Document:

Exhibit 4.2

 

SILICON GRAPHICS, INC.

11.75% Senior Secured Notes Due 2009

INDENTURE

Dated as of December     , 2003

U.S. BANK NATIONAL ASSOCIATION

TRUSTEE

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.06; 7.08

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05; 2.14

  
	
   

  	
  (b)

  	
   

  	
  2.14(b); 13.03

  
	
   

  	
  (c)

  	
   

  	
  2.14(c); 13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.12(a)

  
	
   

  	
  (b)

  	
   

  	
  7.12(a)

  
	
   

  	
  (c)

  	
   

  	
  7.12(a)

  
	
   

  	
  (d)

  	
   

  	
  7.12(b)

  
	
  314

  	
  (a)

  	
   

  	
  4.03; 4.04

  
	
   

  	
  (b)

  	
   

  	
  11.05

  
	
   

  	
  (c)(1)

  	
   

  	
  12.04

  
	
   

  	
  (c)(2)

  	
   

  	
  12.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  11.05

  
	
   

  	
  (e)

  	
   

  	
  12.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(1)(A)

  	
   

  	
  6.02

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  12.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  12.01

  

 

Note:      This cross-reference table
shall not, for any purpose, be deemed to be a part of the Indenture.

 

 

 

TABLE
OF CONTENTS(1)

 

	
  ARTICLE
  1

  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  Section
  1.01.  Definitions.

  	
   

  
	
  Section
  1.02.  Other Definitions.

  	
   

  
	
  Section
  1.03.  Incorporation by Reference of TIA

  	
   

  
	
  Section
  1.04.  Rules of Construction

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  2

  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  Section
  2.01.  Form and Dating

  	
   

  
	
  Section
  2.02.  Execution And Authentication

  	
   

  
	
  Section
  2.03.  Registrar, Paying Agent and
  Conversion Agent

  	
   

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

  	
   

  
	
  Section
  2.05.  Securityholder Lists

  	
   

  
	
  Section
  2.06.  Exchange and Registration of Transfer
  of Securities; Depositary

  	
   

  
	
  Section
  2.07.  Replacement Securities

  	
   

  
	
  Section
  2.08.  Outstanding Securities;
  Determinations of Holders’ Action

  	
   

  
	
  Section
  2.09.  Temporary Securities

  	
   

  
	
  Section
  2.10.  Cancellation

  	
   

  
	
  Section
  2.11.  Persons Deemed Owners

  	
   

  
	
  Section
  2.12.  Payment of Interest; Interest Rights
  Preserved

  	
   

  
	
  Section
  2.13.  Computation of Interest

  	
   

  
	
  Section
  2.14.  Preservation of Information;
  Communications to Holders.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  3

  REDEMPTION

  	
   

  
	
   

  	
   

  
	
  Section
  3.01.  Right to Redeem; Notices to Trustee

  	
   

  
	
  Section
  3.02.  Selection of Securities to be
  Redeemed

  	
   

  
	
  Section
  3.03.  Notice of Redemption

  	
   

  
	
  Section
  3.04.  Effect of Notice of Redemption

  	
   

  
	
  Section
  3.05.  Deposit of Redemption Price

  	
   

  

 

(1) This Table of Contents shall not, for any
purpose, be deemed to be part of the Indenture.

 

 

 

	
  Section
  3.06.  Securities Redeemed in Part

  	
   

  
	
  Section
  3.07.  Redemption at Option of the Holder
  upon a Fundamental Change.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  4

  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section
  4.01.  Payment of Securities

  	
   

  
	
  Section
  4.02.  SEC Reports

  	
   

  
	
  Section
  4.03.  Compliance Certificate

  	
   

  
	
  Section
  4.04.  Further Instruments and Acts

  	
   

  
	
  Section
  4.05.  Maintenance of Office or Agency

  	
   

  
	
  Section
  4.06.  Restriction on Additional
  Indebtedness

  	
   

  
	
  Section
  4.07.  Restricted Payments

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  5

  SUCCESSOR CORPORATION

  	
   

  
	
   

  	
   

  
	
  Section
  5.01.  When Company May Merge or Transfer
  Assets

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  6

  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section
  6.01.  Events of Default

  	
   

  
	
  Section
  6.02.  Acceleration

  	
   

  
	
  Section
  6.03.  Other Remedies

  	
   

  
	
  Section
  6.04.  Waiver of Past Defaults

  	
   

  
	
  Section
  6.05.  Control by Majority

  	
   

  
	
  Section
  6.06.  Limitation on Suits

  	
   

  
	
  Section
  6.07.  Rights of Holders to Receive Payment

  	
   

  
	
  Section
  6.08.  Collection Suit by Trustee

  	
   

  
	
  Section
  6.09.  Trustee May File Proofs of Claim

  	
   

  
	
  Section
  6.10.  Priorities

  	
   

  
	
  Section
  6.11.  Undertaking for Costs

  	
   

  
	
  Section
  6.12.  Waiver of Stay, Extension or Usury
  Laws

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  7

  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section
  7.01.  Duties of Trustee

  	
   

  
	
  Section
  7.02.  Rights of Trustee

  	
   

  
	
  Section
  7.03.  Individual Rights of Trustee

  	
   

  
	
  Section
  7.04.  Trustee’s Disclaimer

  	
   

  
	
  Section
  7.05.  Notice of Defaults

  	
   

  
	
  Section
  7.06.  Disqualification; Conflicting
  Interests

  	
   

  

 

ii

 

	
  Section
  7.07.  Compensation and Indemnity

  	
   

  
	
  Section
  7.08.  Replacement of Trustee

  	
   

  
	
  Section
  7.09.  Successor Trustee by Merger

  	
   

  
	
  Section
  7.10.  Eligibility; Disqualification

  	
   

  
	
  Section
  7.11.  Preferential Collection of Claims
  Against Company

  	
   

  
	
  Section
  7.12.  Reports by Trustee.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  8

  DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  Section
  8.01.  Discharge of Liability on Securities

  	
   

  
	
  Section
  8.02.  Repayment to the Company

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  9

  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  Section
  9.01.  Without Consent of Holders

  	
   

  
	
  Section
  9.02.  With Consent of Holders

  	
   

  
	
  Section
  9.03.  Compliance with TIA

  	
   

  
	
  Section
  9.04.  Revocation and Effect of Consents,
  Waivers and Actions

  	
   

  
	
  Section
  9.05.  Notation on or Exchange of Securities

  	
   

  
	
  Section
  9.06.  Trustee to Sign Supplemental
  Indentures

  	
   

  
	
  Section
  9.07.  Effect of Supplemental Indentures

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  10

  RANKING OF NOTE LIENS

  	
   

  
	
   

  	
   

  
	
  Section
  10.01.  Agreement for the Benefit of Holders
  of Senior Priority Liens

  	
   

  
	
  Section
  10.02.  Securities not Subordinated

  	
   

  
	
  Section
  10.03.  Relative Rights

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  11

  COLLATERAL AND SECURITY

  	
   

  
	
   

  	
   

  
	
  Section
  11.01.  Junior Priority Security Documents.

  	
   

  
	
  Section
  11.02.  Trustee’s Rights and Obligations with
  Respect to the Collateral.

  	
   

  
	
  Section
  11.03.  Authorization of Actions to be Taken.

  	
   

  
	
  Section
  11.04.  Release of Junior Priority Liens.

  	
   

  
	
  Section
  11.05.  Filing, Recording and Opinions.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  12

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section
  12.01.  Conflict with TIA

  	
   

  
	
  Section
  12.02.  Notices

  	
   

  

 

iii

 

	
  Section
  12.03.  Communication by Holders with Other
  Holders

  	
   

  
	
  Section
  12.04.  Certificate and Opinion as to
  Conditions Precedent

  	
   

  
	
  Section
  12.05.  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section
  12.06.  Separability Clause

  	
   

  
	
  Section
  12.07.  Rules By Trustee, Paying Agent,
  Conversion Agent and Registrar

  	
   

  
	
  Section
  12.08.  Legal Holidays

  	
   

  
	
  Section
  12.09.  Governing Law

  	
   

  
	
  Section
  12.10.  No Recourse Against Others

  	
   

  
	
  Section
  12.11.  Successors

  	
   

  
	
  Section
  12.12.  Multiple Originals

  	
   

  
	
   

  	
   

  
	
  Exhibit A — Form of Security

  	
   

  

 

iv

 

INDENTURE, dated as of
December     , 2003, between SILICON GRAPHICS, INC., a
Delaware corporation (the “Company”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States of America (the “Trustee”).

 

Each party agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the Holders of the
Company’s 11.75% Senior Secured Notes Due 2009 (the “Securities”):

 

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“Administrative Agent” means Wells Fargo
Foothill, Inc., as administrative agent for the lenders under the Secured
Credit Facility, and any successor thereto “exercising substantially the same
rights and powers and representative of lender to whom the Company has granted
a Senior Priority Lien on the collateral as permitted under this Indenture.

 

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

 

“Average Life” means, with respect to any
indebtedness, the quotient obtained by dividing the sum of the products of (1)
the number of years from the date of determination to the dates of each
successive scheduled principal payment on such indebtedness, and (2) the amount
of such principal payment, by the sum of all such principal payments.

 

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

 

“Business Day” means each day of the year on
which banking institutions are not required or authorized to close in The City
of New York or at the principal corporate trust office of the Trustee.

 

“Capital Lease” means a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP.

 

 

“Capital Stock” means (1) in the case of a
corporation, corporate stock, (2) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (3) in the case of a
partnership, partnership interests (whether general or limited), and (4) any
other interest or participation that confers on a person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
person.

 

“Code” means the New York Uniform Commercial
Code, as in effect from time to time.

 

“Collateral” means all assets of the Company
that secure the Securities pursuant to the Junior Priority Security Documents
as amended from time to time.

 

“Common Stock” means any stock of any class
of the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which is not subject to redemption by the
Company.

 

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

 

“Company Request” or “Company Order” means a
written request or order signed in the name of the Company by its Chairman of
the Board, a Vice Chairman, its President, a Senior Vice President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.

 

“Custodian” means U.S. Bank National
Association, as custodian with respect to any Global Security, or any
successor.

 

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

 

“Defaulted Interest” has the meaning
specified in Section 2.12.

 

“Depositary” means, with respect to the
Securities issuable or issued in whole or in part in global form, the person
specified in Section 2.06 as the Depositary with respect to the Securities,
until a successor Depositary shall have been appointed and become such pursuant
to the applicable provisions of this Indenture, and thereafter, “Depositary”
shall mean or include such successor.

 

2

 

“Disqualified Stock” means Capital Stock
that, by its terms (or the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder, in whole or in part,
on or prior to the date that is the Stated Maturity of the Securities and the
New Convertible Notes.

 

“Event of Default” means any event or
condition specified as such in Section 6.01.

 

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

 

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

 

“GAAP” means generally accepted accounting
principles.

 

“Global Security” means a Security that is
registered in the Security Register in the name of the Depository or a nominee
thereof.

 

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

 

“Indenture” means this Indenture, as amended
or supplemented from time to time in accordance with the terms hereof.

 

“Intellectual Property Security Agreement”
means an intellectual property security agreement executed and delivered
pursuant to the terms of the Security Agreement by the Company and Trustee, the
form and substance of which is satisfactory to the Trustee.

 

“Intercreditor Agreement” means (i) the
intercreditor agreement dated as of the date hereof among the Company, the
Trustee and Wells Fargo Foothill, Inc., as Administrative Agent under the
Secured Credit Facility and (ii) any agreement entered into among the
Company, the Trustee and any holder of a Senior Priority Lien (or its representative).

 

3

 

“Interest Payment Date” means the Stated
Maturity of an installment of interest on the Securities.

 

“Interest Period” shall have the meaning set
forth in Section 10.02.

 

“Junior Priority Lien” means, to the extent
securing the Securities, a Lien granted by a Junior Priority Security Document
as security for the Securities, which is junior in priority to the Senior
Priority Liens.

 

“Junior Priority Security Documents” means,
collectively, the Security Agreement, the Intellectual Property Agreement and
all other security agreements, pledges, collateral assignments, mortgages or
other instruments evidencing or creating any Security Interests in favor of the
Trustee, for the benefit of the Trustee and the Securityholders, in all or any
portion of the Collateral, in each case, as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, in accordance
with the terms thereof.

 

“Lien” means any interest in an asset
securing an obligation owed to, or a claim by, any Person other than the owner
of the asset, whether such interest shall be based on the common law, statute,
or contract, whether such interest shall be recorded or perfected, and whether
such interest shall be contingent upon the occurrence of some future event or
events or the existence of some future circumstance or circumstances, including
the lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement, conditional sale or trust receipt, or from a lease, consignment, or
bailment for security purposes and also including reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting real property.

 

“Maturity” when used with respect to any
Security, means the date on which the principal of such Security becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, redemption upon a Fundamental
Change or otherwise.

 

“New Convertible Indenture” means that
certain Indenture dated as of December   , 2003 between the
Company and the Trustee, relating to the New Convertible Notes.

 

“New Convertible Notes” means the Company’s
6.50% Senior Secured Convertible Notes Due 2009.

 

“Noteholder Documents” means this Indenture,
the Securities, the Intercreditor Agreement and the Junior Priority Security
Documents.

 

4

 

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

 

“Officers’ Certificate” means a written
certificate containing the information specified in Sections 12.04 and 12.05,
signed in the name of the Company by its Chairman of the Board, a Vice
Chairman, its President, a Senior Vice President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.

 

“Old Notes” means the Company’s 5.25% Senior
Convertible Notes Due 2004.

 

“Old Notes Indenture” means that certain
Indenture dated as of September 1, 1997 between the Company and the U.S. Bank
National Association, as successor trustee to State Street Bank and Trust
Company of California, N.A., relating to the Old Notes.

 

“Opinion of Counsel” means a written opinion
signed by legal counsel who may be an employee of or counsel to the Company and
who shall be satisfactory to the Trustee. 
Each such opinion shall comply with Section 314 of the Trust Indenture
Act and include the information specified in Sections 12.04 and 12.05.

 

“Options” means any warrants, options or
other rights to acquire Capital Stock of the Company (but excluding (i) any
options or other rights issued under a plan maintained by the Company for the
benefit of employees, directors and consultants, and (ii) any debt security
that is convertible into or exchangeable for Capital Stock of the Company).

 

“Permitted Purchase Money Indebtedness”
means indebtedness incurred at the time of, or within 20 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of
the acquisition cost thereof.

 

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

 

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

 

5

 

“Prospectus” means the prospectus dated
November 21, 2003, as amended or supplemented from time to time included
in the registration statement (File No. 333-110683) on Form S-3 filed
by the Company under the Securities Act with the SEC pursuant to which the
Company offered to exchange the Securities and the New Notes for its Old Notes.

 

“Redemption Date” shall mean a date
specified for redemption of the Securities (other than redemption upon a
Fundamental Change at the option of the Securityholder) in accordance with the
terms of the Securities and Section 3.01 of this Indenture.

 

“Redemption Price” shall have the meaning
set forth in paragraph 5 of the Securities.

 

“Regular Record Date” for the interest
payable on any Interest Payment Date means the December 15 or June 15 (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date.

 

“SEC” means the Securities and Exchange
Commission.

 

“Secured Credit Facility” means that certain
Amended and Restated Loan and Security Agreement among the Company, Silicon
Graphics Federal, Inc. and Wells Fargo Foothill, Inc., as Administrative Agent
for itself and other lenders, and the Bank of America, N.A. dated as of
September 20, 2002, as the same shall be renewed, replaced, restructured
or refinanced (whether with the original administrative agent and lenders or
others, and whether provided under the original Secured Credit Facility or any
other agreement or indenture).

 

“Security” or “Securities” means any of the
Company’s 11.75% Senior Secured Notes Due 2009, as amended or supplemented from
time to time, issued under this Indenture.

 

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

 

“Security Agreement” means the security
agreement dated as of the date hereof between the Trustee and the Company.

 

“Security Interests” means the Liens on the
Collateral created by the Junior Priority Security Documents in favor of the
Trustee on a junior priority basis, for the benefit of the Trustee and the
Securityholders.

 

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

 

“Security Register” has the meaning
specified in Section 2.05.

 

6

 

“Senior Priority Lien” means any lien on the
Collateral created by the Company that this senior to the lien granted to
Securityholders under the Security Agreement and that secures debt permitted
under Section 4.06(e) of this Indenture, including, but not limited to the
liens created under the Secured Credit Facility.

 

“Senior Priority Lien Obligations” means all
indebtedness incurred by the Company and permitted under this Indenture that is
secured by a Senior Priority Lien.

 

“SGI Japan Secured Debt” means that Loan
Agreement between the Company, Silicon Graphics World Trade B.V. and SGI Japan,
Ltd. as of November 9, 2001, as the same may be amended from time to time.

 

“Special Record Date” for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 2.12.

 

“Stated Maturity” when used with respect to
any Security or any installment of interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of interest is due and payable, and when used with respect to
any other indebtedness or any installment of interest thereon, the date
specified as the fixed date on which the principal of such debt or such
installment of interest is due and payable as set forth in the documentation
governing that debt, not including any contingent obligation to repay, redeem
or repurchase prior to the regularly scheduled date for payment.

 

“Subsidiary” means a corporation of which a
majority of the capital stock (which for purposes of this definition means any
and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
stock issued by such corporation) having voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation
is owned directly or indirectly by (i) the Company, (ii) the Company and one or
more Subsidiaries or (iii) one or more Subsidiaries.

 

“TIA” means the Trust Indenture Act of 1939
as in effect on the date of this Indenture, except as provided in Section 9.03.

 

“Trust Officer” means any officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.

 

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

 

7

 

Section 1.02.  Other Definitions.

 

 

	
  Term

  	
   

  	
  Defined in

  Section

  	
   

  
	
  Bankruptcy Law

  	
   

  	
  6.01

  	
   

  
	
  Company Notice

  	
   

  	
  3.07

  	
   

  
	
  Event of Default

  	
   

  	
  6.01

  	
   

  
	
  Fundamental Change Repurchase Date

  	
   

  	
  3.07

  	
   

  
	
  Fundamental Change Redemption Price

  	
   

  	
  3.07

  	
   

  
	
  Incur

  	
   

  	
  4.06

  	
   

  
	
  Legal Holiday

  	
   

  	
  12.08

  	
   

  
	
  Notice of Default

  	
   

  	
  6.01

  	
   

  
	
  Paying Agent

  	
   

  	
  2.03

  	
   

  
	
  Registrar

  	
   

  	
  2.03

  	
   

  

 

Section 1.03.  Incorporation by Reference of TIA.  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:

 

“Commission” means the SEC.

 

“Indenture Securities” means the Securities.

 

“Indenture Security Holder” means a
Securityholder.

 

“Indenture to be Qualified” means this
Indenture.

 

“Indenture Trustee” or “Institutional Trustee” means
the Trustee.

 

“Obligor” on the indenture securities means
the Company.

 

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

 

Section 1.04.  Rules of Construction.  Unless the context otherwise
requires:

 

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

 

(b)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;

 

8

 

(c)           “or” is not exclusive;

 

(d)           “including” means including, without
limitation; and

 

(e)           words in the singular include the
plural, and words in the plural include the singular.

 

 

ARTICLE 2

THE SECURITIES

 

Section 2.01.  Form and Dating.  The Securities and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A, which is a part
of this Indenture.  The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage (provided that any such notation, legend or endorsement required by usage
is in a form acceptable to the Company). 
The Company shall provide any such notations, legends or endorsements to
the Trustee in writing.  Each Security
shall be dated the date of its authentication.

 

Section 2.02.  Execution And Authentication.  The Securities shall be executed
on behalf of the Company by its Chairman of the Board, one of its Vice
Chairman, its President, one of its Senior Vice Presidents or one of its Vice
Presidents, under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. 
The signature of any of these officers on the Securities may be manual
or facsimile.

 

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

 

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

 

The Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal amount of up to
$230,591,000 upon a Company Order without any further action by the Company.

 

9

 

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

 

The Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar (if not the
Trustee).  The agreement shall implement
the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar
or co-registrar.

 

The Company initially appoints the Trustee as
Registrar and Paying Agent in connection with the Securities.

 

Section 2.04.  Paying Agent to Hold Money and Securities in
Trust.  Except as otherwise
provided herein, prior to or on each due date of payments in respect of any
Security, the Company shall deposit with the Paying Agent a sum of money or
securities sufficient to make such payments when so becoming due.  The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money and
securities 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
securities so held in trust.  If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent,
it shall segregate the money and securities held by it as Paying Agent and hold
it as a separate trust fund.  The
Company at any time may require a Paying Agent to pay all money and securities
held by it to the Trustee and to account for any funds and securities disbursed
by it.  Upon doing so, the Paying Agent
shall have no further liability for the money or securities.

 

Section 2.05.  Securityholder Lists.  The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders.  If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually on November 15 and
May 15 a listing of Holders dated within 15 days of the date on which the
list is furnished and at such other times as the Trustee may request in

 

10

 

writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.

 

Section 2.06.  Exchange and Registration of Transfer of
Securities; Depositary.  Upon
surrender for registration of transfer of any Security at any office or agency
of the Company designated as Registrar or co-registrar pursuant to Section 2.03
and satisfaction of the requirements for such transfer set forth in this
Section 2.06, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate
principal amount.

 

Securities may be exchanged for a like
aggregate principal amount of Securities of other authorized
denominations.  Securities to be
exchanged shall be surrendered at any office or agency to be maintained by the
Company designated as Registrar or co-registrar pursuant to Section 2.03 and
the Company shall execute and register and the Trustee shall authenticate and
deliver in exchange therefor the Security or Securities which the
Securityholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.

 

All Securities presented for registration of
transfer or for exchange, purchase, redemption or payment shall (if so required
by the Company, the Trustee, the Registrar or any co-registrar) be duly
endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company and the Trustee, duly executed by
the Holder or his attorney duly authorized in writing.

 

No service charge shall be charged to the
Securityholder for any exchange or registration of transfer of Securities, but
the Company may require payment of a sum sufficient to cover any tax,
assessments or other governmental charges that may be imposed in connection
therewith.

 

None of the Company, the Trustee, the
Registrar or any co-registrar shall be required to exchange or register a
transfer of (a) any Securities for a period of 15 days next preceding any
selection of Securities to be redeemed or (b) any Securities or portions
thereof selected or called for redemption or (c) any Securities or portion
thereof surrendered for redemption (and not withdrawn) pursuant to Section
3.07.

 

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

 

11

 

The provisions of Clauses (a), (b), (c), (d)
and (e) below shall apply only to Global Securities:

 

(a)           Each Global Security authenticated
under this Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or Custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this Indenture.

 

(b)           Notwithstanding any other provision
in this Indenture, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
party may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing agency
registered under the Exchange Act, or (B) there shall have occurred and be
continuing an Event of Default with respect to such Global Security.

 

(c)           Subject to 2.06(b) above, any
exchange of a Global Security for other Securities may be made in whole or in
part, and all Securities issued in exchange for a Global Security or any
portion thereof shall be registered in such names as the Depositary for such
Global Security shall direct.

 

(d)           Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of, a
Global Security or any portion thereof whether pursuant to this Article Two or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.

 

(e)           The Depositary or its nominee, as
registered own of a Global Security, shall be the Holder of such Global
Security for all purposes under the Indenture and the Securities, and owners of
beneficial interests in a Global Security shall hold such interests pursuant to
the applicable procedures.  Accordingly,
any such owner’s beneficial interest in a Global Security will be shown only
on, and the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its agent members and such
owners of beneficial interests in a Global Security will not be considered the
owners or holders thereof.

 

12

 

The Depositary shall be a clearing agency
registered under the Exchange Act.  The
Company initially appoints The Depository Trust Company to act as Depositary
with respect to the Securities in global form. 
Initially, the Global Security shall be issued to the Depositary,
registered in the name of Cede & Co., as the nominee of the Depositary, and
deposited with the Trustee as custodian for Cede & Co.

