Document:

Exhibit 4.1

 

 

SEPRACOR INC.

 

 

as Issuer

 

 

AND

 

 

JPMORGAN CHASE BANK

 

 

as Trustee

 

 

INDENTURE

 

 

Dated as of September 22, 2004

 

 

0% Convertible Senior Subordinated Notes due 2024

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  DEFINITIONS

  
	
  Section 1.01. 

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

  
	
   

  	
   

  
	
  Section 2.01. 

  	
  Designation, Amount and Issue of Notes

  	
   

  
	
  Section 2.02. 

  	
  Form of Notes

  	
   

  
	
  Section 2.03.

  	
  Date and Denomination of Notes: Payments of
  Liquidated Damages

  	
   

  
	
  Section 2.04. 

  	
  Execution of Notes

  	
   

  
	
  Section 2.05. 

  	
  Exchange and Registration of Transfer of
  Notes; Restrictions on Transfer; Depositary.

  	
   

  
	
  Section
  2.06.

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  
	
  Section
  2.07. 

  	
  Temporary Notes

  	
   

  
	
  Section
  2.08.

  	
  Cancellation of Notes Paid, Etc

  	
   

  
	
  Section
  2.09. 

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  REDEMPTION OF NOTES

  
	
   

  	
   

  	
   

  
	
  Section
  3.01. 

  	
  Company’s Right to Redeem; Notices to
  Trustee

  	
   

  
	
  Section
  3.02.

  	
  Selection of Notes to Be Redeemed

  	
   

  
	
  Section
  3.03. 

  	
  Notice of Redemption

  	
   

  
	
  Section
  3.04.

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section
  3.05. 

  	
  Deposit of Redemption Price

  	
   

  
	
  Section
  3.06. 

  	
  Notes Redeemed in Part

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  SUBORDINATION OF NOTES

  
	
   

  	
   

  	
   

  
	
  Section
  4.01. 

  	
  Agreement of Subordination

  	
   

  
	
  Section
  4.02. 

  	
  Payments to Noteholders

  	
   

  
	
  Section
  4.03. 

  	
  Subrogation of Notes

  	
   

  
	
  Section
  4.04. 

  	
  Authorization to Effect Subordination

  	
   

  
	
  Section
  4.05. 

  	
  Notice to Trustee

  	
   

  
	
  Section
  4.06. 

  	
  Trustee’s Relation to Senior Obligations

  	
   

  
	
  Section
  4.07.

  	
  No Impairment of Subordination

  	
   

  

 

i

 

	
  Section
  4.08. 

  	
  Certain Conversions Not Deemed Payment

  	
   

  
	
  Section
  4.09.

  	
  Article Applicable to Paying Agents

  	
   

  
	
  Section
  4.10. 

  	
  Senior Obligations Entitled to Rely

  	
   

  
	
  Section
  4.11. 

  	
  Reliance on Judicial Order or Certificate
  of Liquidating Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  PARTICULAR COVENANTS OF THE COMPANY

  
	
   

  	
   

  	
   

  
	
  Section
  5.01. 

  	
  Payment of Principal and Premium and
  Liquidated Damages

  	
   

  
	
  Section
  5.02. 

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section
  5.03. 

  	
  Appointments to Fill Vacancies in Trustee’s
  Office

  	
   

  
	
  Section
  5.04. 

  	
  Provisions As to Paying Agent.

  	
   

  
	
  Section
  5.05. 

  	
  Existence

  	
   

  
	
  Section
  5.06. 

  	
  Rule 144A Information Requirement

  	
   

  
	
  Section
  5.07. 

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  Section
  5.08. 

  	
  Compliance Certificate

  	
   

  
	
  Section
  5.09. 

  	
  Liquidated Damages

  	
   

  
	
  Section
  5.10. 

  	
  Further Instruments and Acts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  NOTEHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section
  6.01.

  	
  Noteholders’ Lists

  	
   

  
	
  Section
  6.02. 

  	
  Preservation and Disclosure of Lists.

  	
   

  
	
  Section
  6.03. 

  	
  Reports by Trustee.

  	
   

  
	
  Section
  6.04. 

  	
  Reports by Company.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  DEFAULTS AND REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section
  7.01. 

  	
  Events of Default

  	
   

  
	
  Section
  7.02. 

  	
  Payments of Notes on Default; Suit Therefor

  	
   

  
	
  Section
  7.03. 

  	
  Application of Monies Collected by Trustee

  	
   

  
	
  Section
  7.04. 

  	
  Proceedings by Noteholder

  	
   

  
	
  Section
  7.05. 

  	
  Proceedings by Trustee

  	
   

  
	
  Section
  7.06. 

  	
  Remedies Cumulative and Continuing

  	
   

  
	
  Section
  7.07. 

  	
  Direction of Proceedings and Waiver of Defaults
  by Majority of Noteholders

  	
   

  
	
  Section
  7.08. 

  	
  Notice of Defaults

  	
   

  
	
  Section
  7.09. 

  	
  Undertaking to Pay Costs

  	
   

  
	
  Section
  7.10. 

  	
  Delay or Omission Not Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  CONCERNING THE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section
  8.01. 

  	
  Duties and Responsibilities of Trustee

  	
   

  

 

ii

 

	
  Section
  8.02.

  	
  Reliance on Documents, Opinions, Etc

  	
   

  
	
  Section
  8.03. 

  	
  No Responsibility for Recitals, Etc

  	
   

  
	
  Section
  8.04. 

  	
  Trustee, Paying Agents, Conversion Agents
  or Registrar May Own Notes

  	
   

  
	
  Section
  8.05. 

  	
  Monies to Be Held in Trust

  	
   

  
	
  Section
  8.06. 

  	
  Compensation and Expenses of Trustee

  	
   

  
	
  Section
  8.07. 

  	
  Officers’ Certificate As Evidence

  	
   

  
	
  Section
  8.08. 

  	
  Conflicting Interests of Trustee

  	
   

  
	
  Section
  8.09. 

  	
  Eligibility of Trustee

  	
   

  
	
  Section
  8.10. 

  	
  Resignation or Removal of Trustee.

  	
   

  
	
  Section
  8.11. 

  	
  Acceptance by Successor Trustee

  	
   

  
	
  Section
  8.12. 

  	
  Succession by Merger, Etc

  	
   

  
	
  Section
  8.13.

  	
  Limitation on Rights of Trustee as Creditor

  	
   

  
	
  Section
  8.14.  

  	
  Trustee’s Application for Instructions from
  the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  CONCERNING THE NOTEHOLDERS

  
	
   

  	
   

  	
   

  
	
  Section
  9.01. 

  	
  Action by Noteholders

  	
   

  
	
  Section
  9.02. 

  	
  Proof of Execution by Noteholders

  	
   

  
	
  Section
  9.03. 

  	
  Who Are Deemed Absolute Owners

  	
   

  
	
  Section
  9.04. 

  	
  Company-Owned Notes Disregarded

  	
   

  
	
  Section
  9.05. 

  	
  Revocation of Consents; Future holders
  Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  NOTEHOLDERS’ MEETINGS

  
	
   

  	
   

  	
   

  
	
  Section
  10.01. 

  	
  Purpose of Meetings

  	
   

  
	
  Section
  10.02. 

  	
  Call of Meetings by Trustee

  	
   

  
	
  Section
  10.03. 

  	
  Call of Meetings by Company or Noteholders

  	
   

  
	
  Section
  10.04. 

  	
  Qualifications for Voting

  	
   

  
	
  Section
  10.05. 

  	
  Regulations

  	
   

  
	
  Section
  10.06. 

  	
  Voting

  	
   

  
	
  Section
  10.07. 

  	
  No Delay of Rights by Meeting

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  Section
  11.01. 

  	
  Supplemental Indentures Without Consent of
  Noteholders

  	
   

  
	
  Section
  11.02. 

  	
  Supplemental Indentures With Consent of
  Noteholders

  	
   

  
	
  Section
  11.03. 

  	
  Effect of Supplemental Indentures

  	
   

  
	
  Section
  11.04. 

  	
  Notation on Notes

  	
   

  
	
  Section
  11.05. 

  	
  Evidence of Compliance of Supplemental
  Indenture to Be Furnished Trustee

  	
   

  

 

iii

 

	
  ARTICLE 12

  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

  
	
   

  	
   

  	
   

  
	
  Section
  12.01. 

  	
  Company May Consolidate, etc

  	
   

  
	
  Section
  12.02. 

  	
  Successor Corporation to Be Substituted

  	
   

  
	
  Section
  12.03. 

  	
  Opinion of Counsel to Be Given Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  SATISFACTION AND DISCHARGE OF INDENTURE

  
	
   

  	
   

  	
   

  
	
  Section
  13.01. 

  	
  Discharge of Indenture

  	
   

  
	
  Section
  13.02.  

  	
  Deposited Monies to Be Held in Trust by
  Trustee

  	
   

  
	
  Section
  13.03. 

  	
  Paying Agent to Repay Monies Held

  	
   

  
	
  Section
  13.04. 

  	
  Return of Unclaimed Monies

  	
   

  
	
  Section
  13.05. 

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  
	
   

  	
   

  	
   

  
	
  Section
  14.01.

  	
  Indenture and Notes Solely Corporate
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  CONVERSION OF NOTES

  
	
   

  	
   

  	
   

  
	
  Section
  15.01.

  	
  Conversion Privilege.

  	
   

  
	
  Section
  15.02. 

  	
  Conversion Procedure.

  	
   

  
	
  Section
  15.03.

  	
  Adjustment of Conversion Rate

  	
   

  
	
  Section
  15.04. 

  	
  Shares To Be Fully Paid

  	
   

  
	
  Section
  15.05.

  	
  Effect of Reclassification, Consolidation,
  Merger or Sale

  	
   

  
	
  Section
  15.06. 

  	
  Certain Covenants.

  	
   

  
	
  Section
  15.07. 

  	
  Responsibility of Trustee

  	
   

  
	
  Section
  15.08. 

  	
  Notice
  To Holders Prior To Certain Actions.

  	
   

  
	
  Section
  15.09. 

  	
  Shareholder Rights Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  REPURCHASE OF NOTES AT OPTION OF HOLDERS

  
	
   

  	
   

  	
   

  
	
  Section
  16.01. 

  	
  Repurchase at Option of Holders.

  	
   

  
	
  Section
  16.02. 

  	
  Repurchase at Option of Holders Upon a
  Designated Event.

  	
   

  
	
  Section
  16.03. 

  	
  Withdrawal of Repurchase Notice or
  Designated Event Repurchase Notice.

  	
   

  
	
  Section
  16.04. 

  	
  Deposit of Repurchase Price or Designated
  Event Repurchase Price.

  	
   

  
	
  Section
  16.05.

  	
  Covenant to Comply with Securities Laws.

  	
   

  

 

iv

 

	
  ARTICLE 17

  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  	
   

  
	
  Section
  17.01. 

  	
  Provisions Binding on Company’s Successors

  	
   

  
	
  Section
  17.02. 

  	
  Official Acts by Successor Corporation

  	
   

  
	
  Section
  17.03. 

  	
  Addresses for Notices, Etc

  	
   

  
	
  Section
  17.04. 

  	
  Governing Law

  	
   

  
	
  Section
  17.05. 

  	
  Evidence of Compliance with Conditions
  Precedent; Certificates to Trustee

  	
   

  
	
  Section
  17.06. 

  	
  Legal Holidays

  	
   

  
	
  Section
  17.07. 

  	
  No Security Interest Created

  	
   

  
	
  Section
  17.08. 

  	
  Trust Indenture Act

  	
   

  
	
  Section
  17.09. 

  	
  Benefits of Indenture

  	
   

  
	
  Section
  17.10. 

  	
  Table of Contents, Headings, Etc

  	
   

  
	
  Section
  17.11. 

  	
  Authenticating Agent

  	
   

  
	
  Section
  17.12. 

  	
  Execution in Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Note

  	
   

  
	
  Schedule
  A

  	
  Table
  of Additional Shares

  	
   

  

 

v

 

INDENTURE
dated as of September 22, 2004 between Sepracor Inc., a Delaware corporation,
as issuer (hereinafter sometimes called the “Company”, as more fully set forth
in Section 1.01), and JPMorgan Chase Bank, a banking corporation organized
under the laws of the State of New York, as trustee (hereinafter sometimes
called the “Trustee”, as more fully set forth in Section 1.01).

 

W I T N E S S
E T H:

 

WHEREAS, for
its lawful corporate purposes, the Company has duly authorized the issue of its
0% Convertible Senior Subordinated Notes due 2024 (hereinafter sometimes called
the “Notes”), initially in an
aggregate principal amount not to exceed $500,000,000 (or $600,000,000 if the
option to purchase additional Notes granted to the Initial Purchaser (as
defined herein) pursuant to the Purchase Agreement (as defined herein) is
exercised in full), and in order to provide the terms and conditions upon which
the Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and

 

WHEREAS, the
Notes, the certificate of authentication to be borne by the Notes, a form of
assignment, a form of option to elect repayment upon a Designated Event (as
defined herein), a form of option to elect repayment on a Repurchase Date (as
defined herein), a form of conversion notice and certificate of transfer to be
borne by the Notes are to be substantially in the forms hereinafter provided
for; and

 

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

 

NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

 

ARTICLE 1

Definitions

 

Section 1.01. 
Definitions.

 

(a)           The terms defined in this Section
1.01 (except as herein otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section 1.01.  All other terms used in
this Indenture, which are defined in the Trust Indenture Act or which are by
reference therein defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires) shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture.  The words “herein,” “hereof,” “hereunder,”
and words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision.  The terms defined in this Article include the plural as well as
the singular.

 

“Accepted
Purchased Shares” The term “Accepted Purchased Shares” shall have the meaning
specified in Section 15.03(g)(i).

 

“Additional Shares” The term “Additional
Shares” shall have the meaning specified in Section 15.01(d)(ii).

 

“Adjustment Determination Date” The term
“Adjustment Determination Date” shall have the meaning specified in Section
15.03(m).

 

“Adjustment Event” The term “Adjustment
Event” shall have the meaning specified in Section 15.03(m).

 

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

 

“Board of Directors” The term “Board of
Directors” shall mean the Board of Directors of the Company or a committee of
such Board duly authorized to act for it hereunder.

 

“Board Resolution” The term “Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors, or duly authorized committee

 

2

 

thereof (to the extent
permitted by applicable law), and to be in full force and effect on the date of
such certification, and delivered to the Trustee.

 

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

 

“close of business” The term “close of
business” means 5 p.m. (New York City time).

 

“Closing Sale Price” The term “Closing Sale
Price” means, on any date, the closing sale price per share of the Common Stock
(or, if no closing sale price is reported, the average of the closing bid and
ask prices or, if more than one in either case, the average of the average
closing bid and the average closing ask prices) on such date as reported on the
Nasdaq National Market or, if the shares of Common Stock are not then listed on
the Nasdaq National Market, as reported in composite transactions for the
principal United States national or regional securities exchange on which
shares of Common Stock are traded or on any similar United States system of
automated dissemination of quotations of securities prices.  In the absence of such quotations, the
Company shall be entitled to determine the Closing Sale Price in such manner as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price determined in good faith
by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution.  The
Closing Sale Price shall be determined without reference to extended or after
hours trading.

 

“Commission” The term “Commission” shall
mean the Securities and Exchange Commission.

 

“Common Stock” The term “Common Stock” shall
mean any stock of any class of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company.  Subject
to the provisions of Section 15.05, however, shares issuable on conversion of
Notes shall include only shares of the class designated as common stock of the
Company, par value $0.10 per share, at the date of this Indenture or shares of
any class or classes resulting from any reclassification or reclassifications
thereof and that have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and that are not subject to redemption by the Company;
provided that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially

 

3

 

in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.

 

“Company” The term “Company” shall mean
Sepracor Inc., a Delaware corporation, and subject to the provisions of Article
12, shall include its successors and assigns.

 

“Company Notice” The term “Company Notice”
shall have the meaning specified in Section 16.01(a).

 

“Conversion Agent” The term “Conversion
Agent” shall have the meaning specified in Section 5.02.

 

“Conversion Date” The term “Conversion Date”
shall have the meaning specified in Section 15.02(d).

 

“Conversion Obligation” The term “Conversion
Obligation” shall have the meaning specified in Section 15.01(a).

 

“Conversion Price” The term “Conversion
Price” means as of any date $1,000 divided by the Conversion Rate as of such
date.

 

“Conversion Rate” The term “Conversion Rate”
shall have the meaning specified in Section 15.01(a).

 

“Conversion Settlement Date” The term
“Conversion Settlement Date” shall have the meaning specified in Section
15.02(d).

 

“Conversion Value” The term “Conversion
Value” shall have the meaning specified in Section 15.02(a).

 

“Corporate Trust Office” The term “Corporate
Trust Office,” or other similar term, shall mean the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office is, at the date as of
which this Indenture is dated, located at JPMorgan Chase Bank, 4 New York Plaza,
New York, New York 10004, Attention: 
Institutional Trust Services (Sepracor Inc. 0% Convertible Senior
Subordinated Notes due 2024).

 

“Current Market Price” The term “Current
Market Price” means, in respect of shares of Common Stock on any day and an issuance
or distribution on the Common Stock, the average of the Closing Sale Prices per
share of Common Stock for each of the ten consecutive Trading Days ending on
the earlier of the day in question and the day before the “ex-date” with
respect to such issuance or distribution requiring such computation. For
purposes of this definition, “ex-date”

 

4

 

means the first date on which
the shares of Common Stock trade on the applicable exchange or in the
applicable market, regular way, without the right to receive such issuance or
distribution.

