(i)             reduce the
percentage of the principal amount of the Outstanding Securities the consent of
whose Holders is required for any supplemental indenture or the consent of
whose Holders is required for any waiver provided for in this Indenture; or

 

(j)            alter the manner of
calculation or rate of accrual of Interest, Contingent Interest or Additional
Amounts, if any, on any Security or extend the payment of any such amount.

 

It shall not be necessary for any Act of Holders under this Section 7.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

 

Section 7.3.           Compliance with Trust Indenture Act.

 

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

 

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

 

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

 

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

 

Section 7.5.           Notation
on or Exchange of Securities.

 

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

 

(a)           the Trustee may require the Holder of
a Security to deliver such Securities to the Trustee, the Trustee may place an
appropriate notation on the Security about the changed

 

48

 

terms and return it to the Holder and the
Trustee may place an appropriate notation on any Security thereafter
authenticated; or

 

(b)           if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.

 

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

 

Section
7.6.           Trustee
to Sign Amendment, Etc.

 

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

 

Section 7.7.           Effect
of Amendment.

 

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

 

ARTICLE 8                                                                               [INTENTIONALLY OMITTED]

 

ARTICLE 9                               COVENANTS

 

Section
9.1.           Payment
of Principal, Redemption Price, Repurchase Price and Interest.

 

The Company will duly and punctually pay the Principal of, Interest,
Contingent Interest and Additional Amounts, if any, on the Securities when and
if at any time any such foregoing amounts are due and payable in accordance
with the terms of the Securities and this Indenture.  The Company will deposit or cause to be deposited with the
Trustee as directed by the Trustee, no later than the day of the Stated
Maturity of any Security, the date of any installment of Interest, Contingent
Interest or Additional Amounts, if any, or any other date such payment is otherwise
due.  If Additional Amounts are payable
by the Company pursuant to the Registration Rights Agreement, the Company shall
deliver to the Trustee a certificate to such effect stating (i) the amount
of Additional Amounts so payable and (ii) the date on which such
Additional Amounts are payable.  Unless
and until a Responsible Officer of the Trustee receives such a certificate, the
Trustee may assume without inquiry that no Additional Amounts are payable.

 

 

49

 

Section 9.2.           Maintenance of Offices or Agencies.

 

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

 

(a)           presented or
surrendered for payment;

 

(b)           surrendered for
registration of transfer or exchange;

 

(c)           surrendered for
conversion;

 

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

 

The Company will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange, where Securities
may be surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served.  The Company will give prompt written notice
to the Trustee, and notice to the Holders in accordance with Section 14.2
hereof, of the appointment or termination of any such agents and of the
location and any change in the location of any such office or agency.

 

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

 

Section 9.3.           Corporate
Existence.

 

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

 

Section
9.4.           Reports.

 

(a)           The Company, shall deliver to the
Trustee within 15 days after it files them with the Commission copies of Forms
10-K and 10-Q which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act; provided, however, the
Company shall not be required to deliver to the Trustee any materials for which
the Company has sought and received confidential treatment by the SEC.  The Company also shall comply with the other
provisions of Section 314(a) of the TIA.

 

(b)           If at any time the Company is not
subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder, the Company, will promptly furnish or cause to be furnished to such
Holder or to a prospective purchaser of such Security designated by such

 

50

 

Holder, as applicable, the information, if
any, required to be delivered by it pursuant to Rule 144A(d)(4) under the
Securities Act to permit compliance with Rule 144A in connection with the
resale of such Security; provided, however, that the Company shall
not be required to furnish such information in connection with any request made
on or after the date which is two years from the later of the date such
security was last acquired from the Company or an “affiliate” (as defined under
Rule 144 under the Securities Act) of the Company.

 

Section 9.5.           Compliance
Certificate.

 

The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officer’s Certificate signed by two
Officers of the Company stating that, in the course of the performance by the
signers of their duties as Officers of the Company, they would normally have
knowledge of any failure by the Company to comply with all conditions, or
Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or
Default and, if so, specifying each such failure or Default and the nature
thereof.  In the event an Officer of the
Company comes to have actual knowledge of a Default, regardless of the date,
the Company shall deliver an Officers’ Certificate to the Trustee within five
Business Days of obtaining such actual knowledge specifying such Default and
the nature and status thereof.

 

When any Registration Default (as defined in the Registration Rights
Agreement) occurs, the Company shall promptly deliver to the Trustee by
registered or certified mail or by telegram, telex or facsimile transmission an
Officer’s Certificate specifying the nature of such Registration Default. In
addition, the Company shall deliver to the Trustee on each Interest Payment
Date during the continuance of a Registration Default and on the first Interest
Payment Date following the cure of a Registration Default (to the extent that
Additional Amounts are then due and payable on such Interest Payment Date), an
Officer’s Certificate specifying the amount of Additional Amounts which have
accrued and which are then owing under the Registration Rights Agreement.

 

Section 9.6.                   Resale of Certain Securities.

 

During the period of two years after the last date of original issuance
of any Securities, the Company shall not, and shall not register for transfer
any sales by any of its “affiliates” (as defined under Rule 144 under the
Securities Act) of any Securities, or shares of Common Stock issuable upon
conversion of the Securities, which constitute “restricted securities” under
Rule 144, except pursuant to an effective registration statement under the
Securities Act; provided, however, that the Company may register
for transfer sales of Securities, or shares of Common Stock issuable upon
conversion of the Securities, which constitute “restricted securities” under
Rule 144, if the transferee thereof acknowledges that such Securities are
Transfer Restricted Securities (as defined in the Registration Rights
Agreement).  The Trustee shall have no responsibility or liability in
respect of the Company’s performance of its agreement in the preceding
sentence.

 

51

 

ARTICLE 10                       REDEMPTION OF SECURITIES

 

Section 10.1.        Optional
Redemption.

 

At any time on or after March 20, 2008, except for Securities that it
is required to purchase pursuant to Section 11.1 or required to convert
pursuant to Section 12.1, the Company may, at its option, redeem the Securities
in whole at any time or in part from time to time, on any date prior to the
Stated Maturity of such Securities, upon notice as set forth in Section 10.4,
at the Redemption Price equal to 100.00% of the principal amount of the
Securities.  In addition, the Company
will pay Interest (including Contingent Interest) on the Securities being
redeemed, including those Securities which are converted into Common Stock
after the date the notice of the redemption is mailed and prior to the
Redemption Date.  This Interest will
include Interest accrued and unpaid to, but excluding, the Redemption Date.  If the Redemption Date is an Interest
Payment Date, the Company will pay the Interest to the Holder of record on the
corresponding Regular Record Date, which may or may not be the same Person to
whom the Company will pay the Redemption Price.

 

If the Company exercises its option to redeem the Securities pursuant
to this Section 10.1, a Holder may nevertheless exercise its right to have its
Securities purchased pursuant to Section 11.1, if applicable, or to convert
such Securities pursuant to Article 12 even if such Securities are not
otherwise convertible at such time, in each case, until the close of business
on the day that is one Business Day immediately preceding the Redemption Date.

 

The Company shall pay Interest, Contingent Interest or Additional
Amounts, if any, to the Holder of the Securities called for redemption pursuant
to Section 10.1 (including those Securities which are converted into Common
Stock after the date the notice of the redemption is mailed and prior to the
Redemption Date) accrued but not paid to, but excluding, the Redemption Date
pursuant to Section 2.1(f)(ii); provided,
however, that if the Redemption Date is an Interest Payment Date,
the Company shall pay the Interest (including Contingent Interest) to the
Holder of the Security at the close of business on such Interest Payment Date.

 

Section 10.2.        Notice
to Trustee.

 

If the Company elects to redeem Securities pursuant to the provisions
of Section 10.1 hereof (such election to be ordered by a Board Resolution), it
shall notify the Trustee at least 20 days prior to the intended Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee) of (i) such
intended Redemption Date, (ii) the principal amount of Securities to be
redeemed and (iii) the CUSIP numbers of the Securities to be redeemed.

 

Section 10.3.        Selection
of Securities to Be Redeemed.

 

If fewer than all the Securities are to be redeemed, the Trustee shall
select the particular Securities to be redeemed from the Outstanding Securities
by a method that complies with the requirements of any exchange on which the
Securities are listed, or, if the Securities are not listed on an exchange, on
a pro
rata basis or by lot or in accordance with any other method the
Trustee considers fair and appropriate. 
The Trustee may select for redemption portions of the principal amount
of Securities that have denominations larger than $1,000.