 

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

 

Section 2.07.  Replacement Securities.  If (i) any mutilated Security is
surrendered to the Trustee, or (ii) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a number
not contemporaneously outstanding.

 

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

 

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

 

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

 

13

 

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

 

Section 2.08.  Outstanding Securities; Determinations of
Holders’ Action.  Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided,
however, that in determining whether the Holders of the requisite principal
amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded.  Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

 

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

 

If the Paying Agent holds, in accordance with
this Indenture, on a Redemption Date, on a Fundamental Change Repurchase Date
or on Stated Maturity, money or securities, if permitted hereunder, sufficient
to pay Securities payable on that date, then on and after that date such
Securities shall cease to be outstanding and interest on such Securities shall
cease to accrue; provided, that if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.

 

Section 2.09.  Temporary Securities.  Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.

 

If temporary Securities are issued, the
Company will cause definitive Securities to be prepared without unreasonable
delay.  After the preparation of

 

14

 

definitive
Securities, the temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the office or agency
of the Company designated for such purpose pursuant to Section 2.03, without
charge to the Holder.  Upon surrender
for cancellation of any one or more temporary Securities the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of authorized
denominations.  Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

 

Section 2.10.  Cancellation.  All Securities surrendered for payment, redemption or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it.  The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee.  The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation.  No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture.  All canceled Securities held by the Trustee
shall be destroyed by the Trustee and evidence of their destruction delivered
to the Company unless the Company directs by Company Order that the Trustee
deliver canceled Securities to the Company.

 

Section 2.11.  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 amount, premium, if any, interest, Redemption Price and
Fundamental Change Redemption Price in respect thereof, for all purposes
whatsoever, whether or not such Security be overdue, and none of the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.

 

Section 2.12.  Payment of Interest; Interest Rights
Preserved.  Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.

 

Any interest on any Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called “Defaulted Interest”) shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted

 

15

 

Interest may
be paid by the Company, at its election in each case, as provided in (a) or (b)
below:

 

(a)           The Company may elect to make payment
of any Defaulted Interest to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment.  The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date.  Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause 2.12(b).

 

(b)           The Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange or market on which the Securities may
be listed, and upon such notice as may be required by such exchange or market,
if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable by
the Trustee.

 

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

 

16

 

Section 2.13.  Computation of Interest.  Interest on the Securities shall
be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 2.14.  Preservation of Information; Communications
to Holders.

 

(a)        The Trustee shall
preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders contained in the most recent list furnished to the Trustee
as provided in Section 2.05 and the names and addresses of Holders received by
the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to it as provided in
Section 2.05 upon receipt of a new list so furnished.

 

(b)        The rights of Holders
to communicate with other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding right and duties of
the Trustee, shall be as provided in the TIA.

 

(c)        Every Holder of
Securities, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of either of
them shall be held accountable by reason of the disclosure of information as to
names and addresses of the Holders made pursuant to the TIA.

 

 

ARTICLE 3

REDEMPTION

 

Section 3.01.  Right to Redeem; Notices to Trustee.  The Company, at its option, may
redeem the Securities in accordance with the provisions of paragraph 5 of the
Securities.  If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the Redemption Date, the principal amount of
Securities to be redeemed, the Redemption Price, and the amount of accrued
interest to, but excluding, the Redemption Date.

 

The Company shall give the notice to the
Trustee provided for in this Section 3.01 (i) in the case of any redemption of
fewer than all of the Securities, at least 45 days before the Redemption Date
and (ii) in the case of a redemption of all of the Securities, no later than
the Company is required to give notice to the Holders pursuant to Section 3.03,
in each case unless a shorter notice shall be satisfactory to the Trustee.

 

Section 3.02.  Selection of Securities to be Redeemed.  If less than all the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata or by lot or by a method the Trustee considers fair and appropriate (as
long as such method is not prohibited by the rules of any stock

 

17

 

exchange or automated quotation system on which the Securities are then
listed).  The Trustee shall make the
selection at least 10 days, but not more than 60 days, before the Redemption
Date from outstanding Securities not previously called for redemption.  The Trustee may select for redemption
portions of the principal amount of Securities that have denominations larger
than $1,000.  Securities and portions of
Securities selected by the Trustee shall be in principal amounts of $1,000 or a
multiple of $1,000.  Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. 
The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.

 

Section 3.03.  Notice of Redemption.  At least 30 days but not more
than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first-class mail, postage prepaid, to each Holder of Securities
to be redeemed.

 

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

 

(a)           the Redemption Date;

 

(b)           the Redemption Price, together with
the amount of accrued interest to, but excluding, the Redemption Date;

 

(c)           the name and address of the Paying
Agent;

 

(d)           that Securities called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price and
accrued interest to, but excluding, the Redemption Date;

 

(e)           if fewer than all the outstanding
Securities are to be redeemed, the certificate number and principal amounts of
the particular Securities to be redeemed; and

 

(f)            that interest on Securities called
for redemption will cease to accrue on and after the Redemption Date.

 

At the Company’s request, the Trustee shall
give the notice of redemption in the Company’s name and at the Company’s
expense.

 

Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is
given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, together with accrued interest to,
but excluding, the Redemption Date, stated in the notice.

 

Upon the later of the Redemption Date or the
date such Securities are surrendered to the Paying Agent, such Securities shall
be paid at the Redemption

 

18

 

Price,
together with accrued interest to, but excluding, the Redemption Date, stated
in the notice.

 

Section 3.05.  Deposit of Redemption Price.  Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price and
accrued interest to, but excluding, the Redemption Date of all Securities to be
redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation; provided that if such payment is made on the
Redemption Date it must be received by the Trustee or Paying Agent, as the case
may be, by 10:00 a.m.  New York City
time, on such Redemption Date.  If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.

 

Section 3.06.  Securities Redeemed in Part.  Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the
Security surrendered.

 

Section 3.07.  Redemption at Option of the Holder upon a
Fundamental Change.

 

(a)        If a Fundamental Change
shall occur at any time prior to July 1, 2009, each Holder of Securities shall
have the right, at such Holder’s option, to require the Company to redeem such
Holder’s Securities on the date (the “Fundamental Change Repurchase Date”) (or if
such date is not a Business Day, the next succeeding Business Day) that is 45
days after the date of the Company’s notice of such Fundamental Change.  The Securities will be redeemable in part in
multiples of $1,000 of principal amount. 
Such repayment shall be made at 100% of the principal amount (the “Fundamental
Change Redemption Price”) thereof. In each case, the Company shall
also pay to such Holders accrued interest to, but excluding, the Fundamental
Change Repurchase Date on the redeemed Securities; provided that if such
Fundamental Change Repurchase Date is an Interest Payment Date, then the interest
payable on such date shall be paid to the Holder of the Security on the next
preceding the Regular Record Date.

 

(b)        On or before the tenth
day after the occurrence of a Fundamental Change, the Company, or, at its
written request (which must be received by the Trustee at least five Business
Days prior to the date the Trustee is requested to give notice as described
below), the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed to all Holders of record on the date

 

19

 

of the
Fundamental Change a notice (the “Company Notice”) of the occurrence of such
Fundamental Change and of the redemption right at the option of the Holders
arising as a result thereof.  Such
notice shall be mailed in the manner and with the effect set forth in Section
3.03.  The Company shall also deliver a
copy of the Company Notice to the Trustee at such time as it is mailed to the
Holders.

 

Each Company Notice shall specify the
circumstances constituting the Fundamental Change, the Fundamental Change
Repurchase Date, the Fundamental Change Redemption Price at which the Company
shall be obligated to redeem the Securities, the amount of interest accrued on
each Security to, but excluding, the Fundamental Change Repurchase Date, the
latest time by which the Holder must exercise the redemption right (the “Fundamental
Change Expiration Time”), that the Holder shall have the right to
withdraw any Notes prior to the Fundamental Change Expiration Time, a description
of the procedure which a Holder must follow to exercise such redemption right
and to withdraw any surrendered Notes and the place or places where the Holder
is to surrender such Holder’s Securities.

 

No failure of the Company to give the
foregoing notices and no defect therein shall limit the Holders’ redemption
rights or affect the validity of the proceedings for the repurchase of the
Securities pursuant to this Section 3.07.

 

(c)        For a Security to be so
redeemed at the option of the Holder, the Paying Agent must receive such
Security with the form entitled “Option to Elect Redemption Upon a Fundamental
Change” on the reverse thereof duly completed (a “Fundamental Change Redemption Notice”),
together with such Security duly endorsed for transfer, on or before the 30th
day after the date of such Company Notice (or if such 30th day is not a
Business Day, the immediately preceding Business Day).  All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
redemption shall be determined by the Company, whose determination shall be
final and binding.

 

(d)        Upon receipt by the
Company of the Fundamental Change Redemption Notice specified in Section
3.07(c), the Holder of the Security in respect of which such Fundamental Change
Redemption Notice was given shall (unless such Fundamental Change Redemption
Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Fundamental Change Redemption Price, together with
accrued interest to, but excluding, the Fundamental Change Repurchase Date,
with respect to such Security.  Such
Fundamental Change Redemption Price together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, shall be paid to such Holder
promptly following the Fundamental Change Repurchase Date.

 

20

 

A Fundamental Change Redemption Notice may be
withdrawn by the Holder by means of a written notice of withdrawal delivered to
the office of the Paying Agent at any time prior to the close of business on
the Fundamental Change Repurchase Date to which it relates specifying:

 

(i)            the certificate number 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 Fundamental Change Redemption
Notice and which has been or will be delivered for purchase by the Company.

 

There shall be no redemption pursuant to
Section 3.07 if there has occurred prior to, on or after, as the case may be,
the giving, by the Holders of such Securities, of the required Fundamental
Change Redemption Notice and is continuing an Event of Default (other than a
default in the payment of the Fundamental Change Redemption Price, together
with accrued interest to, but excluding, the Fundamental Change Repurchase
Date, with respect to such Securities).

 

(e)        On or before the
Fundamental Change Repurchase Date the Company shall 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 2.04) an amount of money and/or securities, if permitted
hereunder, sufficient to pay the aggregate Fundamental Change Redemption Price,
together with accrued interest to, but excluding, the Fundamental Change
Repurchase Date, of all the Securities or portions thereof which are to be
redeemed as of such Fundamental Change Repurchase Date; provided that if such
payment is made on the Fundamental Change Repurchase Date it must be received
by the Trustee or Paying Agent, as the case may be, by 10:00 a.m.  New York City time, on such Fundamental
Change Repurchase Date.

 

(f)         Any Security that is
to be redeemed upon a Fundamental Change 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, upon the Company’s written direction to the Trustee, the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in
exchange

 

21

 

for, the portion of the principal amount of the Security so surrendered
which is not redeemed.

 

(g)        In connection with any
offer to redeem Securities under Section 3.07 hereof the Company shall comply
with all Federal and state securities laws so as to permit the rights and
obligations under Section 3.07 to be exercised in the time and in the manner
specified in Section 3.07.

 

(h)        The Trustee and the
Paying Agent shall return to the Company any cash that remains unclaimed as
provided in paragraph 9 of the Securities, together with interest or dividends,
if any (subject to the provisions of Section 7.01(f)), thereon, held by them
for the payment of a Fundamental Change Redemption Price, together with accrued
interest to, but excluding, the Fundamental Change Repurchase Date; provided,
however that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.07 exceeds the aggregate Fundamental
Change Redemption Price, together with accrued interest to, but excluding, the
Fundamental Change Repurchase Date, of the Securities or portions thereof which
the Company is obligated to purchase as of the Fundamental Change Repurchase
Date then promptly after the Business Day following the Fundamental Change
Repurchase Date the Trustee and the Paying Agent shall return any such excess
to the Company together with interest or dividends, if any, thereon.

 

 

ARTICLE 4

COVENANTS

 

Section 4.01.  Payment of Securities.  The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture.  The principal amount, premium, if any,
accrued interest, Redemption Price and Fundamental Change Redemption Price
shall be considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds on or before 10:00 a.m.  New York City time on such date, in accordance with this
Indenture, money or securities, if permitted hereunder, sufficient to pay all
such amount then due.

 

The Company shall pay interest at the rate
set forth in paragraph 1 of the Securities and it shall pay interest on overdue
interest at the same rate compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest on
overdue interest shall accrue from the date such amounts became overdue.

 

Section 4.02.  SEC Reports.  The Company shall file with the Trustee, within 15
days after it files such annual and quarterly reports, information, documents
and other reports with the SEC, copies of its annual report and of the

 

22

 

information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) which
the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act.

 

Section 4.03.  Compliance Certificate.  The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company (beginning
with the fiscal year ending in June 2004) an Officers’ Certificate stating
whether or not the signers know of any Default that occurred during such
period.  If they do, such Officers’
Certificate shall describe the Default and its status.

 

Section 4.04.  Further Instruments and Acts.  Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.

 

Section 4.05.  Maintenance of Office or Agency.  The Company will maintain in the
Borough of Manhattan, 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, exchange, or redemption and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served.  The
office of U.S. Bank Trust National Association, an Affiliate of the Trustee, at
100 Wall Street, Suite 1600, New York, NY 10005, shall be such office or agency
for all of the aforesaid purposes unless the Company shall maintain some other
office or agency for such purposes and shall give prompt written notice to the
Trustee of the location, and any change in the location, of such other office
or agency.  If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02.

 

The Company may also from time to time
designate one or more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New York, for such
purposes.

 

Section 4.06.  Restriction on Additional Indebtedness.  The Company shall not, nor shall
it permit any Subsidiary to, directly or indirectly, create, incur, assume, guaranty
or otherwise become directly or indirectly liable for (“Incur”) any additional
indebtedness for borrowed money or issue any Disqualified Stock,

 

23

 

except that the Company may, and may permit any Subsidiary to Incur
additional indebtedness:

 

(a)        pursuant to any
interest rate swap agreement, interest rate cap agreement or other agreement
designed to protect against fluctuations in interest rates, any foreign
exchange forward contract, currency swap agreement or other agreement designed
to protect against fluctuations in foreign exchange rates, or any commodity or
raw material futures contract or any other agreement designed to protect
against fluctuations in raw material prices, entered into in the ordinary
course of business for the purpose of limiting risks associated with our
business and not for speculation;

 

(b)        with respect to letters
of credit and bankers’ acceptances issued in the ordinary course of business
and not supporting indebtedness for borrowed money, including letters of credit
supporting performance, surety or appeal bonds, indemnification obligations,
lease or other contractual deposits, or other similar obligations;

 

(c)        the proceeds of which,
less fees and expenses, are used to repay, redeem or repurchase, at the option
of the Company, Securities, New Convertible Notes, or Old Notes, provided that
if any Securities or New Convertible Notes will remain outstanding, the Stated
Maturity of the indebtedness incurred must be at least 120 days after the
Stated Maturity of the Securities and New Convertible Notes;

 

(d)        indebtedness incurred
to refinance, renew or replace the SGI Japan Secured Debt, or any extensions or
amendments of the SGI Japan Secured Debt, in each case that do not increase the
principal amount thereof; 

 

(e)        other indebtedness to
banks or other institutional lenders in the form of revolving credit loans or
term loans or the issuance of letters of credit or bankers’ acceptances or the
like, including the Secured Credit Facility as it may be extended, refinanced,
renewed or replaced, provided that the aggregate principal amount of such other
indebtedness at any time outstanding does not exceed $100 million;

 

(f)         indebtedness
represented by purchase money liens or the interests of lessors under Capital
Leases to the extent that such liens or interests secure Permitted Purchase
Money Indebtedness and so long as such lien attaches only to the asset
purchased or acquired and the proceeds thereof, including indebtedness incurred
to refund, refinance or replace any indebtedness incurred pursuant to this
clause (f); or

 

(g)        that is (i) in an
aggregate principal amount no greater than $35,000,000, (ii) is subordinate in
right of payment to all amounts payable under

 

24

 

the Securities and the New Notes, (iii) does not have a final Stated
Maturity prior to the Stated Maturity of the Securities and the New Notes, and
(iv) has an Average Life at least equal to the remaining Average Life of the
Securities and the New Notes.

 

Section 4.07.  Restricted Payments. 
The Company shall not

 

(a)        declare or pay any
dividend or make any distribution on its Capital Stock, other than dividends or
distributions paid in its or its Subsidiaries’ Capital Stock other than
Disqualified Stock;

 

(b)        purchase, redeem or
otherwise acquire or retire for value any of its Capital Stock or Options,
other than (1) the repurchase of unvested restricted stock in connection with
voluntary or involuntary terminations of employment with an aggregate purchase
price less than $100,000 per fiscal year, or (2) repurchases, redemptions,
acquisitions or retirements paid for with its or its Subsidiaries’ Capital
Stock other than Disqualified Stock or Options to buy Capital Stock other than
Disqualified Stock;

 

(c)        pay any funds to or for
the account of, make any investment in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, participate in, or effect,
any transaction with, any Affiliate except on an arms-length basis on terms at
least as favorable to the Company as could have been obtained from a
third-party that was not an Affiliate (except that the Company may enter into
compensatory arrangements with and pay such salary, bonus or other compensation
to employees, officers and directors as have been approved by a committee of
the Company’s Board of Directors comprised of independent directors); or

 

(d)        repay, redeem,
repurchase, defease or otherwise acquire or retire for value, any indebtedness
subordinated in right of payment to the Securities or the New Convertible Notes
except a payment of interest or principal when due.

 

 

ARTICLE 5

SUCCESSOR CORPORATION

 

Section 5.01.  When Company May Merge or Transfer
Assets.  Company shall not
consolidate with or merge with or into any other Person (other than in a merger
or consolidation in which the Company is the surviving Person) or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:

 

(a)        the Person (if other than the Company)
formed by such consolidation or into which the Company is merged or the Person
which

 

25

 

acquires by
conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety (i) shall be a corporation, partnership or trust
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company under the
Securities and this Indenture;

 

(b)        immediately after giving effect to such
transaction, no Default shall have occurred and be continuing; and

 

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

 

The successor Person formed by such
consolidation or into which the Company is merged or the successor Person to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein; and thereafter, except in the case of (i) a lease of its
properties and assets substantially as an entirety, the Company shall be
discharged from all obligations and covenants under this Indenture and the
Securities.

 

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01.  Events of Default.  “Event of Default” occurs if:

 

(a)        the Company defaults in
the payment of the principal amount of, premium, if any, Redemption Price or
Fundamental Change Redemption Price on any Security when the same becomes due
and payable at its Stated Maturity, upon redemption, upon declaration or
otherwise;

 

(b)        the Company defaults in
the payment of any installment of interest upon any of the Securities as and
when the same shall become due and payable, and continuance of such default for
30 days;

 

26

 

(c)        the Company fails to
comply with any of its agreements in the Securities, this Indenture or the
Junior Priority Security Documents and such failure continues for 60 days after
receipt by the Company of a Notice of Default;

 

(d)        a decree or order by a
court having jurisdiction in the premises shall have been entered adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under any Bankruptcy Law, and such decree
or order shall have continued undischarged and unstayed for a period of 60
consecutive days; or a decree or order of a court having jurisdiction in the
premises of the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding-up or liquidation of its affairs, shall have been entered, and such
decree or order shall have remained in force undischarged and unstayed of a
period of 60 consecutive days; or

 

(e)        the Company shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a petition
or answer or consent seeking reorganization under any Bankruptcy Law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
as they become due.

 

(f)         an event of default
under the Old Notes Indenture or the New Convertible Indenture shall have
occurred which results in the principal amount and accrued interest on that
debt becoming immediately due and payable.

 

“Bankruptcy Law” means Title 11, United
States Code, or any similar Federal or state law for the relief of debtors.

 

A Default under clause (c) above is not an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities 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 (3) above after actual receipt of such notice (a “Notice of
Default”).  Any such notice
must specify the Default, demand that it be remedied and state that such notice
is a Notice of Default.

 

Section 6.02.  Acceleration.  If an Event of Default (other than an Event of Default
specified in Section 6.01(d) or (e)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the principal amount and premium, if any, on all the

 

27

 

Securities and the interest accrued thereon to be immediately due and payable.  Upon such a declaration, such principal
amount, premium, if any, and interest accrued thereon shall be due and payable
immediately.  If an Event of Default
specified in Section 6.01(d) or (e) occurs and is continuing, the principal
amount and premium, if any, on all the Securities and the interest accrued
thereon shall become and be immediately due and payable without any declaration
or other act on the part of the Trustee or any Securityholders.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the principal amount, premium, if any, and interest
accrued thereon that has become due solely as a result of acceleration and if
all amounts due to the Trustee under Section 7.07 have been paid.  No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

 

Section 6.03. 
Other Remedies. 
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of the principal amount
and premium, if any, on the Securities and interest accrued thereon or to
enforce the performance of any provision of the Securities or this Indenture.

 

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

 

Section 6.04. 
Waiver of Past Defaults.  The Holders of a majority in aggregate principal
amount of the Securities at the time outstanding, by notice to the Trustee (and
without notice to any other Securityholder), may waive an existing Default and
its consequences except (1) an Event of Default described in Section 6.01(a) or
6.01(b), or (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected.  When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.

 

Section 6.05. 
Control by Majority. 
The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that conflicts

 

28

 

with law or this Indenture or that the Trustee determines in good faith
is unduly prejudicial to the rights of other Securityholders or would involve
the Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it.

 

Section 6.06. 
Limitation on Suits. 
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:

 

(a)           the Holder gives to the Trustee
written notice stating that an Event of Default is continuing;

 

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

 

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

 

(d)           the Trustee does not comply with the
request within 60 days after receipt of the notice, the request and the offer
of security or indemnity; and

 

(e)           the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding do not
give the Trustee a direction inconsistent with the request during such 60-day
period.

 

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

 

Section 6.07. 
Rights of Holders to Receive Payment.  Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of the
principal amount, premium, if any, accrued interest, Redemption Price or
Fundamental Change Redemption Price in respect of the Securities held by such Holder,
on or after the respective due dates expressed in the Securities or any
Redemption Date or Fundamental Change Repurchase Date, as the case may be, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected adversely without the
consent of each such Holder.

 

Section 6.08. 
Collection Suit by Trustee.  If an Event of Default described in Section 6.01(a) or
6.01(b) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount owing with respect to the Securities and the amounts provided for in
Section 7.07.

 

29

 

Section 6.09. 
Trustee May File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal amount, premium, if any, accrued interest, Redemption Price or
Fundamental Change Redemption Price in respect of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amount) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

 

(a)           to file and prove a
claim for the whole amount of the principal amount, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price 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 moneys or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.

 

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

 

Section 6.10. 
Priorities.  If
the Trustee collects any money pursuant to this Article 6 (including upon
realization of any Lien on the Collateral), it shall pay out the money in the
following order:

 

First:  to the Trustee for amounts due under Section
7.07;

 

Second:  to Securityholders for amounts due and
unpaid on the Securities for the principal amount, premium, if any, accrued
interest, Redemption Price or

 

30

 

Fundamental
Change Redemption Price, as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Securities; and

 

Third:  the balance, if any, to the Company.

 

The Trustee may fix a record date and payment
date for any payment to Securityholders pursuant to this Section 6.10.  At least 15 days before such record date,
the Company shall mail to each Securityholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.

 

Section 6.11. 
Undertaking for Costs.  In any suit for the enforcement of any right or
remedy, under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the Securities at the time outstanding.

 

Section 6.12. 
Waiver of Stay, Extension or Usury Laws.  The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury or other law wherever enacted, now or at
any time hereafter in force, which would prohibit or forgive the Company from
paying all or any portion of the principal amount, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price in respect of
Securities as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
laws 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 7

TRUSTEE

 

Section 7.01. 
Duties of Trustee. 
(a)  If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

 

31

 

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

 

(i)            the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others; 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. However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.