 

“Custodian” The term “Custodian” means
JPMorgan Chase Bank with respect to the Notes in global form, or any successor
entity thereto.

 

“Default” The term “Default” shall mean any
event that is, or after notice or passage of time, or both, would be, an Event
of Default.

 

“Depositary” The term “Depositary” means,
with respect to the Notes issuable or issued in whole or in part in global
form, the person specified in Section 2.05(d) as the Depositary with respect to
such Notes, until a successor shall have been appointed and become such
pursuant to the applicable provisions of this Indenture, and thereafter,
“Depositary” shall mean or include such successor.

 

“Designated Event” The term “Designated
Event” means the occurrence of (a) a Fundamental Change or (b) a Termination of
Trading.

 

“Designated Event Expiration Time” The term
“Designated Event Expiration Time” shall have the meaning specified in Section
16.02(b).

 

“Designated Event Notice” The term
“Designated Event Notice” shall have the meaning specified in Section 16.02(b).

 

“Designated Event Repurchase Date” The term
“Designated Event Repurchase Date” shall have the meaning specified in Section
16.02(a).

 

“Designated Event Repurchase Notice” The
term “Designated Event Repurchase Notice” shall have the meaning specified in
Section 16.02(a)(i).

 

“Designated Event Repurchase Price” The term
“Designated Event Repurchase Price” shall have the meaning specified in Section
16.02(a).

 

“Designated Senior Obligations” The term
“Designated Senior Obligations” shall mean Senior Obligations in which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Obligations shall be “Designated Senior
Obligations” for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right
of such Senior Obligations to exercise the rights of Designated Senior
Obligations). If any payment made to any holder of any Designated Senior
Obligations or its Representative with respect to such Designated Senior
Obligations is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency,

 

5

 

bankruptcy or reorganization of
the Company or otherwise, the reinstated Indebtedness of the Company arising as
a result of such rescission or return shall constitute Designated Senior
Obligations effective as of the date of such rescission or return.

 

“Determination Date” The term “Determination
Date” shall have the meaning specified in Section 15.02(b).

 

“Distributed Property” The term “Distributed
Property” shall have the meaning specified in Section 15.03(d).

 

“Effective Date” The term “Effective Date”
shall have the meaning specified in Section 15.01(d)(ii).

 

“Event of Default” The term “Event of
Default” shall mean with respect to the Notes any event specified in Section
7.01, continued for the period of time, if any, and after the giving of notice,
if any, therein designated.

 

“Ex-Dividend Date” The term “Ex-Dividend
Date” shall mean, with respect to any distribution or dividend on the Common Stock
or any other equity security, the date on which “ex-dividend trading” commences
for such dividend or distribution on the Nasdaq National Market or such other
national or regional exchange or market on which such Common Stock or security
is then listed or quoted.

 

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

 

“Exchange Property” The “Exchange Property”
shall have the meaning specified in Section 15.05.

 

“Exchange Property Value” The term “Exchange
Property Value” shall have the meaning specified in Section 15.05(c).

 

“Exchange Property Weighted Average Price”
The term “Exchange Property Weighted Average Price” shall have the meaning
specified in Section 15.05(c).

 

“Expiration Time” The term “Expiration Time”
shall have the meaning specified in Section 15.03(f).

 

“Fiscal Quarter” The term “Fiscal Quarter”
shall have the meaning specified in Section 15.01(a)(i)

 

6

 

“Five Day Weighted Average Price” The term
“Five Day Weighted Average Price” shall have the meaning specified in Section
15.02(a)(ii).

 

“Fundamental Change” The term “Fundamental
Change” shall mean the occurrence at any time after the original issuance of
Notes of any transaction or event (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which all
or substantially all of the Common Stock is exchanged for, converted into,
acquired for or constitutes solely the right to receive consideration, less
than 90% of which is common stock that (x) is listed on, or immediately after
the transaction or event will be listed on, a United States national securities
exchange, or (y) is approved, or immediately after the transaction or event
will be approved, for quotation on the Nasdaq National Market or any similar
United States system of automated dissemination of quotations of securities
prices.

 

“Global Note” The term “Global Note”  shall have the meaning specified in Section
2.05(b).

 

“Indebtedness” The term “Indebtedness” shall
mean, with respect to any Person, and without duplication, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations of the Company in respect
of overdrafts, foreign exchange contracts, currency exchange agreements,
interest rate protection agreements, and any loans or advances from banks, whether
or not evidenced by notes or similar instruments, and all commitment, stand by
and other fees due and payable to financial institutions with respect to credit
facilities available to such Person) or evidenced by bonds, debentures, notes
or similar instruments (whether or not the recourse of the lender is to the
whole of the assets of such Person or to only a portion thereof) (other than
any account payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining of
materials or services); (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers’ acceptances; (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of real or personal property or
other assets of such Person required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease obligations on
the balance sheet of such Person; (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap
or collar agreement or other similar instrument or agreement or foreign
currency hedge, exchange, purchase or similar instrument or agreement; (e) all
direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to
assure a creditor against loss in respect of indebtedness of another Person of
the kind described in clauses (a) through (d); (f) any indebtedness described
in clauses (a) through (e) secured by any mortgage,

 

7

 

pledge, lien or other
encumbrance existing on property that is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby
shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or supplements
to, any indebtedness, obligation or liability of the kind described in clauses
(a) through (f).

 

“Indenture” The term “Indenture” shall mean
this instrument as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.

 

“Initial Purchaser” The term “Initial
Purchaser” means Morgan Stanley & Co. Incorporated.

 

“Liquidated Damages” The term “Liquidated
Damages” means all Liquidated Damages Amounts as defined in the Registration
Rights Agreement.

 

“Measurement Period” The term “Measurement
Period” shall have the meaning specified in Section 15.01(a)(ii)

 

“Net Exchange Property Amount” The term “Net
Exchange Property Amount” shall have the meaning specified in Section
15.05(d)(ii).

 

“Net Share Amount” The term “Net Share
Amount” shall have the meaning specified in Section 15.02(b)(ii).

 

“Net Shares” The term “Net Shares” shall
have the meaning specified in Section 15.02(b)(ii).

 

“non-electing share” The term “non-electing
share” shall have the meaning specified in Section 15.05(b).

 

“Note” or “Notes”
The terms “Note” or “Notes” shall mean any Note or Notes, as the case may be,
authenticated and delivered under this Indenture.

 

“Noteholder” or holder The terms
“Noteholder” or “holder” as applied to any Note, or other similar terms (but
excluding the term “beneficial holder”), shall mean any person in whose name at
the time a particular Note is registered on the Note register.

 

“Note registrar” The term “Note registrar”
shall have the meaning specified in Section 2.05(a).

 

“Note register” The term “Note register”
shall have the meaning specified in Section 2.05(a).

 

8

 

“Notice of Conversion” The term “Notice of
Conversion” shall have the meaning specified in Section 15.02(c).

 

“Offer Expiration Time” The term “Offer
Expiration Time” shall have the meaning specified in Section 15.03(g).

 

“Officers’ Certificate” The term “Officers’
Certificate”, when used with respect to the Company, shall mean a certificate
signed by (a) one of the President, the Chief Executive Officer, any Executive
or Senior Vice President or any Vice President (whether or not designated by a
number or numbers or word added before or after the title “Vice President”) and
(b) by one of the Treasurer or any Assistant Treasurer, Secretary or any
Assistant Secretary or Controller of the Company, which is delivered to the
Trustee.  Each such certificate shall
include the statements provided for in Section 17.05 if and to the extent
required by the provisions of such Section.

 

“Opinion of Counsel” The term “Opinion of
Counsel” shall mean an opinion in writing signed by legal counsel, who may be
an employee of or counsel to the Company, or other counsel acceptable to the
Trustee, which is delivered to the Trustee. 
Each such opinion shall include the statements provided for in Section
17.05 if and to the extent required by the provisions of such Section.

 

“outstanding” The term “outstanding,” when
used with reference to Notes, shall, subject to the provisions of Section 9.04,
mean, as of any particular time, all Notes authenticated and delivered by the
Trustee under this Indenture, except:

 

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

 

(ii)           Notes, or portions thereof, for the
payment repurchase of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other than the
Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent);

 

(iii)          Notes in lieu of which, or in
substitution for which, other Notes shall have been authenticated and delivered
pursuant to the terms of Section 2.06 unless proof satisfactory to the Trustee
is presented that any such Notes are held by bona fide holders in due course;
and

 

(iv)          Notes converted pursuant to Article
15.

 

“Paying Agent” The term “Paying Agent” shall
have the meaning specified in Section 5.02.

 

9

 

“Payment Blockage Notice” The term “Payment
Blockage Notice” shall have the meaning specified in Section 4.02(b).

 

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

 

“Portal Market” The term “Portal Market”
shall mean The Portal Market operated by the National Association of Securities
Dealers, Inc. or any successor thereto.

 

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

 

“Principal Return” The term “Principal
Return” shall have the meaning specified in Section 15.02(b)(i).

 

“Purchase Agreement” The term “Purchase
Agreement” means that certain Purchase Agreement, dated as of September 17,
2004, between the Company and the Initial Purchaser.

 

“Purchased Shares” The term “Purchased
Shares” shall have the meaning specified in Section 15.03(f)(i).

 

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

 

“Record Date” The term “Record Date” shall
have the meaning specified in Section 15.03(h)(iii).

 

“Redemption Date” The term “Redemption Date”
means the date specified in a notice of redemption on which the Notes may be
redeemed in accordance with the terms of the Notes and this Indenture.

 

“Redemption Price” The term “Redemption
Price” shall have the meaning specified in Section 3.01.

 

“Registration Rights  Agreement” The term “Registration Rights
Agreement” means that certain Registration Rights Agreement, dated as of
September 22, 2004, between the Company and the Initial Purchaser.

 

10

 

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

 

“Repurchase Date” The term “Repurchase Date”
has the meaning specified in Section 16.01(a).

 

“Repurchase Notice” The term “Repurchase
Notice” has the meaning specified in Section 16.01(a).

 

“Repurchase Price” The term “Repurchase
Price” has the meaning specified in Section 16.01(a).

 

“Resale Restriction Termination Date” The
term “Resale Restriction Termination Date” shall have the meaning specified in
Section 2.05(d).

 

“Responsible Officer” The term “Responsible
Officer”, when used with respect to the Trustee, shall mean an officer of the
Trustee in the Corporate Trust Office, including any managing director, vice
president, assistant vice president, assistant treasurer, assistant secretary
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and having direct
responsibility for the administration of this Indenture, and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer’s knowledge of and familiarity with the particular
subject.

 

“Restricted Securities” The term “Restricted
Securities” has the meaning specified in Section 2.05(d).

 

“Rule 144A” The term “Rule 144A” shall mean
Rule 144A as promulgated under the Securities Act.

 

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

 

“Senior Obligations” The term “Senior
Obligations” shall mean the principal of, premium, if any, interest (including
all interest accruing subsequent to the commencement of any bankruptcy or
similar proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding) and rent payable on or in
connection with, and all fees, costs, expenses and other

 

11

 

amounts accrued or due on or in
connection with, Indebtedness of the Company, whether outstanding on the date
of this Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals, extensions
or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee thereof
expressly provides that such Indebtedness shall not be senior in right of
payment to the Notes or expressly provides that such Indebtedness is “pari
passu” or “junior” to the Notes. 
Notwithstanding the foregoing, the term Senior Obligations shall not
include (a) the Company’s 0% Series A Convertible Senior Subordinated Notes due
2008, (b) its 0% Series B Convertible Senior Subordinated Notes due 2010, (c)
its 5% Convertible Subordinated Debentures due 2007, (d) any Indebtedness of
the Company to any Subsidiary of the Company, or (e) the Notes. If any payment
made to any holder of any Senior Obligations or its Representative with respect
to such Senior Obligations is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the reinstated Indebtedness of the Company arising as a
result of such rescission or return shall constitute Senior Obligations
effective as of the date of such rescission or return.

 

“Significant Subsidiary” The term
“Significant Subsidiary” means, with respect to any person, a Subsidiary of
such person that would constitute a “significant subsidiary” as such term is
defined under Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission.

 

“Stock Price” The term “Stock Price” means
the price paid per share of Common Stock in connection with a Fundamental
Change pursuant to which Additional Shares shall be added to the Conversion
Rate pursuant to Section 15.01(d) hereof, which shall be equal to (i) if
holders of Common Stock receive only cash in such Fundamental Change, the cash
amount paid per share of Common Stock and (ii) in all other cases, the average
of the Closing Sale Prices of the Common Stock on the ten Trading Days up to
but not including the effective date of such Fundamental Change.

 

“Subsidiary” The term “Subsidiary” means a
corporation more than 50% of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock” means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

 

“Termination of Trading” A “Termination of
Trading” means any time that the Common Stock (or other common stock into which
the Notes are then

 

12

 

convertible) is neither listed
for trading on a United States national or regional securities exchange nor
approved for trading on the Nasdaq National Market, Nasdaq SmallCap Market or
any similar United States system of automated dissemination of quotations of
securities prices.

 

“Trading Day” The term “Trading Day” shall
mean (x) if the applicable security is quoted on the Nasdaq National Market,
Nasdaq SmallCap Market or any similar United States system of automated dissemination
of quotations of securities prices, a day on which trades may be made thereon
or (y) if the applicable security is listed or admitted for trading on the
American Stock Exchange, New York Stock Exchange or another national or
regional securities exchange, a day on which the American Stock Exchange, New
York Stock Exchange or such other national or regional securities exchange is
open for business or (z) if the applicable security is not so listed, admitted
for trading or quoted, any day other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.

 

“Trading Price” The term “Trading Price”
shall have the meaning specified in Section 15.01(a).

 

“transfer” The term “transfer” shall have
the meaning specified in Section 2.05(d).

 

“Trigger Event” The term “Trigger Event”
shall have the meaning specified in Section 15.03(d).

 

“Trust Indenture Act The term “Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, as it
was in force at the date of execution of this Indenture, except as provided in
Section 11.03 and Section 15.05; provided,
however, that in the event the Trust Indenture Act of 1939 is
amended after the date hereof, the term “Trust Indenture Act” shall mean, to
the extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.

 

“Trustee” The term “Trustee” shall mean
JPMorgan Chase Bank, and its successors and any corporation resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee at the time serving as successor trustee
hereunder.

 

“Volume Weighted Average Price” The term
“Volume Weighted Average Price” with respect to any share of Common Stock on
any Trading Day shall mean the volume weighted average price on the Nasdaq
National Market, or if the Common Stock is not quoted on the Nasdaq National
Market as reported on the principal exchange or over-the-counter market on
which the Common Stock is then listed or traded, from 9:30am to 4:00pm (New
York City time) on that

 

13

 

Trading Day as displayed by
Bloomberg (Bloomberg key-strokes: SEPR Equity VAP) (or if such volume weighted
average price is not available, the market value of one share of Common Stock
on such Trading Day as determined by the Company’s Board of Directors in good
faith using a volume weighted method).

 

ARTICLE 2

Issue, Description, Execution, Registration and Exchange of Notes

 

Section 2.01. 
Designation, Amount and Issue of
Notes.  The Notes shall be
designated as the “0% Convertible Senior Subordinated Notes due 2024”. Notes
not to exceed the aggregate principal amount of $500,000,000 (or $600,000,000
if the option set forth in Section 2(a) of the Purchase Agreement is exercised
in full), upon the execution of this Indenture, or (except pursuant to Section
2.05, Section 2.06, Section 15.02 and Section 16.02) from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes upon the written order of the Company, signed by the Company’s (a) Chief
Executive Officer, President, Executive or Senior Vice President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title “Vice President”) and (b) Treasurer or Assistant Treasurer
or its Secretary or any Assistant Secretary, without any further action by the
Company hereunder, provided, however,
that said Notes may not be executed, delivered or authenticated unless and
until the Trustee shall have received an Officers’ Certificate stating that the
Notes are substantially in the form set forth in Exhibit A of the Indenture and
an Opinion of Counsel substantially to the effect that the Indenture, to the
extent applicable, and Notes have been duly authorized and, if executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and duly paid for by the purchasers thereof on the date of such opinion,
would be entitled to the benefits of the Indenture and would be valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting
creditors’ rights generally, general principles of equity, and such other
matters as shall be specified therein; further
provided that additional Notes
may be issued in an unlimited aggregate principal amount so long as such Notes
are executed, delivered or authenticated at a price that would not cause such
Notes to have “original issue discount” within the meaning of Section 1273 of
the United States Internal Revenue Code of 1986, as amended.  The Trustee shall be fully protected in
relying upon such Officers’ Certificate and Opinion of Counsel.

 

Section 2.02. 
Form of Notes.  The Notes and the Trustee’s certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.

 

14

 

Any of the
Notes may have such letters, numbers or other marks of identification and such
notations, legends and endorsements as the officers executing the same may
approve (execution thereof to be conclusive evidence of such approval) and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or automated
quotation system on which the Notes may be listed or designated for issuance,
or to conform to usage.