 

Securities and portions thereof that the Trustee selects shall be in
principal amounts in integral multiples of $1,000.  Provisions of this
Indenture that apply to Securities

 

52

 

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.

 

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

 

If any Security selected for partial redemption is converted or elected
to be purchased in part before termination of the conversion right or Purchase
Right with respect to the portion of the Security so selected, the converted or
purchased portion of such Security shall be deemed to be the portion selected
for redemption; provided, however, that the Holder of such Security so
converted or purchased and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion or
purchase of such Security subject to Section 2.1(f).  Securities which have been converted or purchased during a
selection of Securities to be redeemed may be treated by the Trustee as Outstanding
for the purpose of such selection.

 

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

 

Section 10.4.        Notice
of Redemption.

 

Notice of redemption shall be given in the manner provided in Section
14.2 to the Holders of Securities to be redeemed.  Such notice shall be given no less than 20 and no more than 60
days prior to the intended Redemption Date.

 

All notices of redemption shall state:

 

(a)           such intended
Redemption Date;

 

(b)           the Redemption Price
and Interest, Contingent Interest or Additional Amounts, if any, accrued and
unpaid to, but excluding, the Redemption Date, if any;

 

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

 

(d)           that on the
Redemption Date the Redemption Price and Interest, Contingent Interest or
Additional Amounts, if any, accrued and unpaid to, but excluding, the
Redemption Date, if any, will become due and payable upon each such Security to
be redeemed;

 

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

 

53

 

(f)            the place or places
where such Securities are to be surrendered for payment of the Redemption Price
and accrued and unpaid Interest, Contingent Interest or Additional Amounts, if
any; and

 

(g)           the CUSIP number of
the Securities.

 

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

 

Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company’s written request
delivered at least 20 days prior to the date of the mailing of such Notice
(unless a shorter period shall be acceptable to the Trustee), by the Trustee in
the name of and at the expense of the Company.

 

Section 10.5.        Effect
of Notice of Redemption.

 

Notice of redemption having been given as provided in Section 10.4
hereof, the Securities so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified and from and after
such date (unless the Company shall default in the payment of the Redemption
Price and accrued and unpaid Interest (including Contingent Interest)) such
Securities shall cease to bear Interest (including Contingent Interest).  Upon surrender of any such Security for
redemption in accordance with such notice, such Security shall be paid by the
Company at the Redemption Price; provided, however, the installments of
Interest (including Contingent Interest) on Securities whose Stated Maturity is
prior to or on the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Date.

 

If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear Interest (including Contingent Interest) from the Redemption
Date at the Interest Rate.

 

Section 10.6.        Deposit
and Payment of Redemption Price.

 

Prior to or on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.6) an amount of money in immediately
available funds sufficient to pay the Redemption Price, and accrued and unpaid
Interest, Contingent Interest or Additional Amounts, if any, in respect of all
the Securities to be redeemed on that Redemption Date from the last Interest
Payment Date to but not including the Redemption Date, other than any
Securities called for redemption on that date which have been converted prior
to the date of such deposit, and accrued and unpaid Interest (including
Contingent Interest) on such Securities. 
The Trustee and Paying Agent shall then cause such funds to be paid to
the Holders of the Securities being redeemed in accordance with this Article.

 

If any Security delivered for redemption shall not be so redeemed by
payment to the Holders thereof on the Redemption Date, the principal amount of
such Security shall, until it

 

54

 

is redeemed, bear Interest (including Contingent Interest) on the
Redemption Date to but not including the actual date of redemption at the
applicable Interest Rate, and each such Security shall remain convertible into
shares of Common Stock pursuant to Article 12 until such Security shall have
been so redeemed.

 

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

 

Section 10.7.        Securities
Redeemed in Part.

 

Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 9.2 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or the Holder’s
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of any authorized denomination as
requested by such Holder in principal amount equal to and in exchange for the
unredeemed portion of the Security so surrendered, provided that no single Security may be purchased in part
unless the portion of the principal amount of such Security to be Outstanding
after such purchase is equal to $1,000 or an integral multiple thereof.

 

ARTICLE 11                       PURCHASE AT THE OPTION OF A HOLDER UPON SPECIFIC REPURCHASE DATES OR
CHANGE OF CONTROL

 

Section
11.1.        Purchase
Right.

 

(a)           On March 15 of 2010, 2015 and 2018,
(each, a “Specific Repurchase Date”)
each Holder shall have the right (the “Purchase Right”),
at the Holder’s option, to require the Company to repurchase for cash, and upon
the exercise of such right the Company shall purchase, all of such Holder’s
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple
thereof (provided that no single
Security may be purchased in part unless the portion of the principal amount of
such Security to be Outstanding after such purchase is equal to $1,000 or an
integral multiple thereof), at a purchase price equal to 100% of the principal
amount of the Securities to be purchased (the “Repurchase
Price”), plus accrued and unpaid Interest (including Contingent
Interest) on those Securities to, but excluding the Specific Repurchase
Date.  Holders may submit their
Securities for repurchase to the Paying Agent at any time from the opening of
business on the date that is 20 Business Days prior to the applicable Specific
Repurchase Date until the close of business on the Specific Repurchase Date.

 

55

 

(b)           In the event that a Change of Control
(together with the Specific Repurchase Dates, “Repurchase Events”) shall occur, each Holder shall have the
Purchase Right, at the Holder’s option, but subject to the provisions of
Section 11.2 hereof, to require the Company to purchase for cash, and upon the
exercise of such right the Company shall purchase, all of such Holder’s
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple
thereof as directed by such Holder pursuant to Section 11.3 (provided  that no single Security may be purchased in part unless the
portion of the principal amount of such Security to be Outstanding after such
purchase is equal to $1,000 or an integral multiple thereof), on the date (the Change of Control Purchase Date”; together with the Specific
Repurchase Date, the “Repurchase Date”)
that is a Business Day no earlier than 20 Business Days and no later than 60
days after the date of the Repurchase Event Notice at the Repurchase Price plus
accrued and unpaid Interest (including Contingent Interest) or Additional
Amounts, if any, to, but excluding, the Change of Control Purchase Date; provided, however, that installments of
Interest (including Contingent Interest) on Securities whose Stated Maturity is
prior to or on the Change of Control Purchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such on the relevant Regular Record Date according to their terms and the
provisions of Section 2.1 hereof.  If
the Holders have a Repurchase Right pursuant to this Section 11.2(b), the
Company shall issue a press release through Dow Jones & Company, Inc. or
Bloomberg Business News containing the relevant information and make such
information available on the Company’s web site or through another public
medium as the Company may use at such time.

 

Section 11.2.        Repurchase
Event Notice.

 

No later than 20 Business Days after the occurrence of a Repurchase
Event, the Company shall mail a written notice of the Repurchase Event (the “Repurchase Event Notice”) by first-
class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law) pursuant to Section 14.2.  The Repurchase Event Notice shall include a form of notice (the “Repurchase Event Purchase Notice”) to be
completed by the Holder and delivered to the Paying Agent pursuant to Section
11.3, and shall state the following:

 

(a)           that it is a
Repurchase Event Notice pursuant to this Section;

 

(b)           the events causing a
Repurchase Event and the date of such Repurchase Event;

 

(c)            the procedures with
which such Holder must comply to exercise its right to have its Securities
purchased pursuant to Section 11.1, including the date by which the completed
Repurchase Event Purchase Notice pursuant to Section 11.3 and the Securities
the Holder elects to have purchased pursuant to Section 11.1 must be delivered
to the Paying Agent in order to have such Securities purchased by the Company
pursuant to Section 11.1, the name and address of the Paying Agent and that the
Securities as to which a Repurchase Event Purchase Notice has been given may be
converted, if they are otherwise convertible pursuant to Article 12, only if
the completed and delivered Repurchase Event Purchase Notice has been withdrawn
in accordance with the terms of  the
Indenture, the Holder’s conversion rights pursuant to Article 12 and the
Conversion Rate then in effect and any adjustments thereto;

 

56

 

(d)            the Repurchase Date
and the Repurchase Price, if applicable;

 

(e)           that, unless the
Company defaults in making payment of such Repurchase Price, Interest,
Contingent  Interest or Additional
Amounts, if any, on the Securities surrendered for purchase by the Company will
cease to accrue on and after the Repurchase Date, if applicable;

 

(f)            the CUSIP number of
the Securities; and

 

No failure by the Company to give the foregoing Repurchase Event Notice
shall limit any Holder’s right to exercise its rights pursuant to Section 11.1
or affect the validity of the proceedings for the purchase of its Securities
hereunder.