 

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

 

(i)            this paragraph (c) does not limit
the effect of paragraph (b) of this Section 7.01;

 

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

 

(iii)          the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05.

 

(d)        Every provision of this Indenture that
in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and
(e) of this Section 7.01.

 

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

 

(f)         Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law.

 

Section 7.02. 
Rights of Trustee. 
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or
matter stated in the document.

 

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

 

32

 

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

 

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

 

Section 7.03. 
Individual Rights of Trustee.  The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent, Registrar or co-registrar may do the same with the like rights.  However, the Trustee must comply with
Section 7.10.

 

Section 7.04. 
Trustee’s Disclaimer.  The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Securities, it shall not be responsible
for any statement in the Prospectus with respect to the Securities or in the
Indenture of the Securities (other than its certificate of authentication), the
acts of an prior Trustee hereunder, or the determination as to which beneficial
owners are entitled to receive any notices hereunder.

 

Section 7.05. 
Notice of Defaults. 
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall give to each Securityholder notice of the
Default within 90 days after it occurs. 
Except in the case of a Default described in Section 6.01(a) or 6.01(b),
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.  The
Trustee shall not give notice of a Default pursuant to Section 6.01(c) until at
least sixty (60) days have passed since its occurrence.

 

Section 7.06. 
Disqualification; Conflicting Interests.  If the Trustee has or shall
acquire any conflicting interest within the meaning of the TIA, it shall either
eliminate such conflicting interest or resign, to the extent and in the.  manner provided by, and subject to the
provisions of the TIA and this Indenture.

 

Section 7.07.  Compensation and Indemnity.  The Company agrees:

 

(a)           to pay to the Trustee from time to
time reasonable compensation for all services rendered by it under the
Noteholder Documents to which it is a party (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);

 

(b)           to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in

 

33

 

accordance
with any provision of the Noteholder Documents to which it is a party
(including the reasonable compensation and the expense, advances and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

 

(c)           to indemnify the Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under the Noteholder Documents to
which it is a party.

 

To secure the Company’s payment obligations
in this Section 7.07, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee, except that held in
trust to pay the principal amount, premium, if any, accrued interest,
Redemption Price or Fundamental Change Redemption Price, as the case may be, on
particular Securities.

 

The Company’s payment obligations pursuant to
this Section 7.07 shall survive the discharge of this Indenture.  When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(d)or (e), the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.

 

Section 7.08. 
Replacement of Trustee.  The Trustee may resign by so notifying the Company; provided
that if the Trustee resigns its position hereunder it shall be deemed to have
also resigned as trustee under the Junior Priority Security Documents.  Any such resignation shall not be effective
until a successor Trustee hereunder and under the Junior Priority Security Documents
has accepted its appointment pursuant to this Section 7.08.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee hereunder
and under the Junior Priority Security Documents.  The Company shall remove the Trustee if:

 

(a)           the Trustee fails to comply with, or
ceases to be eligible under, Section 7.10;

 

(b)           the Trustee is adjudged bankrupt or
insolvent;

 

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

 

(d)           the Trustee otherwise becomes
incapable of acting.

 

34

 

If the Trustee resigns or is removed or if a
vacancy exists in the office of Trustee for any reason, the Company shall
promptly appoint, by resolution of its Board of Directors, a successor Trustee
hereunder and under the Junior Priority Security Documents.

 

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 successor Trustee shall mail a notice of
its succession to Securityholders.  The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.

 

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

 

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

 

Section 7.09. 
Successor Trustee by Merger.  If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trustee business or assets  (including
the administration of the trust created by this Indenture) to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

 

Section 7.10. 
Eligibility; Disqualification.  The Trustee (or if a Trustee is a
member of a bank holding company, its bank holding company) shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of conditions. 
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.

 

Section 7.11. 
Preferential Collection of Claims Against
Company.  If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the TIA
regarding the collection of claims against the Company (or any such other
obligor).

 

Section 7.12. 
Reports by Trustee.

 

35

 

(a)        The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the TIA at the times and in the manner provided
pursuant thereto.

 

(b)        A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange or market upon which the Securities are listed, with the Commission
and with the Company.  The Company will
notify the Trustee when the Securities are listed on any stock exchange or
market.

 

 

ARTICLE 8

DISCHARGE OF INDENTURE

 

Section 8.01. 
Discharge of Liability on Securities.  When (i) the Company delivers to
the Trustee all outstanding Securities (other than Securities replaced pursuant
to Section 2.07) for cancellation or (ii) all outstanding Securities have
become due and payable and the Company deposits with the Trustee cash and/or
securities, as permitted by the terms hereof, sufficient to pay at Stated
Maturity the principal amount of all outstanding Securities (other than Securities
replaced pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 7.07, cease to be of further effect as to all outstanding Securities
issued hereunder and all Security Interests in the Collateral created by the
Junior Priority Security Documents in favor of the Trustee and the
Securityholders.  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 8.02. 
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, provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, shall at the expense of the Company
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each such Holder notice that such money or securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company.  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.

 

36

 

ARTICLE 9

AMENDMENTS

 

Section 9.01. 
Without Consent of Holders.  The Company and the Trustee may amend this Indenture
or the Securities without the consent of any Securityholder:

 

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

 

(b)           to comply with Article 5;

 

(c)           to provide for uncertificated
Securities in addition to certificated Securities so long as such
uncertificated Securities are in registered form for purposes of the Internal
Revenue Code of 1986, as amended;

 

(d)           to make any change that does not
adversely affect the right of any Securityholder;

 

(e)           to make any change to comply with the
TIA, or any amendment thereto, or to comply with any requirement of the SEC in
connection with the qualification, if any, of the Indenture under the TIA;

 

(f)            to add any additional assets as
Collateral;

 

(g)           to reflect the grant of Liens on the
Collateral for the benefit of another secured party to the extent such
indebtedness is permitted by the terms of Section 4.06(e) of this Indenture;

 

(h)           to release Collateral from the Lien
of this Indenture and the Junior Priority Security Documents when permitted or
required by the Noteholder Documents; or

 

(i)            to conform the text of this
Indenture or the other Noteholder Documents to any provision contained in the
Prospectus under the section “Description of the 2009 Secured Notes.”

 

Section 9.02. 
With Consent of Holders.  With the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities at the time
outstanding, the Company and the Trustee may amend this Indenture or the
Securities.  However, without the
consent of each Securityholder affected, an amendment or supplement to this
Indenture or the Securities may not:

 

(a)           make any change to the manner or rate
of accrual in connection with interest, reduce the rate of interest referred to
in paragraph

 

37

 

1 of the
Securities or extend the time for payment of interest on any Security;

 

(b)           reduce the Redemption Price or extend
the Stated Maturity;

 

(c)           reduce the Redemption Price or
Fundamental Change Redemption Price of any Security;

 

(d)           make any Security payable in money or
securities other than that stated in the Security;

 

(e)           make any change in Section 6.04 or
this Section 9.02, except to increase any such percentage; or

 

(f)            make any change that adversely
affects the right to require the Company to redeem the Securities upon a
Fundamental Change in accordance with the terms thereof and this Indenture;

 

and no such
amendment or supplement to this Indenture may reduce the aforesaid percentage
of Securities whose Holders must consent to any such amendment or supplemental
indenture, without the consent of the Holders of all the Securities then
outstanding.

 

It shall not be necessary for the consent of
the Holders under this Section 9.02 to approve the particular form of any
proposed amendment or supplemental indenture, but it shall be sufficient if
such consent approves the substance thereof.

 

After an amendment under this Section 9.02
becomes effective, the Company shall mail to each Holder a notice briefly describing
the amendment.

 

Section 9.03. 
Compliance with TIA. 
Every supplemental indenture executed pursuant to this
Article shall comply with the TIA as then in effect.

 

Section 9.04. 
Revocation and Effect of Consents, Waivers and
Actions.  Until an amendment,
supplemental indenture, waiver or other action becomes effective, a consent to
it or any other action by a Holder of a Security hereunder is a continuing
consent by the Holder and every subsequent Holder of that Security or portion
of the Security that evidences the same obligation as the consenting Holder’s
Security, even if notation of the consent, waiver or action is not made on the
Security.  However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder’s
Security or portion of the Security if the Trustee receives the notice or
revocation before the date the amendment, supplemental indenture, waiver or
action becomes effective.  After an
amendment, supplemental indenture, waiver or action becomes effective, it shall
bind every Securityholder.

 

38

 

Section 9.05. 
Notation on or Exchange of Securities.  Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article
may, and shall if required by the Trustee, bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Securities,

 

Section 9.06. 
Trustee to Sign Supplemental Indentures.  The Trustee shall sign any
supplemental indenture authorized pursuant to this Article 9 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If it does, the Trustee may,
but need not, sign such supplemental indenture.  In signing such supplemental indenture the Trustee shall be
entitled to receive, and (subject to the provisions of Section 7.01) shall be
fully protected in relying upon, an Officers’ Certificate and an Opinion of
Counsel stating that such supplemental indenture is authorized or permitted by
this Indenture.

 

Section 9.07. 
Effect of Supplemental Indentures.  Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

Notwithstanding anything to the contrary
contained in this Article 9, the Company may amend (i) the Secured Credit
Facility and (ii) to the extent contemplated by the Intercreditor Agreement and
Section 11.04 hereof, any agreement or instrument evidencing a Security
Interest without the consent of Trustee or any Securityholder.

 

 

ARTICLE 10

RANKING OF NOTE LIENS

 

Section 10.01.  Agreement
for the Benefit of Holders of Senior Priority Liens.  The Trustee and each Securityholder by accepting a
Security agrees, that:

 

(a)        the Junior Priority Liens securing the
Securities upon any and all Collateral are, to the extent and in the manner
provided in the Intercreditor Agreement, junior in ranking to all present and
future Senior Priority Liens:

 

(i)        are enforceable by the holders of Senior
Priority Liens, for the benefit of the holders of Senior Priority Lien
Obligations secured thereby;

 

39

 

(ii)       will remain enforceable by the holders of
Senior Priority Liens until the payment in full in cash of all Senior Priority
Lien Obligations.

 

(b)        without the necessity of any consent of
or prior notice to the Trustee or any Securityholder, the Company may
(1) amend, modify, supplement or terminate the Senior Credit Facility and
(2) enter into such agreements, including an Intercreditor Agreement, as
may be necessary or desirable to reflect its grant of Senior Priority Liens on
the Collateral for the benefit of additional secured parties, as permitted
under Section 4.06(e) of this Indenture.

 

(c)        as among the Trustee and the Securityholders
and the holders of Senior Priority Liens, the holders of the Senior Priority
Liens and the Administrative Agent will have the sole ability to control and
obtain remedies with respect to all Collateral without the necessity of any
consent of or notice to the Trustee or any Securityholder, as set forth in more
detail in the Intercreditor Agreement;

 

(d)        any or all Liens as set forth in, and
granted under the Junior Priority Security Documents for the benefit of the
Securityholders will be released by the Trustee as provided by Sections 3 or
5(b) of the Intercreditor Agreement, without the necessity of any consent of
the Securityholders, upon the request of the Administrative Agent;

 

(e)        the Indenture and Securities are subject
to the Intercreditor Agreement.  In case
of any conflict or inconsistency between the terms of the Intercreditor
Agreement and the Junior Priority Security Documents, the terms of the
Intercreditor Agreement shall control.

 

Section 10.02.  Securities
not Subordinated.  The provisions
of this Article 10 are intended solely to set forth the relative ranking, as
Liens, of the Junior Priority Liens as against the Senior Priority Liens.  The Securities are senior non-subordinated
obligations of the Company.  Neither the
Securities nor the exercise or enforcement of any right or remedy for the
payment or collection thereof (other than the exercise of rights and remedies
of a secured party, which are subject to the Intercreditor Agreement) are
intended to be, or will ever be by reason of the provisions of this Article 10,
in any respect subordinated, deferred, postponed, restricted or prejudiced.

 

Section 10.03.  Relative
Rights.  The Intercreditor
Agreement defines the relative rights, as lienholders, of holders of Junior
Priority Liens and holders of Senior Priority Liens.  Nothing in this Indenture or the Intercreditor Agreement will:

 

40

 

(a)        impair, as between the Company and the
Securityholders, the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium and interest on such Securities in
accordance with their terms or to perform any other obligation of the Company
under this Indenture or the Securities;

 

(b)        restrict the right of any Securityholder
to sue for payments that are then due and owing;

 

(c)        prevent the Trustee or any
Securityholder from exercising against the Company or any other obligor any of
its other available remedies upon a Default or Event of Default (other than its
rights as a secured party, which are subject to the Intercreditor Agreement);
or

 

(d)        restrict the right of the Trustee or any
Securityholder:

 

(i)        to file and prosecute a petition seeking
an order for relief in an involuntary bankruptcy case as to the Company or otherwise
to commence, or seek relief commencing, any insolvency or liquidation
proceeding involuntarily against the Company;

 

(ii)       to make, support or oppose any request
for an order for dismissal, abstention or conversion in any insolvency or
liquidation proceeding;

 

(iii)      to make, support or oppose, in any
insolvency or liquidation proceeding, any request for an order extending or
terminating any period during which the debtor (or any other Person) has the
exclusive right to propose a plan of reorganization or other dispositive
restructuring or liquidation plan therein;

 

(iv)     to seek the creation of, or appointment to,
any official committee representing creditors (or certain of the creditors) in
any insolvency or liquidation proceedings and, if appointed, to serve and act
as a member of such committee without being in any respect restricted or bound
by, or liable for, any of the obligations under this Article 10;

 

(v)      to seek or object to the appointment of
any professional person to serve in any capacity in any insolvency or
liquidation proceeding or to support or object to any request for compensation
made by any professional person or others therein;

 

(vi)     to make, support or oppose any request for
order appointing a trustee or examiner in any insolvency or liquidation
proceedings; or

 

41

 

(vii)    otherwise to make, support or oppose any
request for relief in any insolvency or liquidation proceeding that it is
permitted by law to make, support or oppose;

 

(x)            if
it were a holder of unsecured claims; or

 

(y)           as
to any matter relating to any plan of reorganization or other restructuring or
liquidation plan or as to any matter relating to the administration of the
estate or the disposition of the case or proceeding

 

(except as set forth in the Intercreditor Agreement).

 

 

ARTICLE 11

COLLATERAL AND SECURITY

 

Section 11.01.  Junior
Priority Security Documents.

 

(a)        The payment of the principal of and
interest and premium, if any, on the Securities when due, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise by the Company and the performance of all other obligations of the
Company under this Indenture and the Securities are secured as provided in the
Junior Priority Security Documents which the Company and Trustee have entered
into simultaneously with the execution of this Indenture and will be secured by
Junior Priority Security Documents hereafter delivered as required or permitted
by this Indenture.

 

(b)        Pursuant to the terms of the Junior
Priority Security Agreements, the Company has agreed to take such actions as
may be necessary to perfect the Security Interests.  To the extent that perfection of the Collateral secured pursuant
to the Intellectual Property Security Agreement may be attained by filing of
financing statements under the Code, such actions will be taken on or prior to
the date hereof.  To the extent that
perfection of such Security Interests requires recordation with the Copyright
Office and Patent and Trademark Office, the Company shall file the
documentation required to effect such recordation on or before the date hereof
and shall notify the Trustee of such recordation upon its effectiveness.

 

Section 11.02.  Trustee’s
Rights and Obligations with Respect to the Collateral.

 

(a)        Subject to Section 7.01, neither the
Trustee nor any of its respective officers, directors, employees, attorneys or
agents will be responsible or liable for the existence, genuineness, value or
protection of any Collateral, for the legality,

 

42

 

enforceability, effectiveness or sufficiency of the Junior Priority
Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Junior Priority Lien, or for any defect or deficiency as to
any such matters, or for any failure to demand, collect, foreclose or realize
upon or otherwise enforce any of the Junior Priority Liens or Junior Priority
Security Documents or any delay in doing so.

 

(b)        Except as required or permitted by this
Indenture, the Trustee will not be obligated:

 

(i)        to act upon directions purported to be
delivered to it by any other Person;

 

(ii)       to foreclose upon or otherwise enforce
any Junior Priority Lien; or

 

(iii)      to take any other action whatsoever with
regard to any or all of the Junior Priority Liens, Junior Priority Security
Documents or Collateral.

 

(c)        The Trustee will be accountable only for
amounts that it actually receives as a result of the enforcement of the Junior
Priority Liens or Junior Priority Security Documents.

 

Section 11.03.  Authorization
of Actions to be Taken.

 

(a)        Each Securityholder, by its acceptance
thereof, consents and agrees to the terms of the Noteholder Documents, as
originally in effect and as amended, supplemented or replaced from time to time
in accordance with its terms, authorizes and directs the Trustee to enter into
and deliver the Noteholder Documents to which it is a party, and authorizes and
empowers the Trustee to bind the Securityholders as set forth in the Noteholder
Documents to which it is a party and to perform its obligations and exercise
its rights and powers thereunder.

 

(b)        The Trustee is authorized and empowered
to receive for the benefit of the Securityholders any funds collected or
distributed under the Noteholder Documents to which the Trustee is a party and
to make further distributions of such funds to the Securityholders according to
the provisions of this Indenture.

 

(c)        Subject to the provisions of Section
7.01, Section 7.02, Article 10, and the Intercreditor Agreement, the Trustee
may, in its sole discretion and without the consent of the Securityholders take
all actions it deems necessary or appropriate in order to:

 

(i)        foreclose upon or otherwise enforce any
or all of the Junior Priority Liens;

 

43

 

(ii)       enforce any of the terms of the
Noteholder Documents to which the Trustee is a party; or

 

(iii)      collect and receive payment of any and all
Securities.

 

Subject to the Intercreditor Agreement, the Trustee is authorized and
empowered to institute and maintain such suits and proceedings as it may deem
expedient to protect or enforce the Junior Priority Liens or the Junior
Priority Security Documents to which the Trustee is a party or to prevent any
impairment of Collateral by any acts that may be unlawful or in violation of
the Junior Priority Security Documents to which Trustee is a party or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Securityholders in
the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the Security Interests under the Junior Priority Security
Documents or be prejudicial to the interests of Securityholders or the Trustee.

 

Section 11.04.  Release of
Junior Priority Liens.

 

(a)        The Junior Priority Liens will be
released, with respect to the Securities:

 

(i)        in accordance with Sections 3 and 5(b)
of the Intercreditor Agreement;

 

(ii)       in whole, upon payment in full of the
principal of, accrued and unpaid interest and premium, if any, on the
Securities;

 

(iii)      in whole, upon satisfaction and discharge
of this Indenture pursuant to Section 8.01;

 

(iv)     in part, as to any property constituting
Collateral that is sold or otherwise disposed of by the Company to any Person
other than the Company in a transaction permitted by the Noteholder Documents,
at the time of such sale or disposition, to the extent of the interest sold or
disposed of.

 

(b)        Upon delivery to the Trustee of an
Officers’ Certificate requesting execution of an instrument confirming the
release of the Junior Priority Liens pursuant to Section 11.04(a), accompanied
by:

 

(i)        an Opinion of Counsel confirming that
such release is permitted by Section 11.04(a); and

 

44

 

(ii)       all instruments requested by the Company
to effectuate or confirm such release.

 

The Trustee will promptly execute and deliver such instruments.

 

(c)        All instruments effectuating or confirming
any release of any Junior Priority Liens will have the effect solely of
releasing such Junior Priority Liens as to the Collateral described therein, on
customary terms and without any recourse, representation, warranty or liability
whatsoever.

 

(d)        The Company will bear and pay all costs
and expenses associated with any release of Junior Priority Liens pursuant to
this Section 11.04, including all reasonable fees and disbursements of any
attorneys or representatives acting for the Trustee.

 

Section 11.05.  Filing,
Recording and Opinions.

 

(a)        The Company will comply with the
provisions of TIA §314(b) and 314(d), except to the extent not required as set
forth in any Commission regulation or interpretation (including any no-action
letter issued by the Staff of the Commission, whether issued to the Company or
any other Person).  To the extent the
Company is required to furnish to the Trustee an Opinion of Counsel pursuant to
TIA §314(b)(2), the Company will furnish such opinion not more than 60 but not
less than 30 days prior to each December [23].

 

(b)        Any release of Collateral permitted by
Section 11.04 hereof will be deemed not to impair the Liens under the Indenture
and the Junior Priority Security Documents in contravention thereof and any
person that is required to deliver an Officer’s Certificate or Opinion of
Counsel pursuant to Section 314(d) of the TIA, shall be entitled to rely upon
the foregoing as a basis for delivery of such certificate or opinion.  The Trustee may, to the extent permitted by
Section 7.01 and Section 7.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained
in such documents and Opinion of Counsel.

 

 

ARTICLE 12

MISCELLANEOUS

 

Section 12.01.  Conflict
with TIA.  If any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required under the TIA to be a part of and govern this Indenture, the latter
provision shall control.  If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or excluded, as the case may be.

 

45

 

Section 12.02.  Notices.  Any request, demand,
authorization, notice, waiver, consent or communication shall be in writing and
delivered in person or mailed by first class mail, postage prepaid, addressed
as follows or transmitted by facsimile transmission (confirmed by overnight
courier) to the following facsimile numbers:

 

if to the Company:

 

Silicon Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:       General Counsel

Telephone Number:             (415)
960-1980

Facsimile Number:                (415)
969-6289

 

if to the Trustee:

 

U.S. Bank National Association

633 West Fifth Street, 24th Floor

Los Angeles, California 90071

Attention:  Corporate Trust Services
(Silicon Graphics, Inc.)

Telephone Number:  (213) 615-6043

Telefax Number:  (213) 615-6197

Paula.Oswald@usbank.com

 

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 given to a
Securityholder shall be mailed to the Securityholder, by first class mail,
postage prepaid, at the Securityholder’s address as it appears on the
registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

 

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

 

If the Company mails a notice or
communication to the Securityholders, it shall mail a copy to the Trustee and
each Registrar, Paying Agent, Conversion Agent or co-registrar.

 

Section 12.03.  Communication
by Holders with Other Holders.  Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities.

46

 

The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).

 

Section 12.04.  Certificate
and Opinion as to Conditions Precedent. 
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:

 

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

 

(b)           an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been
complied with.

 

Section 12.05.  Statements
Required in Certificate or Opinion.  Each
Officers’ Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:

 

(a)           a statement that each person making
such Officers’ Certificate or Opinion of Counsel has read such covenant or
condition,

 

(b)           a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such Officers’ Certificate or Opinion of Counsel are
based;

 

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

 

(d)           a statement that, in the opinion of
such person, such covenant or condition has been complied with.

 

Section 12.06.  Separability
Clause.  In case any
provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

Section 12.07.  Rules By
Trustee, Paying Agent, Conversion Agent and Registrar.  The Trustee may make reasonable
rules for action by or a meeting of Securityholders.  The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.

 

Section 12.08.  Legal
Holidays.  A “Legal
Holiday” is any day other than a Business Day.  If any specified date (including a date for
giving notice) is a Legal Holiday, the action shall be taken on the next
succeeding day that is not a

 

47

 

Legal Holiday, and, to the extent applicable, no interest, if any,
shall accrue for the intervening period.

 

Section 12.09.  Governing
Law.  THE LAWS OF THE STATE
OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES.

 

Section 12.10.  No Recourse
Against Others.  A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Securityholder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.

 

Section 12.11.  Successors.  All agreements of the Company in
this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.

 

Section 12.12.  Multiple
Originals.  The parties may
sign any number of copies of this Indenture. 
Each signed copy shall be an original, but all of them together
represent the same agreement.  One
signed copy is enough to prove this Indenture.

 

48

 

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

 

	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Zellmer

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ________________________

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paula M. Oswald

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

49

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

[FORM OF LEGEND FOR GLOBAL 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.]

 

SILICON GRAPHICS, INC.