 

The Global
Note shall represent such of the outstanding Notes as shall be specified
therein and shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect transfers or exchanges permitted hereby.  Any endorsement of the Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon written instructions given by
the holder of such Notes in accordance with this Indenture.  Payment of principal, Liquidated Damages, if
any, and premium, if any (including any Repurchase Price or Designated Event
Repurchase Price), on the Global Note shall be made to the holder of such Note
on the date of payment, unless a record date or other means of determining
holders eligible to receive payment is provided for herein.

 

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

 

Section 2.03.  Date and Denomination of Notes: Payments of
Liquidated Damages.  The
Notes shall be issuable in fully registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof.  Every Note shall be dated the date of its
authentication and shall pay Liquidated Damages in the manner and to the
persons set forth in the Registration Rights Agreement.

 

Section 2.04. 
Execution of Notes.  The Notes shall be signed in the name and on
behalf of the Company by the facsimile signature of its Chief Executive
Officer, President, any of its Executive or Senior Vice Presidents, or any of
its Vice Presidents (whether or not designated by a number or numbers or word
or words added before or after the title “Vice President”) and attested by the
facsimile signature of its Secretary or any of its Assistant Secretaries (or
Treasurer or any of its Assistant Treasurers) (which may be printed, engraved
or otherwise reproduced thereon, by facsimile or otherwise).  Only such Notes as shall bear

 

15

 

thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 17.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.  Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this Indenture.

 

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

 

Section 2.05.  Exchange and Registration of Transfer of
Notes; Restrictions on Transfer; Depositary.

 

(a)           The Company shall cause to be kept at
the Corporate Trust Office a register (the register maintained in such office
and in any other office or agency of the Company designated pursuant to Section
5.02 being herein sometimes collectively referred to as the “Note register”) in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes.  Such register shall be in written form or in any form capable of
being converted into written form within a reasonable period of time.  The Trustee is hereby appointed “Note
registrar” for the purpose of registering Notes and transfers of Notes as
herein provided.  The Company may
appoint one or more co-registrars in accordance with Section 5.02.

 

Upon surrender
for registration of transfer of any Note to the Note registrar or any
co-registrar, and satisfaction of the requirements for such transfer set forth
in this Section 2.05, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

 

Notes may be exchanged
for other Notes of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at any such
office or agency maintained by the Company pursuant to Section 5.02.  Whenever any Notes are so surrendered for
exchange, the

 

16

 

Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Noteholder making
the exchange is entitled to receive, bearing registration numbers not
contemporaneously outstanding.

 

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

 

No service
charge shall be charged to the Noteholder for any exchange or registration of
transfer of Notes, 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 Note registrar or any co-registrar shall be required
to exchange or register a transfer of (a) any Notes surrendered for conversion
or, if a portion of any Note is surrendered for conversion, such portion
thereof surrendered for conversion or (b) any Notes, or a portion of any Note,
surrendered for repurchase (and not withdrawn) in accordance with Article 16
hereof.

 

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

 

(b)           So long as the Notes are eligible for
book-entry settlement with the Depositary, unless otherwise required by law,
all Notes shall be represented by a Note in global form (a “Global Note”) registered in the name of the
Depositary or the nominee of the Depositary. 
The transfer and exchange of beneficial interests in a Global Note,
which does not involve the issuance of a definitive Note, shall be effected
through the Depositary (but not the Trustee or the Custodian) in accordance
with this Indenture (including the restrictions on transfer set forth herein)
and the procedures of the Depositary therefor.

 

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

 

17

 

issuance or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

 

(d)           Every Note that bears or is required
under this Section 2.05(d) to bear either of the legends set forth in this
Section 2.05(d) (together with any Common Stock issued upon conversion of the
Notes and required to bear either of the legends set forth in Section 2.05(e),
collectively, the “Restricted Securities”) shall be subject to the restrictions
on transfer set forth in this Section 2.05(d) (including one of the legends set
forth below), unless such restrictions on transfer shall be waived by written
consent of the Company, and the holder of each such Restricted Security, by
such holder’s acceptance thereof, agrees to be bound by all such restrictions
on transfer.  As used in Section 2.05(d)
and Section 2.05(e), the term “transfer” encompasses any sale, pledge, transfer
or other disposition whatsoever of any Restricted Security.

 

Until the date
(the “Resale Restriction Termination Date”)
that is two (2) years after the later of the original issuance date of any Note
and the last date on which the Company or any affiliate of the Company was the
owner of such Note, any certificate evidencing such Note (and all securities
issued in exchange therefor or substitution thereof, other than Common Stock,
if any, issued upon conversion thereof which shall bear the legend set forth in
Section 2.05(e), if applicable) shall bear a legend in substantially the
following form (unless such Notes have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Act and which continues to be effective at the time of such transfer, pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act, or unless otherwise agreed by the Company in writing, with notice thereof
to the Trustee):

 

THIS SECURITY
AND THE SHARES OF SEPRACOR INC. (THE “COMPANY”) COMMON STOCK (“COMMON STOCK”)
ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS.   NONE OF THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
OR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

 

THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) THAT IS TWO YEARS AFTER THE LATER OF

 

18

 

 

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

 

Any Note (or
security issued in exchange or substitution therefor) as to which such
restrictions on transfer shall have expired in accordance with their terms may,
upon surrender of such Note for exchange to the Note registrar in accordance
with the provisions of this Section 2.05, be exchanged for a new Note or Notes,
of like tenor and aggregate principal amount, which shall not bear the
restrictive legend required by this Section 2.05(d).

 

Notwithstanding
any other provisions of this Indenture (other than the provisions set forth in
this Section 2.05(d)), a Global Note may not be transferred as a whole or in
part except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary, provided
that a Global Note may be exchanged in whole or in part for a definitive Note
registered in the name of any Person other than the Depositary if (x) any
holder of a beneficial interest in such

 

19

 

Global Note through the Depositary requests
to exchange such beneficial interest for a Note in registered form, in
accordance with customary procedures or (y) the Company determines, in its sole
discretion, not to have Notes represented by a Global Note.

 

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

 

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

 

Definitive
Notes issued in exchange for all or a part of the Global Note pursuant to this
Section 2.05(d) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.  Upon execution and authentication, the
Trustee shall deliver such definitive Notes to the persons in whose names such
definitive Notes are so registered.

 

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

 

(e)           Until the Resale Restriction
Termination Date, any stock certificate representing Common Stock issued upon
conversion of such Note shall bear a

 

20

 

legend in substantially the following form
(unless the Note or such Common Stock has been sold pursuant to the exemption
from registration provided by Rule 144 under the Securities Act or pursuant to
a registration statement that has been declared effective under the Securities
Act, and which continues to be effective at the time of such transfer, or such
Common Stock has been issued upon conversion of Notes that have been
transferred pursuant to a registration statement that has been declared
effective under the Securities Act or pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or unless otherwise
agreed by the Company with written notice thereof to the Trustee and any
transfer agent for the Common Stock):

 

THE COMMON
STOCK EVIDENCED HEREBY (THE “SECURITY”) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

 

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

 

21

 

THIS SECURITY IS REQUIRED, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST
OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR
OTHER INFORMATION SATISFACTORY TO THE COMPANY.

 

Any such
Common Stock as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new
certificate or certificates for a like aggregate number of shares of Common
Stock, which shall not bear the restrictive legend required by this Section
2.05(e).

 

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

 

(g)           Notwithstanding any provision of
Section 2.05 to the contrary, in the event Rule 144(k) as promulgated under the
Securities Act (or any successor rule) is amended to change the two-year period
under Rule 144(k) (or the corresponding period under any successor rule), from
and after receipt by the Trustee of the Officers’ Certificate and Opinion of
Counsel provided for in this Section 2.05(g), (i) each reference in Section
2.05(d) to “two (2) years” and in the restrictive legend set forth in such
paragraph to “TWO YEARS” shall be deemed for all purposes hereof to be
references to such changed period, (ii) each reference in Section 2.05(e) to
“two (2) years” and in the restrictive legend set forth in such paragraph to
“TWO YEARS” shall be deemed for all purposes hereof to be references to such
changed period and (iii) all corresponding references in the Notes (including
the definition of Resale Restriction Termination Date) and the restrictive
legends thereon shall be deemed for all purposes hereof to be references to
such changed period, provided
that such changes shall not become effective if they are otherwise prohibited
by, or would otherwise cause a violation of, the then-applicable federal
securities laws.  As soon as practicable
after the Company has knowledge of the effectiveness of any such amendment to
change the two-year period under Rule 144(k) (or the corresponding period under
any

 

22

 

successor rule), unless such
changes would otherwise be prohibited by, or would otherwise cause a violation
of, the then-applicable securities law, the Company shall provide to the
Trustee an Officers’ Certificate and Opinion of Counsel informing the Trustee
of the effectiveness of such amendment and the effectiveness of the foregoing
changes to Section 2.05(d) and Section 2.05(e) and the Notes.  The provisions of this Section 2.05(g) will
not be effective until such time as the Opinion of Counsel and Officers’
Certificate have been received by the Trustee hereunder.  This Section 2.05(g) shall apply to
successive amendments to Rule 144(k) (or any successor rule) changing the
holding period thereunder.

 

Section 2.06.  Mutilated, Destroyed, Lost or Stolen
Notes.  In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and deliver, a
new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen.  In
every case the applicant for a substituted Note shall furnish to the Company,
to the Trustee and, if applicable, to such authenticating agent such security
or indemnity as may be required by them to save each of them harmless from any
loss, liability, cost or expense caused by or connected with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.

 

The Trustee or
such authenticating agent may authenticate any such substituted Note and
deliver the same upon the receipt of such security or indemnity as the Trustee,
the Company and, if applicable, such authenticating agent may require.  Upon the issuance of any substituted Note,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.  In case
any Note which has matured or is about to mature or is about to be converted
into Common Stock shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender
thereof except in the case of a mutilated Note), as the case may be, if the
applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such substitution,
and, in case of destruction, loss or theft, evidence satisfactory to the
Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent
of the destruction, loss or theft of such Note and of the ownership thereof.

 

23

 

Every substitute
Note issued pursuant to the provisions of this Section 2.06 by virtue of the
fact that any Note is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be found at any time, and shall be entitled to all the
benefits of (but shall be subject to all the limitations set forth in) this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.  To the extent permitted by
law, all Notes shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment
or conversion of mutilated, destroyed, lost or stolen Notes and shall preclude
any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement
or payment or conversion of negotiable instruments or other securities without
their surrender.

 

Section 2.07.  Temporary Notes.  Pending the preparation of Notes in certificated form,
the Company may execute and the Trustee or an authenticating agent appointed by
the Trustee shall, upon written request of the Company, authenticate and
deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any authorized denomination,
and substantially in the form of the Notes in certificated form but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. 
Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form.  Without
unreasonable delay the Company will execute and deliver to the Trustee or such
authenticating agent Notes in certificated form (other than in the case of
Notes in global form) and thereupon any or all temporary Notes (other than any
Global Note) may be surrendered in exchange therefor, at each office or agency
maintained by the Company pursuant to Section 5.02 and the Trustee or such
authenticating agent shall authenticate and deliver in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form.  Such exchange shall be made by
the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Notes shall
in all respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.

 

Section 2.08.  Cancellation of Notes Paid, Etc.  All Notes surrendered for the
purpose of payment, repurchase, conversion, exchange or registration of transfer,
shall, if surrendered to the Company or any Paying Agent or any Note registrar
or any Conversion Agent, be surrendered to the Trustee and promptly canceled by
it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture.  Upon
written instructions of the Company, the Trustee shall destroy canceled Notes
and, after such destruction, shall deliver a

 

24

 

certificate of such destruction
to the Company.  If the Company shall
acquire any of the Notes, such acquisition shall not operate as satisfaction of
the indebtedness represented by such Notes unless and until the same are
delivered to the Trustee for cancellation.

 

Section 2.09. 
CUSIP Numbers.  The Company in issuing the Notes may use
“CUSIP” numbers (if then generally in use), and, if so, the trustee shall use
“CUSIP” numbers in Company Notices as a convenience to holders of the Notes;
provided, that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Notes or Company
Notice and that reliance may be placed only on the other identification numbers
printed on the Notes.  The Company will
promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

ARTICLE 3

Redemption of Notes

 

Section 3.01.  Company’s Right to Redeem; Notices to
Trustee.  Prior to October
20, 2009, the Notes will not be redeemable at the Company’s option.  Beginning on October 20, 2009, the Company,
at its option, may redeem the Notes for cash at any time as a whole, or from
time to time in part, at a redemption price (the “Redemption Price”) equal to 100% of the principal amount of
the Notes to be redeemed plus accrued and unpaid Liquidated Damages, if any, on
the Notes to be redeemed to (but excluding) the Redemption Date.  If the Company elects to redeem Notes, it
shall notify the Trustee in writing of the Redemption Date, the principal
amount of Notes to be redeemed and the Redemption Price.

 

The Company
shall give the notice to the Trustee provided for in this Section 3.01 at least
45 days before the Redemption Date, unless the Trustee consents to a shorter
period, accompanied by an Officers’ Certificate to the effect that such
redemption will comply with the conditions herein.

 

Section 3.02.  Selection of Notes to Be Redeemed.  If fewer than all the Notes are
to be redeemed, the Trustee shall select the Notes to be redeemed pro rata or
by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers appropriate and
in accordance with methods generally used at the time of selection by
fiduciaries in similar circumstances. The Trustee shall make the selection from
outstanding Notes not previously called for redemption.  Notes and portions of Notes the Trustee
selects shall be in principal amounts of $1,000 or a whole multiple of
$1,000.  Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes
called for redemption.  The Trustee
shall notify the

 

25

 

Company as promptly as
practicable of the Notes or portions of Notes to be redeemed.

 

Notes and
portions of Notes that are to be redeemed are convertible, pursuant to Section
15.01(a)(iii), by the holder thereof until the close of business one Business
Day prior to the Redemption Date.  If
any Note selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be)
to be from the portion selected for redemption.  Notes that have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.

 

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

 

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

 

(1)           the Redemption Date;

 

(2)           the Redemption Price;

 

(3)           the then existing Conversion Rate;

 

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

 

(5)           that Notes called for redemption may
be converted at any time before the close of business on the date that is one
Business Day immediately prior to the Redemption Date;

 

(6)           that holders who want to convert
their Notes must satisfy the requirements for conversion set forth in the Notes
and this Indenture;

 

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

 

(8)           if fewer than all of the outstanding
Notes are to be redeemed, the certificate numbers, if any, and principal
amounts of the particular Notes to be redeemed; and

 

(9)           the CUSIP number(s) of the Notes.

 

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

 

26

 

which such notice of redemption
must be given to holders in accordance with this Section 3.03.

 

Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is
given, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Notes which
are converted in accordance with the terms of this Indenture.  Upon surrender to the Paying Agent, such
Notes shall be paid at the Redemption Price stated in the notice.

 

Section 3.05. 
Deposit of Redemption Price.  Prior to 10:00 a.m. (New York City time) on
the Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary thereof is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted.  Subject to receipt of funds and/or Notes by the Paying Agent,
payment for Notes surrendered for redemption will be made promptly after the
later of (x) the Redemption Date with respect to such Note and (y) the time of
delivery of such Note to the Paying Agent by the holder thereof, by mailing
checks for the amount payable to the holders of such Notes entitled thereto as
they shall appear in the Note Register, provided,
however, that payments to the
Depositary shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee. 
The Paying Agent shall as promptly as practicable return to the Company
any money not required for that purpose because of conversion of Notes pursuant
to Section 15.01.  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.

 

If the Trustee
(or other Paying Agent appointed by the Company) holds money sufficient to
redeem on the Redemption Date all the Notes or portions thereof that are to be
redeemed as of the Redemption Date, then on and after the Business Day
following the Redemption Date (i) such Notes will cease to be outstanding, (ii)
Liquidated Damages, if any, will cease to accrue on such Notes, and (iii) all
other rights of the holders of such Notes will terminate, whether or not
book-entry transfer of the Notes has been made or the Notes have been delivered
to the Trustee or Paying Agent, other than the right to receive the Redemption
Price upon delivery of the Notes.

 

Section 3.06. 
Notes Redeemed in Part.  Upon surrender of a Note that is redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the holder a new Note in an authorized denomination equal in principal
amount to the unredeemed portion of the Note surrendered.  In the event of any redemption in part, the
Company will not be required to (i) issue, register the transfer of or exchange
any Note during a period beginning at the opening of

 

27

 

business 15 days before any
selection of Notes for redemption and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have been
given to all holders of Notes to be so redeemed, or (ii) register the transfer
of or exchange any Note so selected for redemption, in whole or in part, except
the unredeemed portion of any Note being redeemed in part.

 

ARTICLE 4

Subordination of Notes

 

Section 4.01. 
Agreement of Subordination.  The Company covenants and agrees, and each
holder of Notes issued hereunder by its acceptance thereof likewise covenants
and agrees, that all Notes shall be issued subject to the provisions of this
Indenture; and each person holding any Note, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees to be bound
by such provisions.

 

The payment of
the principal of, premium, if any, and Liquidated Damages, if any, on all Notes
(including, but not limited to, the Redemption Price, Principal Return,
Repurchase Price or Designated Event Repurchase Price with respect to the Notes
as provided in the Indenture) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment
to the prior payment in full of all Senior Obligations, whether outstanding at
the date of this Indenture or thereafter incurred.  Notwithstanding anything to the contrary in the Indenture or any
Notes, the Notes issued pursuant to this Indenture shall be senior in right of
payment to the Company’s 0% Series A Convertible Senior Subordinated Notes due
2008, its 0% Series B Convertible Senior Subordinated Notes due 2010 and its 5%
Convertible Subordinated Debentures due 2007.