 

Section 11.3.        Delivery
of Repurchase Event Purchase Notice; Form of Repurchase Event Purchase Notice;
Withdrawal of Repurchase Event Purchase Notice.

 

(a)           The Company shall
deliver, or cause the Trustee or Paying Agent, to deliver, to all Holders (and
beneficial holders of the Securities) a form of Repurchase Event Purchase
Notice, which with respect to Holders’ Purchase Rights set forth in Section
11.1, shall be delivered to such Holders at least 20 Business Days prior to the
Repurchase Event Purchase Date and, as set forth in Section 11.2, shall be
included in the Repurchase Event Notice; provided
that the delivery of such form of Repurchase Event Purchase Notice to the
Holders shall be made in the Company’s name and at the Company’s expense and
the text of such form of Repurchase Event Purchase Notice shall be prepared by
the Company pursuant to clause (b) of this Section.

 

(b)           The form of
Repurchase Event Purchase Notice shall provide instructions regarding
procedures with which Holders must comply to exercise their rights pursuant to
Section 11.1 and the completion of the Repurchase Event Purchase Notice
and also shall state:

 

(i)            that it is the
Repurchase Event Purchase Notice pursuant to Sections 11.2 and 11.3 of the
Indenture and must be completed by the Holder and delivered to the Paying Agent
(and any beneficial holder of securities), together with the delivery of the
Holder’s Securities for which the Holder will exercise its Purchase Rights
pursuant to Section 11.1, for such Holder to receive the Repurchase Price;

 

(ii)           the name and
address of the Paying Agent to, and the date by, which the completed Repurchase
Event Purchase Notice and Securities must be delivered in order for the Holder
to receive the applicable purchase price;

 

(iii)           the portion of the
principal amount of the Security which the Holder will deliver to be purchased,
which portion must be in Principal Amounts at Maturity of $1,000 or an integral
multiple thereof;

 

(iv)           any other
procedures then applicable that the Holder must follow to exercise rights under
Article 11 and a brief description of those rights;

 

(v)           the Repurchase Date
and the Repurchase Price;

 

57

 

(vi)           the procedures with
which such Holder must comply to exercise its right to have its Securities
purchased pursuant to Section 11.1, including the date by which the completed
Repurchase Event Purchase Notice pursuant to Section 11.3 and the Securities
the Holder elects to have purchased pursuant to Section 11.1 must be delivered
to Paying Agent in order to have such Securities purchased by the Company
pursuant to Section 11.1, the name and address of the Paying Agent and that the
Securities as to which a Repurchase Event Purchase Notice has been given may be
converted, if they are otherwise convertible pursuant to Article 12, only if
the completed and delivered Repurchase Event Purchase Notice has been withdrawn
in accordance with the terms of the Indenture, the Holder’s conversion rights
pursuant to Article 12, the Conversion Rate then in effect and any adjustments
thereto;

 

(vii)         the Holder’s right
to withdraw a completed and delivered Repurchase Event Purchase Notice, the
procedures for withdrawing a Repurchase Event Purchase Notice, pursuant to
clause (c) below and that Securities as to which a completed and delivered
Repurchase Event Purchase Notice may be converted, if they are convertible only
in accordance with Article 12, if the applicable completed and delivered
Repurchase Event Purchase Notice has been withdrawn;

 

(viii)        that, unless the
Company defaults in making payment on Securities for which a Repurchase Event
Purchase Notice has been submitted, Interest, Contingent Interest or Additional
Amounts, if any, on such Securities will cease to accrue on the Repurchase
Event Purchase Date; and

 

(ix)            the CUSIP number
of the Securities.

 

(c)            Notwithstanding anything herein to
the contrary, any Holder which has delivered a completed Repurchase Event
Purchase Notice to the Paying Agent shall have the right to withdraw such
Repurchase Event Purchase Notice by delivery of a written notice of withdrawal
delivered to the office of the Paying Agent in accordance with the Repurchase
Event Purchase Notice at any time prior to the close of business on the
Repurchase Date specifying:

 

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

 

(ii)           the principal
amount of the Security with respect to which such notice of withdrawal is being
submitted; and

 

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

 

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

 

58

 

Section 11.4.        Exercise
of Purchase Rights.

 

To exercise a Purchase Right pursuant to Section 11.1, a Holder must
deliver to the Trustee at its offices on or prior to the Repurchase Date the
following:

 

(a)           a completed
Repurchase Event Purchase Notice, the form of which is provided in Exhibit B
hereto; and

 

(b)           the Securities or
cause such Securities to be delivered through the facilities of the Depositary,
as applicable, with respect to which the Purchase Right is being exercised,
with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer, in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing.

 

Section 11.5.        Deposit and Payment of the Purchase Price

 

(a)           If a Holder has exercised its rights
pursuant to Section 11.1 and has satisfied the conditions for the exercise of
such rights in accordance with Section 11.4, then the Company shall, prior to
10:00 a.m. (New York City time) on the Business Day following the Repurchase
Date, deposit with the Trustee or with the Paying Agent (or, if the Company or
a Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.4) an amount of
money in immediately available funds, if deposited on such Business Day,
sufficient to pay the aggregate Repurchase Price of all the Securities or
portions thereof which are to be purchased on such purchase date.  The Trustee or Paying Agent, as applicable,
shall pay the Holder the applicable Repurchase Price multiplied by the
principal amount of Securities for which such rights were exercised on the
Change of Control Purchase Date.

 

(b)           There shall be no purchase of any
Securities pursuant to Section 11.1 if there has occurred (prior to, on or
after, as applicable, the giving, by the Holders of such Securities, of the
required Repurchase Event Purchase Notice) and is continuing an Event of
Default (other than a default in the payment of the Repurchase Event Price with
respect to such Securities). The Paying Agent will promptly return to the
respective Holders thereof any Securities (i) with respect to which a
Repurchase Event Purchase Notice has been withdrawn in compliance with this Indenture,
or (ii) held by it during the continuance of an Event of Default (other than a
default in the payment of the Repurchase Price with respect to such Securities)
in which case, upon such return, the Repurchase Event Purchase Notice with
respect thereto shall be deemed to have been withdrawn.

 

(c)           If any Security delivered for
purchase pursuant to Section 11.1 shall not be so paid on the Repurchase Date,
the principal amount of such Security shall, until it is paid, bear Interest
(including Contingent Interest) from the purchase date to but not including the
date of actual payment hereunder at the applicable Interest Rate, and each such
Security shall remain convertible into shares of Common Stock pursuant to
Article 12 until such Security shall have been paid.

 

59

 

Section 11.6.        Effect
of Delivery of Repurchase Event Purchase Notice and Purchase.

 

(a)           Upon receipt by the
Paying Agent of a Repurchase Event Purchase Notice, the Holder of the Security
in respect of which such Repurchase Event Purchase Notice was delivered shall
(unless such Repurchase Event Purchase Notice is withdrawn pursuant to Section
11.3(c)) thereafter be entitled to receive solely the Repurchase Price with
respect to such Security, and, if applicable, any accrued and unpaid Interest
(including Contingent Interest) pursuant to Section 2.1(f).  Securities in respect of which a Repurchase
Event Purchase Notice has been delivered by the Holder thereof may not be
converted pursuant to Article 12 on or after the date of the delivery of such
Repurchase Event Purchase Notice unless such Repurchase Event Purchase Notice
which has been completed and delivered to the Paying Agent has first been
validly withdrawn pursuant to Section 11.3(c).

 

(b)           All Securities
delivered for purchase shall be canceled by the Trustee or Paying Agent, as
applicable.

 

Section 11.7.        Physical
Securities Purchased in Part.

 

Any Physical Security which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in principal amount equal to,
and in exchange for, the portion of the principal amount of the Security so
surrendered which is not purchased.

 

Section 11.8.        Covenant
to Comply With Securities Laws Upon Purchase of Securities.