 

$              
11.75% SENIOR SECURED NOTE DUE 2009

 

	
  REGISTERED

  	
   

  	
  CUSIP No. 827056 AE 2

  

No. 1

 

Silicon Graphics, Inc., a Delaware
corporation, promises to pay to or registered assigns, the principal amount
of                     
Dollars ($) on June 1, 2009 and to pay interest thereon from
December     , 2003 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semi-annually on December 1 and June 1 in each year, commencing
June 1, 2004, at the rate of 11.75% 
per annum until the principal hereof is paid or made available for
payment.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date, as provided
in such Indenture, will be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be November 15 or
May 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date.  Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the

 

A-1

 

requirements
of any securities exchange or other market on which the Securities may be
listed, and upon such notice as may be required by such exchange or market, all
as more fully provided in said Indenture. 
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the Corporate Trust Office or the office or agency of
the Company maintained for that purposes in the Borough of Manhattan, The City
of New York, New York in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of, or by wire transfer to the
account of, the Person entitled thereto as such address shall appear in the
Security Register.

 

Additional provisions of this Security are
set forth on the other side of this Security.

 

A-2

 

IN WITNESS WHEREOF, Silicon Graphics,
Inc.  has caused this instrument to be
duly executed under its corporate seal.

 

	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This is one of the Securities referred to in the within mentioned
  Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
									

 

A-3

 

[FORM OF REVERSE SIDE OF SECURITY]

 

SILICON GRAPHICS, INC.

 

11.75% SENIOR SECURED NOTE DUE 2009

 

1.             Interest

 

This Security shall bear interest at 11.75%
per annum in the manner set forth in the Indenture and the face of this
Security.  In the event that principal
hereof or any portion of such principal is not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 5 hereof, upon the date
set for payment of a Fundamental Change Redemption Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Security), then in each such case
the overdue amount shall bear interest at the rate of 11.75% per annum,
compounded semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest shall accrue from the date such overdue
amount was due to the date payment of such amount, including interest thereon,
has been made or duly provided for.  All
such interest shall be payable on demand.

 

2.             Method of Payment

 

Subject to the terms and conditions of the
Indenture, the Company will make payments in respect of the Securities to the
persons who are registered Holders of Securities at the close of business on
the Redemption Date, Fundamental Change Repurchase Date or Stated Maturity, as
the case may be.  Holders must surrender
Securities to a Paying Agent to collect such payments in respect of the
Securities.  The Company will pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  However, the Company may make such cash payments by check mailed
to the address of, or by wire transfer to the account of, the person entitled
to such payment.

 

3.             Paying Agent and
Registrar

 

Initially, U.S. Bank National Association, a
national banking association (the “Trustee”), will act as Paying Agent and
Registrar.  The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice, other than
notice to the Trustee.  The Company or
any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.

 

 

A-4

 

4.             Indenture

 

The Company issued the Securities under an
Indenture dated as of December [      ],
2003 (the “Indenture”), between the Company and the Trustee.  Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Securityholders are referred to the Indenture for a statement of those
terms.

 

The Securities are general unsecured
obligations of the Company limited to $230,591,000 aggregate principal amount
(subject to Sections 2.02 and 2.07 of the Indenture).

 

5.             Redemption at the
Option of the Company

 

Prior to June 1, 2004, the Securities
will not be redeemable at the option of the Company.  Beginning on June 1, 2004, the Company may redeem the
Securities for cash as a whole at any time, or from time to time in part, upon
not less than 10 days’ nor more than 60 days’ notice at the following prices
(the “Redemption
Price”) (expressed as percentages of the principal amount), together
with accrued and unpaid interest to, but excluding, the Redemption Date.  Beginning on June 1, 2004, the
Redemption Price shall be 104% of the principal amount plus accrued and unpaid
interest thereon.  Beginning on
June 1, 2005, the Redemption Price shall be 103% plus accrued and unpaid
interest thereon.  Beginning on
June 1, 2006, the Redemption Price shall be 102% plus accrued and unpaid
interest thereon.  Beginning on June 1,
2007, the Redemption Price shall be 101% plus accrued and unpaid interest
thereon.  Beginning on June 1,
2008, the Redemption Price shall be 100% plus accrued and unpaid interest
thereon.

 

If any Redemption Date is an Interest Payment
Date, then the interest payable on such date shall be paid to the Holder of the
Security on the next preceding Regular Record Date.  No Securities may be redeemed by the Company if an Event of
Default with respect to the payment of interest on the Securities has occurred
and is continuing.

 

No sinking fund is provided for the
Securities.

 

Notice of redemption at the option of the
Company will be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Securities to be redeemed at the Holder’s
registered address.  If money sufficient
to pay the Redemption Price, together with accrued interest to, but excluding,
the Redemption Date, of all Securities (or portions thereof) to be redeemed on
the Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, on and after such date interest ceases to accrue on such
Securities or portions thereof. 
Securities in denominations larger than $1,000 of

 

 

A-5

 

principal
amount may be redeemed in part but only in multiples of $1,000 of principal
amount.

 

6.             Redemption at the
Option of the Holder Upon a Fundamental Change

 

(a)           At the option of the Holder and
subject to the terms and conditions of the Indenture, the Company shall become
obligated to redeem the Securities held by such Holder on the date (the “Fundamental
Change Repurchase Date”) (or if such date is not a Business Day, the
next succeeding Business Day) that is 45 days after the date of the Company’s
notice of such Fundamental Change (as defined in the Indenture) occurring on or
prior to June 1, 2009 at 100% of the principal amount.  In each case, the Company shall also pay
accrued but unpaid interest, if any, on such Securities to, but excluding, the
Fundamental Change Repurchase Date; provided that if such Fundamental Change
Repurchase Date is an Interest Payment Date, then the interest payable on such
date shall be paid to the Holder of the Security on the next preceding Regular
Record Date.  Securities in
denominations larger than $1,000 of principal amount may be redeemed in part in
connection with a Fundamental Change, but only in multiples of $1,000 of
principal amount.

 

(b)           Holders have the right to withdraw
any Fundamental Change Redemption Notice by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the
Indenture.

 

(c)           If cash sufficient to pay the
Fundamental Change Redemption Price, together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, of all Securities or
portions thereof to be purchased as of the Fundamental Change Repurchase Date
is deposited with the Paying Agent on or prior to the Fundamental Change
Repurchase Date, interest ceases to accrue on such Securities (or portions
thereof) on and after the Fundamental Change Repurchase Date, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Fundamental Change Redemption Price, together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, upon surrender of such
Security).

 

7.             Denominations;
Transfer; Exchange

 

The Securities are in registered form,
without coupons, in denominations of $1,000 of principal amount and multiples
of $1,000.  A Holder may transfer or
exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture.  The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a

 

 

A-6

 

Fundamental
Change Redemption Notice has been given and not withdrawn (except, in the case
of a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.

 

8.             Persons Deemed
Owners

 

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

 

9.             Unclaimed Money or
Securities

 

The Trustee and the Paying Agent shall return
to the Company upon written request any money or securities held by them for
the payment of any amount with respect to the Securities that remains unclaimed
for two years, provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, shall at the expense of the Company
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each such Holder notice that such money or securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company.  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.

 

10.          Amendment; Waiver

 

Subject to certain exceptions set forth in
the Indenture, (i) the Indenture or the Securities may be amended with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities at the time outstanding and (ii) certain defaults or
noncompliance with certain provisions may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the Securities at
the time outstanding.  Subject to
certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article 5 of the Indenture, to provide for uncertificated Securities in
addition to or in place of certificated Securities or to make any change that
does not adversely affect the rights of any Securityholder or to comply with
any requirement of the SEC in connection with the qualification of the
Indenture under the TIA.

 

 

A-7

 

11.          Defaults and Remedies

 

Under the Indenture, Events of Default
include (i) default in payment of the principal amount, Redemption Price or
Fundamental Change Redemption Price, as the case may be, in respect of the
Securities when the same becomes due and payable; (ii) default for 30 days in
the payment of any installment of interest on the Securities; (iii) failure by
the Company to comply with other agreements in the Indenture or the Securities,
subject to notice and lapse of time; (iv) an event of default under the Old
Notes Indenture, the New Convertible Indenture or the Junior Priority Security
Documents shall have occurred that results in the principal amount of and
accrued interest on that debt becoming immediately due and payable, and (v)
certain events of bankruptcy or insolvency. 
If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate principal amount of the Securities at the
time outstanding, may declare all the Securities to be due and payable
immediately.  Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being declared due and payable immediately upon the occurrence of
such Events of Default.

 

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

 

12.          Lien Subordination
and Sharing.  This Security is secured by Junior Priority
Liens upon the Collateral pursuant to certain Junior Priority Security
Documents.  The Junior Priority Liens
upon any and all Collateral are, to the extent and in the manner provided in
the Intercreditor Agreement, subordinate in ranking to all present and future
Senior Priority Liens as set forth in the Indenture and the Intercreditor
Agreement.

 

13.          Trustee Dealings with
the Company

 

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

 

14.          No Recourse Against
Others

 

A director, officer, employee or stockholder,
as such, of the Company shall not have any liability for any obligations of the
Company under the

 

A-8

 

Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Securityholder waives and releases all such
liability.  The waiver and release are
part of the consideration for the issue of the Securities.

 

15.          Authentication

 

This Security shall not be valid until an
authorized officer of the Trustee manually signs the Trustee’s Certificate of
Authentication on the other side of this Security.

 

16.          Abbreviations

 

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

 

17.          Governing Law

 

THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THIS SECURITY.

 

 

The Company will furnish to any
Securityholder upon written request and without charge a copy of the Indenture
which has in it the text of this Security in larger type.  Requests may be made to:

 

Silicon Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:  General Counsel

 

A-9

 

[FORM OF OPTION TO ELECT REDEMPTION

UPON A FUNDAMENTAL CHANGE]

 

To:          Silicon Graphics,
Inc.

 

The undersigned registered holder of this
Security hereby acknowledges receipt of a notice from Silicon Graphics,
Inc.  (the “Company”) as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem this Security, or the portion hereof (which is
$1,000 principal amount or a multiple thereof) below designated, in accordance
with the terms of the Indenture referred to in this Security.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  principal amount to be redeemed

  
	
   

  	
  (if less than all):

  	
   

  
	
   

  	
   

  
	
   

  	
  $

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or other

  	
   

  
	
   

  	
  Taxpayer Identification Number

  	
   

  

 

A-10

 

[FORM OF ASSIGNMENT]

 

For value received
                     
hereby sell(s), assign(s) and transfer(s) unto 

 

(Please insert social security or other
taxpayer identification number of assignee.)

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee

  	
   

  

 

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

 

 

A-11Exhibit
4.3

 

SILICON
GRAPHICS, INC.

 

6.50%
Senior Secured Convertible Notes Due 2009

 

 

INDENTURE

 

Dated
as of December   , 2003

 

 

U.S.
BANK NATIONAL ASSOCIATION

TRUSTEE

 

 

CROSS-REFERENCE TABLE

 

	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.06; 7.08

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05; 2.14

  
	
   

  	
  (b)

  	
   

  	
  2.14(b); 13.03

  
	
   

  	
  (c)

  	
   

  	
  2.14(c); 13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.12(a)

  
	
   

  	
  (b)

  	
   

  	
  7.12(a)

  
	
   

  	
  (c)

  	
   

  	
  7.12(a)

  
	
   

  	
  (d)

  	
   

  	
  7.12(b)

  
	
  314

  	
  (a)

  	
   

  	
  4.03; 4.04

  
	
   

  	
  (b)

  	
   

  	
  12.05

  
	
   

  	
  (c)(1)

  	
   

  	
  13.04

  
	
   

  	
  (c)(2)

  	
   

  	
  13.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  12.05

  
	
   

  	
  (e)

  	
   

  	
  13.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(1)(A)

  	
   

  	
  6.02

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  13.01

  

 

Note:      This cross-reference table
shall not, for any purpose, have been deemed to be a part of the Indenture.

 

 

TABLE OF CONTENTS(1)

 

	
  ARTICLE 1

  DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
   

  
	
   

  	
   

  
	
  Section 1.01.  Definitions.

  	
   

  
	
  Section 1.02.  Other Definitions.

  	
   

  
	
  Section 1.03.  Incorporation by Reference of TIA

  	
   

  
	
  Section 1.04.  Rules of Construction

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2

  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  Section 2.01.  Form and Dating

  	
   

  
	
  Section 2.02.  Execution And Authentication

  	
   

  
	
  Section 2.03.  Registrar, Paying Agent and Conversion Agent

  	
   

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

  	
   

  
	
  Section 2.05.  Securityholder Lists

  	
   

  
	
  Section 2.06.  Exchange and Registration of Transfer of
  Securities; Depositary

  	
   

  
	
  Section 2.07.  Replacement Securities

  	
   

  
	
  Section 2.08.  Outstanding Securities; Determinations of Holders’
  Action

  	
   

  
	
  Section 2.09.  Temporary Securities

  	
   

  
	
  Section 2.10.  Cancellation

  	
   

  
	
  Section 2.11.  Persons Deemed Owners

  	
   

  
	
  Section 2.12.  Payment of Interest; Interest Rights Preserved

  	
   

  
	
  Section 2.13.  Computation of Interest

  	
   

  
	
  Section 2.14.  Preservation of Information; Communications to
  Holders.

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3

  REDEMPTION

  	
   

  
	
   

  	
   

  
	
  Section 3.01.  Right to Redeem; Notices to Trustee

  	
   

  
	
  Section 3.02.  Selection of Securities to be Redeemed

  	
   

  
	
  Section 3.03.  Notice of Redemption

  	
   

  
	
  Section 3.04.  Effect of Notice of Redemption

  	
   

  
	
  Section 3.05.  Deposit of Redemption Price

  	
   

  
	
  Section 3.06.  Securities Redeemed in Part

  	
   

  

 

(1)  This Table of Contents
shall not, for any purpose, be deemed to be part of the Indenture.

 

 

i

 

	
  Section 3.07.  Conversion Arrangement on Call for Redemption

  	
   

  
	
  Section 3.08.  Redemption at Option of the Holder upon a
  Fundamental Change

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4

  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 4.01.  Payment of Securities

  	
   

  
	
  Section 4.02.  SEC Reports

  	
   

  
	
  Section 4.03.  Compliance Certificate

  	
   

  
	
  Section 4.04.  Further Instruments and Acts

  	
   

  
	
  Section 4.05.  Maintenance of Office or Agency

  	
   

  
	
  Section 4.06.  Restriction on Additional Indebtedness

  	
   

  
	
  Section 4.07.  Restricted Payments

  	
   

  
	
   

  	
   

  
	
  Article 5

  SUCCESSOR CORPORATION

  	
   

  
	
   

  	
   

  
	
  Section 5.01.  When Company May Merge or Transfer Assets

  	
   

  
	
   

  	
   

  
	
  Article 6

  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 6.01.  Events of Default

  	
   

  
	
  Section 6.02.  Acceleration

  	
   

  
	
  Section 6.03.  Other Remedies

  	
   

  
	
  Section 6.04.  Waiver of Past Defaults

  	
   

  
	
  Section 6.05.  Control by Majority

  	
   

  
	
  Section 6.06.  Limitation on Suits

  	
   

  
	
  Section 6.07.  Rights of Holders to Receive Payment

  	
   

  
	
  Section 6.08.  Collection Suit by Trustee

  	
   

  
	
  Section 6.09.  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10.  Priorities

  	
   

  
	
  Section 6.11.  Undertaking for Costs

  	
   

  
	
  Section 6.12.  Waiver of Stay, Extension or Usury Laws

  	
   

  
	
   

  	
   

  
	
  Article 7

  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section 7.01.  Duties of Trustee

  	
   

  
	
  Section 7.02.  Rights of Trustee

  	
   

  
	
  Section 7.03.  Individual Rights of Trustee

  	
   

  
	
  Section 7.04.  Trustee’s Disclaimer

  	
   

  
	
  Section 7.05.  Notice of Defaults

  	
   

  
	
  Section 7.06.  Disqualification; Conflicting Interests

  	
   

  

 

ii

 

	
  Section 7.07.  Compensation and Indemnity

  	
   

  
	
  Section 7.08.  Replacement of Trustee

  	
   

  
	
  Section 7.09.  Successor Trustee by Merger

  	
   

  
	
  Section 7.10.  Eligibility; Disqualification

  	
   

  
	
  Section 7.11.  Preferential Collection of Claims Against Company

  	
   

  
	
  Section 7.12.  Reports by Trustee.

  	
   

  
	
   

  	
   

  
	
  Article 8

  DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  Section 8.01.  Discharge of Liability on Securities

  	
   

  
	
  Section 8.02.  Repayment to the Company

  	
   

  
	
   

  	
   

  
	
  Article 9

  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  Section 9.01.  Without Consent Of Holders

  	
   

  
	
  Section 9.02.  With Consent of Holders

  	
   

  
	
  Section 9.03.  Compliance with TIA

  	
   

  
	
  Section 9.04.  Revocation and Effect of Consents, Waivers and
  Actions

  	
   

  
	
  Section 9.05.  Notation on or Exchange of Securities

  	
   

  
	
  Section 9.06.  Trustee to Sign Supplemental Indentures

  	
   

  
	
  Section 9.07.  Effect of Supplemental Indentures

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10

  CONVERSION

  	
   

  
	
   

  	
   

  
	
  Section 10.01.  Conversion Privilege

  	
   

  
	
  Section 10.02.  Conversion Procedure

  	
   

  
	
  Section 10.03.  Fractional Shares

  	
   

  
	
  Section 10.04.  Taxes on Conversion

  	
   

  
	
  Section 10.05.  Company to Provide Stock

  	
   

  
	
  Section 10.06.  Adjustment for Change in Capital Stock

  	
   

  
	
  Section 10.07.  Adjustment for Rights Issue

  	
   

  
	
  Section 10.08.  Adjustment for Other Distributions

  	
   

  
	
  Section 10.09.  When Adjustment May be Deferred

  	
   

  
	
  Section 10.10.  When no Adjustment Required

  	
   

  
	
  Section 10.11.  Notice of Adjustment

  	
   

  
	
  Section 10.12.  Voluntary Decrease

  	
   

  
	
  Section 10.13.  Notice Of Certain Transactions

  	
   

  
	
  Section 10.14.  Effect of Reclassification, Consolidation, Merger
  or Sale

  	
   

  
	
  Section 10.15.  Company Determination Final

  	
   

  
	
  Section 10.16.  Trustee’s Adjustment Disclaimer

  	
   

  
	
  Section 10.17.  Simultaneous Adjustment

  	
   

  
	
  Section 10.18.  Successive Adjustments

  	
   

  

 

iii

 

	
  Section 10.19.  Rights Issued in Respect of Common Stock Issued
  Upon Conversion

  	
   

  
	
  Section 10.20.  General Considerations

  	
   

  
	
   

  	
   

  
	
  ARTICLE 11

  RANKING OF NOTE LIENS

  	
   

  
	
   

  	
   

  
	
  Section 11.01.  Agreement for the Benefit of Holders of Senior
  Priority Liens

  	
   

  
	
  Section 11.02.  Securities not Subordinated

  	
   

  
	
  Section 11.03.  Relative Rights

  	
   

  
	
   

  	
   

  
	
  ARTICLE 12

  COLLATERAL AND SECURITY

  	
   

  
	
   

  	
   

  
	
  Section 12.01.  Junior Priority Security Documents

  	
   

  
	
  Section 12.02.  Trustee’s Rights and Obligations with Respect to
  the Collateral.

  	
   

  
	
  Section 12.03.  Authorization of Actions to be Taken.

  	
   

  
	
  Section 12.04.  Release of Junior Priority Liens.

  	
   

  
	
  Section 12.05.  Filing, Recording and Opinions.

  	
   

  
	
   

  	
   

  
	
  ARTICLE 13

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 13.01.  Conflict with TIA

  	
   

  
	
  Section 13.02.  Notices

  	
   

  
	
  Section 13.03.  Communication by Holders with Other Holders

  	
   

  
	
  Section 13.04.  Certificate And Opinion as to Conditions Precedent

  	
   

  
	
  Section 13.05.  Statements Required in Certificate or Opinion

  	
   

  
	
  Section 13.06.  Separability Clause

  	
   

  
	
  Section 13.07.  Rules by Trustee, Paying Agent, Conversion Agent
  and Registrar

  	
   

  
	
  Section 13.08.  Legal Holidays

  	
   

  
	
  Section 13.09.  Governing Law

  	
   

  
	
  Section 13.10.  No Recourse Against Others

  	
   

  
	
  Section 13.11.  Successors

  	
   

  
	
  Section 13.12.  Multiple Originals

  	
   

  
	
   

  	
   

  
	
  Exhibit A — Form of Security

  	
   

  

 

iv

 

INDENTURE,
dated as of December    , 2003, between SILICON GRAPHICS,
INC., a Delaware corporation (the “Company”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States of America (the “Trustee”).

 

Each party
agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Company’s 6.50% Senior Secured
Convertible Notes Due 2009 (the “Securities”):

 

ARTICLE 1

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“Administrative
Agent” means Wells Fargo Foothill, Inc., as administrative agent for
the lenders under the Secured Credit Facility, and any successor thereto
“exercising substantially the same rights and powers and representative of
lender to whom the Company has granted a Senior Priority Lien on the collateral
as permitted under this Indenture.

 

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

 

“Average Life”
means, with respect to any indebtedness, the quotient obtained by dividing the
sum of the products of (1) the number of years from the date of determination
to the dates of each successive scheduled principal payment on such
indebtedness, and (2) the amount of such principal payment, by the sum of all
such principal payments.

 

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

 

“Business Day”
means each day of the year on which banking institutions are not required or
authorized to close in The City of New York or at the principal corporate trust
office of the Trustee.

 

“Capital
Lease” means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.

 

 

“Capital
Stock” means (1) in the case of a corporation, corporate stock, (2)
in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (3) in the case of a partnership, partnership interests
(whether general or limited), and (4) any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing person.

 

“Closing
Price” means with respect to any securities on any day the closing
sale price regular way on such day or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices, regular way, in
each case on the New York Stock Exchange, or, if such security is not listed or
admitted to trading on such Exchange, on the principal national security
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market on the day
in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or a price determined
in good faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose determination shall
be conclusive.

 

“Code”
means the New York Uniform Commercial Code, as in effect from time to time.

 

“Collateral”
means all assets of the Company that secure the Securities pursuant to the
Junior Priority Security Documents as amended from time to time.

 

“Common Stock”
means any stock of any class of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company.  Subject
to the provisions of Section 10.14, however, shares issuable on conversion
of the Securities shall include only shares of Common Stock, par value $.00l
per share, of the Company as it exists on the date of this Indenture or shares
of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to
redemption by the Company; provided that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to

 

2

 

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

 

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

 

“Company
Request” or “Company Order” means a written request or
order signed in the name of the Company by its Chairman of the Board, a Vice
Chairman, its President, a Senior Vice President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.

 

“Conversion
Price” has the meaning specified in Section 10.01

 

“Current Market Price” per share of Common
Stock at any date shall be the average of the last reported sale prices for the
ten consecutive Trading Days preceding the day before the record date with
respect to any distribution, issuance or other event requiring such
computation.  The last reported sale
price for each day shall be (i) the last reported sale price of Common Stock on
the New York Stock Exchange, or, if such security is not listed or admitted to
trading on such Exchange, on the principal national security exchange on which
such security is listed, or on the Nasdaq National Market or any similar system
of automated dissemination of quotations of securities prices then in common
use, if so quoted, or (ii) if not quoted as described in clause (i), the mean
between the high bid and low asked quotations for Common Stock as reported by
the National Quotation Bureau Incorporated if at least two securities dealers
have inserted both bid and asked quotations for the Common Stock on at least 5
of the 10 preceding days, or (iii) if the Common Stock is listed or admitted
for trading on any national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of the Common Stock on the principal
securities exchange on which the Common Stock is listed.  If the Common Stock is quoted on a national
securities or central market system, in lieu of a market or quotation system
described above, the last reported sale price shall be determined in the manner
set forth in clause (ii) of the preceding sentence if bid and asked quotations
are reported but actual transactions are not, and in the manner set forth in
clause (iii) of the preceding sentence if actual transactions are
reported.  If none of the conditions set
forth above is met, the last reported sale price of Common Stock on any day or
the average of such last reported sale prices for any period shall be the fair
market value of the Common Stock as determined by a member firm of the New York
Stock Exchange, Inc. selected by the Company.