 

No provision
of this Section 4.01 shall prevent the occurrence of any default or Event of
Default hereunder.

 

Section 4.02.  Payments to Noteholders.  No payment shall be made with
respect to the principal of, premium, if any, or Liquidated Damages, if any, on
the Notes (including, but not limited to, the Redemption Price, Principal
Return, Repurchase Price or Designated Event Repurchase Price with respect to
Notes as provided in this Indenture), except payments and distributions made by
the Trustee as permitted by the first or second paragraph of Section 4.05, if:

 

(a)           a default in the payment of
principal, premium, if any, interest, rent or other obligations in respect of
Senior Obligations occurs and is continuing (a “Payment Default”), unless and until such Payment Default shall
have been cured or waived or shall have ceased to exist; or

 

28

 

(b)           a default, other than a Payment
Default, on any Designated Senior Obligations occurs and is continuing that
then permits holders of such Designated Senior Obligations to accelerate its
maturity and the Trustee receives written notice of the default (a “Payment Blockage Notice”) from a holder of
Designated Senior Obligations, a Representative of Designated Senior
Obligations or the Company (a “Non-Payment
Default”).

 

If the Trustee
receives any Payment Blockage Notice pursuant to clause (b) above, no
subsequent Payment Blockage Notice shall be effective for purposes of this
Section 4.02 unless and until at least 365 days shall have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for
a subsequent Payment Blockage Notice.

 

The Company
may and shall resume payments on and distributions in respect of the Notes,
including any past scheduled payments of the principal of, premium, if any, and
Liquidated Damages, if any, on such Notes (including, but not limited to, the
Redemption Price, Principal Return, Repurchase Price or Designated Event
Repurchase Price with respect to Notes as provided in this Indenture), to which
the holders of the Notes would have been entitled but for the provisions of
this Article 4:

 

(i)    in the case of a Payment Default, on the
date upon which such Payment Default is cured or waived or ceases to exist, and

 

(ii)   in the case of a Non-Payment Default, the
earlier of (a) the date upon which such default is cured or waived or ceases to
exist or (b) 179 days after the Payment Blockage Notice is received by the
Trustee if the maturity of such Designated Senior Obligations has not been
accelerated and no Payment Default with respect to any Senior Obligations has
occurred which has not been cured or waived or ceased to exist (in such event
clause (1) above shall instead be applicable),

 

unless this Article 4 otherwise prohibits the
payment or distribution at the time of such payment or distribution.

 

Upon any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior Obligations
shall first be paid in full in cash or other payment satisfactory to the
holders of such Senior Obligations, or payment thereof in accordance with its
terms provided for in cash or other payment satisfactory to the holders of such
Senior Obligations before any payment is made on account of the principal of,

 

29

 

premium, if any, or Liquidated
Damages, if any, on the Notes (except payments made pursuant to Article 13 from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding up, liquidation or reorganization);
and upon any such dissolution or winding up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the holders of the
Notes or the Trustee would be entitled, except for the provision of this
Article 4, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Notes or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Obligations (pro rata to such holders on the basis of the respective
amounts of Senior Obligations held by such holders, or as otherwise required by
law or a court order) or their Representative or Representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Obligations may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Obligations in
full, in cash or other payment satisfactory to the holders of such Senior
Obligations, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Obligations, before any payment or distribution is
made to the holders of the Notes or to the Trustee.

 

For purposes
of this Article 4, the words, “cash, property or securities” shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article 4 with respect to the Notes to the
payment of all Senior Obligations that may at the time be outstanding; provided
that (i) the Senior Obligations are assumed by the new corporation, if any,
resulting from any reorganization or readjustment, and (ii) the rights of the
holders of Senior Obligations are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 12 shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 4.02 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article 12.

 

In the event
of the acceleration of the Notes because of an Event of Default, no payment or distribution
shall be made to the Trustee or any holder of Notes in respect of the principal
of, premium, if any, or Liquidated Damages, if any on the Notes (including, but
not limited to, the Redemption Price, Principal

 

30

 

Return, Repurchase Price or the
Designated Event Repurchase Price with respect to Notes as provided in the
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.05, until all Senior Obligations
have been paid in full in cash or other payment satisfactory to the holders of
Senior Obligations or such acceleration is rescinded in accordance with the
terms of this Indenture. If payment of the Notes is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior
Obligations of the acceleration.

 

In the event
that, notwithstanding the foregoing provisions, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing provisions in this Section 4.02, shall be received
by the Trustee or the holders of the Notes before all Senior Obligations are paid
in full in cash or other payment satisfactory to the holders of such Senior
Obligations, or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Senior
Obligations, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Obligations or their Representative or Representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Obligations may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of any
Senior Obligations remaining unpaid to the extent necessary to pay all Senior
Obligations in full in cash or other payment satisfactory to the holders of
such Senior Obligations, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Obligations.

 

Nothing in
this Section 4.02 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 8.06. This Section 4.02 shall be subject to the further
provisions of Section 4.05.

 

Section 4.03.  Subrogation of Notes.  Subject to the payment in full of
all Senior Obligations, the rights of the holders of the Notes shall be
subrogated to the extent of the payments or distributions made to the holders
of such Senior Obligations pursuant to the provisions of this Article 4
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Notes are subordinated and is entitled to
like rights of subrogation; provided
that the Notes are senior in right of payment to the Company’s 0% Series A
Convertible Senior Subordinated Notes due 2008, its 0% Series B Convertible
Senior Subordinated Notes due 2010, and its 5% Convertible Subordinated
Debentures due 2007) to the rights of the holders of Senior Obligations to
receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Obligations until the principal, premium, if

 

31

 

any, and Liquidated Damages, if
any, on the Notes shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Obligations of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article 4, and no payment over pursuant to the provisions of this Article 4, to
or for the benefit of the holders of Senior Obligations by holders of the Notes
or the Trustee, shall, as between the Company, its creditors other than holders
of Senior Obligations, and the holders of the Notes, be deemed to be a payment
by the Company to or on account of the Senior Obligations; and no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provisions of this Article 4,
that would otherwise have been paid to the holders of Senior Obligations shall
be deemed to be a payment by the Company to or for the account of the Notes. It
is understood that the provisions of this Article 4 are and are intended solely
for the purposes of defining the relative rights of the holders of the Notes,
on the one hand, and the holders of the Senior Obligations, on the other hand.

 

Nothing
contained in this Article 4 or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company, its creditors other than the
holders of Senior Obligations, and the holders of the Notes, the obligation of
the Company, which is absolute and unconditional, to pay to the holders of the Notes
the principal of, premium, if any, and Liquidated Damages, if any, on the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Obligations, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article 4 of the holders of Senior Obligations in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.

 

Section 4.04.  Authorization to Effect Subordination.  Each holder of a Note by the
holder’s acceptance thereof authorizes and directs the Trustee on the holder’s
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 4 and appoints the Trustee to act as
the holder’s attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in the second paragraph of Section 7.02 hereof at
least thirty (30) days before the expiration of the time to file such claim,
the holders of any Senior Obligations or their representatives are hereby
authorized to file an appropriate claim for and on behalf of the holders of the
Notes.

 

Section 4.05.  Notice to Trustee.  The Company shall give prompt written notice in the
form of an Officers’ Certificate to a Responsible Officer of the

 

32

 

Trustee and to any Paying Agent
of any fact known to the Company which would prohibit the making of any payment
of monies to or by the Trustee or any Paying Agent in respect of the Notes
pursuant to the provisions of this Article 4. Notwithstanding the provisions of
this Article 4 or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Notes pursuant to the provisions of this Article 4, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
at the Corporate Trust Office from the Company (in the form of an Officers’
Certificate) or a Representative or a holder or holders of Senior Obligations
or from any trustee thereof; and before the receipt of any such written notice,
the Trustee shall be entitled in all respects to assume that no such facts
exist; provided that if on a date not less than two (2) Business Days prior to
the date upon which by the terms hereof any such monies may become payable for
any purpose (including, without limitation, the payment of the principal of, or
premium, if any, or Liquidated Damages on any Note) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
4.05, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice
to the contrary which may be received by it on or after such prior date.

 

Notwithstanding
anything in this Article 4 to the contrary, nothing shall prevent any payment
by the Trustee to the Noteholders of monies deposited with it pursuant to
Section 13.01, provided such deposit was not in violation of this Article 4,
and any such payment shall not be subject to the provisions of Section 4.01 or
Section 4.02

 

The Trustee
shall be entitled to conclusively rely on the delivery to it of a written
notice by a Representative to a person representing himself to be a holder of
Senior Obligations (or a trustee on behalf of such holder) to establish that
such notice has been given by a Representative or a holder of Senior
Obligations or a trustee on behalf of any such holder or holders.  The Trustee shall not be required to make
any payment or distribution to or on behalf of a holder of Senior Obligations
pursuant to this Article 4 unless it has received reasonably satisfactory
evidence as to the amount of Senior Obligations held by such person, the extent
to which such person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such person under this Article
4.

 

Section 4.06.  Trustee’s Relation to Senior
Obligations.  The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior Obligations at any time held by it, to the
same extent as any other holder of Senior Obligations, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.

 

33

 

With respect
to the holders of Senior Obligations, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article 4, and no implied covenants or obligations with respect
to the holders of Senior Obligations shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Obligations.

 

Section 4.07.  No Impairment of Subordination.  No right of any present or future
holder of any Senior Obligations to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.

 

Section 4.08.  Certain Conversions Not Deemed Payment.  For the purposes of this Article
4 only, (1) the issuance and delivery of junior securities upon conversion of
Notes in accordance with Article 15 shall not be deemed to constitute a payment
or distribution on account of the principal of, premium, if any, or Liquidated
Damages, if any, on Notes or on account of the purchase or other acquisition of
Notes, and (2) the payment, issuance or delivery of cash (including the
Principal Return, but excluding cash in satisfaction of fractional shares
pursuant to Section 15.02(b)(iii)), property or securities (other than junior
securities) upon conversion of a Note shall be deemed to constitute payment on
account of the principal of, premium, if any, or Liquidated Damages, if any, on
such Note. For the purposes of this Section 4.08, the term “junior securities”
means (a) shares of any stock of any class of the Company or (b) securities of
the Company that are subordinated in right of payment to all Senior Obligations
that may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the Notes are
so subordinated as provided in this Article. Nothing contained in this Article
4 or elsewhere in this Indenture or in the Notes is intended to or shall
impair, as among the Company, its creditors (other than holders of Senior
Obligations) and the Noteholders, the right, which is absolute and unconditional,
of the holder of any Note to convert such Note in accordance with Article 15.

 

Section 4.09.  Article Applicable to Paying Agents.  If at any time any Paying Agent
other than the Trustee shall have been appointed by the Company and be then
acting hereunder, the term “Trustee” as used in this Article shall (unless the
context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that
the first paragraph of Section 4.05 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.  The Trustee shall not be responsible for the
actions or inactions

 

34

 

of any other Paying Agents
(including the Company if acting as its own Paying Agent) and have no control
of any funds held by such other Paying Agents, unless and to the extent that
the Trustee has been appointed as Paying Agent under this Indenture.

 

Section 4.10.  Senior Obligations Entitled to Rely.  The holders of Senior Obligations
(including, without limitation, Designated Senior Obligations) shall have the
right to rely upon this Article 4, and no amendment or modification of the
provisions contained herein shall diminish the rights of such holders unless
such holders shall have agreed in writing thereto.

 

Section 4.11.  Reliance on Judicial Order or Certificate of
Liquidating Agent.  Upon any
payment or distribution of assets of the Company referred to in this Article,
the Trustee and the Noteholders shall be entitled to conclusively rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or to the Noteholders, for the purpose
of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Obligations and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.

 

ARTICLE 5

Particular Covenants of the Company

 

Section 5.01. 
Payment of Principal and Premium and
Liquidated Damages.  The
Company covenants and agrees that it will duly and punctually pay or cause to
be paid the principal of and premium, if any, and Liquidated Damages, if any,
on each of the Notes at the places, at the respective times and in the manner
provided herein and in the Notes.  Each
installment of Liquidated Damages on the Notes due on any Damages Payment Date
(as defined in the Registration Rights Agreement) may be paid by mailing checks
for the amount payable to or upon the written order of the holders of Notes
entitled thereto as they shall appear on the registry books of the Company,
provided that, with respect to any holder of Notes with an aggregate principal
amount equal to or in excess of $2,000,000, at the request of such holder in
writing to the Company, Liquidated Damages on such holder’s Notes shall be paid
by wire transfer in immediately available funds in accordance with the wire
transfer instructions supplied by such holder from time to time to the Trustee
and Paying Agent (if different from Trustee) at least two days prior to the
applicable record date; providedfurther that payment of
Liquidated Damages made to the Depositary

 

35

 

shall be paid by wire transfer
in immediately available funds in accordance with such wire transfer
instructions and other procedures provided by the Depositary from time to time.

 

Section 5.02. 
Maintenance of Office or Agency.  The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment or repurchase (“Paying Agent”)
or for conversion (“Conversion Agent”)
and where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served.  The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency not designated or appointed by
the Trustee.  If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York.

 

The Company
may also from time to time designate one or more other offices or agencies
where the Notes may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided 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.  The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. 
The terms Paying Agent and Conversion Agent include any such additional
or other offices or agencies, as applicable.

 

The Company
hereby initially designates the Trustee as the Paying Agent, Note registrar,
Custodian and Conversion Agent and the Corporate Trust Office as one such
office or agency of the Company for each of the aforesaid purposes.

 

So long as the
Trustee is the Note registrar, the Trustee agrees to mail, or cause to be
mailed, the notices set forth in Section 8.10(a) and the third paragraph of
Section 8.11.

 

Section 5.03.  Appointments to Fill Vacancies in Trustee’s Office.  The Company, whenever necessary
to avoid or fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 8.10, a Trustee, so that there shall at all times be
a Trustee hereunder.

 

Section 5.04.  Provisions As to Paying Agent.

 

(a)           If the Company shall appoint a Paying
Agent other than the Trustee or if the Trustee shall appoint such a Paying
Agent, it will cause such Paying

 

36

 

Agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.04:

 

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

 

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

 

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

 

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

 

(b)           If the Company shall act as its own
Paying Agent, it will, on or before each due date of the principal of, premium,
if any, or Liquidated Damages on the Notes, set aside, segregate and hold in
trust for the benefit of the holders of the Notes a sum sufficient to pay such
principal, premium, if any, or Liquidated Damages so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or any other obligor under the Notes) to make any
payment of the principal of, premium, if any, or Liquidated Damages on the
Notes when the same shall become due and payable.

 

(c)           Anything in this Section 5.04 to the
contrary notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust by the
Company or any Paying Agent hereunder as required by this Section 5.04, such
sums to be held by the Trustee upon the trusts herein contained and upon such
payment by the Company or any Paying Agent to the Trustee, the Company or such
Paying Agent shall be released from all further liability with respect to such
sums.

 

37

 

(d)           Anything in this Section 5.04 to the
contrary notwithstanding, the agreement to hold sums in trust as provided in
this Section 5.04 is subject to Section 13.03 and Section 13.04.

 

Section 5.05.  Existence.  Subject to Article 12, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

 

Section 5.06. 
Rule 144A Information Requirement.  Within the period prior to the expiration of
the holding period applicable to sales of Notes or any Common Stock issuable on
conversion thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to any holder or beneficial holder of Notes or any such Common Stock,
in each case which continue to be Restricted Securities, in connection with any
sale thereof and any prospective purchaser of Notes or such Common Stock from
such holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or
beneficial holder of the Notes or such Common Stock and it will take such
further action as any holder or beneficial holder of such Notes or such Common
Stock may reasonably request, all to the extent required from time to time to
enable such holder or beneficial holder to sell its Notes or Common Stock
without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such rule may be amended from time to
time.  Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.

 

Section 5.07. 
Stay, Extension and Usury Laws.  The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on
the Notes as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.

 

Section 5.08. 
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 on December
31, 2004) an Officers’ Certificate stating whether or not to the best of their
knowledge the signers know

 

38

 

of any default or Event of
Default that occurred during such period. 
If they do, such Officers’ Certificate shall describe the default or
Event of Default and its status.

 

Section 5.09. 
Liquidated Damages.  If Liquidated Damages are payable by the
Company pursuant to the Registration Rights Agreement, the Company shall
deliver to the Trustee a certificate to that effect stating (i) the amount of
such Liquidated Damages that are payable and (ii) the date on which such
damages are payable.  Unless and until a
Responsible Officer of the Trustee receives at the Corporate Trust Office such
a certificate, the Trustee may assume without inquiry that no such Liquidated
Damages are payable.  If the Company has
paid Liquidated Damages directly to the persons entitled to them, the Company
shall deliver to the Trustee a certificate setting forth the particulars of
such payment.

 

Section 5.10. 
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.

 

ARTICLE 6

Noteholders’ Lists and Reports by the Company and the Trustee

 

Section 6.01.  Noteholders’ Lists.  The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semi-annually,
not more than fifteen (15) days after each May 1 and November 1 in each year
beginning with November 1, 2004, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in
order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Notes as of a date not more than fifteen
(15) days (or such other date as the Trustee may reasonably request in order to
so provide any such notices) prior to the time such information is furnished,
except that no such list need be furnished so long as the Trustee is acting as
Note registrar.