 

When complying with the provisions of this Article 11 (provided that such offer or purchase
constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act at the time of such offer or purchase), the Company shall (a) comply
with Rule 13e- 4, Rule 14e-1 and any other tender offer rules under the
Exchange Act which may then be applicable, (b) file the related Schedule TO (or
any successor schedule, form or report) under the Exchange Act and (c)
otherwise comply with all federal and state securities laws so as to permit the
rights and obligations under this Article 11 to be exercised in the time and in
the manner specified in this Article 11.

 

Section 11.9.        Repayment to the Company. 
The Trustee and the Paying Agent shall return to the Company any cash
that remains unclaimed, together with interest or dividends, if any, thereon
(subject to the provisions of Section 5.4), held by them for the payment of the
Repurchase Price; provided, however, that to the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 11.5 exceeds the
aggregate Repurchase Price of the Securities or portions thereof which the
Company is obligated to purchase on the purchase date then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
such purchase date, the Trustee or Paying Agent, as applicable, shall return
any such excess to the Company together with interest or dividends, if any,
thereon, subject to the provisions of Section 5.4.

 

60

 

ARTICLE 12                       CONVERSION OF SECURITIES

 

Section
12.1.        Conversion
Right; Expiration of Conversion Right; Conversion Price.

 

(a)           Subject to and upon compliance with
the provisions of this Article, at the option of the Holder at any time and
from time to time, any Security or any portion of the principal amount thereof
which is an integral multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into duly authorized, fully paid
and nonassessable shares of Common Stock, at the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion:

 

(i)            during any
Conversion Period, if the Market Price of the Common Stock for at least 20
Trading Days in the 30 consecutive Trading Day period ending on the first day
of such Conversion Period was more than 125% of the Conversion Price in effect
on such 30th Trading Day (in the event that the Conversion Price on such
thirtieth Trading Day is not the same as the Conversion Price in effect for
each of such thirty Trading Days, the Conversion Agent shall make such
adjustments as it, in its discretion, deems appropriate in determining whether
the foregoing condition has been met);

 

(ii)           on or before March
15, 2018, during the five Business Day period following any 10 consecutive
Trading Day period in which the average Trading Price of the Securities for
such 10 Trading Day period was less than 105% of the average Conversion Value
of the Securities during the same period;

 

(iii)          at any time prior
to the close of business on the day that is one Business Day immediately
preceding the Redemption Date, if such Security has been called for redemption
pursuant to Article 10 hereof;

 

(iv)          during any period,
following the earlier of (a) the date the Securities are rated by both Standard
& Poor’s and Moody’s and (b) April 21, 2003, when the long-term credit
rating assigned to the Securities  by
either Standard & Poor’s or Moody’s is lower than “BB” or “Ba3”,
respectively, or either of these rating agencies does not have a rating then
assigned to the Securities for any reason, including any withdrawal or
suspension of a rating assigned to the Securities; or

 

(v)           as provided in
Section 12.1(b).

 

The Conversion Agent shall, on behalf of the Company, determine on a
daily basis whether the Securities shall be convertible as a result of the
occurrence of an event specified in clause (i) or clause (ii) above and, if the
Securities shall be so convertible, the Conversion Agent shall promptly deliver
to the Company and the Trustee written notice thereof.  Whenever the Securities shall become
convertible pursuant to Section 12.1, the Company or, at the Company’s
request, the Trustee in the name and at the expense of the Company, shall notify
the Holders of the event triggering such convertibility in the manner provided
in Section 14.2, and the Company shall also publicly announce such
information and publish it on the Company’s web site.  Any notice so given shall be conclusively presumed to have been
duly given, whether or not the Holder receives such notice.

 

61

 

(b)           In addition, in the event that:

 

(i)            (A) the Company
distributes to all holders of shares of Common Stock rights or warrants
entitling them (for a period expiring within 60 days of the record date for
such distribution) to subscribe for or purchase shares of Common Stock, at a price per share less than the Market
Price of the Common Stock at the time of the announcement of such distribution,
(B) the Company distributes to all holders of shares of Common Stock cash or
other assets, debt securities or rights or warrants to purchase the Company’s
securities, where the Fair Market Value (as determined by the Board of Directors)
of such distribution per share of Common Stock exceeds 5% of the Market Price
of a share of Common Stock on the Business Day immediately preceding the date
of declaration of such distribution or (C) a Change of Control occurs but the
Holders do not have the right to require the Company to purchase their
Securities as a result of such Change of Control, because of the provisions set
forth in Section 11, then, in each case, the Securities may be surrendered
for conversion at any time on and after the date that the Company gives notice
to the Holders of such right, which shall be not less than 20 days prior to the
Ex-Dividend Time for such distribution, in the case of clause (A) or (B), or
within 20 Business Days after the occurrence of the Change of Control, in the
case of clause (C), until (1) the earlier of the close of business on the
Business Day immediately preceding the Ex-Dividend Time or the date the Company
announces that such distribution will not take place, in the case of clause (A)
or (B), or (2) the earlier of 20 Business Days after the Company’s delivery of
the Repurchase Event Notice or the date the Company announces that the Change
of Control will not take place, in the case of clause (C).

 

(ii)           the Company
consolidates with or merges into another Person, or is a party to a binding
share exchange pursuant to which the shares of Common Stock would be converted
into cash, securities or other property as set forth in Section 12.5
hereof, then the Securities may be surrendered for conversion at any time from
and after the date which is 15 days prior to the date announced by the Company
as the anticipated effective time of such transaction until 15 days after the
actual date of such transaction, provided,
however, that at the effective time of a transaction described in
the immediately preceding clause, the right to convert a Security into Common
Stock will be changed into a right to convert a Security into the kind and
amount of cash, securities or other property which a Holder would have received
if such Holder had converted such Security immediately prior to such
transaction.

 

“Conversion Period” means
the period from and including the thirtieth Trading Day in a fiscal quarter to,
but not including, the thirtieth Trading Day in the immediately following
fiscal quarter.

 

“Conversion Value”, on any
day, means the product of the Market Price for the Common Stock multiplied by
the then-current Conversion Rate.

 

“Ex-Dividend Time” means,
with respect to any issuance or distribution on shares of Common Stock, the
first date on which the shares of Common Stock trade regular way on the
principal securities market on which the shares of Common Stock are then traded
without the right to receive such issuance or distribution.

 

62

 

The “Conversion Rate”, at
any time, shall equal (A) $1,000 divided  by the Conversion Price
at such time, rounded to three decimal places (rounded up if the fourth decimal
place thereof is 5 or more and otherwise rounded down).

 

(c)           The price at which shares of Common
Stock shall be delivered upon conversion (the “Conversion Price”) shall be initially equal to approximately
$40.05 per share of Common Stock, subject to adjustment, in certain instances,
as provided in Section 12.4.

 

(d)           No payment or adjustment will be made
for dividends on, or other distributions with respect to, any Common Stock
except as provided in this Article 12.

 

(e)           A Security in respect of which a
Holder has delivered a Repurchase Event 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
Section 11.3(c).

 

Section 12.2.        Exercise
of Conversion Right

 

(a)           To exercise the conversion right with
respect to a Physical Security, a Holder must (1) deliver a completed
conversion notice, the form of which is provided in Exhibit C, to the
Depositary stating that the Holder elects to convert such Physical Security or,
if less than the entire principal amount thereof is to be converted, the
portion thereof to be converted, (2) deliver duly signed completed conversion
notice and the Physical Security duly endorsed or assigned to the Company or in
blank, at the office of any Conversion Agent, (3) pay all Interest (including
Contingent Interest) to which the Holder is not entitled, if any, pursuant to
Section 2.1(f) and (4) pay any transfer taxes or other applicable taxes or
duties, if required.

 

(b)           To convert interests in a Global
Security issued pursuant to Rule 144A, a Holder must deliver to DTC the
appropriate instruction form for conversion pursuant to DTC’s conversion
program.

 

(c)           To the extent provided in Section
2.1(f), Securities surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (except in the case of any Security whose
Stated Maturity is prior to such Interest Payment Date) shall be accompanied by
payment by such Holder in immediately available funds to the Company of an
amount equal to the Interest (including Contingent Interest) to be received on
such Interest Payment Date on principal amount of Securities being surrendered
for conversion.  To the extent provided
in Section 2.1, Securities which have been called for redemption by the Company
in a notice of redemption pursuant to Section 10.4, and are converted prior to
redemption on a Redemption Date that is on or prior to the third Business Day
after such Interest Payment Date, shall not require such concurrent payment to
the Company upon surrender for conversion, and, if such Securities are
converted during the time period set forth in the preceding sentence, the
Holders of such converted Securities shall be entitled to receive (and retain)
any accrued interest on the principal amount of such surrendered Securities, if
any.