 

3

 

“Custodian”
means U.S. Bank National Association, as custodian with respect to any Global
Security, or any successor.

 

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

 

“Defaulted
Interest” has the meaning specified in Section 2.12.

 

“Depositary”
means, with respect to the Securities issuable or issued in whole or in part in
global form, the person specified in Section 2.06 as the Depositary with
respect to the Securities, until a successor Depositary shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Disqualified
Stock” means Capital Stock that, by its terms (or the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder, in whole or in part, on or prior to the date that is the Stated
Maturity of the New Notes and the Securities.

 

“Event of
Default” means any event or condition specified as such in
Section 6.01.

 

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

 

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

 

“GAAP”
means generally accepted accounting principles.

 

“Global
Security” means a Security that is registered in the Security
Register in the name of the Depository or a nominee thereof.

 

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

 

4

 

“Indenture”
means this Indenture, as amended or supplemented from time to time in
accordance with the terms hereof.

 

“Intellectual
Property Security Agreement” means an intellectual property security
agreement executed and delivered pursuant to the terms of the Security
Agreement by the Company and Trustee, the form and substance of which is
satisfactory to the Trustee.

 

“Intercreditor
Agreement” means (i) the intercreditor agreement dated as of
the date hereof among the Company, the Trustee and Wells Fargo Foothill, Inc.,
as Administrative Agent under the Secured Credit Facility and (ii) any
agreement entered into among the Company, the Trustee and any holder of a
Senior Priority Lien (or its representative).

 

“Interest
Payment Date” means the Stated Maturity of an installment of
interest on the Securities.

 

“Interest
Period” shall have the meaning set forth in Section 10.02.

 

“Junior
Priority Lien” means, to the extent securing the Securities, a Lien
granted by a Junior Priority Security Document as security for the Securities,
which is junior in priority to the Senior Priority Liens.

 

“Junior
Priority Security Documents” means, collectively, the Security Agreement,
the Intellectual Property Agreement and all other security agreements, pledges,
collateral assignments, mortgages or other instruments evidencing or creating
any Security Interests in favor of the Trustee, for the benefit of the Trustee
and the Securityholders, in all or any portion of the Collateral, in each case,
as amended, amended and restated, supplemented, replaced or otherwise modified
from time to time, in accordance with the terms thereof.

 

“Lien”
means any interest in an asset securing an obligation owed to, or a claim by,
any Person other than the owner of the asset, whether such interest shall be
based on the common law, statute, or contract, whether such interest shall be
recorded or perfected, and whether such interest shall be contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances, including the lien or security interest arising
from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, conditional sale or trust receipt, or
from a lease, consignment, or bailment for security purposes and also including
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting real property.

 

5

 

“Maturity”
when used with respect to any Security, means the date on which the principal
of such Security becomes due and payable as therein or herein provided, whether
at the Stated Maturity or by declaration of acceleration, call for redemption,
redemption upon a Fundamental Change or otherwise.

 

“New
Indenture” means that certain Indenture dated as of
December    , 2003 between the Company and the Trustee,
relating to the New Notes.

 

“New Notes”
means the Company’s 11.75% Senior Notes Due 2009.

 

“Noteholder
Documents” means this Indenture, the Securities, the Intercreditor
Agreement and the Junior Priority Security Documents.

 

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

 

“Officers’
Certificate” means a written certificate containing the information
specified in Sections 13.04 and 13.05, signed in the name of the Company by its
Chairman of the Board, a Vice Chairman, its President, a Senior Vice President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Old Notes”
means the Company’s 5.25% Senior Convertible Notes Due 2004.

 

“Old Notes
Indenture” means that certain Indenture dated as of
September 1, 1997 between the Company and the U.S. Bank National
Association, as successor trustee to State Street Bank and Trust Company of
California, N.A., relating to the Old Notes.

 

“Opinion of
Counsel” means a written opinion signed by legal counsel who may be
an employee of or counsel to the Company and who shall be satisfactory to the
Trustee.  Each such opinion shall comply
with Section 314 of the Trust Indenture Act and include the information
specified in Sections 13.04 and 13.05 of this Indenture.

 

“Options”
means any warrants, options or other rights to acquire Capital Stock of the
Company (but excluding (i) any options or other rights issued under a plan
maintained by the Company for the benefit of employees, directors and
consultants, and (ii) any debt security that is convertible into or
exchangeable for Capital Stock of the Company).

 

“Permitted
Purchase Money Indebtedness” means indebtedness incurred at the time
of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.

 

6

 

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

 

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

 

“Prospectus”
means the prospectus dated November 21, 2003, as amended or supplemented
from time to time included in the registration statement (File
No. 333-110683) on Form S-3 filed by the Company under the Securities
Act with the SEC pursuant to which the Company offered to exchange the
Securities and the New Notes for its Old Notes.

 

“Redemption
Date” shall mean a date specified for redemption of the Securities
(other than redemption upon a Fundamental Change at the option of the
Securityholder) in accordance with the terms of the Securities and
Section 3.01 of this Indenture.

 

“Redemption
Price” shall have the meaning set forth in paragraph 5 of the
Securities.

 

“Regular
Record Date” for the interest payable on any Interest Payment Date
means the December 15 or June 15 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.

 

“SEC”
means the Securities and Exchange Commission.

 

“Secured
Credit Facility” means that certain Amended and Restated Loan and
Security Agreement among the Company, Silicon Graphics Federal, Inc. and Wells
Fargo Foothill, Inc., as Administrative Agent for itself and other lenders, and
the Bank of America, N.A. dated as of September 20, 2002, as the same
shall be renewed, replaced, restructured or refinanced (whether with the
original administrative agent and lenders or others, and whether provided under
the original Secured Credit Facility or any other agreement or indenture.).

 

“Security”
or “Securities”
means any of the Company’s 6.50% Senior Convertible Notes Due 2009, as amended
or supplemented from time to time, issued under this Indenture.

 

7

 

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

 

“Security
Agreement” means the security agreement dated as of the date hereof
between the Trustee and the Company.

 

“Security
Interests” means the Liens on the Collateral created by the Junior
Priority Security Documents in favor of the Trustee on a junior priority basis,
for the benefit of the Trustee and the Securityholders.

 

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

 

“Security
Register” has the meaning specified in Section 2.05.

 

“Senior
Priority Lien” means any lien on the Collateral created by the
Company that is senior to the lien granted to Securityholders under the
Security Agreement and that secures debt permitted under Section 4.06(e)
of this Indenture, including, but not limited to the liens created under the
Secured Credit Facility.

 

“Senior
Priority Lien Obligations” means all indebtedness incurred by the
Company and permitted under this Indenture that is secured by a Senior Priority
Lien.

 

“SGI Japan
Secured Debt” means that Loan Agreement between the Company, Silicon
Graphics World Trade B.V. and SGI Japan, Ltd. as of November 9, 2001, as
the same may be amended from time to time.

 

“Special
Record Date” for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.

 

“Stated
Maturity” when used with respect to any Security or any installment
of interest thereon, means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of interest is
due and payable, and when used with respect to any other indebtedness or any
installment of interest thereon, the date specified as the fixed date on which
the principal of such debt or such installment of interest is due and payable as
set forth in the documentation governing that debt, not including any
contingent obligation to repay, redeem or repurchase prior to the regularly
scheduled date for payment.

 

“Subsidiary”
means a corporation of which a majority of the capital stock (which for
purposes of this definition means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by such corporation) having
voting power

 

8

 

under ordinary
circumstances to elect a majority of the board of directors of such corporation
is owned directly or indirectly by (i) the Company, (ii) the Company and one or
more Subsidiaries or (iii) one or more Subsidiaries.

 

“TIA”
means the Trust Indenture Act of 1939 as in effect on the date of this
Indenture, except as provided in Section 9.03.

 

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

 

“Trust
Officer” means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

 

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

 

Section 1.02.  Other Definitions.  

 

	
  Term

  	
   

  	
  Defined in

  Section

  	
   

  
	
  Bankruptcy
  Law

  	
   

  	
  6.01

  	
   

  
	
  Company
  Notice

  	
   

  	
  3.08

  	
   

  
	
  Conversion
  Agent

  	
   

  	
  2.03

  	
   

  
	
  Event of
  Default

  	
   

  	
  6.01

  	
   

  
	
  Fundamental
  Change Repurchase Date

  	
   

  	
  3.08(a)

  	
   

  
	
  Fundamental
  Change Redemption Price

  	
   

  	
  3.08(a)

  	
   

  
	
  Incur

  	
   

  	
  4.06

  	
   

  
	
  Legal
  Holiday

  	
   

  	
  13.08

  	
   

  
	
  Notice of
  Default

  	
   

  	
  6.01

  	
   

  
	
  Paying Agent

  	
   

  	
  2.03

  	
   

  
	
  Registrar

  	
   

  	
  2.03

  	
   

  

 

Section 1.03.  Incorporation by Reference of TIA.  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:

 

9

 

“Commission”
means the SEC.

 

“Indenture
Securities” means the Securities.

 

“Indenture
Security Holder” means a Securityholder.

 

“Indenture to
be Qualified” means this Indenture.

 

“Indenture
Trustee” or “Institutional Trustee” means the Trustee.

 

“Obligor”
on the indenture securities means the Company.

 

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

 

Section 1.04.  Rules of Construction.  Unless the context otherwise
requires:

 

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

 

(b)           an accounting term not otherwise defined has
the meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;

 

(c)           “or” is not exclusive;

 

(d)           “including” means including, without
limitation; and

 

(e)           words in the singular include the plural,
and words in the plural include the singular.

 

ARTICLE 2

THE SECURITIES

 

Section 2.01.  Form and Dating.  The Securities and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A, which is a part
of this Indenture.  The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage (provided
that any such notation, legend or endorsement required by usage is
in a form acceptable to the Company). 
The Company shall provide any such notations, legends or endorsements to
the Trustee in writing.  Each Security
shall be dated the date of its authentication.

 

10

 

Section 2.02.  Execution And Authentication.  The Securities shall be executed
on behalf of the Company by its Chairman of the Board, one of its Vice
Chairman, its President, one of its Senior Vice Presidents or one of its Vice
Presidents, under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. 
The signature of any of these officers on the Securities may be manual
or facsimile.

 

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

 

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

 

The Trustee
shall authenticate and deliver Securities for original issue in an aggregate
principal amount of up to $230,591,000 upon a Company Order without any further
action by the Company.

 

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

 

The Company
shall enter into an appropriate agency agreement with any Registrar, Paying
Agent, Conversion Agent or co-registrar (if not the Trustee).  The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar, Paying Agent or
Conversion Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07.  The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent or co-registrar.

 

11

 

The Company initially
appoints the Trustee as Registrar, Conversion Agent and Paying Agent in
connection with the Securities.

 

Section 2.04.  Paying Agent to Hold Money and Securities in
Trust.  Except as otherwise
provided herein, prior to or on each due date of payments in respect of any
Security, the Company shall deposit with the Paying Agent a sum of money or
securities sufficient to make such payments when so becoming due.  The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money and
securities 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
securities so held in trust.  If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent,
it shall segregate the money and securities held by it as Paying Agent and hold
it as a separate trust fund.  The
Company at any time may require a Paying Agent to pay all money and securities
held by it to the Trustee and to account for any funds and securities disbursed
by it.  Upon doing so, the Paying Agent
shall have no further liability for the money or securities.

 

Section 2.05.  Securityholder Lists.  The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders.  If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually on November 15 and
May 15 a listing of Holders dated within 15 days of the date on which the
list is furnished and at such other times as the Trustee may request in writing
a list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of Securityholders.

 

Section 2.06.  Exchange and Registration of Transfer of
Securities; Depositary.  Upon
surrender for registration of transfer of any Security at any office or agency
of the Company designated as Registrar or co-registrar pursuant to
Section 2.03 and satisfaction of the requirements for such transfer set
forth in this Section 2.06, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of
a like aggregate principal amount.

 

Securities may
be exchanged for a like aggregate principal amount of Securities of other
authorized denominations.  Securities to
be exchanged shall be surrendered at any office or agency to be maintained by
the Company designated as Registrar or co-registrar pursuant to
Section 2.03 and the Company shall execute and register and the Trustee
shall authenticate and deliver in exchange therefor the Security or Securities
which the Securityholder making the exchange

 

12

 

shall be
entitled to receive, bearing registration numbers not contemporaneously
outstanding.

 

All Securities
presented for registration of transfer or for exchange, purchase, redemption,
conversion or payment shall (if so required by the Company, the Trustee, the
Registrar or any co-registrar) be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee, duly executed by the Holder or his attorney duly
authorized in writing.

 

No service
charge shall be charged to the Securityholder for any exchange or registration
of transfer of Securities, but the Company may require payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection therewith.

 

None of the
Company, the Trustee, the Registrar or any co-registrar shall be required to
exchange or register a transfer of (a) any Securities for a period of 15 days
next preceding any selection of Securities to be redeemed or (b) any Securities
or portions thereof selected or called for redemption or (c) any Securities or
portion thereof surrendered for conversion or (d) any Securities or portion
thereof surrendered for redemption (and not withdrawn) pursuant to
Section 3.08.

 

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

 

The provisions
of Clauses (a), (b), (c), (d), and (e) below shall apply only to Global
Securities:

 

(a)           Each Global Security authenticated under
this Indenture shall be registered in the name of the Depositary designated for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or Custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

 

(b)           Notwithstanding any other provision in this
Indenture, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
party may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing agency
registered under the Exchange Act, or (B) there

 

13

 

shall have occurred and be continuing an Event of Default with respect
to such Global Security.

 

(c)           Subject to 2.06(b) above, any exchange of a
Global Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion thereof
shall be registered in such names as the Depositary for such Global Security
shall direct.

 

(d)           Every Security authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof whether pursuant to this Article Two or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.

 

(e)           The Depositary or its nominee, as registered
own of a Global Security, shall be the Holder of such Global Security for all
purposes under the Indenture and the Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
applicable procedures.  Accordingly, any
such owner’s beneficial interest in a Global Security will be shown only on,
and the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its agent members and such
owners of beneficial interests in a Global Security will not be considered the
owners or holders thereof.

 

The Depositary
shall be a clearing agency registered under the Exchange Act.  The Company initially appoints The
Depository Trust Company to act as Depositary with respect to the Securities in
global form.  Initially, the Global
Security shall be issued to the Depositary, registered in the name of Cede
& Co., as the nominee of the Depositary, and deposited with the Trustee as
custodian for Cede & Co.

 

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

 

Section 2.07.  Replacement Securities.  If (i) any mutilated Security is
surrendered to the Trustee, or (ii) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is

 

14

 

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

 

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

 

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

 

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

 

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

 

Section 2.08.  Outstanding Securities; Determinations of
Holders’ Action.  Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided,
however,
that in determining whether the Holders of the requisite principal amount of
Securities have given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or
such other obligor shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded.  Subject to the foregoing,
only Securities outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

 

15

 

If a Security
is replaced pursuant to Section 2.07, it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Security is
held by a bona fide purchaser.

 

If the Paying
Agent holds, in accordance with this Indenture, on a Redemption Date, on a
Fundamental Change Repurchase Date or on Stated Maturity, money or securities,
if permitted hereunder, sufficient to pay Securities payable on that date, then
on and after that date such Securities shall cease to be outstanding and
interest on such Securities shall cease to accrue; provided that if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made.

 

If a Security
is converted in accordance with Article 10, then from and after such
conversion such Security shall cease to be outstanding and interest shall cease
to accrue on such Security.

 

Section 2.09.  Temporary Securities.  Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.

 

If temporary
Securities are issued, the Company will cause definitive Securities to be
prepared without unreasonable delay. 
After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.03, without charge to the Holder.  Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations.  Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.

 

Section 2.10.  Cancellation.  All Securities surrendered for payment, conversion,
redemption or registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it.  The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
canceled by the Trustee.  The

 

16

 

Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10.  No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture.  All canceled Securities held by the Trustee shall be destroyed by
the Trustee and evidence of their destruction delivered to the Company unless
the Company directs by Company Order that the Trustee deliver canceled
Securities to the Company.

 

Section 2.11.  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 amount, premium, if any, interest, Redemption Price and Fundamental
Change Redemption Price in respect thereof, for the purpose of conversion and
for all other purposes whatsoever, whether or not such Security be overdue, and
none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.

 

Section 2.12.  Payment of Interest; Interest Rights
Preserved.  Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.

 

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

 

(a)           The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner.  The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which shall be
not

 

17

 

more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment.  The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days prior to such Special
Record Date.  Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (b).

 

(b)           The Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange or market on which the Securities may
be listed, and upon such notice as may be required by such exchange or market,
if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable by
the Trustee.

 

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

 

In the case of
any Security which is converted after any Regular Record Date on or prior to
the close of business on the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date.  Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable.

 

Section 2.13.  Computation of Interest.  Interest on the Securities shall
be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 2.14.  Preservation of Information; Communications
to Holders.

 

(a)           The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of Holders contained
in the most recent list

 

18

 

furnished to the Trustee as provided in Section 2.05 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar.  The Trustee may destroy any
list furnished to it as provided in Section 2.05 upon receipt of a new
list so furnished.

 

(b)           The rights of Holders to communicate with
other Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding right and duties of the Trustee, shall be as
provided in the TIA.

 

(c)           Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of information as to names and
addresses of the Holders made pursuant to the TIA.

 

ARTICLE 3

REDEMPTION

 

Section 3.01.  Right to Redeem; Notices to Trustee.  The Company, at its option, may
redeem the Securities in accordance with the provisions of paragraph 5 of the
Securities.  If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the Redemption Date, the principal amount of
Securities to be redeemed, the Redemption Price, and the amount of accrued
interest to, but excluding, the Redemption Date.

 

The Company
shall give the notice to the Trustee provided for in this Section 3.01 (i)
in the case of any redemption of fewer than all of the Securities, at least 45
days before the Redemption Date and (ii) in the case of a redemption of all of
the Securities, no later than the Company is required to give notice to the
Holders pursuant to Section 3.03, in each case unless a shorter notice
shall be satisfactory to the Trustee.

 

Section 3.02.  Selection of Securities to be Redeemed.  If less than all the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata or by lot or by a method the Trustee considers fair and appropriate (as
long as such method is not prohibited by the rules of any stock exchange or
automated quotation system on which the Securities are then listed).  The Trustee shall make the selection at
least 10 days, but not more than 60 days, before the Redemption Date from
outstanding Securities not previously called for redemption.  The Trustee may select for redemption
portions of the principal amount of Securities that have denominations larger
than $1,000.  Securities and portions of
Securities selected by the Trustee shall be in principal amounts of $1,000 or a
multiple of $1,000.  Provisions of this
Indenture that apply to

 

19

 

Securities called for redemption also apply
to portions of Securities called for redemption.  The Trustee shall notify the Company promptly of the Securities
or portions of Securities to be redeemed.

 

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

 

Section 3.03.  Notice of Redemption.  At least 30 days but not more
than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first-class mail, postage prepaid, to each Holder of Securities
to be redeemed.

 

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

 

(a)           the Redemption Date;

 

(b)           the Redemption Price, together with the
amount of accrued interest to, but excluding, the Redemption Date;

 

(c)           the Conversion Price;

 

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

 

(e)           that Securities called for redemption may be
converted at any time before the close of business on the last Trading Day
prior to the Redemption Date;

 

(f)            that Holders who want to convert Securities
must satisfy the requirements set forth in paragraph 7 of the Securities;

 

(g)           that Securities called for redemption must
be surrendered to the Paying Agent to collect the Redemption Price and accrued
interest to, but excluding, the Redemption Date;

 

(h)           if fewer than all the outstanding Securities
are to be redeemed, the certificate number and principal amounts of the
particular Securities to be redeemed; and

 

(i)            that interest on Securities called for
redemption will cease to accrue on and after the Redemption Date.

 

At the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense.

 

20

 

Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is
given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, together with accrued interest to,
but excluding, the Redemption Date, stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture.

 

Upon the later
of the Redemption Date or the date such Securities are surrendered to the
Paying Agent, such Securities shall be paid at the Redemption Price, together
with accrued interest to, but excluding, the Redemption Date, stated in the notice.

 

Section 3.05.  Deposit of Redemption Price.  Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price and
accrued interest to, but excluding, the Redemption Date of all Securities to be
redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted; provided that if such
payment is made on the Redemption Date it must be received by the Trustee or
Paying Agent, as the case may be, by 10:00 a.m.  New York City time, on such Redemption Date.  The Paying Agent shall as promptly as
practicable return to the Company any money, with interest, if any, thereon
(subject to the provisions of Section 7.01(f)), not required for that
purpose because of conversion of Securities. 
If such money is then held by the Company in trust and is not required
for such purpose it shall be discharged from such trust.

 

Section 3.06.  Securities Redeemed in Part.  Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the
Security surrendered.

 

Section 3.07.  Conversion Arrangement on Call for
Redemption.  In connection
with any redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or
more investment bankers or other purchasers to purchase such Securities by
paying to the Paying Agent in trust for the Securityholders, on or before the
close of business on the Redemption Date, an amount that, together with any
amounts deposited with the Paying Agent by the Company for the redemption of
the Securities, is not less than the Redemption Price, together with interest,
if any, accrued to the Redemption Date, of such Securities.  Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the Redemption
Price of such Securities, including all accrued interest, shall be deemed to be
satisfied and discharged to

 

21

 

the extent such amount is so paid by such
purchasers.  If such an agreement is
entered into, any Securities not duly surrendered for conversion by the Holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 10)
surrendered by such purchasers for conversion, all immediately prior to the
close of business on the Redemption Date, subject to payment of the above
amount as aforesaid.

 

The Paying
Agent shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would moneys
deposited with it by the Company for the redemption of Securities.  Without the Paying Agent’s prior written
consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect
any of the powers, duties, responsibilities or obligations of the Paying Agent
as set forth in this Indenture, and the Company agrees to indemnify the Paying
Agent from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Company and such purchasers, including
the costs and expenses incurred by the Paying Agent in the defense of any claim
or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this
Indenture.

 

Section 3.08.  Redemption at Option of the Holder upon a
Fundamental Change.  (a)  If
a Fundamental Change shall occur at any time prior to July 1, 2009, each
Holder of Securities shall have the right, at such Holder’s option, to require
the Company to redeem such Holder’s Securities on the date (the “Fundamental
Change Repurchase Date”) (or if such date is not a Business Day, the
next succeeding Business Day) that is 45 days after the date of the Company’s
notice of such Fundamental Change.  The
Securities will be redeemable in part in multiples of $1,000 of principal
amount.  Such repayment shall be made at
100% of the principal amount (the “Fundamental Change Redemption Price”)
thereof. In each case, the Company shall also pay to such Holders accrued
interest to, but excluding, the Fundamental Change Repurchase Date on the redeemed
Securities; provided
that if such Fundamental Change Repurchase Date is an Interest Payment Date,
then the interest payable on such date shall be paid to the Holder of the
Security on the next preceding the Regular Record Date.

 

(b)           On or before the tenth day after the
occurrence of a Fundamental Change, the Company, or, at its written request
(which must be received by the Trustee at least five Business Days prior to the
date the Trustee is requested to give notice as described below), the Trustee
in the name of and at the expense of the Company, shall mail or cause to be
mailed to all Holders of record on the date of the Fundamental Change a notice
(the “Company
Notice”) of the occurrence

 

22

 

of such Fundamental Change and of the redemption right at the option of
the Holders arising as a result thereof. 
Such notice shall be mailed in the manner and with the effect set forth
in Section 3.03.  The Company shall
also deliver a copy of the Company Notice to the Trustee at such time as it is
mailed to the Holders.