 

Section 6.02. 
Preservation and Disclosure of Lists.

 

(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names
and addresses of the holders of Notes contained in the most recent list
furnished to it as provided in
Section 6.01 or maintained by the Trustee in its capacity as Note registrar, if
so acting.  The Trustee may destroy any
list furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.

 

39

 

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

 

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

 

Section 6.03.  Reports by Trustee.

 

(a)           Within sixty (60) days after October
15 of each year commencing with the year 2005, the Trustee shall transmit to
holders of Notes such reports dated as of October 15 of each year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.

 

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

 

Section 6.04.  Reports by Company.

 

(a)           After this Indenture has been
qualified under the Trust Indenture Act, the Company shall file with the
Trustee and the Commission, and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.

 

(b)           Delivery of such reports, information
and documents to the Trustee is for informational purposes only, and the
Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on an
Officer’s Certificate).

 

40

 

ARTICLE 7

Defaults and Remedies

 

Section 7.01. 
Events of Default.  The following events shall be
Events of Default with respect to the Notes:

 

(a)           default in the payment of the
principal of and premium, if any, on the Notes as and when the same shall
become due and payable either at maturity or in connection with any redemption,
repurchase or otherwise, whether or not such payment is prohibited by the
provisions of Article 4; or

 

(b)           default for thirty (30) days in the
payment of any installment of Liquidated Damages, if any, upon any of the Notes
as and when the same shall become due and payable, whether or not such payment
is prohibited by the provisions of Article 4; or

 

(c)           failure on the part of the Company
duly to observe or perform any other of the covenants on the part of the
Company in the Notes or in this Indenture (other than a covenant default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with) and the continuance of such failure for a period of sixty (60) days
after the date on which written notice of such failure, requiring the Company
to remedy the same, shall have been given to the Company by the Trustee, or to
the Company and a Responsible Officer of the Trustee by the holders of at least
25% in aggregate principal amount of outstanding Notes at the time outstanding
determined in accordance with Section 9.04; or

 

(d)           a default in the payment of the
Repurchase Price or Designated Event Repurchase Price in respect of any Note on
the Repurchase Date or Designated Event Repurchase Date in accordance with the
provisions of Article 16, whether or not such payment in cash of the Repurchase
Price or Designated Event Repurchase Price is prohibited by the provisions of
Article 4; or

 

(e)           failure on the part of the Company to
provide a written notice of a Designated Event in accordance with Section
16.02; or

 

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

 

41

 

a liquidation or winding up of
a Significant Subsidiary pursuant to applicable corporate law shall not be
deemed an Event of Default hereunder; or

 

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

 

(h)           following the exercise by a
Noteholder of the right to convert any Note in accordance with Article 15
hereof, the Company fails to pay the Principal Return or deliver the Net Shares
when due within five calendar days following the applicable date of payment and
delivery set forth in Article 15; or

 

(i)            acceleration of Indebtedness of the
Company that, in the aggregate, is equal to or exceeds $25,000,000.

 

In case one or
more Events of Default shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), then, and in each and every such case
(other than an Event of Default specified in Section 7.01(f) or Section 7.01(g)
with respect to the Company), unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the Notes then outstanding
determined in accordance with Section 9.04, by notice in writing to the Company
(and to the Trustee if given by Noteholders), may declare the principal of and
premium, if any, on all the Notes and Liquidated Damages accrued thereon to be
due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in this Indenture or
in the Notes contained to the contrary notwithstanding.  If an Event of Default specified in Section
7.01(f) or Section 7.01(g) occurs and is continuing with respect to the
Company, the principal of all the Notes and Liquidated Damages accrued thereon
shall be immediately due and payable. 
This provision, however, is subject to the conditions that if, at any
time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay installments of
Liquidated Damages upon all Notes and the principal of and premium, if any, on
any and all Notes that shall have become due otherwise than by acceleration
(with interest on overdue installments of Liquidated Damages (to

 

42

 

the extent that payment of such
interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate of 1% per year) and amounts due to the Trustee
pursuant to Section 8.06, and if any and all defaults under this Indenture,
other than the nonpayment of principal of and premium, if any, and accrued
Liquidated Damages on Notes that shall have become due by acceleration, shall
have been cured or waived pursuant to Section 7.07, then and in every such case
the holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default with respect to the Notes and rescind and annul
such declaration and its consequences; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon.  The Company shall notify the Responsible
Officer of the Trustee, promptly upon becoming aware thereof, of any Event of
Default by delivering to the Trustee a statement specifying such Event of
Default and the action the Company has taken, is taking or proposes to take
with respect thereto.

 

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

 

Section 7.02.  Payments of Notes on Default; Suit
Therefor.  In the event that
the Trustee or the holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Notes then outstanding hereunder have
declared the principal of and premium, if any, on all Notes (including Liquidated
Damages, if any,) to be due and payable immediately in accordance with Section
7.01, and the Company shall have failed forthwith to pay such amounts, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any actions or proceedings at law or in equity for
the collection of the sums so due and unpaid (including such further amounts as
shall be sufficient to cover the costs and expenses of collection, including
compensation to the Trustee, its agents, attorneys, custodians, nominees and
counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith), and may prosecute any such
action or proceeding to judgment or final degree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

 

43

 

In the case
there shall be pending proceedings for the bankruptcy or for the reorganization
of the Company or any other obligor on the Notes under Title 11 of the United
States Code, or any other applicable law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Company or
such other obligor, the property of the Company or such other obligor, or in
the case of any other judicial proceedings relative to the Company or such
other obligor upon the Notes, or to the creditors or property of the Company or
such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 7.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove
a claim or claims for the whole amount of principal premium, if any, and
Liquidated Damages in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents and to
take such other actions as it may deem 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 Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.06; and any receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, as administrative expenses, and, in the event that the Trustee
shall consent to the making of such payments directly to the Noteholders, to
pay to the Trustee any amount due it for reasonable compensation, expenses,
advances and disbursements, including agents and counsel fees, and including
any other amounts due to the Trustee under Section 8.06 hereof, incurred by it
up to the date of such distribution.  To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid
out of, any and all distributions, dividends, monies, securities and other
property which the holders of the Notes may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

 

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

 

44

 

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

 

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

 

Section 7.03.  Application of Monies Collected by
Trustee.  Any monies
collected by the Trustee pursuant to this Article 7 with respect the Notes
shall be applied in the order following, at the date or dates fixed by the
Trustee for the distribution of such monies, upon presentation of the several
Notes, and stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:

 

First, to the
payment of all amounts due the Trustee under Section 8.06;

 

Second,
subject to the provisions of Article 4, in case the principal of the
outstanding Notes shall not have become due and be unpaid, to the payment of
Liquidated Damages with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of Liquidated Damages
at the rate of 1% per year, such payments to be made ratably to the persons
entitled thereto;

 

Third, subject
to the provisions of Article 4, in case the principal of the outstanding Notes
shall have become due, by declaration or otherwise, and be unpaid, to the
payment of the whole amount then owing and unpaid upon the Notes for principal
and premium, if any, and Liquidated Damages, if any, and interest (to the
extent that such interest has been collected by the Trustee) upon overdue
installments of Liquidated Damages at the rate of 1% per year; and in case such
monies shall be insufficient to pay in full the whole amounts so due and unpaid
upon the Notes, then to the payment of such principal and premium, if any, and
Liquidated Damages without preference or priority of principal and premium, if
any, over Liquidated Damages, or of Liquidated Damages over principal and
premium, if any, or of any Note over any other Note, ratably to the aggregate of
such principal and premium, if any, and unpaid Liquidated Damages.

 

Section 7.04.  Proceedings by Noteholder.  No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to

 

45

 

institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture,
or for the appointment of a receiver, trustee, liquidator, custodian or other
similar official, or for any other remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof, as hereinbefore provided, and unless
also the holders of not less than 25% in aggregate principal amount of the
Notes then outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such indemnity it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action,
suit or proceeding and no direction inconsistent with such written request
shall have been given to the Trustee by the holders of Notes pursuant to
Section 7.07; it being understood and intended, and being expressly covenanted
by the taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any
manner whatever by virtue of or by availing of any provision of this Indenture
to affect, disturb or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). 
For the protection and enforcement of this Section 7.04, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

 

Notwithstanding
any other provision of this Indenture and any provision of any Note, the right
of any holder of any Note to receive payment of the principal of and premium,
if any, and Liquidated Damages on such Note, on or after the respective due
dates expressed in such Note, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.

 

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

 

Section 7.05.  Proceedings by Trustee.  In case of an Event of Default
the Trustee may in its discretion proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such rights,
either by suit in equity or by action at law or by proceeding in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted in
this Indenture, or to

 

46

 

enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.

 

Section 7.06.  Remedies Cumulative and Continuing.  Except as provided in the last
paragraph of Section 2.06, all powers and remedies given by this Article 7 to
the Trustee or to the Noteholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.04, every power and remedy given by this Article 7 or
by law to the Trustee or to the Noteholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Noteholders.

 

Section 7.07.  Direction of Proceedings and Waiver of
Defaults by Majority of Noteholders.  The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.04 shall have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to Notes; provided,however, that (a) such
direction shall not be in conflict with any rule of law or with this Indenture,
and (b) the Trustee may take any other action deemed proper by the Trustee that
is not inconsistent with such direction. 
The holders of a majority in aggregate principal amount of the Notes at
the time outstanding determined in accordance with Section 9.04 may on behalf
of the holders of all of the Notes waive any past default or Event of Default
hereunder and its consequences except (i) a default in the payment of
Liquidated Damages or premium, if any, on, or the principal of, the Notes when
due which has not been cured pursuant to the provisions of Section 7.01, (ii) a
failure by the Company to convert any Notes into Common Stock or (iii) a
default in respect of a covenant or provisions hereof which under Article 11
cannot be modified or amended without the consent of the holders of all Notes
then outstanding.  Upon any such waiver
the Company, the Trustee and the holders of the Notes shall be restored to
their former positions and rights hereunder; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.  Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.07, said default or Event of Default shall for all purposes of
the Notes and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

 

47

 

Section 7.08.
 Notice of Defaults.  The Trustee shall, within ninety
(90) days after the occurrence of a default of which a Responsible Officer has
actual knowledge, mail to all Noteholders as the names and addresses of such
holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived
before the giving of such notice; and provided that, except in the case of
default in the payment of the principal of, or premium, if any or Liquidated Damages,
on any of the Notes, including without limiting the generality of the foregoing
any default in the payment of any Repurchase Price or Designated Event
Repurchase Price, then in any such event the Trustee shall be protected in
withholding such notice if and so long as a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the best interests of the Noteholders.

 

Section 7.09. 
Undertaking to Pay Costs.  All parties to this Indenture agree, and
each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section 7.09 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Noteholder, or group of Noteholders, holding in
the aggregate more than 10% in principal amount of the Notes at the time
outstanding determined in accordance with Section 9.04, or to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
premium, if any, or Liquidated Damages on any Note (including, but not limited
to, the Repurchase Price or Designated Event Repurchase Price with respect to
the Notes being repurchased as provided in this Indenture) on or after the due
date expressed in such Note or to any suit for the enforcement of the right to
convert any Note in accordance with the provisions of Article 15.

 

Section 7.10. 
Delay or Omission Not Waiver.  No
delay or omission of the Trustee or of any holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein.  Every right and
remedy given by this Article or by law to the Trustee or to the holders of
Notes may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the holders of Notes, as the case may be.

 

48

 

ARTICLE 8

Concerning the Trustee

 

Section 8.01.  Duties and Responsibilities of Trustee.  The Trustee, prior to the occurrence of an
Event of Default and after the curing or waiver of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture. 
In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of such person’s own affairs.

 

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

 

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

 

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

 

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

 

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

 

(c)           the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a majority in
principal amount of the Notes at the time outstanding determined as provided in
Section 9.04 relating to the time, method

 

49

 

and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture;

 

(d)           whether
or not therein provided, every provision of this Indenture relating to the conduct
or affecting the liability of, or affording protection to, the Trustee shall be
subject to the provisions of this Section;

 

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

 

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

 

(g)           in
the absence of written investment direction from the Company, all cash received
by the Trustee shall be placed in a non-interest bearing trust account.  In no event shall the Trustee be liable for
the selection of investments or for investment losses incurred thereon or for
losses incurred as a result of the liquidation of any such investments prior to
its stated maturity or the failure of the party directing such investments
prior to its stated maturity or the failure of the party directing such
investment to provide timely written investment direction, and the Trustee
shall have no obligation to invest or reinvest any amounts held hereunder in
the absence of such written investment direction from the Company; and

 

(h)           in
the event that the Trustee is also acting as Custodian, Note Registrar, Paying
Agent, Conversion Agent or transfer agent hereunder, the rights and protections
afforded to the Trustee pursuant to this Article 8 shall also be afforded to
such Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer
agent.

 

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

 

Section 8.02.  Reliance on Documents, Opinions, Etc.  Except as otherwise provided in
Section 8.01:

 

(a)           the
Trustee may conclusively rely and shall be fully protected in acting upon any
resolution, certificate, statement, instrument, opinion, report,

 

50

 

notice, request, consent, order, bond, note,
coupon or other paper or document believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties;

 

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

 

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

 

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

 

(e)           the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; provided,  however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
indemnity satisfactory to the Trustee from the Noteholders against such
expenses or liability as a condition to so proceeding; the reasonable expenses
of every such examination shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Company upon demand;
and

 

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

 

51

 

In no event shall the Trustee be liable for
any consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action other
than through the Trustee’s willful misconduct or gross negligence.

 

Section 8.03.  No Responsibility for Recitals, Etc.  The recitals contained herein and
in the Notes (except in the Trustee’s certificate of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. 
The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered
by the Trustee in conformity with the provisions of this Indenture.

 

Section 8.04.  Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes.  The
Trustee, any Paying Agent, any Conversion Agent or Note registrar, in its
individual or any other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not Trustee, Paying Agent, Conversion
Agent or Note registrar.

 

Section 8.05.  Monies to Be Held in Trust.  Subject to the provisions of
Section 4.02 and Section 13.04, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received.  Money held by the
Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law.  The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed from time to time by the Company and the Trustee.

 

Section 8.06.  Compensation and Expenses of Trustee. The
Company covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, reasonable compensation for all services rendered
by it hereunder in any capacity (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust) as mutually
agreed to in writing between the Trustee and the Company, and the Company will
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, willful
misconduct or bad faith.  The Company
also covenants to indemnify the Trustee in any capacity under this Indenture
and any other document or transaction entered into in connection herewith and
its agents and any authenticating agent for, and to hold them harmless against,
any loss, liability or expense incurred without negligence, willful misconduct
or bad

 

52

 

faith on the part of the Trustee, its
officers, directors, agents or employees, or such agent or authenticating
agent, as the case may be, and arising out of or in connection with the
acceptance or administration of this trust or in any other capacity hereunder,
including the costs and expenses of defending themselves against any claim of
liability in the premises.  The
obligations of the Company under this Section 8.06 to compensate or indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Notes upon all
property and funds held or collected by the Trustee as such, except, subject to
the effect of Section 4.03 and Section 7.06, funds held in trust herewith for
the benefit of the holders of particular Notes prior to the date of the accrual
of such unpaid compensation or indemnifiable claim.  The Trustee’s right to receive payment of any amounts due under
this Section 8.06 shall not be subordinate to any other liability or
indebtedness of the Company (even though the Notes may be so
subordinated).  The obligation of the
Company under this Section 8.06 shall survive the satisfaction and discharge of
this Indenture and the earlier resignation or removal or the Trustee.  The indemnification provided in this Section
8.06 shall extend to the officers, directors, agents and employees of the
Trustee.

 

When the Trustee and its agents and any
authenticating agent incur expenses or render services after an Event of
Default specified in Section 7.01(f) or Section 7.01(g) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

 

Section 8.07.  Officers’ Certificate As Evidence.  Except as otherwise provided in
Section 8.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness
and bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers’ Certificate delivered to the Trustee, and such
Officers’ Certificate, in the absence of negligence, willful misconduct,
recklessness and bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.

 

Section 8.08.  Conflicting Interests of Trustee.  After qualification under the Trust
Indenture Act, if the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.

 

Section 8.09.  Eligibility of Trustee.  There shall at all times be a Trustee
hereunder which shall be a person that is eligible pursuant to the Trust
Indenture

 

53

 

Act to act as such and has a combined capital
and surplus of at least $50,000,000.  If
such person publishes reports of condition at least annually, pursuant to law
or to the requirements of any supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such person shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.

 

Section 8.10.  Resignation or Removal of Trustee.

 

(a)           The
Trustee may at any time resign by giving written notice of such resignation to
the Company and by mailing notice thereof to the holders of Notes at their
addresses as they shall appear on the Note register.  Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Noteholder who has been a bona fide holder of a Note or Notes
for at least six months may, subject to the provisions of Section 7.09, on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. 
Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.

 

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

 

(i)        the
Trustee shall fail to comply with Section 8.08 within a reasonable time after
written request therefor by the Company or by any Noteholder who has been a
bona fide holder of a Note or Notes for at least six (6) months, or

 

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

 

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

 

then, in any
such case, the Company may by a Board Resolution remove the Trustee and appoint
a successor trustee by written instrument, in duplicate,

 

54

 

executed by
order of the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.09, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee.  Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.