 

(d)           Securities shall be deemed to have
been converted immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance with

 

63

 

the foregoing provisions, and at such time
the rights of the Holders of such Securities as Holders shall cease, and the
Person or Persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock at such time.

 

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

 

(f)            As promptly as practicable on or
after the Conversion Date, the Company shall cause to be issued and delivered
to such Conversion Agent a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion of such Securities, together
with payment in lieu of any fraction of a share as provided in Section 12.3
hereof.  The Company hereby initially
appoints Wells Fargo Bank, National Association as the Conversion Agent.

 

(g)           A Security in respect of which a
Holder has delivered a Repurchase Event 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
Section 11.3(c).

 

(h)           If shares of Common Stock to be
issued upon conversion of a Restricted Security, or Securities to be issued
upon conversion of a Restricted Security in part only, are to be registered in
a name other than that of the Holder of such Restricted Security, such Holder
must deliver to the Conversion Agent a certificate in substantially the form
set forth in Exhibit C annexed hereto, dated the date of surrender of
such Restricted Security and signed by such Holder, as to compliance with the
restrictions on transfer applicable to such Restricted Security.  None of the Trustee, any Conversion Agent,
Registrar or Transfer Agent shall be required to register in a name other than
that of the Holder of shares of Common Stock or Securities issued upon
conversion of any such Restricted Security not so accompanied by a properly
completed certificate.

 

Section 12.3.        Fractions
of Shares.

 

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

 

64

 

Section 12.4.        Adjustment
of Conversion Price.

 

The Conversion Price shall be subject to adjustment, calculated in good
faith by the Company, from time to time as follows:

 

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

 

(i)            the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the Conversion Record Date fixed for such determination; and

 

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

 

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

 

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

 

(c)           In case the Company shall issue
rights or warrants (other than any rights or warrants issued pursuant to a
rights plan (commonly referred to as a “poison pill” plan) referred to in
Section 12.4(d)) to all holders of its outstanding shares of Common Stock
entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into shares of Common Stock) at a price per share (or
having a conversion price per share) less than the Current Market Price on the
Conversion Record Date fixed for the determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Conversion Record
Date by a fraction:

 

(i)            the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the Conversion Record Date, plus the number of shares which the
aggregate offering price of the total number of shares so offered for

 

65

 

subscription
or purchase (or the aggregate conversion price of the convertible securities so
offered) would purchase at such Current Market Price; and

 

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

 

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

 

(d)           In case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock shares of
any class of Capital Stock of the Company (other than any dividends or
distributions to which Section 12.4(a) applies) or evidences of its
Indebtedness, cash or other assets, including securities, but excluding (1) any
rights or warrants referred to in Section 12.4(c), (2) dividends or
distributions of stock, securities or other property or assets (including cash)
in connection with a reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance to which Section 12.5 applies,
(3) dividends and distributions paid exclusively in cash and (4) distributions
of Common Stock referred to in Section 12.4(a) (such Capital Stock, evidence of
its Indebtedness, cash, other assets or securities being distributed
hereinafter in this Section 12.4(d) called the “distributed assets”), then, in each such case, subject to
clause (ii) of this Section 12.4(d), the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Conversion Record Date with respect to such distribution by a fraction:

 

(i)            the numerator of
which shall be the Current Market Price on such date, less the Fair Market
Value (as determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) on such date of the portion of
the distributed assets so distributed applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding on
the Conversion Record Date); and

 

66

 

(ii)           the denominator of
which shall be such Current Market Price on such Conversion Record Date.

 

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

 

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

 

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 specified in
such rights or warrants or related instruments or agreements governing the same
(a “Trigger Event”):

 

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

 

(B)           are not exercisable; and

 

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

 

shall be deemed not to have
been distributed for purposes of this Section 12.4(d) (and no adjustment to the
Conversion Price under this Section 12.4(d) will be required) until the
occurrence of the earliest Trigger Event. 
If such right or warrant is subject to subsequent events, upon the
occurrence of which such right or warrant shall become exercisable to purchase
different distributed assets, evidences of Indebtedness or other assets or
entitle the Holder to purchase a different number or amount of the foregoing or
to purchase any of the foregoing at a different purchase price, then the
occurrence of each such event shall be deemed to be the date of issuance and
the Conversion Record Date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the Holder thereof); In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of
the type described in the preceding sentence) with respect thereto, that
resulted in an adjustment to the Conversion Price under this Section 12.4(d):

 

67

 

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

 

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

 

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

 

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

 

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

 

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

 

(B)                                any
shares of Common Stock included in such dividend or distribution shall not be
deemed “outstanding at the close of business on the date fixed

 

68

 

for such
determination” within the meaning of Section 12.4(a) and any reduction or
increase in the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection with such dividend
or distribution.

 

In the event
of any distribution referred to in Section 12.4(c) or 12.4(d), where, in the
case of a distribution described in Section 12.4(d), the Fair Market Value of
such distribution per share of Common Stock (as determined by the Board of
Directors) exceeds 5% of the Current Market Price on the Business Day
immediately preceding the declaration date for such distribution, then, if such
distribution would also trigger a conversion right under Section 12.1(b) or the
Securities are otherwise convertible pursuant to this Article 12, the Company
will be required to give notice to the Holders at least 20 days prior to the
Ex-Dividend Time for the distribution and, upon giving of notice, the
Securities may be surrendered for conversion at any time on and after the date
that the Company gives notice to the Holders of such conversion right, until
the close of business on the Business Day prior to the Ex-Dividend Time or
until the Company announces that such distribution will not take place.  No adjustment to the Conversion Price or the
ability of a Holder to convert will be made if the Holder will otherwise
participate in such distribution without conversion.

 

(e)           In case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock cash
(excluding any cash that is distributed upon a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.5 applies or as part of a distribution referred
to in Section 12.4(d)), in an aggregate amount that, combined together with:

 

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

 

(ii)           the aggregate of
any cash plus the Fair Market Value (as determined by the Board of Directors,
whose determination shall be conclusive and set forth in a Board Resolution) of
consideration payable in respect of any tender or exchange offer by the Company
or any of its Subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of such distribution and in respect of which
no adjustment pursuant to Section 12.4(f) has been made;

 

exceeds 5% of the product of
the Current Market Price on the Conversion Record Date with respect to such
distribution multiplied by the number of shares of Common Stock outstanding on
such Conversion Record Date or the date of payment for such distribution, then
and in each such case, immediately after the close of business on such date,
the Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on such Conversion Record Date by a fraction:

 

(A)          the numerator of
which shall be equal to the Current Market Price on the Conversion Record Date
less an amount equal to the quotient of (x)

 

69

 

the excess of
such combined amount over such 5% and (y) the number of shares of Common Stock
outstanding on the Conversion Record Date, and

 

(B)           the denominator of
which shall be equal to the Current Market Price on such Conversion Record
Date.

 

However, in
the event that the then Fair Market Value (as so determined) of the portion of
the securities so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price on the Conversion Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion of a Security (or any
portion thereof) the amount of cash such Holder would have received had such
Holder converted such Security (or portion thereof) immediately prior to such
Conversion Record Date.  In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.

 

(f)            In case a tender offer made by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
shall expire and such tender offer (as amended upon the expiration thereof)
shall require the payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer) of Purchased Shares) of an
aggregate consideration having a Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:

 

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

 

(ii)           the aggregate
amount of any distributions to all holders of the Company’s Common Stock made
exclusively in cash within 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to Section 12.4(e) has
been made,

 

exceeds 5% of the product of
the Current Market Price as of the last time (the “Expiration Time”) tenders could have been made pursuant to
such tender offer (as it may be amended) multiplied by the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date
of the Expiration Time by a fraction:

 

(A)          the numerator of
which shall be the number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time

 

70

 

multiplied by
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time; and

 

(B)           the denominator
shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the “Purchased Shares”) and (y) the product of
the number of shares of Common Stock outstanding (less any Purchased Shares) on
the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time.

 

Such reduction (if any) shall
become effective immediately prior to the opening of business on the day
following the Expiration Time.  In the
event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made.  If the application of this Section 12.4(f)
to any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 12.4(f).