 

Each Company
Notice shall specify the circumstances constituting the Fundamental Change, the
Fundamental Change Repurchase Date, the Fundamental Change Redemption Price at
which the Company shall be obligated to redeem the Securities, the amount of
interest accrued on each Security to, but excluding, the Fundamental Change
Repurchase Date, the latest time by which the Holder must exercise the
redemption right (the “Fundamental Change Expiration Time”), that
the Holder shall have the right to withdraw any Notes prior to the Fundamental
Change Expiration Time, a description of the procedure which a Holder must
follow to exercise such redemption right and to withdraw any surrendered Notes
and the place or places where the Holder is to surrender such Holder’s
Securities.

 

No failure of
the Company to give the foregoing notices and no defect therein shall limit the
Holders’ redemption rights or affect the validity of the proceedings for the
repurchase of the Securities pursuant to this Section 3.08.

 

(c)           For a Security to be so redeemed at the
option of the Holder, the Paying Agent must receive such Security with the form
entitled “Option to Elect Redemption Upon a Fundamental Change” on the reverse
thereof duly completed (a “Fundamental Change Redemption Notice”),
together with such Security duly endorsed for transfer, on or before the 30th
day after the date of such Company Notice (or if such 30th day is not a
Business Day, the immediately preceding Business Day).  All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
redemption shall be determined by the Company, whose determination shall be
final and binding.

 

(d)           Upon receipt by the Company of the Fundamental
Change Redemption Notice specified in Section 3.08(c), the Holder of the
Security in respect of which such Fundamental Change Redemption Notice was
given shall (unless such Fundamental Change Redemption Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Fundamental Change Redemption Price, together with accrued interest
to, but excluding, the Fundamental Change Repurchase Date, with respect to such
Security.  Such Fundamental Change Redemption
Price together with accrued interest to, but excluding, the Fundamental Change
Repurchase Date, shall be paid to such Holder promptly following the
Fundamental Change Repurchase Date. 
Securities in respect of which a Fundamental Change Redemption Notice
has been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Fundamental Change

 

23

 

Redemption Notice, unless such Fundamental Change Redemption Notice has
first been validly withdrawn as specified in the following two paragraphs.

 

A Fundamental
Change Redemption Notice may be withdrawn by the Holder by means of a written
notice of withdrawal delivered to the office of the Paying Agent at any time
prior to the close of business on the Fundamental Change Repurchase Date to
which it relates specifying:

 

(i)            the
certificate number 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 Fundamental Change Redemption Notice and which has been or will be
delivered for purchase by the Company.

 

There shall be
no redemption pursuant to Section 3.08 if there has occurred prior to, on
or after, as the case may be, the giving, by the Holders of such Securities, of
the required Fundamental Change Redemption Notice and is continuing an Event of
Default (other than a default in the payment of the Fundamental Change
Redemption Price, together with accrued interest to, but excluding, the
Fundamental Change Repurchase Date, with respect to such Securities).

 

(e)           On or before the
Fundamental Change Repurchase Date the Company shall 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 2.04) an amount of money sufficient to pay the
aggregate Fundamental Change Redemption Price, together with accrued interest
to, but excluding, the Fundamental Change Repurchase Date, of all the
Securities or portions thereof which are to be redeemed as of such Fundamental
Change Repurchase Date; provided that if such payment is made on
the Fundamental Change Repurchase Date it must be received by the Trustee or
Paying Agent, as the case may be, by 10:00 a.m.  New York City time, on such Fundamental Change Repurchase Date.

 

(f)            Any Security that is
to be redeemed upon a Fundamental Change 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, upon the Company’s written direction to the Trustee, the
Trustee shall authenticate and deliver to the Holder of such Security, without

 

24

 

service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Security so
surrendered which is not redeemed.

 

(g)           In connection with any
offer to redeem Securities under Section 3.08 hereof the Company shall
comply with all Federal and state securities laws so as to permit the rights
and obligations under Section 3.08 to be exercised in the time and in the
manner specified in Section 3.08.

 

(h)           The Trustee and the
Paying Agent shall return to the Company any cash that remains unclaimed as
provided in paragraph 11 of the Securities, together with interest or
dividends, if any (subject to the provisions of Section 7.01(f)), thereon,
held by them for the payment of a Fundamental Change Redemption Price, together
with accrued interest to, but excluding, the Fundamental Change Repurchase
Date; provided,
however that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.08 exceeds the aggregate
Fundamental Change Redemption Price, together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, of the Securities or
portions thereof which the Company is obligated to purchase as of the
Fundamental Change Repurchase Date then promptly after the Business Day
following the Fundamental Change Repurchase Date the Trustee and the Paying
Agent shall return any such excess to the Company together with interest or
dividends, if any, thereon.

 

ARTICLE 4

COVENANTS

 

Section 4.01.  Payment of Securities.  The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture.  The principal amount, premium, if any,
accrued interest, Redemption Price and Fundamental Change Redemption Price
shall be considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds on or before 10:00 a.m.  New York City time on such date, in accordance with this
Indenture, money or securities, if permitted hereunder, sufficient to pay all
such amount then due.

 

The Company
shall pay interest at the rate set forth in paragraph 1 of the Securities and
it shall pay interest on overdue interest at the same rate compounded
semiannually (to the extent that the payment of such interest shall be legally
enforceable), which interest on overdue interest shall accrue from the date
such amounts became overdue.

 

25

 

Section 4.02.  SEC Reports.  The Company shall file with the Trustee, within 15
days after it files such annual and quarterly reports, information, documents
and other reports with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act.

 

Section 4.03.  Compliance Certificate.  The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending in June 2004) an Officers’
Certificate stating whether or not the signers know of any Default that
occurred during such period.  If they
do, such Officers’ Certificate shall describe the Default and its status.

 

Section 4.04.  Further Instruments and Acts.  Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.

 

Section 4.05.  Maintenance of Office or Agency.  The Company will maintain in the
Borough of Manhattan, 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, exchange, redemption or conversion
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. 
The office of U.S. Bank Trust National Association, an Affiliate of the
Trustee, at 100 Wall Street, Suite 1600, New York, NY 10005, shall be such
office or agency for all of the aforesaid purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such other office or agency.  If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 11.02.

 

The Company
may also from time to time designate one or more other offices or agencies
where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes.

 

Section 4.06.  Restriction on Additional Indebtedness.  The Company shall not, nor shall
it permit any Subsidiary to, directly or indirectly, create, incur,

 

26

 

assume, guaranty or otherwise become directly
or indirectly liable for (“Incur”) any additional indebtedness for
borrowed money or issue any Disqualified Stock, except that the Company may,
and may permit any Subsidiary to Incur additional indebtedness

 

(a)           pursuant to any interest rate swap
agreement, interest rate cap agreement or other agreement designed to protect
against fluctuations in interest rates, any foreign exchange forward contract,
currency swap agreement or other agreement designed to protect against fluctuations
in foreign exchange rates, or any commodity or raw material futures contract or
any other agreement designed to protect against fluctuations in raw material
prices, entered into in the ordinary course of business for the purpose of
limiting risks associated with our business and not for speculation;

 

(b)           with respect to letters of credit and
bankers’ acceptances issued in the ordinary course of business and not
supporting indebtedness for borrowed money, including letters of credit
supporting performance, surety or appeal bonds, indemnification obligations,
lease or other contractual deposits, or other similar obligations;

 

(c)           the proceeds of which, less fees and
expenses, are used to repay, redeem or repurchase, at the option of the
Company, Securities, New Notes, or Old Notes, provided that if any
Securities or New Notes will remain outstanding, the Stated Maturity of the
indebtedness incurred must be at least 120 days after the Stated Maturity of
the Securities and the New Notes;

 

(d)           indebtedness incurred to refinance, renew or
replace the SGI Japan Secured Debt, or any extensions or amendments of the SGI
Japan Secured Debt, in each case that do not increase the principal amount
thereof;

 

(e)           other indebtedness to banks or other
institutional lenders in the form of revolving credit loans or term loans or
the issuance of letters of credit or bankers’ acceptances or the like,
including the Secured Credit Facility as it may be extended, refinanced,
renewed or replaced, provided that the aggregate principal
amount of such other indebtedness at any time outstanding does not exceed $100
million; or

 

(f)            indebtedness represented by purchase money
liens or the interests of lessors under Capital Leases to the extent that such
liens or interests secure Permitted Purchase Money Indebtedness and so long as
such lien attaches only to the asset purchased or acquired and the proceeds
thereof, including indebtedness incurred to refund, refinance or replace any
indebtedness incurred pursuant to this clause (f).

 

27

 

(g)           that is (i) in an aggregate principal amount
no greater than $35,000,000, (ii) is subordinate in right of payment to all
amounts payable under the Securities and the New Notes, (iii) does not have a
final Stated Maturity prior to the Stated Maturity of the Securities and the
New Notes, and (iv) has an Average Life at least equal to the remaining Average
Life of the Securities and the New Notes.

 

Section 4.07.  Restricted Payments. 
The Company shall not

 

(a)           declare or pay any dividend or make any
distribution on its Capital Stock, other than dividends or distributions paid
in its or its Subsidiaries’ Capital Stock other than Disqualified Stock;

 

(b)           purchase, redeem or otherwise acquire or
retire for value any of its Capital Stock or Options, other than (1) the
repurchase of unvested restricted stock in connection with voluntary or
involuntary terminations of employment with an aggregate purchase price less
than $100,000 per fiscal year, or (2) repurchases, redemptions, acquisitions or
retirements paid for with its or its Subsidiaries’ Capital Stock other than
Disqualified Stock or Options to buy Capital Stock other than Disqualified
Stock;

 

(c)           pay any funds to or for the account of, make
any investment in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Company as could have been obtained from a third-party that was not an
Affiliate (except that the Company may enter into compensatory arrangements
with and pay such salary, bonus or other compensation to employees, officers
and directors as have been approved by a committee of the Company’s Board of
Directors comprised of independent directors); or

 

(d)           repay, redeem, repurchase, defease or
otherwise acquire or retire for value, any indebtedness subordinated in right
of payment to the Securities or the New Notes except a payment of interest or
principal when due.

 

ARTICLE 5

SUCCESSOR
CORPORATION

 

Section 5.01.  When Company May Merge or Transfer
Assets.  Company shall not
consolidate with or merge with or into any other Person (other than in a merger
or consolidation in which the Company is the surviving Person) or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:

 

28

 

(a)           the Person (if other than the Company)
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance, transfer or lease the properties and assets of
the Company substantially as an entirety (i) shall be a corporation,
partnership or trust organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and (ii) shall
expressly assume, by an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company under the Securities and this Indenture;

 

(b)           immediately after giving effect to such
transaction, no Default shall have occurred and be continuing; and

 

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

 

The successor
Person formed by such consolidation or into which the Company is merged or the
successor Person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor had
been named as the Company herein; and thereafter, except in the case of (i) a
lease of its properties and assets substantially as an entirety and (ii)
obligations the Company may have under a supplemental indenture pursuant to
Section 10.14, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.

 

ARTICLE 6

DEFAULTS AND
REMEDIES

 

Section 6.01.  Events of Default.  “Event of Default” occurs if:

 

(a)           the Company defaults in the payment of the
principal amount of, premium, if any, Redemption Price or Fundamental Change
Redemption Price on any Security when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration or otherwise;

 

(b)           the Company defaults in the payment of any
installment of interest upon any of the Securities as and when the same shall
become due and payable, and continuance of such default for 30 days;

 

29

 

(c)           the Company fails to comply with any of its
agreements in the Securities, this Indenture or the Junior Priority Security
Documents and such failure continues for 60 days after receipt by the Company
of a Notice of Default;

 

(d)           a decree or order by a court having
jurisdiction in the premises shall have been entered adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of the Company under any Bankruptcy Law, and such decree or
order shall have continued undischarged and unstayed for a period of 60
consecutive days; or a decree or order of a court having jurisdiction in the
premises of the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding-up or liquidation of its affairs, shall have been entered, and such
decree or order shall have remained in force undischarged and unstayed of a
period of 60 consecutive days; or

 

(e)           the Company shall institute proceedings to
be adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under any Bankruptcy Law, or shall consent to the filing
of any such petition, or shall consent to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due.

 

(f)            an event of default under the Old Notes
Indenture or the New Indenture shall have occurred which results in the
principal amount and accrued interest on that debt becoming immediately due and
payable.

 

“Bankruptcy
Law” means Title 11, United States Code, or any similar Federal or
state law for the relief of debtors.

 

A Default
under (c) above is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities 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 (3) above after actual receipt of
such notice (a “Notice of Default”). 
Any such notice must specify the Default, demand that it be remedied and
state that such notice is a Notice of Default.

 

Section 6.02.  Acceleration.  If an Event of Default (other than an Event of Default
specified in Section 6.01(d) or (e)) occurs and is continuing, the Trustee
by notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the principal amount and premium, if any, on all the

 

30

 

Securities and the interest accrued thereon
to be immediately due and payable.  Upon
such a declaration, such principal amount, premium, if any, and interest
accrued thereon shall be due and payable immediately.  If an Event of Default specified in Section 6.01(d) or (e)
occurs and is continuing, the principal amount and premium, if any, on all the Securities
and the interest accrued thereon shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholders.  The Holders of a
majority in aggregate principal amount of the Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder) may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the principal
amount, premium, if any, and interest accrued thereon that has become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 7.07 have been paid.  No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.

 

Section 6.03.  Other Remedies.  If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of the principal
amount and premium, if any, on the Securities and interest accrued thereon or
to enforce the performance of any provision of the Securities or this
Indenture.

 

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

 

Section 6.04.  Waiver of Past Defaults.  The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (1) an Event of Default described
in Section 6.01(a) or 6.01(b), (2) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected, or (3) a Default that constitutes a failure to convert
any Security in accordance with the terms of Article 10.  When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.

 

Section 6.05.  Control by Majority.  The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy

 

31

 

available to the Trustee or of exercising any
trust or power conferred on the Trustee. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or that the Trustee determines in good faith is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it.

 

Section 6.06.  Limitation on Suits.  A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:

 

(a)           the Holder gives to the Trustee written
notice stating that an Event of Default is continuing;

 

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

 

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

 

(d)           the Trustee does not comply with the request
within 60 days after receipt of the notice, the request and the offer of
security or indemnity; and

 

(e)           the Holders of a majority in aggregate
principal amount of the Securities at the time outstanding do not give the
Trustee a direction inconsistent with the request during such 60-day period.

 

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

 

Section 6.07.  Rights of Holders to Receive Payment.  Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of the
principal amount, premium, if any, accrued interest, Redemption Price or Fundamental
Change Redemption Price in respect of the Securities held by such Holder, on or
after the respective due dates expressed in the Securities or any Redemption
Date or Fundamental Change Repurchase Date, as the case may be, and to convert
the Securities in accordance with Article 10, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall, not be impaired or affected adversely without the consent of
each such Holder.

 

Section 6.08.  Collection Suit by Trustee.  If an Event of Default described
in Section 6.01(a) or 6.01(b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company

 

32

 

for the whole amount owing with respect to
the Securities and the amounts provided for in Section 7.07.

 

Section 6.09.  Trustee May File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal amount, premium, if any, accrued interest, Redemption Price or
Fundamental Change Redemption Price in respect of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amount) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

 

(a)           to file and prove a claim for the whole
amount of the principal amount, premium, if any, accrued interest, Redemption
Price or Fundamental Change Redemption Price 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 moneys or other
property payable or deliverable on any such claims and to distribute the same;

 

and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or similar
official in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07.

 

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

 

Section 6.10.  Priorities. 
If the Trustee collects any money pursuant to this
Article 6 (including upon realization of any Lien on the Collateral), it
shall pay out the money in the following order:

 

First:  to the Trustee for amounts due under
Section 7.07;

 

33

 

Second:  to Securityholders for amounts due and
unpaid on the Securities for the principal amount, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price, as the case
may be, ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and

 

Third:  the balance, if any, to the Company.

 

The Trustee
may fix a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.  At
least 15 days before such record date, the Company shall mail to each
Securityholder and the Trustee a notice that states the record date, the
payment date and amount to be paid.

 

Section 6.11.  Undertaking for Costs.  In any suit for the enforcement
of any right or remedy, under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more
than 10% in aggregate principal amount of the Securities at the time
outstanding.

 

Section 6.12.  Waiver of Stay, Extension or Usury
Laws.  The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal amount, premium, if
any, accrued interest, Redemption Price or Fundamental Change Redemption Price
in respect of Securities as contemplated herein, or which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such laws 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 7

TRUSTEE

 

Section 7.01.  Duties of Trustee.  (a)  If an Event of Default has occurred and
is continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent

 

34

 

man would exercise or use under the
circumstances in the conduct of his own affairs.

 

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

 

(i)            the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others; 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. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

 

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

 

(i)            this
paragraph (c) does not limit the effect of paragraph (b) of this
Section 7.01;

 

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

 

(iii)          the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 6.05.

 

(d)           Every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e)
of this Section 7.01.

 

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

 

(f)            Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law.

 

Section 7.02.  Rights of Trustee.  (a) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper
person.  The Trustee need not
investigate any fact or matter stated in the document.

 

35

 

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

 

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

 

(d)           Subject to the provisions of
Section 7.01(c), the Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers.

 

Section 7.03.  Individual Rights of Trustee.  The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent, Registrar, Conversion Agent or co-registrar may do the same with the
like rights.  However, the Trustee must
comply with Section 7.10.

 

Section 7.04.  Trustee’s Disclaimer.  The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be responsible for any statement in the Prospectus
with respect to the Securities or in the Indenture of the Securities (other
than its certificate of authentication), the acts of an prior Trustee
hereunder, or the determination as to which beneficial owners are entitled to
receive any notices hereunder.

 

Section 7.05.  Notice of Defaults.  If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after it occurs.  Except in the case of a Default described in
Section 6.01(a) or 6.01(b), the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.  The Trustee shall not give notice of a
Default pursuant to Section 6.01(c) until at least sixty (60) days have
passed since its occurrence.

 

Section 7.06.  Disqualification; Conflicting
Interests.  If the Trustee
has or shall acquire any conflicting interest within the meaning of the TIA, it
shall either eliminate such conflicting interest or resign, to the extent and
in the.  manner provided by, and subject
to the provisions of the TIA and this Indenture.

 

Section 7.07.  Compensation and Indemnity.  The Company agrees:

 

(a)           to pay to the Trustee from time to time
reasonable compensation for all services rendered by it under the Noteholder
Documents to which it is a party

 

36

 

(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

 

(b)           to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of the Noteholder Documents to which
it is a party (including the reasonable compensation and the expense, advances
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and

 

(c)           to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred under the Noteholder
Documents without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
under the Noteholder Documents to which it is a party.

 

To secure the
Company’s payment obligations in this Section 7.07, the Trustee shall have
a lien prior to the Securities on all money or property held or collected by
the Trustee, except that held in trust to pay the principal amount, premium, if
any, accrued interest, Redemption Price or Fundamental Change Redemption Price,
as the case may be, on particular Securities.

 

The Company’s
payment obligations pursuant to this Section 7.07 shall survive the
discharge of this Indenture.  When the
Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(d) or (e), the expenses are intended to constitute expenses
of administration under any Bankruptcy Law.

 

Section 7.08.  Replacement of Trustee.  The Trustee may resign by so
notifying the Company; provided that if the Trustee resigns its
position hereunder it shall be deemed to have also resigned as trustee under
the Junior Priority Security Documents. 
Any such resignation shall not be effective until a successor Trustee
hereunder and under the Junior Priority Security Documents has accepted its
appointment pursuant to this Section 7.08.  The Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee hereunder and under the Junior
Priority Security Documents.  The
Company shall remove the Trustee if:

 

(a)           the Trustee fails to comply with, or ceases
to be eligible under, Section 7.10;

 

(b)           the Trustee is adjudged bankrupt or
insolvent;

 

37

 

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

 

(d)           the Trustee otherwise becomes incapable of
acting.

 

If the Trustee
resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee hereunder and under the Junior Priority Security
Documents.

 

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 and under the Junior Priority Security Documents.  The successor Trustee shall mail a notice of
its succession to Securityholders.  The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.

 

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

 

If the Trustee
fails to comply with Section 7.10, any Securityholder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

 

Section 7.09.  Successor Trustee by Merger.  If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trustee business or assets (including the administration of the trust created
by this Indenture) to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.

 

Section 7.10.  Eligibility; Disqualification.  The Trustee (or if a Trustee is a
member of a bank holding company, its bank holding company) shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of conditions. 
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.

 

Section 7.11.  Preferential Collection of Claims Against
Company.  If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the

 

38

 

TIA regarding the collection of claims
against the Company (or any such other obligor).

 

Section 7.12.  Reports by Trustee.

 

(a)           The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the TIA at the times and in the manner provided pursuant
thereto.

 

(b)           A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange or market upon which the Securities are listed, with the Commission
and with the Company.  The Company will
notify the Trustee when the Securities are listed on any stock exchange or
market.

 

ARTICLE 8

DISCHARGE OF
INDENTURE

 

Section 8.01.  Discharge of Liability on Securities.  When (i) the Company delivers to
the Trustee all outstanding Securities (other than Securities replaced pursuant
to Section 2.07) for cancellation or (ii) all outstanding Securities have
become due and payable and the Company deposits with the Trustee cash and/or
securities, as permitted by the terms hereof, sufficient to pay at Stated
Maturity the principal amount of all outstanding Securities (other than
Securities replaced pursuant to Section 2.07), and if in either case the
Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 7.07, cease to be of further effect as
to all outstanding Securities issued hereunder and all Security Interests in
the Collateral created by the Junior Priority Security Documents in favor of
the Trustee and the Securityholders. 
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 8.02.  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, provided, however, that the Trustee or
such Paying Agent, before being required to make any such return, shall at the
expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each such Holder notice that
such money or securities remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed money or securities then remaining will be returned
to the Company.

 

39

 

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.

 

ARTICLE 9

AMENDMENTS

 

Section 9.01.  Without Consent Of Holders.  The Company and the Trustee may
amend this Indenture or the Securities without the consent of any
Securityholder:

 

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

 

(b)           to comply with Article 5 or
Section 10.14;

 

(c)           to provide for uncertificated Securities in
addition to certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986, as
amended;

 

(d)           to make any change that does not adversely
affect the right of any Securityholder;

 

(e)           to make any change to comply with the TIA,
or any amendment thereto, or to comply with any requirement of the SEC in
connection with the qualification, if any, of the Indenture under the TIA;

 

(f)            to add any additional assets as Collateral;

 

(g)           to reflect the grant of Liens on the
Collateral for the benefit of another secured party to the extent such
indebtedness is permitted by the terms of Section 4.06(e) of this
Indenture; 

 

(h)           to release Collateral from the Lien of this
Indenture and the Junior Priority Security Documents when permitted or required
by the Noteholder Documents; or

 

(i)            to conform the text of this Indenture or
the other Noteholder Documents to any provision contained in the Prospectus
under the section “Description of the 
2009 Secured Notes.”