 

(c)           The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding may at any time remove the Trustee and nominate a successor trustee
which shall be deemed appointed as successor trustee unless within ten (10)
days after notice to the Company of such nomination the Company objects
thereto, in which case the Trustee so removed or any Noteholder, upon the terms
and conditions and otherwise as in Section 8.10(a) provided, may petition any
court of competent jurisdiction for an appointment of a successor trustee.

 

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

 

Section 8.11.  Acceptance by Successor Trustee.  Any successor trustee appointed
as provided in Section 8.10 shall execute, acknowledge and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of Section 8.06,
execute and deliver an instrument transferring to such successor trustee all
the rights and powers of the trustee so ceasing to act.  Upon request of any such successor trustee,
the Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers.  Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property and funds held or
collected by such trustee as such, except for funds held in trust for the
benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.06.

 

No successor trustee shall accept appointment
as provided in this Section 8.11 unless at the time of such acceptance such
successor trustee shall be qualified

 

55

 

under the provisions of Section 8.08 and be
eligible under the provisions of Section 8.09.

 

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

 

Section 8.12.  Succession by Merger, Etc.  Any corporation or other entity
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
other entity succeeding to all or substantially all of the corporate trust
business of the Trustee (including the administration of this Indenture), shall
be the successor to the Trustee hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided
that in the case of any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee such corporation shall be qualified
under the provisions of Section 8.8 and eligible under the provisions of
Section 8.09.

 

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

 

Section 8.13.  Limitation on Rights of Trustee as
Creditor.  If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), after qualification under the Trust Indenture Act, the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of the claims against the Company (or any such other obligor).

 

56

 

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

 

ARTICLE 9

CONCERNING THE NOTEHOLDERS

 

Section 9.01.  Action by Noteholders.  Whenever in this Indenture it is provided
that the holders of a specified percentage in aggregate principal amount of the
Notes may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Noteholders in person or by
agent or proxy appointed in writing, or (b) by the record of the holders of Notes
voting in favor thereof at any meeting of Noteholders duly called and held in
accordance with the provisions of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Noteholders.  Whenever the Company or the Trustee solicits
the taking of any action by the holders of the Notes, the Company or the
Trustee may fix in advance of such solicitation, a date as the record date for
determining Noteholders entitled to take such action.  The record date shall be not more than fifteen (15) days prior to
the date of commencement of solicitation of such action.

 

Section 9.02.  Proof of Execution by Noteholders.  Subject to the provisions of
Section 8.01, Section 8.02 and Section 10.05, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the
Note register or by a certificate of the Note

 

57

 

registrar. 
The record of any Noteholders’ meeting shall be proved in the manner
provided in Section 10.06.

 

Section 9.03.  Who Are Deemed Absolute Owners.  The Company, the Trustee, any authenticating
agent, any Paying Agent, any Conversion Agent and any Note registrar may deem
the person in whose name such Note shall be registered upon the Note register
to be, and may treat him as, the absolute owner of such Note (whether or not
such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of, premium, if any, and Liquidated Damages on such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any Paying Agent nor any Conversion Agent nor any Note
registrar shall be affected by any notice to the contrary.  All such payments so made to any holder for
the time being, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for
monies payable upon any such Note. 
Notwithstanding anything to the contrary in this Indenture or the Notes,
any holder of a beneficial interest in a Global Note may directly enforce
against the Company, without the consent, solicitation, proxy, authorization or
any other action of the Depositary or any other person, such holder’s right to
exchange such beneficial interest for a Note in certificated form in accordance
with the provisions of this Indenture.

 

Section 9.04.  Company-Owned Notes Disregarded.  In determining whether the holders of the
requisite aggregate principal amount of Notes have concurred in any direction,
consent, waiver or other action under this Indenture, Notes that are owned by
the Company or any other obligor on the Notes or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on such Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent, waiver or
other action only Notes that a Responsible Officer knows are so owned shall be
so disregarded.  Notes so owned that
have been pledged in good faith may be regarded as outstanding for the purposes
of this Section 9.04 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee’s right to vote such Notes and that the pledgee is not the
Company, any other obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. 
In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Company
shall furnish to the Trustee promptly an Officers’ Certificate listing and
identifying all Notes, if any, known by the Company to be owned or held by or
for the account of any of the above described persons; and, subject to Section
8.01, the Trustee shall be entitled to accept such Officers’ Certificate as

 

58

 

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

 

Section 9.05.  Revocation of Consents; Future holders Bound.  At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 9.01, of the taking of any
action by the holders of the percentage in aggregate principal amount of the
Notes specified in this Indenture in connection with such action, any holder of
a Note that is shown by the evidence to be included in the Notes the holders of
which have consented to such action may, by filing written notice with the
Trustee at its Corporate Trust Office and upon proof of holding as provided in
Section 9.02, revoke such action so far as concerns such Note.  Except as aforesaid, any such action taken
by the holder of any Note shall be conclusive and binding upon such holder and
upon all future holders and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Note or any Note issued in exchange or
substitution therefor.

 

ARTICLE 10

NOTEHOLDERS’ MEETINGS

 

Section 10.01.  Purpose of Meetings.  A meeting of Noteholders may be called at
any time and from time to time pursuant to the provisions of this Article 10
for any of the following purposes:

 

(a)           to
give any notice to the Company or to the Trustee or to give any directions to
the Trustee permitted under this Indenture, or to consent to the waiving of any
default or Event of Default hereunder and its consequences, or to take any
other action authorized to be taken by Noteholders pursuant to any of the
provisions of Article 7;

 

(b)           to
remove the Trustee and nominate a successor trustee pursuant to the provisions
of Article 8;

 

(c)           to
consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 11.02; or

 

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

 

Section 10.02.  Call of Meetings by Trustee.  The Trustee may, at the expense of the
Company, at any time call a meeting of Noteholders to take any action specified
in Section 10.01, to be held at such time and at such place as the Trustee
shall determine.  Notice of every
meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to

 

59

 

be taken at such meeting and the
establishment of any record date pursuant to Section 9.01, shall be mailed to
holders of such Notes at their addresses as they shall appear on the Note
register.  Such notice shall also be
mailed to the Company.  Such notices
shall be mailed not less than twenty (20) nor more than ninety (90) days prior
to the date fixed for the meeting.

 

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

 

Section 10.03.  Call of Meetings by Company or Noteholders.  In case at any time the Company, pursuant to
a resolution of its Board of Directors, or the holders of at least 10% in
aggregate principal amount of the Notes then outstanding, shall have requested
the Trustee to call a meeting of Noteholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within twenty (20)
days after receipt of such request, then the Company or such Noteholders may
determine the time and the place for such meeting and may call such meeting to
take any action authorized in Section 10.01, by mailing notice thereof as
provided in Section 10.02.

 

Section 10.04.  Qualifications for Voting.  To be entitled to vote at any meeting of
Noteholders a person shall (a) be a holder of one or more Notes on the record
date pertaining to such meeting or (b) be a person appointed by an instrument
in writing as proxy by a holder of one or more Notes.  The only persons who shall be entitled to be present or to speak
at any meeting of Noteholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.

 

Section 10.05.  Regulations.  Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Noteholders, in regard to proof of the holding of Notes and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.

 

The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. 
A permanent chairman and a permanent

 

60

 

secretary of the meeting shall be elected by
vote of the holders of a majority in principal amount of the Notes represented
at the meeting and entitled to vote at the meeting.

 

Subject to the provisions of Section 9.04, at any meeting of
Noteholders each Noteholder or proxyholder shall be entitled to one vote for
each $1,000 principal amount of Notes held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding.  The
chairman of the meeting shall have no right to vote other than by virtue of
Notes held by him or instruments in writing as aforesaid duly designating him
as the proxy to vote on behalf of other Noteholders.  Any meeting of Noteholders duly called pursuant to the provisions
of Section 10.02 or Section 10.03 may be adjourned from time to time by the
holders of a majority of the aggregate principal amount of Notes represented at
the meeting, whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.

 

Section 10.06.  Voting.  The vote upon any resolution submitted to any meeting of
Noteholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Notes or of their representatives by proxy and the
principal amount of the Notes held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at
the meeting.  A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 10.02. 
The record shall show the principal amount of the Notes voting in favor
of or against any resolution.  The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to
the Company and the other to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting.

 

Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

 

Section 10.07.  No Delay of Rights by Meeting.  Nothing in this Article 10 contained shall
be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.

 

61

 

ARTICLE 11

SUPPLEMENTAL INDENTURES

 

Section 11.01.  Supplemental Indentures Without Consent of
Noteholders.  The Company,
when authorized by the resolutions of the Board of Directors, and the Trustee,
at the Company’s expense, may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:

 

(a)           to
make provision with respect to the conversion rights of the holders of Notes
pursuant to the requirements of Article 15;

 

(b)           subject
to Article 4, to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Notes, any property or assets;

 

(c)           to
evidence the succession of another corporation to the Company, or successive
successions, and the assumption by the successor corporation of the covenants,
agreements and obligations of the Company pursuant to Article 12;

 

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

 

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

 

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

 

(g)           to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualifications of this

 

62

 

Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted.

 

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

 

Any
supplemental indenture authorized by the provisions of this Section 11.01 may
be executed by the Company and the Trustee without the consent of the holders
of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.02.

 

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

 

Section 11.02.  Supplemental Indentures With Consent of
Noteholders.  With the
consent (evidenced as provided in Article 9) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding
(determined in accordance with Article 9), the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may, at the Company’s
expense, from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes, provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time for payment of Liquidated Damages thereon,
or reduce the principal amount thereof or premium, if any, thereon, or reduce
any amount payable on repurchase or redemption thereof, impair, or change in
any respect adverse to the holder of Notes, the obligation of the Company to
repurchase any Note at the option of the holder upon the happening of a
Designated Event or any Repurchase Date, or change the time at which the Notes
may or must be redeemed or repurchased, or impair or adversely affect the right
of any Noteholder to institute suit for the payment thereof, or change the
currency in which the Notes are payable, or impair the right to convert the
Notes into Common Stock, cash or other property receivable upon conversion,
subject to the terms set forth herein, including Section 15.05 or reduce the
number of shares of Common Stock or the amount of

 

63

 

any other property receivable upon conversion
of the Notes, or modify the provisions of this Indenture in any material
respect with respect to the subordination of the Notes in a manner adverse to
the Noteholders, reduce the quorum or voting requirement for the Notes as set
forth in this Indenture, modify the provisions of this Section 11.02, except to
increase the percentage in principal amount of Notes whose holders must consent
to an amendment or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of Noteholders of outstanding
Notes affected by such modification or waiver without the consent of the holder
of each such Note so affected, or (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Notes then outstanding.

 

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

 

It shall not
be necessary for the consent of the Noteholders under this Section 11.02 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.

 

Section 11.03.  Effect of Supplemental Indentures.  Any supplemental indenture
executed pursuant to the provisions of this Article 11 shall comply with the
Trust Indenture Act, as then in effect. 
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article 11, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitation of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the holders of Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

 

Section 11.04.  Notation on Notes.  Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article 11 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. 
If the Company or the Trustee shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any

 

64

 

such supplemental indenture may, at the
Company’s expense, be prepared and executed by the Company, authenticated by
the Trustee (or an authenticating agent duly appointed by the Trustee pursuant
to Section 17.11) and delivered in exchange for the Notes then outstanding,
upon surrender of such Notes then outstanding.

 

Section 11.05.  Evidence of Compliance of Supplemental Indenture to
Be Furnished Trustee.  The
Trustee may receive an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 11.

 

ARTICLE 12

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 12.01.  Company May Consolidate, etc. on Certain
Terms.  Subject to the
provisions of Section 12.02 and notwithstanding anything to the contrary in
this Indenture, the Company shall not consolidate or merge with or into any
other Person (whether or not affiliated with the Company), or sell, convey or
lease all or substantially all of its assets or properties to any Person unless
the person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer, or which leases, all or substantially
all of the assets or properties of the Company shall be a corporation organized
under the laws of the United States of America, any state thereof or the
District of Columbia; and unless, after giving effect to any such
consolidation, merger, sale, conveyance or lease, there shall be no Event of
Default under this Indenture, and no event which, after notice or passage of
time or both, would become an Event of Default.  Further, upon any such consolidation, merger, sale, conveyance or
lease, the due and punctual payment of the principal of and premium, if any,
and Liquidated Damages, if any, on all of the Notes, according to their terms,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company, shall be expressly
assumed by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee by the corporation (if other than the Company)
formed by such consolidation, or into which the Company shall have been merged,
or which shall have acquired or leased all or substantially all of the
Company’s assets or properties, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Article 15.

 

Section 12.02.  Successor Corporation to Be Substituted.  In case of any such consolidation, merger,
sale, conveyance or lease and upon the assumption by the successor corporation,
by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of and premium, if any, and Liquidated Damages on all

 

65

 

of the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Company, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein as the party of the first part. 
Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of Sepracor Inc. any or all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver, or cause to be authenticated and delivered, any Notes which
previously shall have been signed and delivered by the officers of the Company
to the Trustee for authentication, and any Notes which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee
for that purpose.  All the Notes so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof.  In the event
of any such consolidation, merger, sale, conveyance or lease, the person named
as the “Company” in the first paragraph of this Indenture or any successor
which shall thereafter have become such in the manner prescribed in this
Article 12 may be dissolved, wound up and liquidated at any time thereafter and
such person shall be released from its liabilities as obligor and maker of the
Notes and from its obligations under this Indenture.

 

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

 

Section 12.03.  Opinion of Counsel to Be Given Trustee.  The Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article 12.

 

ARTICLE 13

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 13.01.  Discharge of Indenture.  When (a) the Company shall deliver to the
Trustee for cancellation all Notes theretofore authenticated (other than any
Notes that have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable,
and the Company shall deposit with the Trustee, in trust, funds sufficient to
pay at maturity all of the Notes (other than any Notes that shall have been
mutilated,

 

66

 

destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and Liquidated Damages
due or to become due to such date of maturity accompanied by a verification
report, as to the sufficiency of the deposited amount, from an independent
certified public accountant or other financial professional, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except as to (i) the right to receive payments of principal of and
premium, if any, and Liquidated Damages on, the Notes and the other rights,
duties and obligations of Noteholders, as beneficiaries hereof with respect to
the amounts, if any, so deposited with the Trustee, (ii) the rights,
obligations and immunities of the Trustee hereunder and (iii) the obligations
of the Company under Section 8.06, and the Trustee, on written demand of the
Company accompanied by an Officers’ Certificate and an Opinion of Counsel as
required by Section 17.05 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the
Trustee and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Notes.

 

Section 13.02.  Deposited Monies to Be Held in Trust by Trustee.  Subject to Section 13.04, all monies
deposited with the Trustee pursuant to Section 13.01 shall be held in trust and
applied by it to the payment, notwithstanding the provisions of Article 4, either
directly or through any Paying Agent (including the Company if acting as its
own Paying Agent), to the holders of the particular Notes for the payment of
which such monies have been deposited with the Trustee, of all sums due and to
become due thereon for principal and Liquidated Damages and premium, if any.

 

Section 13.03.  Paying Agent to Repay Monies Held.  Upon the satisfaction and
discharge of this Indenture, all monies then held by any Paying Agent of the
Notes (other than the Trustee) shall, upon written demand of the Company, be
repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.

 

Section 13.04.  Return of Unclaimed Monies.  Subject to the requirements of applicable
law, any monies deposited with or paid to the Trustee for payment of the
principal of, premium, if any, or Liquidated Damages on Notes (including any
Principal Return, Redemption Price, Repurchase Price or Designated Event
Repurchase Price) and not applied but remaining unclaimed by the holders of
Notes for two years after the date upon which the principal of, premium, if
any, or Liquidated Damages on such Notes, as the case may be, shall have become
due and payable, shall be repaid to the Company by the Trustee on written
demand

 

67

 

and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the Notes
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect unless an applicable abandoned property law designates
another person.  The Trustee shall,
promptly after such payment of the principal of, premium, if any, or Liquidated
Damages on Notes (including any Principal Return, Redemption Price, Repurchase
Price or Designated Event Repurchase Price), as described in this Section 13.04
and upon written demand of the Company, return to the Company any funds in
excess of the amount required for such payment.

 

Section 13.05.  Reinstatement.  If (i) the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 13.02 by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise prohibiting
such application and (ii) the holders of at least a majority in principal
amount of the then outstanding Notes so request by written notice to the
Trustee, the Company’s obligations under this Indenture shall be revived and
reinstated as though no deposit had occurred pursuant to Section 13.01 until
such time as the Trustee or the Paying Agent is permitted to apply all such
money in accordance with Section 13.02; provided, however, that if the Company
makes any payment of Liquidated Damages on or principal of any Note following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the holders of Notes to receive such payment from the money held by
the Trustee or Paying Agent.

 

ARTICLE 14

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Section 14.01.  Indenture and Notes Solely Corporate
Obligations.  No
recourse for the payment of the principal of or premium, if any, or Liquidated
Damages on any Note, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any Note,
or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, employee, agent, officer or director
or Subsidiary, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Notes.

 

68

 

ARTICLE 15

CONVERSION OF NOTES

 

Section 15.01.  Conversion Privilege.