 

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

 

(i)            “Current Market Price” shall mean the average of
the daily Trading Prices per share of Common Stock (or such other security as
specified herein) for the ten consecutive Trading Days immediately prior to the
date in question; provided, however, that if:

 

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

 

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

 

71

 

the Conversion
Price is so required to be adjusted as a result of such other event; and

 

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

 

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

 

(1)           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
Trading Price was obtained without the right to receive such issuance or
distribution;

 

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

 

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

 

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

 

72

 

(ii)           “Fair Market Value” shall mean, if there is
a current market for the asset, debt or transaction in question, the amount
that a willing buyer would pay a willing seller in an arm’s length transaction
or, in the absence of a current market for such asset, debt or transaction, the
amount determined in good faith by the Board of Directors that represents its
determination of the fair market value of the asset.

 

(iii)          “Conversion 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).

 

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

 

(h)           No adjustment need be made for (i) a
transaction referred to in Sections 12.4 or 12.5 if Holders participate in the
transaction without conversion on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and
notice on which holders of shares of Common Stock participate in the
transaction; (ii) the issuance and distribution of rights to purchase shares of
Common Stock pursuant to (A) a Company plan for reinvestment of dividends or
interest, (B) a change in the par value or no par value of the shares of Common
Stock or (C) to the extent the Securities become convertible pursuant to this
Article 12 in whole or in part into cash, with respect to such cash after such
cash is distributed to the Holders in satisfaction of such conversion right.

 

(i)            To the extent permitted by
applicable law, the Company from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least 20 days and the
reduction is irrevocable during the period and the Board of Directors
determines in good faith that such reduction would be in the best interests of
the Holders, which determination shall be conclusive and set forth in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Trustee and the Conversion Agent a
notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

 

(j)            No adjustment in the Conversion
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 12.4(j) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this Article 12 shall
be made by the Company in good faith and shall be made to the nearest cent or
to the nearest one hundredth of a share, as applicable.  No adjustment need be made for a change in
the par value or no par value of the Common Stock.

 

73

 

(k)           No adjustment in Conversion Price
shall be required if the Fair Market Value of any assets, debt securities or
rights, warrants or options to purchase the securities of the Company,
including but not limited to Common Stock, in each case applicable to each
share of Common Stock are distributed to the Company’s stockholders and such
Fair Market Value either equals or exceeds the Current Market Price or such
Current Market Price exceeds the such Fair Market Price Value by an amount not
exceeding $1.00; provided, however, that any adjustments which by
reason of this Section 12.4(k) are not required to be made shall be distributed
upon conversion of any Security in an amount of assets, securities or rights,
warrants or options comprising the distribution that a Holder would have
received if such Holder had converted such Security immediately prior to the
Conversion Record Date.

 

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

 

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

 

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

 

(o)           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 a Subsidiary, then the Conversion Price shall be
reduced so that the same shall be equal to the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business on
the Conversion Record Date with respect to such distribution by a fraction:

 

(i)            the numerator of
which shall be the Current Market Price of the shares of Capital Stock of such
Subsidiary (as determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution), measured from the date of
such distribution; and

 

74

 

(ii)           the denominator of
which shall be the Current Market Price of the Company’s common stock, measured
from the date of such distribution.

 

(p)           If the Company
adjusts the Conversion Price pursuant to this Section 12.4, the Company shall
issue a press release through Dow Jones & Company, Inc. or Bloomberg
Business News containing the relevant information and make such information
available on the Company’s web site or through another public medium as the
Company may use at such time.

 

Section
12.5.        Consolidation
or Merger of the Company.

 

If any of the
following events occurs, namely:

 

(a)           any reclassification
or change of the outstanding Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) as a result of which holders of Common
Stock shall be entitled to receive 
Capital Stock, securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock;

 

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

 

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

 

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, if such
supplemental indenture is then required to so comply) providing that such
Securities shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance had such Securities
been converted into Common Stock immediately prior to such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance assuming such holder of Common Stock did not exercise its rights of
election, if any, as to the kind or amount of securities, cash or other
property receivable upon such merger, consolidation, statutory share exchange,
sale or conveyance (provided that
if the kind or amount of securities, cash or other property receivable upon
such merger, consolidation, statutory share exchange, sale or conveyance is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised (“Non-Electing
Share”), then for the purposes of this Section 12.5, the kind
and amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide for adjustments which
shall be as

 

75

 

nearly equivalent as may be
practicable to the adjustments provided for in this Article 12.  If, in the case of any such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, the stock or other securities and assets receivable
thereupon by a holder of Common Stock includes shares of stock or other
securities and assets of a Person other than the successor or purchasing
Person, as the case may be, in such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, then
such supplemental indenture shall also be executed by such other Person and
shall contain such additional provisions to protect the interests of the
Holders as the Board of Directors shall reasonably consider necessary by reason
of the foregoing, including to the extent practicable the provisions providing
for the Purchase Rights set forth in Article 11 hereof.

 

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

 

The above
provisions of this Section 12.5 shall similarly apply to successive
reclassifications, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.

 

If this
Section 12.5 applies to any event or occurrence, Section 12.4 shall
not apply.

 

Section
12.6.        Notice
of Adjustments of Conversion Price.

 

Whenever the
Conversion Price is adjusted as herein provided (other than in the case of an
adjustment pursuant to the second paragraph of Section 12.4(i) for which the
notice required by such paragraph has been provided), the Company shall
promptly file with the Trustee and any Conversion Agent other than the Trustee
an Officers’ Certificate setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is
based.  Promptly after delivery of such
Officers’ Certificate, the Company shall prepare a notice or press release
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective, shall issue such notice or press release through Dow Jones &
Company Inc. or Bloomberg Business News and shall make the information
available on the Company’s website or through another public medium as the Company
may use at such time.  Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.

 

Section
12.7.        Notice
Prior to Certain Actions.

 

In case at any
time after the date hereof:

 

(a)           the Company shall
become party to a consolidation or merger for which approval of any
stockholders of the Company is required, or enters into the sale or conveyance
to another Person or entity or group of Persons or entities acting in concert
as a partnership, limited partnership, syndicate or other group (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
all or substantially all of the property and assets of the Company;

 

76

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
12.8.        Company
to Reserve Common Stock.

 

The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, for the purpose of effecting the

 

77

 

conversion of the Securities,
the full number of shares of fully paid and nonassessable Common Stock then
issuable upon the conversion of all Outstanding Securities.

 

Section
12.9.        Common
Stock to be Fully Paid and Nonassessable.

 

The Company
covenants that all Common Stock which may be issued upon conversion of
Securities will upon issue be fully paid and nonassessable and, except as
provided in Section 12.10, the Company will pay all taxes, liens and charges
with respect to the issue thereof.

 

Section
12.10.      Taxes
on Conversions.

 

Except as
provided in the next sentence, the Company will pay any and all taxes (other
than taxes on income) and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant to
Article 12.  A Holder delivering a
Security for conversion shall be liable for and will be required to pay any tax
or duty which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless the Person requesting such issue has paid to the Company
the amount of any such tax or duty, or has established to the satisfaction of
the Company that such tax or duty has been paid.

 

Section 12.11.      Cancellation of Converted Securities.

 

All Securities
delivered for conversion shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee.

 

Section 12.12.      Responsibility of Trustee for Conversion
Provisions.

 

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

 

78

 

ARTICLE 13  [INTENTIONALLY
OMITTED]

 

ARTICLE 14     OTHER
PROVISIONS OF GENERAL APPLICATION

 

Section 14.1.        Trust Indenture Act Controls.

 

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

 

Section
14.2.        Notices.

 

Any notice or
communication to the Company or the Trustee is duly given if in writing (which
may be by facsimile with the original to follow) and delivered in person or
mailed by first-class mail to the address set forth below:

 

(a)           if to the Company:

 

Watson
Pharmaceuticals, Inc.

311 Bonnie
Circle

Corona,
California 92880

Attention:
General Counsel

Fax:  (909) 270-1096

Telephone:  (909) 493-5300

 

With a copy
to:

 

Latham &
Watkins LLP

650 Town
Centre Drive, 20th Floor

Costa Mesa, California
92626-1925

Attention:  Charles K. Ruck, Esq.

