Document:

Exhibit
4.6

 

 

 

 

SILICON GRAPHICS, INC.

11.75% Senior Secured Notes Due 2009

INDENTURE

Dated as of December 24, 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.

 

 

ii

 

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

  	
   

  

 

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

 

iii

 

	
  Section 3.05. Deposit of Redemption Price

  	
   

  
	
  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

  	
   

  

 

iv

 

	
  Section 7.06. Disqualification; Conflicting Interests

  	
   

  
	
  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

  	
   

  

 

v

 

	
  Section 12.02. Notices

  	
   

  
	
  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

  	
   

  

 

vi

 

INDENTURE, dated as of December 24, 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 24, 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-4 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 November 15 or
May 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 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 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.  As set forth in Section
4.05, 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

 

10

 

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 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 owner 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 10 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
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 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 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 this Indenture (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 24.

(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.

1500 Crittenden Lane

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: 

  	
  /s/ Jeffrey V. Zellmer

  
	
   

  	
  Name:

  	
  Jeffrey V. Zellmer

  
	
   

  	
  Title:

  	
  Senior Vice President and 

  Chief Financial Officer

  
				

 

 

	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paula M. Oswald

  
	
   

  	
  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. ___________

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 20, 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 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 inconsistent with the requirements of any 

A-1

 

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:

  	
  Jeffrey V. Zellmer

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and 

  Chief Financial Officer

  

 

 

[SEAL]

 

	
  Attest:

  	
   

  
	
   

  	
  Name:

  	
  Sandra M. Escher

  
	
   

  	
  Title:

  	
  Senior Vice President, Secretary
  and General Counsel

  

 

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, Registrar or co-registrar.

 

A-1

 

4.             Indenture

The Company issued the Securities under an Indenture
dated as of December 24, 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 secured obligations of the
Company pursuant to certain Junior Priority Security Documents (as defined in
the Indenture) and 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 10 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-2

 

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 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-3

 

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, to make any change that
does not adversely affect the rights of any Securityholder, to comply with any
requirement of the SEC in connection with the qualification of the Indenture
under the TIA, to add any additional assets as Collateral, to reflect the grant
of Liens on the Collateral to another Secured party, to release Collateral or
to conform the Indenture or other Noteholder Documents to any provision in the
Prospectus.

A-4

 

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, 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 Convertible 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 as set forth in (i)-(iv) above 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-5

 

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.

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.

1500 Crittenden Lane

Mountain View, California
94043

Attn:  General Counsel

 

 

A-6

 

[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-7

 

 

[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-1Exhibit 4.7

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.

$2,386,000 11.75% SENIOR
SECURED NOTE DUE 2009

REGISTERED                                                                                                             CUSIP
No. 827056 AD 4

No. 1

Silicon Graphics, Inc., a Delaware corporation,
promises to pay to or registered assigns, the principal amount of 2,386,000
Dollars ($) on June 1, 2009 and to pay interest thereon from
December 20, 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 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 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 

A-1

 

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:

  	
  /s/ Jeffrey V. Zellmer

  
	
   

  	
   

  	
  Name: Jeffrey V. Zellmer

  
	
   

  	
   

  	
  Title: Senior Vice
  President and Chief Financial Officer

  

 

 

[SEAL]

 

	
  Attest:

  	
  /s/ Sandra M. Escher

  	
   

  
	
   

  	
  Name:

  	
  Sandra M. Escher

  
	
   

  	
  Title:

  	
  Senior Vice President,
  Secretary and General Counsel

  
				

 

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:

  	
  /s/ Paula M. Oswald

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
					

 

A-3

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, Registrar or co-registrar.

4.             Indenture

The Company issued the Securities under an Indenture
dated as of December 24, 2003 (the “Indenture”),
between the Company and the Trustee. 
Capitalized terms used herein and not defined herein have the meanings
ascribed 

A-1

 

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 secured obligations of the
Company pursuant to certain Junior Priority Security Documents (as defined in
the Indenture) and 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 10 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.

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 

A-2

 

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 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 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.

A-3

 

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, to make any change that
does not adversely affect the rights of any Securityholder, to comply with any
requirement of the SEC in connection with the qualification of the Indenture
under the TIA, to add any additional assets as Collateral, to reflect the grant
of Liens on the Collateral to another secured party, to release Collateral or
to conform the Indenture or other Noteholder Documents to any provision in the
Prospectus.

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, 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 Convertible 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

A-4

 

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 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

A-5

 

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.

1500 Crittenden Lane

Mountain View, California
94043

Attn:  General Counsel

 

A-6

 

[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-7

 

[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-1

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