 

(a)           Subject to the
conditions described below, and upon compliance with the provisions of, this Article
15, a Noteholder shall have the right, at such holder’s option, to convert all
or any portion (if the portion to be converted is $1,000 principal amount or an
integral multiple thereof) of such Note at any time during the time periods
specified below and prior to the close of business on the Business Day prior to
the maturity of the Notes at a rate (the “Conversion Rate”) of 14.8816 shares of
Common Stock (subject to adjustment as provided in this Indenture) per $1,000
principal amount Note under any of the following circumstances (the “Conversion
Obligation”):

 

(i)        during
any fiscal quarter of the Company (a “Fiscal Quarter”) (and only during such
Fiscal Quarter) commencing after December 31, 2004, if the Closing Sale Price
of the Common Stock for at least 20 Trading Days in the 30 consecutive Trading
Day period ending on the last Trading Day of the immediately preceding Fiscal
Quarter was more than 130% of the Conversion Price in effect on such 30th
Trading Day;

 

(ii)       during
the five Business Day period immediately after any five consecutive Trading Day
period (the “Measurement Period”) in which the Trading Price per $1,000
principal amount of Notes for each day of such Measurement Period was less than
98% of the product of the Closing Sale Price on such date and the Conversion
Rate on such date, all as determined by the Trustee, as provided below; provided,
however, if, on the Trading Day before the date the Notes are
tendered for conversion in reliance on this subsection, the Closing Sale Price
is greater than 100% of the Conversion Price then in effect but equal to or
less than the 130% of the Conversion Price then in effect, the holders will
receive, in lieu of a Conversion Value based on the Conversion Rate then in
effect pursuant to Section 15.02, a Conversion Value equal to the principal
amount of the Notes to be converted.

 

(iii)      at
any time prior to the close of business on the Business Day prior to the
Redemption Date, if the Notes have been called for redemption pursuant to
Article 3 hereof; and

 

(iv)     as
provided in Section 15.01(b), Section 15.01(c), and Section 15.01(d).

 

The Company
shall deliver to the Trustee at the beginning of each Fiscal Quarter an
Officers’ Certificate setting forth the Closing Sale Prices for the 30

 

69

 

consecutive Trading Day period ending on the
last Trading Day of the immediately preceding Fiscal Quarter and stating
whether the Company believes the Notes shall be convertible as a result of the
occurrence of an event specified in clause (i) above.  Upon receipt, the Trustee, as Conversion Agent, shall promptly
review such Officers’ Certificate and, based on the data provided therein,
confirm the determination that the Notes shall be convertible as a result of
the occurrence of an event specified in this Section 15.01(a)(i) and, if the
Notes shall be so convertible, the Conversion Agent shall promptly deliver to
the Trustee and the Company written notice thereof.

 

The Trustee
shall not determine the Trading Price of the Notes unless requested by the
Company to do so, and the Company shall have no obligation to make such request
unless a holder of Notes provides the Company with reasonable evidence that the
Trading Price of the Notes may be less than 98% of the product of (a) the
then-applicable Conversion Rate of the Notes and (b) the Closing Sale Price at
such time, at which time the Company shall instruct the Trustee to determine
the Trading Price of the Notes beginning on the next Trading Day and on each
successive Trading Day until the Trading Price per Note is greater than or
equal to 98% of the product of (a) the then-applicable Conversion Rate of the
Notes and (b) the Closing Sale Price on such day.  To the extent the Trustee wishes to contact the Company regarding
the determination of the Trading Price, it may contact the Company’s Executive
Vice President, Finance and Administration, at: Sepracor Inc., 84 Waterford
Drive, Marlborough, MA 01752, Tel: (508) 481-6700.

 

“Trading
Price” means, with respect to a Note as of any date (each such date
a “date of determination”), the average of the secondary market bid quotations
per Note obtained by the Trustee for $5,000,000 principal amount of Notes at
approximately 3:30 p.m., New York City time, on such date of determination from
two independent nationally recognized securities dealers designated in writing
by the Company to the Trustee at any time the Company instructs the Trustee to
determine the Trading Price; provided that if at least two such bids cannot
reasonably be obtained by the Trustee, but one such bid can reasonably be
obtained by the Trustee, this one bid shall be used. If the Trustee cannot
reasonably obtain at least one such bid for $5,000,000 principal amount of
Notes from a nationally recognized securities dealer, then the Trading Price of
a Note will be deemed to be less than 98% of the product of (a) the
then-applicable Conversion Rate of the Notes and (b) the Closing Sale Price on
such date of determination.

 

(b)           In the event that:

 

(i)        the
Company distributes to all holders of Common Stock rights entitling them to
purchase, for a period expiring within 60 days after

 

70

 

such distribution, Common Stock at less than
the Current Market Price of the Common Stock at such time; or

 

(ii)       the
Company distributes to all holders of Common Stock assets or debt securities of
the Company or rights to purchase the Company’s securities, which distribution
has a per share value exceeding 7.5% of the Closing Sale Price of the Common
Stock on the Business Day immediately preceding the date of declaration of such
distribution,

 

then, in each
case, the Notes may be surrendered for conversion at any time on and after the
date that the Company gives notice to the holders of such right, which shall be
not less than 20 days prior to the Ex-Dividend Date for such distribution,
until the earlier of the close of business on the Business Day immediately
preceding the Ex-Dividend Date or the date the Company announces that such
distribution will not take place. 
Notwithstanding the foregoing, the Notes will not be convertible
pursuant to clauses (i) or (ii) above if the Company provides that holders of
Notes shall participate in such distribution without conversion.

 

(c)           In
the event that the Company is party to a consolidation, merger or binding share
exchange pursuant to which the Common Stock would be converted into cash,
securities or other property, a Noteholder may surrender Notes for conversion
at any time from and after the date that is 15 days prior to the anticipated
effective date of the transaction until 15 days after the actual date of such
transaction, unless such transaction occurs on or prior to October 20, 2009 and
also constitutes a Fundamental Change (in which case the Notes will be
convertible in accordance with Section 15.01(d) below).  The Company shall notify Noteholders and the
Trustee (whether or not such transaction also constitutes a Fundamental Change)
at the same time the Company publicly announces such transaction (but in no
event less than 15 days prior to the effective date of such transaction).  Following the effective date of such
transaction, the right to convert the Notes at the Conversion Rate, and the
settlement thereof, shall be modified as set forth under Section 15.05.

 

(d)           (i)
In the event that a Fundamental Change occurs on or prior to October 20, 2009,
a Noteholder may surrender Notes for conversion at any time from and after the
date that is 10 Trading Days before the anticipated effective date of such
Fundamental Change until the Designated Event Repurchase Date relating to such
Fundamental Change.  The Company shall
give notice to all record holders of Notes and the Trustee at least 10 Trading
Days prior to the anticipated effective date of any such Fundamental Change
and, within 30 days after the occurrence of any such Fundamental Change, the
Company shall give all record holders of Notes and the Trustee notice of such
Fundamental Change and of the repurchase right arising as a result of such Fundamental
Change as set forth under Article 16 below.

 

71

 

(ii)           If
a Noteholder elects to convert Notes in connection with a Fundamental Change
pursuant to this subsection, the Conversion Rate for such converting Noteholder
shall be increased by an additional number of shares of Common Stock (the “Additional
Shares”) as described below; provided that if the Stock Price is
greater than $150 or less than $51.69 (subject in each case to adjustment as
described below), the number of Additional Shares shall be zero.

 

The number of
Additional Shares shall be determined by reference to the table attached as
Schedule A hereto, based on the effective date of such Fundamental Change
transaction (the “Effective Date”) and the Stock Price; provided
that if the Stock Price is between two Stock Price amounts in the table or such
Effective Date is between two Effective Dates in the table, the number of
Additional Shares shall be determined by a straight-line interpolation between
the number of Additional Shares set forth for the next higher and next lower
Stock Price amounts and the two nearest Effective Dates, as applicable, based
on a 365-day year.

 

The Stock
Prices set forth in the first row of the table in Schedule A hereto shall be
adjusted as of any date on which the Conversion Rate of the Notes is
adjusted.  The adjusted Stock Prices
shall equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to the adjustment giving rise to the Stock Price adjustment
and the denominator of which is the Conversion Rate as so adjusted.  The number of Additional Shares within the
table shall be adjusted in the same manner as the Conversion Rate as set forth
in Section 15.03 (other than by operation of an adjustment to the Conversion
Rate by adding Additional Shares).

 

Notwithstanding
the foregoing, in no event shall the total number of shares of Common Stock
issuable upon conversion exceed 19.35 shares per $1,000 principal amount of
Notes, subject to adjustment in the same manner as the Conversion Rate as set
forth in Section 15.03.

 

Any conversion
of Notes in connection with a Fundamental Change as provided in this
subsection, and the settlement thereof, shall be as set forth in Section 15.05.

 

Section 15.02.  Conversion Procedure.

 

(a)           Upon
conversion of any Note, subject to this Section 15.02 and Section 15.01(a)(ii),
Section 15.01(d), and Section 15.05, the Company shall satisfy the Conversion
Obligation with respect to such Note by payment and delivery of cash and, if
applicable, shares of Common Stock, the aggregate value of which (the “Conversion
Value”) shall be equal to the product of:

 

72

 

(i)        (A)
the aggregate principal amount of Notes to be converted divided by 1,000
multiplied by (B) the then applicable Conversion Rate (plus Additional Shares,
if any); and

 

(ii)       the
average of the daily Volume Weighted Average Price of Common Stock for each of
the five consecutive Trading Days (appropriately adjusted to take into account
the occurrence during such period of stock splits and similar events) beginning
on the second Trading Day immediately following the day the Notes are tendered
for conversion (the “Five Day Weighted Average Price”).

 

(b)           The
Company shall deliver the Conversion Value to converting holders as follows:

 

(i)        an
amount in cash (the “Principal Return”) equal to the lesser of
(A) the Conversion Value of the Notes to be converted and (B) the aggregate
principal amount of the Notes to be converted;

 

(ii)       if
the Conversion Value of the Notes to be converted is greater than the Principal
Return, an amount in whole shares of Common Stock (the “Net Shares”), determined as
set forth below, equal to such aggregate Conversion Value less the Principal
Return (the “Net Share Amount”); and

 

(iii)      an
amount in cash, in lieu of any fractional shares of Common Stock as set forth
below.

 

The number of Net Shares to be paid shall be
determined by dividing the Net Share Amount by the Five Day Weighted Average
Price.  Holders of Notes will not
receive fractional shares upon conversion of Notes.  In lieu of fractional shares, holders will receive cash for the
value of the fractional shares, which cash payment shall be based on the Five
Day Weighted Average Price.

 

The Conversion Value, Principal Return,
number of Net Shares and Net Share Amount shall be determined by the Company at
the end of the five consecutive Trading Day period (the “Determination Date”)
beginning on the second Trading Day immediately following the day the Notes are
tendered for conversion; provided that with respect to any Notes surrendered
for conversion pursuant to Section 15.01(d) above, the Determination Date shall
be the last Trading Day in the period on which the applicable Stock Price is
determined (pursuant to the definition thereof) in connection with the
determination of Additional Shares, if any, to be added to the Conversion Rate.

 

(c)           Before
any holder of a Note shall be entitled to convert the same as set forth above,
such holder shall (1) in the case of Global Notes, comply with the procedures
of the Depositary in effect at that time and furnish appropriate

 

73

 

endorsement and transfer documents, and (2)
in the case of a Note issued in certificated form, surrender such Notes, duly
endorsed to the Company or in blank (and accompanied by appropriate endorsement
and transfer documents), at the office of the Conversion Agent, and give
irrevocable written notice to the Conversion Agent in the form on the reverse
of such certificated Note (or a facsimile thereof) (a “Notice of Conversion”) at
said office or place that such holder elects to convert the same and shall
state in writing therein the principal amount of Notes to be converted and the
name or names (with addresses) in which such holder wishes the certificate or
certificates for the Net Shares, if any, included upon settlement the
Conversion Obligation, if any, to be registered.  No Notice of Conversion with respect to any Notes may be tendered
by a holder thereof if such holder has also tendered a Repurchase Notice or
Designated Event Repurchase Notice and not validly withdrawn such Repurchase
Notice or Designated Event Repurchase Notice in accordance with Section 16.03.

 

If more than one Note shall be surrendered
for conversion at one time by the same holder, the Conversion Obligation with
respect to such Notes, if any, that shall be payable upon conversion shall be computed
on the basis of the aggregate principal amount of the Notes (or specified
portions thereof to the extent permitted thereby) so surrendered.

 

(d)           A
Note shall be deemed to have been converted immediately prior to the close of
business on the date (the “Conversion Date”) that is the later of: (i)
the date the holder has complied with the requirements set forth in clause (c)
above or (ii) the Determination Date. 
Payment of the cash and Net Shares, if any, in satisfaction of the Conversion
Obligation shall be made by the Company promptly following the Conversion Date,
but in no event later than three Business Days thereafter (the “Conversion
Settlement Date”) by paying in cash the Principal Return (together
with any cash in lieu of fractional shares) to the holder of a Note surrendered
for conversion, or such holder’s nominee or nominees, and issue, or cause to be
issued, and deliver to the Conversion Agent or to such holder, or such holder’s
nominee or nominees, certificates or a book-entry transfer through the
Depositary for the number of full shares of Common Stock equal to the Net
Shares, if any, to which such holder shall be entitled as part of such
Conversion Obligation.

 

(e)           In
case any Note shall be surrendered for partial conversion, the Company shall
execute and the Trustee shall authenticate and deliver to or upon the written
order of the holder of the Note so surrendered, without charge to such holder,
a new Note or Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Notes.

 

(f)            If
a holder submits a Note for conversion, the Company shall pay all stamp and
other duties, if any, which may be imposed by the United States or any
political subdivision thereof or taxing authority thereof or therein with
respect to

 

74

 

the issuance of shares of Common Stock, if
any, upon the conversion.  However, the
holder shall pay any such tax which is due because the holder requests any Net
Shares to be issued in a name other than the holder’s name.  The Trustee may refuse to deliver the
certificates representing the shares of Common Stock being issued in a name
other than the holder’s name until the Trustee receives a sum sufficient to pay
any tax which will be due because the shares are to be issued in a name other
than the holder’s name.  Nothing herein
shall preclude any tax withholding required by law or regulations.

 

(g)           Except
as provided in Section 15.03, no adjustment shall be made for dividends on any
shares issued upon the conversion of any Note as provided in this Article.

 

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

 

Section 15.03.  Adjustment of Conversion Rate.  The Conversion Rate shall be
adjusted from time to time by the Company as follows:

 

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

 

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

 

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

 

such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination.  If any dividend or distribution of the type described in this
Section 15.03(a) is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.

 

75

 

(b)           In
case the Company shall issue rights or warrants to all holders of its
outstanding shares of Common Stock entitling them (for a period expiring within
forty-five (45) days after the record date fixed for such issuance) to
subscribe for or purchase shares of Common Stock at a price per share less than
the average of the Closing Sale Prices of the Common Stock for the 10 Trading
Days immediately preceding the date fixed for determination of stockholders
entitled to receive such rights or warrants, the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the date fixed for determination
of stockholders entitled to receive such rights or warrants by a fraction,

 

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

 

(ii)       the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total number of shares so
offered would purchase at a price equal to the average of the Closing Sale
Prices of the Common Stock for the 10 Trading Days immediately preceding the
date fixed for determination of stockholders entitled to receive such rights or
warrants.

 

Such
adjustment shall be successively made whenever any such rights or warrants are
issued, and shall become effective immediately after the opening of business on
the day following the date fixed for determination of stockholders entitled to
receive such rights or warrants.  To the
extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered.  If such rights or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed.  In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date fixed for
determination of stockholders entitled to receive such rights or warrants, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or

 

76

 

warrants and
any amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

 

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

 

(d)           In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock of the Company or
evidences of its indebtedness, cash or other assets (including Notes, but
excluding (1) any Common Stock, rights or warrants referred to in Section
15.03(a) or Section 15.03(b), (2) dividends and distributions (A) in connection
with the liquidation, dissolution or winding up of the Company or (B) paid
exclusively in cash and (3) any capital stock, evidences of indebtedness, cash
or assets distributed upon a merger or consolidation to which Section 15.05
applies) (any of such shares of capital stock, indebtedness, cash or other
property hereinafter in this Section 15.03(d)) called the “Distributed Property”)),
then, in each such case (unless the Company distributes such Distributed
Property for distribution to the Noteholders on such dividend or distribution
date (as if each Noteholder had converted such Note into Common Stock
immediately prior to the Record Date (as defined in Section 15.03(h)(iii) for
such distribution or dividend of Distributed Property)) the Conversion Rate
shall be increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the Record Date with respect to
such distribution by a fraction,

 

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

 

(ii)       the
denominator of which shall be the Current Market Price on such Record Date less
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board
of Directors) on the Record Date of the portion of the Distributed Property so
distributed applicable to one share of Common Stock,

 

such
adjustment to become effective immediately prior to the opening of business on
the day following such Record Date; provided that if the then fair market
value

 

77

 

(as so
determined) of the portion of the Distributed Property so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Distributed Property such holder would have
received had such holder converted each Note on the Record Date.  If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.  If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.03(d) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price on the applicable Record
Date.