Fax:  (714) 755-8290

Telephone:  (714) 755-8245

 

(b)           if to the Trustee:

 

Wells Fargo
Bank, National Association

707 Wilshire
Boulevard, 17th Floor

Los Angeles,
California 90017

Attn:  Jeanie Mar, Vice President

Fax:(213)
614-3355

Telephone:
(213) 614-3349

 

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

 

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

 

79

 

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

 

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

 

Section
14.3.        Communication
by Holders with Other Holders.

 

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

 

Section
14.4.        Acts
of Holders of Securities.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent or proxy duly appointed in writing.

 

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

 

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

 

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

 

Section
14.5.        Certificate
and Opinion as to Conditions Precedent.

 

In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or

 

80

 

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

 

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

 

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

 

Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers’ Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such Counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished; provided, however, that, at any time that an Opinion
of Counsel is required to be delivered hereunder, the opining counsel may, with
the consent of the Trustee, deliver to the Trustee the Opinion of Counsel in
question addressed to a party other than the Trustee with text to the effect
that the Trustee may rely on such opinion rather than by delivering a separate
Opinion of Counsel to the Trustee directly.

 

Section
14.6.        Statements
Required in Certificate or Opinion.

 

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

 

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

 

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

 

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

 

81

 

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

 

Section
14.7.        Effect
of Headings and Table of Contents.

 

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

 

Section
14.8.        Successors
and Assigns.

 

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

 

Section
14.9.        Separability
Clause.

 

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

 

Section
14.10.      Benefits
of Indenture.

 

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

 

Section
14.11.      Governing
Law.

 

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

 

Section
14.12.      Counterparts.

 

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

 

Section
14.13.      Legal
Holidays.

 

In any case
where any Interest Payment Date, Redemption Date, Repurchase Date or Stated
Maturity of any Security or the last day on which a Holder has a right to
convert such Security shall not be a Business Day at any Place of Payment or
Place of Conversion, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of Principal on or Interest (including
Contingent Interest) on or conversion of the Securities, need not be made at
such Place of Payment or Place of Conversion on such day, but may be made on
the next succeeding Business Day at such Place of Payment or Place of
Conversion with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repurchase Date or at the Stated Maturity or on such
last day for conversion; provided, however, that in the case that
payment is made on such succeeding Business Day, no Interest shall accrue on
the amount so

 

82

 

payable for the period from and
after such Interest Payment Date, Redemption Date, Repurchase Date or Stated
Maturity, as applicable.

 

Section
14.14.      Recourse
Against Others.

 

No recourse
for the payment of the Principal of or Interest (including Contingent Interest)
on any Securities, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder, officer or
director or manager, as such, past, present or future, of the Company of any
successor entity to either the Company, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance thereof and as part of
the consideration for the issue thereof, expressly waived and released.

 

83

 

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

 

	
   

  	
  WATSON PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /S/ Allen Chao

  	
   

  
	
   

  	
   

  	
  Name:  Allen Chao, Ph.D.

  
	
   

  	
   

  	
  Title:  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, AS TRUSTEE AND NOT IN ITS

  
	
   

  	
  INDIVIDUAL CAPACITY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Jeanie
  Mar

  	
   

  
	
   

  	
   

  	
  Name:  Jeanie Mar

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

84

 

EXHIBIT A

 

FORM OF SECURITY

 

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

 

THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF DTC TO DTC
OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC
OR A NOMINEE OF SUCH SUCCESSOR.

 

A-1

 

WATSON PHARMACEUTICALS, INC.

 

1.75% Convertible Contingent Senior
Debentures due March 15, 2023

 

CUSIP
NO.  942683202AB9

 

	
  No.       

  	
   

  	
  Principal Amount

  	
  $

  	
                        

  

 

Watson
Pharmaceuticals, Inc., a Nevada corporation (including any successor
corporation under the Indenture hereinafter referred to, the “Company”), for value received, hereby
promises to pay to Cede & Co., or its registered assigns, the principal sum
of                                                     U.S.
Dollars ($                           )
on March 15, 2023.

 

Interest
Payment Dates: March 15 and September 15, commencing September 15, 2003.

 

Regular Record
Dates: March 1 and September 1.

 

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

 

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

 

 

	
   

  	
  WATSON
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 20

  	
   

  	
   

  
								

 

Trustee’s Certificate of
Authentication

 

This is one of the 1.75%
Convertible Contingent Senior Debentures due March 15, 2023 described in the
within-named Indenture.

 

	
  WELLS FARGO
  BANK, NATIONAL ASSOCIATION, as Trustee

  
	
   

  
	
  By:

  	
   

  
	
  Authorized Signatory

  
	
   

  
	
  Dated:

  	
   

  	
  , 20

  	
   

  	
   

  
						

 

A-2

 

WATSON PHARMACEUTICALS, INC.

 

1.75% Convertible Contingent Senior
Debentures due March 15, 2023

 

SECTION 1            Indenture; Securities.

 

This Security
is one of a duly authorized series of the 1.75% Convertible Contingent Senior
Debentures due March 15, 2023 (the “Securities”)
of Watson Pharmaceuticals, Inc., a Nevada corporation (including any successor
Person under the Indenture hereinafter referred to, the “Company”), issued under an Indenture, dated
as of March 7, 2003 (the “Indenture”),
between the Company and Wells Fargo Bank, National Association, as trustee (the
“Trustee”).  The terms of the Security include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (“TIA”).  This Security is subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of all
such terms.  To the extent permitted by
applicable law, in the event of any inconsistency or difference between the
terms of this Security and the terms of the Indenture, the terms of the
Indenture shall control.  Capitalized
terms used but not defined herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

 

SECTION 2            Principal and Interest.

 

The Company
promises to pay Interest on the principal amount of the Securities at the
Interest Rate from the date of issuance until repayment in full at Stated
Maturity, redemption or purchase.  The
Company will pay Interest (including Contingent Interest) on this Security
semi-annually in arrears on March 15 and September 15 of each year (each, an “Interest Payment Date”), commencing
September 15, 2003.

 

The Securities
shall bear Interest from March 7, 2003 until the Principal thereof is paid or
made available for payment, or until such date on which the Securities are
converted, redeemed or purchased as provided herein, (i) prior to the
occurrence of a Reset Transaction, at a rate of 1.75% per annum, and (ii)
following the occurrence of a Reset Transaction, at the Adjusted Interest Rate
related to such Reset Transaction to, but not including, the effective date of
any succeeding Reset Transaction. 
Interest shall be payable semi-annually in arrears on each Interest
Payment Date.

 

In addition,
Contingent Interest will accrue on this Security during any six-month period
from March 15 to September 14 and from September 15 to March 14, commencing
with the six-month period beginning September 15, 2003, under the conditions
specified in the Indenture at a rate equal to the greater of (i) a per annum
rate equal to 5.00% of the Company’s then-current estimated per annum borrowing
rate for senior non-convertible fixed-rate Indebtedness with a Maturity and
other terms comparable to this Security and (ii) 0.33% per annum.

 

Interest
(including Contingent Interest) on the Securities shall be computed (i) for any
full semi-annual period for which a particular Interest Rate is applicable, on
the basis of a 360-day year comprised of twelve 30-day months and (ii) for any
period for which a particular

 

A-3

 

Interest Rate is applicable for
less than a full semiannual period for which Interest is calculated, on the
basis of a 30-day month and, for such periods of less than a month, the actual
number of days elapsed over a 30-day month. 
For purposes of determining the Interest Rate, the Trustee may assume
that a Reset Transaction has not occurred unless the Trustee has received an
Officers’ Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.

 

Further
reference is made to Sections 2.1(c) through Section 2.1(f) of the Indenture
for other provisions of the Securities relating to the payment of Interest and
Contingent Interest.

 

If the Company
fails to make a payment of Principal of or Interest (including Contingent
Interest) on any Security when due and payable, it shall pay such Interest on
such amounts (to the extent lawful), which shall be calculated using the
applicable Interest Rate (such amounts, the “Defaulted
Interest”).  It may elect to
pay such Defaulted Interest, plus any other Interest (including Contingent
Interest) payable on it, to the Persons who are Holders on which the Interest
(including Contingent Interest) is due on a subsequent special record
date.  The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each such Security. The Company shall fix any such special record date and
payment date for such payment.  At least
15 days before any such special record date, the Company shall mail to Holders
affected thereby a notice that states the special record date, the Interest
Payment Date and amount to be paid.

 

SECTION 3            Method of Payment.