 

Section 9.02.  With Consent of Holders.  With the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
at the time outstanding, the Company and the Trustee may amend this Indenture
or the Securities.  However, without the
consent of each Securityholder affected, an amendment or supplement to this
Indenture or the Securities may not:

 

40

 

(a)                                  make any change to
the manner or rate of accrual in connection with interest, reduce the rate of
interest referred to in paragraph 1 of the Securities or extend the time for
payment of interest on any Security;

 

(b)                                 reduce the Redemption
Price or extend the Stated Maturity;

 

(c)                                  reduce the Redemption
Price or Fundamental Change Redemption - Price of any Security;

 

(d)                                 make any Security
payable in money or securities other than that stated in the Security;

 

(e)                                  make any change in
Section 6.04 or this Section 9.02, except to increase any such
percentage;

 

(f)                                    make any change
that adversely affects the right to convert any Security; or

 

(g)                                 make any change that
adversely affects the right to require the Company to redeem the Securities
upon a Fundamental Change in accordance with the terms thereof and this
Indenture;

 

and no such
amendment or supplement to this Indenture may reduce the aforesaid percentage
of Securities whose Holders must consent to any such amendment or supplemental
indenture, without the consent of the Holders of all the Securities then
outstanding.

 

It shall not
be necessary for the consent of the Holders under this Section 9.02 to
approve the particular form of any proposed amendment or supplemental
indenture, but it shall be sufficient if such consent approves the substance
thereof.

 

After an amendment
under this Section 9.02 becomes effective, the Company shall mail to each
Holder a notice briefly describing the amendment.

 

Section 9.03.  Compliance with TIA.  Every supplemental indenture
executed pursuant to this Article shall comply with the TIA as then in
effect.

 

Section 9.04.  Revocation and Effect of Consents, Waivers
and Actions.  Until an
amendment, supplemental indenture, waiver or other action becomes effective, a
consent to it or any other action by a Holder of a Security hereunder is a
continuing consent by the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same obligation as the consenting
Holder’s Security, even if notation of the consent, waiver or action is not
made on the Security.  However, any such
Holder or subsequent Holder may revoke the consent, waiver or action as to such
Holder’s Security or portion of the Security if the Trustee receives the notice
or revocation before the date the amendment,

 

41

 

supplemental indenture, waiver or action
becomes effective.  After an amendment,
supplemental indenture, waiver or action becomes effective, it shall bind every
Securityholder.

 

Section 9.05.  Notation on or Exchange of Securities.  Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture.  If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Securities,

 

Section 9.06.  Trustee to Sign Supplemental
Indentures.  The Trustee
shall sign any supplemental indenture authorized pursuant to this
Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
If it does, the Trustee may, but need not, sign such supplemental
indenture.  In signing such supplemental
indenture the Trustee shall be entitled to receive, and (subject to the
provisions of Section 7.01) shall be fully protected in relying upon, an
Officers’ Certificate and an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture.

 

Section 9.07.  Effect of Supplemental Indentures.  Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

Notwithstanding
anything to the contrary contained in this Article 9, the Company may
amend (i) the Secured Credit Facility and (ii) to the extent contemplated by
the Intercreditor Agreement and Section 12.04 hereof, any agreement or
instrument evidencing a Security Interest without the consent of Trustee or any
Securityholder.

 

ARTICLE 10

CONVERSION

 

Section 10.01.  Conversion Privilege.  A Holder of a Security may
convert such Security into Common Stock at any time during the period stated in
paragraph 7 of the Securities.  The
conversion price per share of Common Stock (the “Conversion Price”) shall be
that set forth in paragraph 7 in the Securities, subject to adjustment as
herein set forth.

 

42

 

A Holder may
convert a portion of the principal amount of a Security if the portion is
$1,000 or a multiple of $1,000. 
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.

 

Section 10.02.  Conversion Procedure.  To convert a Security a Holder
must satisfy the requirements in paragraph 7 of the Securities.  The date on which the Holder satisfies all
those requirements is the conversion date (the “Conversion Date”).  Securities surrendered for conversion during
the period from the close of business on any Regular Record Date to the close
of business on the Trading Day immediately prior to the next succeeding
Interest Payment Date (the “Interest Period”) shall (except in the case
of Securities or portions thereof which have been called for redemption on a
Redemption Date within such Interest Period) be accompanied by payment in New
York Clearing House funds or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of Securities being surrendered for conversion.  Subject to the provisions of
Section 3.07 relating to the payment of Defaulted Interest by the Company,
the interest payment with respect to a Security surrendered for conversion
during the Interest Period (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within the
Interest Period) shall be payable on such Interest Payment Date to the Holder
of such Securities at the close of business on such Regular Record Date
notwithstanding the conversion of such Securities during such Interest Period.

 

As soon as
practicable after the Conversion Date, the Company shall deliver to the Holder,
through the Conversion Agent, a certificate for the number of full shares of
Common Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 10.03.  The person in whose name the certificate is registered shall be
treated as a stockholder of record on and after the Conversion Date; provided,
however,
that no surrender of a Security on any date when the stock transfer books of
the Company shall be closed shall be effective to constitute the person or
persons entitled to receive the shares of Common Stock upon such conversion as
the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the person or persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; such conversion shall be at the Conversion
Price in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been
closed.  Upon conversion of a Security,
such person shall no longer be a Holder of such Security.

 

43

 

No payment or
adjustment will be made for dividends on or other distribution with respect to
any Common Stock except as provided in this Article 10.

 

If the Holder
converts more than one Security at the same time, the number of shares of
Common Stock issuable upon the conversion shall be based on the total principal
amount of the Securities converted.

 

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

 

If the last
day on which a Security may be converted is a Legal Holiday in a place where a
Conversion Agent is located, the Security may be surrendered to that Conversion
Agent on the next succeeding day that it is not a Legal Holiday.

 

Section 10.03.  Fractional Shares.  The Company will not issue a fractional share of
Common Stock upon conversion of a Security. 
Instead, the Company will deliver cash for the current market value of
the fractional share.  The current
market value of a fractional share shall be determined to the nearest
1/10,000th of a share by multiplying the last reported sale price (determined
as set forth in the definition of Current Market Price), on the last Trading
Day prior to the Conversion Date, of a full share by the fractional amount and
rounding the product to the nearest whole cent.

 

Section 10.04.  Taxes on Conversion.  If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon the conversion.  However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name
other than the Holder’s name.  The
Conversion Agent may refuse to deliver the certificates representing the Common
Stock being issued in a name other than the Holder’s name until the Conversion
Agent receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder’s name.  Nothing herein shall preclude any tax
withholding required by law or regulations.

 

Section 10.05.  Company to Provide Stock.  The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Stock a sufficient
number of shares of Common Stock to permit the conversion of the Securities.

 

All shares of
Common Stock delivered upon conversion of the Securities shall be newly issued
shares or treasury shares, shall be duly and validly issued

 

44

 

and fully paid
and nonassessable and shall be free from preemptive rights and free of any lien
or adverse claim.

 

The Company
will endeavor promptly to comply with all Federal and state securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities, if any, and will endeavor promptly, if permitted by the rules of
such exchange, over-the-counter market or other market, to list or cause to
have quoted such shares of Common Stock on each national Securities exchange or
in the over-the-counter market or such other market on which the Common Stock
is then listed or quoted.

 

Section 10.06.  Adjustment for Change in Capital Stock.  In case the Company shall (i) pay
a dividend, or make a distribution, in shares of its Common Stock, on its
Common Stock, (ii) subdivide its outstanding Common Stock into a greater number
of shares, or (iii) combine its outstanding Common Stock into a smaller number
of shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the holder of any Security thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the
Company which he would have owned or have been entitled to receive after the
happening of any of the events described above had such Security been converted
immediately prior to the happening of such event.  If any dividend or distribution of the type described in clause
(i) above is 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.  An
adjustment made pursuant to this Section 10.06 shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of subdivision or
combination.

 

Section 10.07.  Adjustment for Rights Issue.  In case the Company shall issue
rights or warrants to all holders of its Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price per share of Common Stock at the record date for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the same shall equal the Conversion Price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase.  Such adjustment shall be made successively

 

45

 

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

 

Section 10.08.  Adjustment for Other Distributions.  (a) In case the Company shall
distribute to all holders of its Common Stock (excluding any distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary) any shares of any class of capital stock of
the Company (other than Common Stock) or evidences of its indebtedness or
assets (other than cash) or rights or warrants to subscribe for or purchase any
of its securities (excluding those referred to in Section 10.07 hereof)
(any of the foregoing hereinafter in this Section 10.08(a) called the “Distributed
Securities”), then, in each case, the Conversion Price shall be
adjusted so that the same shall equal the Conversion Price determined by
multiplying the Conversion Price in effect immediately prior to the date of
such distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the record date mentioned below
less the fair market value on such record date (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and
described in a certificate filed with the Trustee) of the Distributed
Securities so distributed applicable to one share of Common Stock, and the
denominator shall be the Current Market Price per share of the Common Stock on
such record date.  Such adjustment shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.  Notwithstanding the foregoing, in the event the then fair market
value (as so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the relevant record date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Securityholder shall have the right to receive upon conversion the amount of
Distributed Securities such Holder would have received had such

 

46

 

Holder converted each Security on such record
date.  In the event that such
distribution is not so paid or made, the Conversion Price shall again be
adjusted to the Conversion Price which would then be in effect if such
distribution had not been declared.  If
the Board of Director determines the fair market value of any distribution for
purposes of this Section 10.08(a) by reference to the actual or when
issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price of the Common Stock.

 

Notwithstanding
the foregoing provisions of this Section 10.08(a), no adjustment shall be
made thereunder for any distribution of Distributed Securities if the Company
makes proper provision so that each Holder of a Security who converts such
Security (or any portion thereof) after the record date for such distribution
shall be entitled to receive upon such conversion, in addition to the shares of
Common Stock issuable upon such conversion, the amount and kind of Distributed
Securities that such Holder would have been entitled to receive if such Holder
had, immediately prior to such record date, converted such Security into Common
Stock, provided
that, with respect to any Distributed Securities that are
convertible, exchangeable or exercisable, the foregoing provision shall only
apply to the extent (and so long as) the Distributed Securities receivable upon
conversion of such Security would be convertible, exchangeable or exercisable,
as applicable, without any loss of rights or privileges for a period of at
least 60 days following conversion of such Security.

 

(b)                                 In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
cash (excluding (x) any quarterly cash dividend on the Common Stock to the
extent the aggregate cash dividend per share of Common Stock in any fiscal
quarter does not exceed the greater of (A) the amount per share of Common Stock
of the next preceding quarterly cash dividend on the Common Stock to the extent
such preceding quarterly dividend did not require any adjustment of the
Conversion Price pursuant to this Section 10.08(b) (as adjusted to reflect
subdivisions or combinations of the Common Stock), and (B) 3.75% of the average
of the last reported sales prices of the Common Stock (determined as provided
in the definition of Current Market Price) during the ten Trading Days next
preceding the date of declaration of such dividend and (y) any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, unless the
Company elects to reserve such cash for distribution to the holders of the
Securities upon the conversion of the Securities so that any such holder
converting Securities will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the amount of cash
which such holder would have received if such holder had, immediately prior to
the record date for such distribution of cash, converted its Securities into
Common Stock, the Conversion Price shall be decreased so that the same shall
equal the Conversion Price determined by multiplying the Conversion Price in
effect immediately prior

 

47

 

to the record date by a fraction of which the numerator shall be the
Current Market Price of the Common Stock on the record date less the amount of
cash so distributed (and not excluded as provided above) applicable to one
share of Common Stock, and the denominator shall be such Current Market Price
of the Common Stock, such decrease to be effective immediately prior to the
opening of business on, the day following the record date; provided, however,
that in the event the portion of the cash so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Securityholder shall have the
right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Security on the record date.  If such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had not
been declared.  If any adjustment is
required to be made as set forth in this Section 10.08(b) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto.  If an adjustment is required to be made as set forth in this
Section 10.08(b) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.

 

(c)                                  In case a tender or
exchange offer made by the Company or any Subsidiary of the Company for all or
any portion of the Common Stock shall expire and such tender or exchange offer
shall involve the payment by the Company or such Subsidiary of consideration
per share of Common Stock having a fair market value (as determined by the
Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive, and
described in a resolution of the Board of Directors or such duly authorized
committee thereof, as the case may be, at the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended)) that exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be decreased so that the same shall equal the
Conversion Price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted up to

 

48

 

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
decrease to 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 or exchange offer, but the Company is permanently prevented
by applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be effect if such tender or exchange offer had not been
made.

 

(d)                                 In case of a tender or
exchange offer made by a Person other than the Company or any Subsidiary for an
amount which increases the offeror’s ownership of Common Stock to more than 25%
of the Common Stock outstanding and shall involve the payment by such person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) at the last time (the
“Offer
Expiration Time”) tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Offer Expiration Time, and in which, as of the Offer Expiration Time the Board
of Directors is not recommending rejection of the offer, the Conversion Price
shall be decreased so that the same shall equal the Conversion Price determined
by multiplying the Conversion Price in effect immediately prior to the Offer
Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
on the Offer Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Offer Expiration Time, and
the denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the “Accepted Purchased Shares”) and (y) the
product of the number of shares of Common Stock outstanding (less any Accepted
Purchased Shares) on the Offer Expiration Time and the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time, such
decrease to become effective immediately prior to the opening of business on
the day following the Offer Expiration Time. 
In the event that such Person is obligated to purchase shares pursuant to
any such tender or exchange offer, but such Person is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be

 

49

 

the Conversion Price which would then be in effect if such tender or
exchange offer had not been made. 
Notwithstanding the foregoing, the adjustment described in this
Section 10.08(d) shall not be made if as of the Offer Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Article 5.

 

Section 10.09.  When Adjustment May be Deferred.  No adjustment in the Conversion
Price need be made unless the adjustment would require an increase or decrease
of at least 1% in the Conversion Price. 
Any adjustments that are not made shall be carried forward and taken
into account in any subsequent adjustment.

 

All
calculations under this Article 10 shall be made to the nearest cent or to
the nearest 1/10,000th of a share, as the case may be.

 

Section 10.10.  When no Adjustment Required.  No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.

 

No adjustment
need be made for a change in the par value or no par value of the Common Stock.

 

To the extent
the Securities become convertible into cash, assets, property or securities
(other than capital stock of the Company), no adjustment need be made
thereafter as to the cash, assets, property or such securities.  Interest will not accrue on the cash.

 

Section 10.11.  Notice of Adjustment.  Whenever the Conversion Price is
adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment.  The Company shall file with
the Trustee and the Conversion Agent such notice.  The certificate shall, absent manifest error, be conclusive
evidence that the adjustment is correct. 
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
to any Holder desiring inspection thereof.

 

Section 10.12.  Voluntary Decrease.  The Company may make such
decreases in the Conversion Price, in addition to those required by Sections
10.06, 10.07 and 10.08, as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.  To the extent permitted by
applicable law, the Company from time to time may decrease the Conversion Price
by any amount for any period of time if the period is at least 20 days, the
decrease is irrevocable during the period and the Board of Directors

 

50

 

shall have made a determination that such
decrease would be in the best interests of the Company, which determination
shall be conclusive.  Whenever the
Conversion Price is so decreased, the Company shall mail to Securityholders and
file with the Trustee and the Conversion Agent a notice of the decrease.  The Company shall mail the notice at least
15 days before the date the decreased Conversion Price takes effect.  The notice shall state the decreased
Conversion Price and the period it will be in effect.

 

Section 10.13.  Notice Of Certain Transactions.  If:

 

(a)                                  the Company makes any
distribution or dividend that would require an adjustment in the Conversion
Price pursuant to Section 10.06, 10.07 or 10.08; or

 

(b)                                 the Company takes any
action that would require a supplemental indenture pursuant to
Section 10.14; or

 

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

 

then the
Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice referencing this Section 10.13 and stating the
proposed record date for a dividend or distribution or the proposed effective
date of a subdivision, combination, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up, and if applicable, the
new Conversion Price.  The Company shall
file and mail the notice at least 15 days before such date.  Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.  Unless and until the Trustee shall receive a
notice pursuant to this Section 10.13, it shall not be deemed to have
knowledge of any event required to be described in a notice pursuant to this
Section 10.13.

 

Section 10.14.  Effect of Reclassification, Consolidation,
Merger or Sale.  If any of
the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture
providing that each Security shall be convertible into the kind and amount of
shares of stock and other securities or

 

51

 

property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Securities immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance.  Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.

 

The Company
shall cause notice of the execution of such supplemental indenture to be mailed
to each holder of Securities at his address appearing on the Security register
provided for in Section 2.03 of this Indenture.

 

The above
provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers, combinations, and sales.

 

If this
Section applies, neither Section 10.06, 10.07 nor 10.08 applies.

 

Section 10.15.  Company Determination Final.  Any determination that the
Company or the Board of Directors must make pursuant to Section 10.03,
10.06, 10.07, 10.08, 10.09, 10.10, 10.14 or 10.17 is conclusive.

 

Section 10.16.  Trustee’s Adjustment Disclaimer.  The Trustee has no duty to
determine when an adjustment under this Article 10 should be made, how it
should be made or what it should be. 
The Trustee has no duty to determine whether a supplemental indenture
under Section 10.14 need be entered into or whether any provisions of any
supplemental indenture are correct.  The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities.  The Trustee shall not be
responsible for the Company’s failure to comply with this Article 10.  Each Conversion Agent shall have the same
protection under this Section 10.16 as the Trustee.

 

Section 10.17.  Simultaneous Adjustment.  In the event that this
Article 10 requires adjustments to the Conversion Price under more than
one of Sections 10.06, 10.07, 10.08(a) or 10.08(b), and the record dates for
the distributions giving rise to such adjustments shall occur on the same date,
then such adjustments shall be made by applying, first, the provisions of
Section 10.08(a), second, the provisions of Section 10.08(b), third
the provisions of Section 10.06 and, fourth, the provisions of
Section 10.07.

 

Section 10.18.  Successive Adjustments.  After an adjustment to the
Conversion Price under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the
Conversion Price as so adjusted.

 

52

 

Section 10.19.  Rights Issued in Respect of Common Stock
Issued Upon Conversion.  Each
share of Common Stock issued upon conversion of Securities pursuant to this
Article 10 shall be entitled to receive the appropriate number of Rights
(as defined below), if any, and the certificates representing the Common Stock
issued upon such conversion shall bear such legends, if any, in each case as
provided by and subject to the terms of the agreement governing such Rights
(the “Rights
Agreement”) as in effect at the time of such conversion.  If the Rights are separated from the Common
Stock in accordance with the provisions of the Rights Agreement such that the
Holders of Securities would thereafter not be entitled to receive any such
Rights in respect to the Common Stock issuable upon conversion of such
Securities, the Conversion Price will be adjusted as provided in Section 10.08(a)
on the separation date; provided that if such Rights expire,
terminate or are redeemed by the Company, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
separation had not occurred.  In lieu of
any such adjustment, the Company may amend the Rights Agreement to provide that
upon conversion of the Securities the Holders will receive, in addition to the
Common Stock issuable upon such conversion, the Rights which would have
attached to such shares of Common Stock if the Rights had not become separated
from the Common Stock pursuant to the provisions of the Rights Agreement.

 

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

 

(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,

 

(“Rights”)
shall not be deemed distributed for purposes of Section 10.08(a) until the
occurrence of the earliest Trigger Event. 
In addition, in the event of any distribution of rights or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an
adjustment to the Conversion Price under Section 10.08(a), (1) in the case
of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
any

 

53

 

such rights or
warrants all of which shall have expired without exercise by any holder
thereof, the Conversion Price shall be readjusted as if such issuance had not
occurred.

 

Section 10.20.  General Considerations.  Whenever successive adjustments
to the Conversion Price are called for pursuant to this Article 10, such
adjustments shall be made to the Current Market Price as may be necessary or
appropriate to effectuate the intent of this Article and to avoid unjust
or inequitable results as determined in good faith by the Board of Directors.

 

ARTICLE 11

RANKING OF NOTE LIENS

 

Section 11.01.  Agreement for the Benefit of Holders of
Senior Priority Liens.  The
Trustee and each Securityholder by accepting a Security agrees, that:

 

(a)                                  the Junior Priority
Liens securing the Securities upon any and all Collateral are, to the extent
and in the manner provided in the Intercreditor Agreement, junior in ranking to
all present and future Senior Priority Liens:

 

(i)                                     are
enforceable by the holders of Senior Priority Liens, for the benefit of the
holders of Senior Priority Lien Obligations secured thereby;

 

(ii)                                  will
remain enforceable by the holders of Senior Priority Liens until the payment in
full in cash of all Senior Priority Lien Obligations.

 

(b)                                 without the necessity
of any consent of or prior notice to the Trustee or any Securityholder, the
Company may (1) amend, modify, supplement or terminate the Senior Credit
Facility and (2) enter into such agreements, including an Intercreditor
Agreement, as may be necessary or desirable to reflect its grant of Senior
Priority Liens on the Collateral for the benefit of additional secured parties,
as permitted under Section 4.06(e) of this Indenture.

 

(c)                                  as among the Trustee
and the Securityholders and the holders of Senior Priority Liens, the holders
of the Senior Priority Liens and the Administrative Agent will have the sole
ability to control and obtain remedies with respect to all Collateral without
the necessity of any consent of or notice to the Trustee or any Securityholder,
as set forth in more detail in the Intercreditor Agreement;

 

(d)                                 any or all Liens as
set forth in, and granted under the Junior Priority Security Documents for the
benefit of the Securityholders will be released by the

 

54

 

Trustee as provided by Sections 3 or 5(b) of the Intercreditor
Agreement, without the necessity of any consent of the Securityholders, upon
the request of the Administrative Agent;

 

(e)                                  the Indenture and
Securities are subject to the Intercreditor Agreement.  In case of any conflict or inconsistency
between the terms of the Intercreditor Agreement and the Junior Priority
Security Documents, the terms of the Intercreditor Agreement shall control.

 

Section 11.02.  Securities not Subordinated.  The provisions of this
Article 11 are intended solely to set forth the relative ranking, as
Liens, of the Junior Priority Liens as against the Senior Priority Liens.  The Securities are senior non-subordinated
obligations of the Company.  Neither the
Securities nor the exercise or enforcement of any right or remedy for the
payment or collection thereof (other than the exercise of rights and remedies
of a secured party, which are subject to the Intercreditor Agreement) are
intended to be, or will ever be by reason of the provisions of this
Article 11, in any respect subordinated, deferred, postponed, restricted
or prejudiced.

 

Section 11.03.  Relative Rights.  The Intercreditor Agreement defines the relative
rights, as lienholders, of holders of Junior Priority Liens and holders of
Senior Priority Liens.  Nothing in this
Indenture or the Intercreditor Agreement will:

 

(a)                                  impair, as between
the Company and the Securityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of, premium and interest on such
Securities in accordance with their terms or to perform any other obligation of
the Company under this Indenture or the Securities;

 

(b)                                 restrict the right of
any Securityholder to sue for payments that are then due and owing;

 

(c)                                  prevent the Trustee
or any Securityholder from exercising against the Company or any other obligor
any of its other available remedies upon a Default or Event of Default (other
than its rights as a secured party, which are subject to the Intercreditor
Agreement); or

 

(d)                                 restrict the right of
the Trustee or any Securityholder:

 

(i)                                     to
file and prosecute a petition seeking an order for relief in an involuntary
bankruptcy case as to the Company or otherwise to commence, or seek relief
commencing, any insolvency or liquidation proceeding involuntarily against the
Company;

 

55

 

(ii)                                  to
make, support or oppose any request for an order for dismissal, abstention or
conversion in any insolvency or liquidation proceeding;

 

(iii)                               to
make, support or oppose, in any insolvency or liquidation proceeding, any
request for an order extending or terminating any period during which the
debtor (or any other Person) has the exclusive right to propose a plan of
reorganization or other dispositive restructuring or liquidation plan therein;

 

(iv)                              to
seek the creation of, or appointment to, any official committee representing
creditors (or certain of the creditors) in any insolvency or liquidation
proceedings and, if appointed, to serve and act as a member of such committee
without being in any respect restricted or bound by, or liable for, any of the
obligations under this Article 11;

 

(v)                                 to
seek or object to the appointment of any professional person to serve in any
capacity in any insolvency or liquidation proceeding or to support or object to
any request for compensation made by any professional person or others therein;

 

(vi)                              to
make, support or oppose any request for order appointing a trustee or examiner
in any insolvency or liquidation proceedings; or

 

(vii)                           otherwise
to make, support or oppose any request for relief in any insolvency or liquidation
proceeding that it is permitted by law to make, support or oppose;

 

(x)                                   if
it were a holder of unsecured claims; or

 

(y)                                 as
to any matter relating to any plan of reorganization or other restructuring or
liquidation plan or as to any matter relating to the administration of the
estate or the disposition of the case or proceeding

 

(except as set forth in the Intercreditor Agreement).