 

Interest
(including Contingent Interest) on this Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such Interest.  Principal of and
Interest (including Contingent Interest) on Global Securities will be payable,
for the benefit of the Holders of this Security, to the Depositary in
immediately available funds.

 

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

 

SECTION 4            Paying Agent and Registrar.

 

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

 

 

A-4

 

SECTION 5            Optional Redemption

 

Reference is
made to Article 10 of the Indenture regarding the Company’s right to optionally
redeem the Securities, which is incorporated into this Security by reference as
if stated herein in its entirety.

 

SECTION 6            Purchase Right Upon a Specific Date
or Repurchase Event.

 

Reference is
made to Article 11 of the Indenture regarding the Company’s obligations to the
Holders upon a Repurchase Event and the Holders’ rights to require the Company
to repurchase their Securities upon a Repurchase Event, which is incorporated
into this Security by reference as if stated herein in its entirety.

 

SECTION 7            Conversion Right.

 

Reference is
made to Article 12 of the Indenture regarding the Holders’ right to convert
their Securities and related matters, which is incorporated into this Security
by reference as if stated herein in its entirety.

 

SECTION 8            No Sinking Fund.

 

The Securities
are not subject to a sinking fund.

 

SECTION 9            Absolute Obligation.

 

No reference
herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company under the Indenture and
this Security which is absolute and unconditional, to pay the Principal of or
Interest (including Contingent Interest) on this Security at the place and time
and in the coin or currency herein prescribed.

 

SECTION 10          Denominations; Transfer; Exchange.

 

The Securities
are issuable in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000 in excess thereof.  A Holder may transfer and register the transfer or exchange of
Securities in accordance with the Indenture.

 

Pursuant to
the Indenture, when this Security (or any portion thereof in integral multiples
of $1,000 in principle amount) is presented to the Registrar with a request to
register the transfer or to exchange it for an equal principal amount other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if the requirements hereunder for such transactions are
met (including that such portions thereof are duly endorsed or accompanied by a
written instrument of transfer duly executed by the Holder thereof or by an
attorney who is authorized in writing to act on behalf of the Holder).  Subject to Section 2.4 of the Indenture, to
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or other

 

A-5

 

similar governmental charge
payable upon exchanges pursuant to Sections 2.14, 7.5 or 10.7 of the
Indenture).

 

Pursuant to
the Indenture, neither the Company nor the Registrar shall be required to
exchange or register a transfer of this Security (or any portion thereof):

 

(a)           for a period of 15
days prior to the day of any selection of any portion of this Security for
redemption under Article 10 hereof;

 

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

 

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

 

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

 

SECTION 11          Persons Deemed Owners.

 

The registered
Holder of this Security shall be treated as its owner for all purposes.

 

SECTION 12          Discharge Prior to Redemption or
Stated Maturity.

 

Subject to
certain conditions contained in the Indenture, the Company may discharge its
obligations under the Securities and the Indenture if (1)(A) all of the
Outstanding Securities shall become due and payable at their scheduled Stated
Maturity within one year or (B) all of the Outstanding Securities are scheduled
for redemption within one year or have all been converted, and (2) the Company
shall have deposited with the Trustee cash or, in the event of a conversion
pursuant to the terms of the Indenture, Common Stock, sufficient to pay all
amounts due and owing on all Outstanding Securities on the date of their
scheduled maturity or the scheduled date of redemption, as the case may be.

 

SECTION 13          Amendment; Supplement; Waiver.

 

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority of the aggregate principal
amount of the Outstanding Securities. 
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences and to make any changes or
modifications necessary in connection with the registration of the Securities
under the Securities Act as contemplated in the Registration Rights
Agreement.  Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such 

 

A-6

 

Holder and upon all future
Holders of this Security and of any Security issued upon registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.

 

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

 

SECTION 14          Defaults and Remedies.

 

Reference is
made to the Indenture for the Events of Default, remedies and related
provisions with respect to the Securities, which is incorporated into this
security by reference as if stated herein in its entirety.

 

SECTION 15          Authentication.

 

This Security
shall not be valid until the Trustee executes the certificate of authentication
in the space provided therefore on the Security.

 

SECTION 16          Abbreviations.

 

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

 

SECTION 17          CUSIP Numbers.

 

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

 

SECTION 18          Governing Law.

 

The Indenture
and this Security shall be governed by, and construed in accordance with, the
laws of the State of New York.

 

SECTION 19          Successor Corporation.

 

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

 

A-7

 

SECTION 20          Registration Rights.

 

The Holders of
the Securities are entitled to the benefits of a Resale Registration Rights
Agreement, dated as of March 7, 2003, among the Company, Lehman Brothers Inc.,
Morgan Stanley & Co. Incorporated, CIBC World Markets Corp., Wachovia
Securities, Inc., Banc of America Securities LLC, Comerica Securities, Inc. and
Wells Fargo Securities, LLC, including the receipt of additional amounts upon a
registration default (as defined in such agreement).

 

SECTION 21          Tax Treatment.

 

The Company
agrees, and by acceptance of a beneficial ownership interest in the Securities
each beneficial holder of the Securities will be deemed to have agreed, for
United States federal income tax purposes (1) to treat the Securities as
indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and, for
purposes of the Contingent Payment Regulations, to treat the fair market value
of any stock beneficially received by a beneficial holder upon any conversion
of the Securities as a contingent payment and (2) to be bound by the Company’s
determination that the “comparable yield” and “projected payment schedule,” within
the meaning of the Contingent Payment Regulations, with respect to the
Securities.  A Holder of the Securities
may obtain the amount of original issue discount, issue date, yield to
maturity, comparable yield and projected payment schedule by submitting a
written request for it to the Company at the Company’s address specified in
Section 14.2 of the Indenture.

 

A-8

 

ASSIGNMENT FORM

 

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

 

____________________________________________________

(Insert assignee’s social security
or tax I.D. number)

 

____________________________________________________

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

 

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

 

Your
Name:____________________________________________________________________

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

 

In connection
with any transfer of this Security occurring prior to the date which is the end
of the period referred to in Rule 144(k) under the Securities Act (other than a
transfer pursuant to an effective registration statement under the Securities
Act), the undersigned confirms that without utilizing any general solicitation
or general advertising that:

 

[Check One]

 

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

 

or

 

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

 

If none of the foregoing boxes
is checked, the Trustee or other Registrar shall not be obligated to register
this Security in the name of any Person other than the Holder hereof unless the
conditions to any such transfer of registration set forth herein and in
Sections 2.7, 2.8 and 2.17 of the Indenture shall have been satisfied.

                                                                                                                            

	
   

  	
  Dated: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee*: 

  	
   

  
					

 

*              Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-9

 

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

 

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

 

Dated:
________________________

 

NOTICE:  To be executed by an executive officer.

 

A-10

 

SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES

 

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

 

	
  Date of Exchange

  	
   

  	
  Amount of
  decrease in

  Principal Amount of

  this Global Security

  	
   

  	
  Amount of
  increase in

  Principal Amount of

  this Global Security

  	
   

  	
  Principal
  Amount of this

  Global Security

  following such decrease

  (or increase)

  	
   

  	
  Signature
  of

  authorized officer of

  Trustee

  	
   

  

 

A-11

 

EXHIBIT B

 

FORM OF REPURCHASE EVENT PURCHASE NOTICE

 

TO: Watson Pharmaceuticals,
Inc.

311 Bonnie
Circle

Corona,
California 92880

 

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

 

 

Your Name:
____________________________________________________________________

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

 

Dated: 
_____________________________________________________________________________

 

	
   

  	
  Your
  Signature:

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee*: 

  	
   

  	
   

  
						

 

Social
Security or other Taxpayer Identification
Number:______________________________                                   

 

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

 

Certificate
number (if applicable:
                                                                                                                                    

 

*              Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

B-1

 

EXHIBIT C

 

FORM OF CONVERSION NOTICE

 

TO: Watson Pharmaceuticals,
Inc.

311 Bonnie
Circle

Corona,
California 92880

 

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

 

Your Name:
_____________________________________________________________________

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

 

Dated: 
___________________________________________________________________________

 

Your
Signature: ___________________________________________________________________

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

 

Signature
Guarantee*: ______________________________________________________________

 

Social
Security or other Taxpayer Identification
Number: ___________________________________

 

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

 

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

 

________________________________________________________________________

(Name)

________________________________________________________________________

(Street Address)

________________________________________________________________________

(City, State and Zip Code)

 

*              Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

C-1

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