 

ARTICLE 12

COLLATERAL AND SECURITY

 

Section 12.01.  Junior Priority Security Documents.

 

(a)                                  The payment of the
principal of and interest and premium, if any, on the Securities when due,
whether on an interest payment date, at maturity, by

 

56

 

acceleration, repurchase, redemption or otherwise by the Company and
the performance of all other obligations of the Company under this Indenture
and the Securities are secured as provided in the Junior Priority Security
Documents which the Company and Trustee have entered into simultaneously with
the execution of this Indenture and will be secured by Junior Priority Security
Documents hereafter delivered as required or permitted by this Indenture.

 

(b)                                 Pursuant to the terms
of the Junior Priority Security Agreements, the Company has agreed to take such
actions as may be necessary to perfect the Security Interests.  To the extent that perfection of the
Collateral secured pursuant to the Intellectual Property Security Agreement may
be attained by filing of financing statements under the Code, such actions will
be taken on or prior to the date hereof. 
To the extent that perfection of such Security Interests requires
recordation with the Copyright Office and Patent and Trademark Office, the
Company shall file the documentation required to effect such recordation on or
before the date hereof and shall notify the Trustee of such recordation upon
its effectiveness.

 

Section 12.02.  Trustee’s Rights and Obligations with
Respect to the Collateral.

 

(a)                                  Subject to
Section 7.01, neither the Trustee nor any of its respective officers,
directors, employees, attorneys or agents will be responsible or liable for the
existence, genuineness, value or protection of any Collateral, for the
legality, enforceability, effectiveness or sufficiency of the Junior Priority
Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Junior Priority Lien, or for any defect or deficiency as to
any such matters, or for any failure to demand, collect, foreclose or realize
upon or otherwise enforce any of the Junior Priority Liens or Junior Priority
Security Documents or any delay in doing so.

 

(b)                                 Except as required or
permitted by this Indenture, the Trustee will not be obligated:

 

(i)                                     to
act upon directions purported to be delivered to it by any other Person;

 

(ii)                                  to
foreclose upon or otherwise enforce any Junior Priority Lien; or

 

(iii)                               to
take any other action whatsoever with regard to any or all of the Junior
Priority Liens, Junior Priority Security Documents or Collateral.

 

57

 

(c)                                  The Trustee will be
accountable only for amounts that it actually receives as a result of the
enforcement of the Junior Priority Liens or Junior Priority Security Documents.

 

Section 12.03.  Authorization of Actions to be Taken.

 

(a)                                  Each Securityholder,
by its acceptance thereof, consents and agrees to the terms of the Noteholder
Documents, as originally in effect and as amended, supplemented or replaced
from time to time in accordance with its terms, authorizes and directs the
Trustee to enter into and deliver the Noteholder Documents to which it is a
party, and authorizes and empowers the Trustee to bind the Securityholders as
set forth in the Noteholder Documents to which it is a party and to perform its
obligations and exercise its rights and powers thereunder.

 

(b)                                 The Trustee is
authorized and empowered to receive for the benefit of the Securityholders any
funds collected or distributed under the Noteholder Documents to which the
Trustee is a party and to make further distributions of such funds to the
Securityholders according to the provisions of this Indenture.

 

(c)                                  Subject to the
provisions of Section 7.01, Section 7.02, Article 11 and the
Intercreditor Agreement, the Trustee may, in its sole discretion and without
the consent of the Securityholders take all actions it deems necessary or
appropriate in order to:

 

(i)                                     foreclose
upon or otherwise enforce any or all of the Junior Priority Liens;

 

(ii)                                  enforce
any of the terms of the Noteholder Documents to which the Trustee is a party;
or

 

(iii)                               collect
and receive payment of any and all Securities.

 

Subject to the Intercreditor Agreement, the Trustee is authorized and
empowered to institute and maintain such suits and proceedings as it may deem
expedient to protect or enforce the Junior Priority Liens or the Junior
Priority Security Documents to which the Trustee is a party or to prevent any
impairment of Collateral by any acts that may be unlawful or in violation of
the Junior Priority Security Documents to which Trustee is a party or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Securityholders in
the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the Security

 

58

Interests under the
Junior Priority Security Documents or be prejudicial to the interests of
Securityholders or the Trustee.

 

Section 12.04.  Release of Junior Priority Liens.

 

(a)                                  The Junior Priority
Liens will be released, with respect to the Securities:

 

(i)                                     in
accordance with Sections 3 and 5(b) of the Intercreditor Agreement;

 

(ii)                                  in
whole, upon payment in full of the principal of, accrued and unpaid interest
and premium, if any, on the Securities;

 

(iii)                               in
whole, upon satisfaction and discharge of this Indenture pursuant to
Section 8.01;

 

(iv)                              in
part, as to any property constituting Collateral that is sold or otherwise
disposed of by the Company to any Person other than the Company in a
transaction permitted by the Noteholder Documents, at the time of such sale or
disposition, to the extent of the interest sold or disposed of.

 

(b)                                 Upon delivery to the
Trustee of an Officers’ Certificate requesting execution of an instrument
confirming the release of the Junior Priority Liens pursuant to
Section 12.04(a), accompanied by:

 

(i)                                     an
Opinion of Counsel confirming that such release is permitted by
Section 12.04(a); and

 

(ii)                                  all
instruments requested by the Company to effectuate or confirm such release.

 

The Trustee will promptly execute and deliver such instruments.

 

(c)                                  All instruments
effectuating or confirming any release of any Junior Priority Liens will have
the effect solely of releasing such Junior Priority Liens as to the Collateral
described therein, on customary terms and without any recourse, representation,
warranty or liability whatsoever.

 

(d)                                 The Company will bear
and pay all costs and expenses associated with any release of Junior Priority
Liens pursuant to this Section 12.04, including all reasonable fees and
disbursements of any attorneys or representatives acting for the Trustee.

 

 

 

59

 

Section 12.05.  Filing, Recording and Opinions.

 

(a)                                  The Company will
comply with the provisions of TIA §314(b) and 314(d), except to the extent not
required as set forth in any Commission regulation or interpretation (including
any no-action letter issued by the Staff of the Commission, whether issued to
the Company or any other Person).  To the
extent the Company is required to furnish to the Trustee an Opinion of Counsel
pursuant to TIA §314(b)(2), the Company will furnish such opinion not more than
60 but not less than 30 days prior to each December [23].

 

(b)                                 Any release of
Collateral permitted by Section 12.04 hereof will be deemed not to impair
the Liens under the Indenture and the Junior Priority Security Documents in
contravention thereof and any person that is required to deliver an Officer’s
Certificate or Opinion of Counsel pursuant to Section 314(d) of the TIA,
shall be entitled to rely upon the foregoing as a basis for delivery of such
certificate or opinion.  The Trustee
may, to the extent permitted by Section 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and Opinion of Counsel.

 

ARTICLE 13

MISCELLANEOUS

 

Section 13.01.  Conflict with TIA.  If any provision hereof limits, qualifies or conflicts
with a provision of the TIA that is required under the TIA to be a part of and
govern this Indenture, the latter provision shall control.  If any provision of this Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.

 

Section 13.02.  Notices. 
Any request, demand, authorization, notice, waiver, consent
or communication shall be in writing and delivered in person or mailed by first
class mail, postage prepaid, addressed as follows or transmitted by facsimile
transmission (confirmed by overnight courier) to the following facsimile
numbers:

 

if to the
Company:

 

Silicon
Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:  General Counsel

Telephone Number:  (415) 960-1980

Facsimile Number:  (415) 969-6289

 

60

 

if to the
Trustee:

 

U.S. Bank
National Association

633 West Fifth Street, 24th Floor

Los Angeles, California 90071

Attention:  Corporate Trust Services
(Silicon Graphics, Inc.)

Telephone Number:  (213) 615-6043

Telefax Number:  (213) 615-6197

Paula.Oswald@usbank.com

 

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 given to a Securityholder shall be mailed to the Securityholder,
by first class mail, postage prepaid, at the Securityholder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

 

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

 

If the Company
mails a notice or communication to the Securityholders, it shall mail a copy to
the Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar.

 

Section 13.03.  Communication by Holders with Other
Holders.  Securityholders may
communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar, the
Paying Agent, the Conversion Agent and anyone else shall have the protection of
TIA Section 312(c).

 

Section 13.04.  Certificate And Opinion as to Conditions
Precedent.  Upon any request
or application by the Company to the Trustee to take any action under this Indenture,
the Company shall furnish to the Trustee:

 

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

 

(b)                                 an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with.

 

61

 

Section 13.05.  Statements Required in Certificate or
Opinion.  Each Officers’
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:

 

(a)                                  a statement that each
person making such Officers’ Certificate or Opinion of Counsel has read such
covenant or condition,

 

(b)                                 a brief statement as
to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such Officers’ Certificate or Opinion of
Counsel are based;

 

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

 

(d)                                 a statement that, in
the opinion of such person, such covenant or condition has been complied with.

 

Section 13.06.  Separability Clause.  In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

Section 13.07.  Rules by Trustee, Paying Agent, Conversion
Agent and Registrar.  The
Trustee may make reasonable rules for action by or a meeting of
Securityholders.  The Registrar,
Conversion Agent and the Paying Agent may make reasonable rules for their
functions.

 

Section 13.08.  Legal Holidays.  A “Legal Holiday” is any day other than a
Business Day.  If any specified date
(including a date for giving notice) is a Legal Holiday, the action shall be
taken on the next succeeding day that is not a Legal Holiday, and, to the
extent applicable, no interest, if any, shall accrue for the intervening
period.

 

Section 13.09.  Governing Law.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE SECURITIES.

 

Section 13.10.  No Recourse Against Others.  A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation.  By accepting a Security, each
Securityholder shall waive and release all such liability.  The waiver and release shall be part of the
consideration for the issue of the Securities.

 

62

 

Section 13.11.  Successors. 
All agreements of the Company in this Indenture and the
Securities shall bind its successor. 
All agreements of the Trustee in this Indenture shall bind its
successor.

 

Section 13.12.  Multiple Originals.  The parties may sign any number
of copies of this Indenture.  Each
signed copy shall be an original, but all of them together represent the same
agreement.  One signed copy is enough to
prove this Indenture.

 

63

 

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

 

	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Zellmer

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL 

  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paula M. Oswald

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

64

 

EXHIBIT A

 

[FORM OF FACE
OF SECURITY]

 

[FORM OF
LEGEND FOR GLOBAL 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.]

 

SILICON
GRAPHICS, INC.

 

$              
6.50% SENIOR SECURED CONVERTIBLE NOTE DUE 2009

 

	
  REGISTERED

  	
   

  	
  CUSIP No.
  827056 AE 2

  
	
  No. 1

  	
   

  	
   

  

 

Silicon
Graphics, Inc., a Delaware corporation, promises to pay to or registered
assigns, the principal amount of
                 
Dollars ($) on June 1, 2009 and to pay interest thereon from  [the date after expiration of the exchange
offer], 2003 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on December 1 and
December  in each year, commencing June 1, 2004, at the rate of 6.50%
per annum until the principal hereof is paid or made available for
payment.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the
November 15 or May 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not

 

A-1

 

inconsistent with the requirements of any securities exchange or other
market on which the Securities may be listed, and upon such notice as may be
required by such exchange or market, all as more fully provided in said
Indenture.  Payment of the principal of
(and premium, if any) and interest on this Security will be made at the
Corporate Trust Office or the office or agency of the Company maintained for
that purposes in the Borough of Manhattan, The City of New York, New York in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of, or by wire transfer to the account of, the Person
entitled thereto as such address shall appear in the Security Register.

 

Additional provisions
of this Security are set forth on the other side of this Security.

 

A-2

 

IN WITNESS
WHEREOF, Silicon Graphics, Inc.  has
caused this instrument to be duly executed under its corporate seal.

 

	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This is one of the Securities referred to
  in the within mentioned Indenture.

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
						

 

A-3

 

[FORM OF
REVERSE SIDE OF SECURITY]

 

SILICON
GRAPHICS, INC.

 

6.50% SENIOR
SECURED CONVERTIBLE NOTE DUE 2009

 

1.                                      Interest

 

This Security
shall bear interest at 6.50% per annum in the manner set forth in the Indenture
and the face of this Security.  In the
event that principal hereof or any portion of such principal is not paid when
due (whether upon acceleration pursuant to Section 6.02 of the Indenture,
upon the date set for payment of the Redemption Price pursuant to paragraph 5
hereof, upon the date set for payment of a Fundamental Change Redemption Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security),
then in each such case the overdue amount shall bear interest at the rate of
6.50% per annum, compounded semiannually (to the extent that the payment of
such interest shall be legally enforceable), which interest shall accrue from
the date such overdue amount was due to the date payment of such amount,
including interest thereon, has been made or duly provided for.  All such interest shall be payable on
demand.

 

2.                                      Method
of Payment

 

Subject to the
terms and conditions of the Indenture, the Company will make payments in respect
of the Securities to the persons who are registered Holders of Securities at
the close of business on the Redemption Date, Fundamental Change Repurchase
Date or Stated Maturity, as the case may be. 
Holders must surrender Securities to a Paying Agent to collect such
payments in respect of the Securities. 
The Company will pay cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private debts.  However, the Company may make such cash
payments by check mailed to the address of, or by wire transfer to the account
of, the person entitled to such payment.

 

3.                                      Paying
Agent, Conversion Agent and Registrar

 

Initially,
U.S. Bank National Association, a national banking association (the “Trustee”),
will act as Paying Agent, Conversion Agent and Registrar.  The Company may appoint and change any
Paying Agent, Conversion Agent, Registrar or co-registrar without notice, other
than notice to the Trustee.  The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.

 

A-4

 

4.                                      Indenture

 

The Company
issued the Securities under an Indenture dated as of
December     , 2003 (the “Indenture”), between the
Company and the Trustee.  Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture.  The Securities are
subject to all such terms, and Securityholders are referred to the Indenture
for a statement of those terms.

 

The Securities
are general unsecured obligations of the Company limited to $230,591,000
aggregate principal amount (subject to Sections 2.02 and 2.07 of the
Indenture).

 

5.                                      Redemption
at the Option of the Company

 

Prior to the
second anniversary of the original issuance of the Securities, the Securities
will not be redeemable at the option of the Company.  Beginning on the second anniversary of the original issuance of
the Securities, the Company may redeem the Securities for cash as a whole at
any time, or from time to time in part, upon not less than 10 days’ nor more
than 60 days’ notice at the a price equal to 100% of the principal amount (the
“Redemption
Price”) thereof, together with accrued and unpaid interest to, but
excluding, the Redemption Date, provided that during the year beginning on the
first anniversary of the original issuance of the Securities, the Company may
only redeem the Securities if the Closing Price of the Company’s Common Stock
has been at least 150% of the then-applicable Conversion Price for the 20
consecutive Trading Days ending two Trading Days prior to the notice of
redemption.

 

If any
Redemption Date is an Interest Payment Date, then the interest payable on such
date shall be paid to the Holder of the Security on the next preceding Regular
Record Date.  No Securities may be
redeemed by the Company if an Event of Default with respect to the payment of
interest on the Securities has occurred and is continuing.

 

No sinking
fund is provided for the Securities.

 

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

 

A-5

 

6.                                      Redemption
at the Option of the Holder Upon a Fundamental Change

 

(a)                                  At
the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to redeem the Securities held by
such Holder on the date (the “Fundamental Change Repurchase Date”) (or if
such date is not a Business Day, the next succeeding Business Day) that is 45
days after the date of the Company’s notice of such Fundamental Change (as
defined in the Indenture) occurring on or prior to June 1, 2009 at 100% of
the principal amount.  In each case, the
Company shall also pay accrued but unpaid interest, if any, on such Securities
to, but excluding, the Fundamental Change Repurchase Date; provided that if
such Fundamental Change Repurchase Date is an Interest Payment Date, then the
interest payable on such date shall be paid to the Holder of the Security on
the next preceding Regular Record Date. 
Securities in denominations larger than $1,000 of principal amount may
be redeemed in part in connection with a Fundamental Change, but only in
multiples of $1,000 of principal amount.

 

(b)                                 Holders
have the right to withdraw any Fundamental Change Redemption Notice by
delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.

 

(c)                                  If
cash sufficient to pay the Fundamental Change Redemption Price, together with
accrued interest to, but excluding, the Fundamental Change Repurchase Date, of
all Securities or portions thereof to be purchased as of the Fundamental Change
Repurchase Date is deposited with the Paying Agent on or prior to the
Fundamental Change Repurchase Date, interest ceases to accrue on such
Securities (or portions thereof) on and after the Fundamental Change Repurchase
Date, and the Holder thereof shall have no other rights as such (other than the
right to receive the Fundamental Change Redemption Price, together with accrued
interest to, but excluding, the Fundamental Change Repurchase Date, upon
surrender of such Security).

 

7.                                      Conversion

 

Subject to the
next two succeeding sentences, a Holder of a Security may convert it into
Common Stock of the Company at any time after issuance and before the close of
business on June 1, 2009.  If the
Security is called for redemption, the Holder may convert it at any time before
the close of the last Trading Day prior to the Redemption Date.  In the event the Security is surrendered
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the close of business on the Trading Day
immediately preceding the next succeeding Interest Payment Date (except in the
case of Security to be redeemed within such period), such Securities must be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on

 

A-6

 

such Interest Payment Date on the principal amount of this Security
then being converted.  Subject to the
aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or before
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest payable on such Interest Payment Date (except in the
case of Securities whose Maturity is prior to such Interest Payment Date), no
payment or adjustment is to be made on conversion for interest accrued hereon
or for dividends on the Common Stock issued on conversion.  A Security in respect of which a Holder has
delivered a notice of exercise of the option to redeem such Security in the
event of a Fundamental Change may be converted only if the notice of exercise
is withdrawn in accordance with the terms of the Indenture.

 

The initial
Conversion Price is $1.25 per share of Common Stock, subject to adjustment in
certain events described in Section 10 of the Indenture.  The Company will deliver cash or a check in
lieu of any fractional share of Common Stock.

 

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

 

A Holder may
convert a portion of a Security if the principal amount of such portion is
$1,000 or a multiple of $1,000.  No
payment or adjustment will be made for dividends on the Common Stock except as
provided in the indenture.

 

The Conversion
Price is subject to adjustment as provided in the Indenture.  In addition, in the case of (i) any
reclassification of the Common Stock, or (ii) a consolidation or merger
involving the Company or a sale or
conveyance to another corporation of the property and assets of the
Company as an entirety (or substantially as an entirety), in each case as a
result of which holders of Common Stock shall be entitled to receive stock, securities, other property or assets
(including cash) with respect to or in exchange for such Common Stock, as set
forth in the Indenture, or upon certain distributions described in the
Indenture, the right to convert a Security into Common Stock may be changed; as
set forth in the Indenture, into a right to convert it into securities, cash or
other assets of the Company or another person.

 

A-7

 

8.                                      Conversion
Arrangement on Call for Redemption

 

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

 

9.                                      Denominations;
Transfer; Exchange

 

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

 

10.                               Persons
Deemed Owners

 

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

 

11.                               Unclaimed
Money or Securities

 

The Trustee
and the Paying Agent shall return to the Company upon written request any money
or securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, provided, however, that the
Trustee or such Paying Agent, before being required to make any such return,
shall at the expense of the Company cause to be published once in a newspaper
of general circulation in The City of New York or mail to each such Holder
notice that such money or securities remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed money or securities then remaining will
be returned to the Company.  After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment

 

A-8

 

as general creditors unless an applicable abandoned property law
designates another person.

 

12.                               Amendment;
Waiver

 

Subject to
certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written consent of the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding.  Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, or to comply with Article 5 or Section 10.14 of the
Indenture, to provide for uncertificated Securities in addition to or in place
of certificated Securities or to make any change that does not adversely affect
the rights of any Securityholder or to comply with any requirement of the SEC
in connection with the qualification of the Indenture under the TIA.

 

13.                               Defaults
and Remedies

 

Under the
Indenture, Events of Default include (i) default in payment of the principal
amount, Redemption Price or Fundamental Change Redemption Price, as the case
may be, in respect of the Securities when the same becomes due and payable;
(ii) default for 30 days in the payment of any installment of interest on the
Securities; (iii) failure by the Company to comply with other agreements in the
Indenture, the Securities, or the Junior Priority Security Documents subject to
notice and lapse of time; (iv) an event of default under the Old Notes
Indenture or the New Indenture shall have occurred that results in the
principal amount of and accrued interest on that debt becoming immediately due
and payable, and (v) certain events of bankruptcy or insolvency.  If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. 
Certain events of bankruptcy or insolvency are Events of Default which
will result in the Securities being declared due and payable immediately upon
the occurrence of such Events of Default.

 

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

 

A-9

 

14.                               Lien
Subordination and Sharing.  This
Security is secured by Junior Priority Liens upon the Collateral pursuant to
certain Junior Priority Security Documents. 
The Junior Priority Liens upon any and all Collateral are, to the extent
and in the manner provided in the Intercreditor Agreement, subordinate in
ranking to all present and future Senior Priority Liens as set forth in the
Indenture and the Intercreditor Agreement.

 

15.                               Trustee
Dealings with the Company

 

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

 

16.                               No
Recourse Against Others

 

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

 

17.                               Authentication

 

This Security
shall not be valid until an authorized officer of the Trustee manually signs
the Trustee’s Certificate of Authentication on the other side of this Security.

 

18.                               Abbreviations

 

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

 

19.                               Governing
Law

 

THE LAWS OF
THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.

 

A-10

 

The Company
will furnish to any Securityholder upon written request and without charge a
copy of the Indenture which has in it the text of this Security in larger
type.  Requests may be made to:

 

Silicon
Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:  General Counsel

 

A-11

 

[FORM OF
CONVERSION NOTICE]

 

CONVERSION
NOTICE

 

To:  Silicon Graphics, Inc.

 

The undersigned
registered holder of this Security hereby irrevocably exercises the option to
convert this Security, or portion hereof (which is $1,000 principal amount or a
multiple thereof) below designated, into shares of Common Stock of Silicon
Graphics, Inc.  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.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

A-12

 

	
  Fill in for registration of shares if to be

  delivered, and Securities if to be issued

  other than to and in the name of the

  registered bolder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Street
  Address)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (City, State
  and zip code)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please print
  name and address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  principal
  amount to be converted

  (if less than all):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $     ,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social
  Security or Other

  Taxpayer Identification Number

  

 

A-13

 

[FORM OF
OPTION TO ELECT REDEMPTION

UPON A FUNDAMENTAL CHANGE]

 

To:          Silicon
Graphics, Inc.

 

The
undersigned registered holder of this Security hereby acknowledges receipt of a
notice from Silicon Graphics, Inc.  (the
“Company”)
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to redeem this Security, or the portion
hereof (which is $1,000 principal amount or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  principal
  amount to be redeemed

  (if less than all):

  
	
   

  	
   

  
	
   

  	
  $             

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social
  Security or Other

  Taxpayer Identification Number

  

 

A-14

 

[FORM OF
ASSIGNMENT]

 

For value received
                                                        
hereby sell(s), assign(s) and transfer(s) unto
                                                 

(Please insert social security or other taxpayer identification number of
assignee.)

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  Signature(s)
  must be guaranteed by a

  commercial bank or trust company or a

  member firm of a major stock exchange.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature
  Guarantee

  

 

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

 

A-15

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