 

Notwithstanding the foregoing, if the Distributed Property distributed
by the Company to all holders of its Common Stock consist of capital stock of,
or similar equity interests in, a Subsidiary or other business unit, the
Conversion Rate shall be increased so that the same shall be equal to the rate
determined by multiplying the Conversion Rate in effect on the Record Date with
respect to such distribution by a fraction,

 

(i)        the
numerator of which shall be the sum of (A) the average of the Closing Sale
Prices of the Common Stock for the ten (10) Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date plus (B) the fair
market value of the securities distributed in respect of each share of Common
Stock for which this Section 15.03(d) applies, which shall equal the number of
securities distributed in respect of each share of Common Stock multiplied by
the average of the Closing Sale Prices of those securities distributed for the
ten (10) Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date; and

 

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

 

such
adjustment to become effective immediately prior to the opening of business on
the day following such Record Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that each Noteholder shall
have the right to receive upon conversion the amount of Distributed Property
such holder would have received had such holder converted its Notes on the
Record Date with respect to such distribution.

 

78

 

Rights or
warrants distributed by the Company to all holders of Common Stock entitling
the holders thereof to subscribe for or purchase shares of the Company’s
capital stock (either initially or under certain circumstances), which rights
or warrants, until the occurrence of a specified event or events (“Trigger
Event”): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.03 (and no adjustment to the Conversion Rate under
this Section 15.03 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 15.03(d).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this
Section 15.03 was made, (1) in the case of any such rights or warrants that
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case
may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of Common Stock
with respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants that
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights and warrants had not
been issued.

 

No adjustment
of the Conversion Rate shall be made pursuant to this Section 15.03(d) in
respect of rights or warrants distributed or deemed distributed on any Trigger
Event to the extent that such rights or warrants are actually distributed, or
reserved by the Company for distribution to holders of Notes upon conversion by
such holders of Notes into Common Stock.

 

For purposes
of this Section 15.03(d), Section 15.03(a), and Section 15.03(b), any dividend
or distribution to which this Section 15.03(d) is applicable that also includes
shares of Common Stock, or rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 15.03(b) applies (or both),

 

79

 

shall be deemed instead to be (1) a dividend
or distribution of the evidences of indebtedness, assets or shares of capital
stock other than such shares of Common Stock or rights or warrants to which
Section 15.03(b) applies (and any Conversion Rate adjustment required by this
Section 15.03(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such shares of
Common Stock or such rights or warrants (and any further Conversion Rate adjustment
required by Section 15.03(a) and Section 15.03(b) with respect to such dividend
or distribution shall then be made), except (A) the Record Date of such
dividend or distribution shall be substituted as “the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution”, “the date fixed for the determination of stockholders entitled
to receive such rights or warrants” and “the date fixed for such determination”
within the meaning of Section 15.03(a) and Section 15.03(b)and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the close of business on the date fixed for such determination”
within the meaning of Section 15.03(a).

 

(e)           In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary), then the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on such record date by a
fraction,

 

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

 

(ii)       the
denominator of which shall be the Current Market Price on such record date less
the amount of cash so distributed applicable to one share of Common Stock,

 

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

 

(f)            In
case a tender or exchange offer made by the Company or any Subsidiary for all
or any portion of the Common Stock shall expire and such

 

80

 

tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders of consideration
per share of Common Stock having a Fair Market Value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) exceeds the Closing Sale Price of a share
of Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction,

 

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

 

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

 

such
adjustment to become effective immediately prior to the opening of business on
the day following the Expiration Time. 
If the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made.

 

(g)           In
case of a tender or exchange offer made by a Person other than the Company or
any Subsidiary for an amount that increases the offeror’s ownership of Common
Stock to more than 25% of the Common Stock outstanding and shall involve the
payment by such Person of consideration per share of Common Stock having a Fair
Market Value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors)
that as of the last time (the “Offer Expiration Time”) tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the Closing Price of a share of Common Stock on
the Trading Day next succeeding the Offer Expiration

 

81

 

Time, and in which, as of the Offer
Expiration Time the Board of Directors is not recommending rejection of the
offer, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to the Offer Expiration Time by a fraction

 

(i)        the
numerator of which shall be the sum of (x) the Fair Market Value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the “Accepted Purchased Shares”) and (y) the
product of the number of shares of Common Stock outstanding (less any Accepted
Purchased Shares) at the Offer Expiration Time and the Closing Sale Price of a
share of Common Stock on the Trading Day next succeeding the Offer Expiration
Time, and

 

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

 

such
adjustment to become effective immediately prior to the opening of business on
the day following the Offer Expiration Time. 
If such Person is obligated to purchase shares pursuant to any such
tender or exchange offer, but such Person is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made.  Notwithstanding the foregoing,
the adjustment described in this Section 15.03(g) shall not be made if, as of
the Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article 12.

 

(h)           For
purposes of this Section 15.03, the following terms shall have the meaning
indicated:

 

(i)        “Current
Market Price” shall have the meaning set forth in Section 1.01,
except that if another issuance, distribution, subdivision or combination to
which Section 15.03 applies occurs during the period applicable for calculating
“Current Market Price” pursuant to the definition thereof, “Current Market
Price” shall be calculated for such period in a manner determined by the Board
of Directors to reflect the impact of such issuance, distribution, subdivision
or combination on the Closing Sale Price of the Common Stock during such
period.

 

82

 

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

 

(iii)      “Record Date”
shall mean, with respect to any dividend, distribution or other transaction or
event in which the holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether such date
is fixed by the Board of Directors or by statute, contract or otherwise).

 

(i)            The
Company may make such increases in the Conversion Rate, in addition to those
required by clauses (a), (b), (c), (d), (e), (f) or (g) of this Section 15.03
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

 

(j)            To
the extent permitted by applicable law, the Company from time to time may
increase the Conversion Rate by any amount if the Board of Directors shall have
made a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive.  Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to the holder of each Note at his
last address appearing on the Note register provided for in Section 2.05 a notice
of the increase at least one full Business Day prior to the date the increased
Conversion Rate takes effect, and such notice shall state the increased
Conversion Rate and the period during which it will be in effect.

 

(k)           All
calculations under this Article 15 shall be made by the Company and shall be
made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a
share, as the case may be.  No
adjustment shall be made for the Company’s issuance of rights to purchase
Common Stock pursuant to a Company plan for reinvestment of dividends or
interest or for any issuance of Common Stock or convertible or exchangeable
securities or rights to purchase Common Stock or convertible or exchangeable
securities, other than as provided in this Section 15.03.  To the extent the Notes become convertible
into cash, assets, property or securities, no adjustment need be made
thereafter upon the issuance of the cash, assets, property or such securities
or upon the issuance of any cash, assets, property or securities that are
issued upon exercise or conversion of any securities issued upon the conversion
of the Notes.  Interest will not accrue
on any cash into which the Notes are convertible.

 

83

 

(l)            Whenever
the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an
Officers’ Certificate setting forth the Conversion Rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of
the Trustee shall have received such Officers’ Certificate, the Trustee shall
not be deemed to have knowledge of any adjustment of the Conversion Rate and
may assume without inquiry that the last Conversion Rate of which it has
knowledge is still in effect.  Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Rate to the holder of each Note at
his last address appearing on the Note register provided for in Section 2.05 of
this Indenture, within twenty (20) days of the effective date of such
adjustment.  Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.

 

(m)          In
any case in which this Section 15.03 provides that an adjustment shall become
effective immediately after (1) a record date or Record Date for an event, (2)
the date fixed for the determination of stockholders entitled to receive a
dividend or distribution pursuant to Section 15.03(a), (3) a date fixed for the
determination of stockholders entitled to receive rights or warrants pursuant
to Section 15.03(b), or (4) the Expiration Time or Offer Expiration Time, as
the case may be, for any tender or exchange offer pursuant to Section 15.03(f)
or Section 15.03(g), (each an “Adjustment Determination Date”), the
Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Note converted
after such Adjustment Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 15.03.  For purposes of this Section 15.03(m), the
term “Adjustment Event” shall mean:

 

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

 

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

 

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

 

84

 

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

 

(n)           For
purposes of this Section 15.03, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

 

Section 15.04.  Shares To Be Fully Paid.  The Company shall provide, free
from preemptive rights, out of its authorized but unissued shares or shares
held in treasury, sufficient shares of Common Stock to provide for conversion
of the Notes from time to time as such Notes are presented for conversion.

 

Section 15.05.  Effect of Reclassification, Consolidation,
Merger or Sale.  If any of
the following events occur, namely (i) any reclassification or change of the
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a split, subdivision or combination), (ii) any consolidation, merger or combination
of the Company with another Person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other Person as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then:

 

(a)           the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
providing for the conversion and settlement of the Notes as set forth in this
Indenture.  Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.  If, in the case of any such
reclassification, change, consolidation, merger, combination, sale or conveyance,
the Exchange Property includes shares of stock or other securities and assets
of a corporation other than the successor or purchasing corporation, as the
case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the holders of the Notes as the Board of Directors
shall reasonably consider necessary by reason of the

 

85

 

foregoing, including to the extent required
by the Board of Directors and practicable the provisions providing for the
repurchase rights set forth in Article 16 herein.

 

(b)           Notwithstanding
the provisions of Section 15.02(a), and subject to the provisions of Section
15.01(a)(ii), the Conversion Value with respect to each $1,000 principal amount
of Notes converted following the effective date of any such transaction, shall
be calculated (as provided in clause (d) below) based on the kind and amount of
shares of stock and other securities or property or assets (including cash)
received upon such reclassification, change, consolidation, merger, combination
sale or conveyance by a holder of Common Stock holding, immediately prior to
the transaction, a number of shares of Common Stock equal to the Conversion
Rate (plus Additional Shares, to the extent that the holder is entitled to
Additional Shares in accordance with Section 15.01(d) upon conversion)
immediately prior to such transaction (the “Exchange Property”), assuming
such holder of Common Stock did not exercise his rights of election, if any, as
to the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, statutory exchange, sale or conveyance (provided
that, if the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised (“non-electing share”), then for the purposes
of this Section 15.05 the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).

 

(c)           The
Conversion Value in respect of any Notes converted following the effective date
of any such transaction shall be equal to the average of the daily values of
the Exchange Property pertaining to such Notes as determined in the next
sentence (the “Exchange Property Value”) for each of the five consecutive
Trading Days (appropriately adjusted to take into account the occurrence during
such period of stock splits and similar events) beginning on the later of (A)
the second Trading Day immediately following the day the Notes are tendered for
conversion and (B) the Effective Date of such transaction (the “Exchange
Property Weighted Average Price”). 
For the purpose of determining the value of any Exchange Property:

 

(i)        Any
shares of common stock of the successor or purchasing corporation or any other
corporation that are included in the Exchange Property shall be valued as set
forth in Section 15.02 as if such shares were “Common Stock” using the
procedures set forth in the definition of “Closing Sale Price” in Section 1.01;
and

 

86

 

(ii)       Any
other property (other than cash) included in the Exchange Property shall be
valued in good faith by the Board of Directors or by a New York Stock Exchange
member firm selected by the Board of Directors.

 

(d)           The
Company shall deliver such Conversion Value to holders of Notes so converted as
follows:

 

(i)        An
amount equal to the Principal Return, determined as set forth in Section
15.02(b)(i); and

 

(ii)       If
the Conversion Value of the Notes so converted is greater than the Principal
Return, an amount of Exchange Property, determined as set forth below, equal to
such aggregate Conversion Value less the Principal Return (the “Net Exchange
Property Amount”).

 

The amount of
Exchange Property to be delivered shall be determined by dividing the Net
Exchange Property Amount by the Exchange Property Weighted Average Price.  If the Exchange Property includes more than
one kind of property, the amount of Exchange Property of each kind to be
delivered shall be in the proportion that the Exchange Property Value of such
kind of Exchange Property bears to the Exchange Property Value of all the
Exchange Property.  If the foregoing
calculations would require the Company to deliver a fractional share or unit of
Exchange Property to a holder of Notes being converted, the Company shall
deliver cash in lieu of such fractional share or unit based on its Exchange
Property Weighted Average Price.

 

(e)           Notwithstanding
clauses (b), (c) and (d) above, if the Notes are tendered for conversion prior
to the Effective Date of any such transaction pursuant to Section 15.01(d)
above, and the Principal Return and Net Shares, if any, have been determined as
of the Effective Date of such transaction, then the Company shall (i) pay the
Principal Return in cash and (ii) instead of delivering Net Shares, if
applicable, deliver an amount of Exchange Property that a holder of Common
Stock, holding, immediately prior to the transaction, a number of shares of
Common Stock equal to the Net Shares, would receive, assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, statutory exchange, sale or conveyance is not the
same for each non-electing share, then for the purposes of this Section 15.05
the kind and amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares).  If the foregoing calculations would require the Company to

 

87

 

deliver a fractional share or unit of
Exchange Property to a holder of Notes being converted, the Company shall
deliver cash in lieu of such fractional share or unit based on the Exchange
Property Value (as so determined).

 

(f)            Notwithstanding
the foregoing and anything to the contrary in this Indenture, with respect to
any Notes converted following the effective date of any such transaction, the
Company may, at its option, satisfy its Conversion Obligation by paying in cash
the Conversion Value of such Notes.

 

(g)           The
Company shall cause notice of the execution of such supplemental indenture to
be mailed to each holder of Notes, at his address appearing on the Note
register provided for in this Indenture, within twenty (20) days after
execution thereof.  Failure to deliver
such notice shall not affect the legality or validity of such supplemental
indenture.

 

(h)           The
above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.

 

Section 15.06.  Certain Covenants.

 

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

 

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

 

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

 

(c)           The
Company further covenants that if at any time the Common Stock shall be listed
on any other national securities exchange or automated quotation system the
Company will, if permitted and required by the rules of such exchange or
automated quotation system, list and keep listed, so long as the Common Stock
shall be so listed on such exchange or automated quotation system, all Common
Stock issuable upon conversion of the Notes.

 

88

 

Section 15.07.  Responsibility of Trustee.  The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. 
The Trustee and any other Conversion Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Note; and the Trustee and any other
Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article. 
Without limiting the generality of the foregoing, neither the Trustee nor
any Conversion Agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 15.05 relating either to the kind or amount of shares
of stock or securities or property (including cash) receivable by Noteholders
upon the conversion of their Notes after any event referred to in such Section
15.05 or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 8.01, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers’ Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

 

Section 15.08.  Notice To Holders Prior To Certain Actions.
n case:

 

(a)           the
Company shall declare a dividend (or any other distribution) on its Common
Stock (that would require an adjustment in the Conversion Rate pursuant to
Section 15.03); or

 

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

 

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

 

89

 

(d)           of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company;

 

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

 

Section 15.09.  Shareholder Rights Plans.  Each share of Common Stock issued
upon conversion of Securities pursuant to this Article 15 shall be entitled to
receive the appropriate number of rights, if any, and the certificates
representing the Common Stock issued upon such conversion shall bear such
legends, if any, in each case as may be provided by the terms of any
shareholder rights plan adopted by the Company, as the same may be amended from
time to time. If at the time of conversion, however, the rights have separated
from the shares of Common Stock in accordance with the provisions of the
applicable shareholder rights agreement so that the holders of the Securities
would not be entitled to receive any rights in respect of Common Stock issuable
upon conversion of the Securities, the Conversion Rate will be adjusted as
provided in Section 15.03(d).

 

ARTICLE 16

REPURCHASE OF NOTES AT OPTION OF HOLDERS

 

Section 16.01.  Repurchase at Option of Holders.

 

(a)           Notes
shall be purchased by the Company at the option of the holder on October 15,
2009, October 15, 2014 and October 15, 2019, or the next Business Day after
each such date if any such date is not a Business Day (each, a “Repurchase
Date”), at a purchase price (the “Repurchase Price”) equal to
100% of the principal amount of the Notes to be repurchased, plus accrued and
unpaid Liquidated Damages thereon, if any, to (but excluding) such Repurchase
Date.  Unless the Company has issued a
notice of redemption to redeem the Notes

 

90

 

as set forth in Section 3.01, not later than
20 Business Days prior to any Repurchase Date, the Company shall mail a notice
(the “Company
Notice”) by first class mail to the Trustee and to each holder (and
to beneficial owners as required by applicable law).  The notice shall include a form of repurchase notice to be
completed by a holder and shall state:

 

(i)        the
Repurchase Price and the Conversion Rate;

 

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

 

(iii)      that
Notes as to which a Repurchase Notice has been given may be converted if they
are otherwise convertible only in accordance with Article 15 hereof and the
terms of the Notes if the applicable Repurchase Notice has been withdrawn in
accordance with the terms of this Indenture;

 

(iv)     that
Notes must be surrendered to the Paying Agent to collect payment;

 

(v)      that
the Repurchase Price for any Note as to which a Repurchase Notice has been
given and not withdrawn will be paid promptly following the later of the
Repurchase Date and the time of surrender of such Note as described in (iv);

 

(vi)     the
procedures the holder must follow to exercise its repurchase rights under this
Section 16.01 and a brief description of those rights;

 

(vii)    briefly,
the conversion rights, if any, with respect to the Notes;

 

(viii)   the
procedures for withdrawing a Repurchase Notice; and

 

(ix)      the
CUSIP number of the Securities.

 

At the
Company’s request, the Trustee shall give such notice in the Company’s name and
at the Company’s expense; provided, however, that, in all cases,
the text of such Company Notice shall be prepared by the Company.

 

Purchases of
Notes hereunder shall be made, at the option of the holder thereof, upon:

 

(A)     delivery
to the Paying Agent by the holder of a written notice of repurchase (a “Repurchase Notice”) during the
period beginning at any time from the opening of business on the

 

91

 

date that is 20 Business Days prior to the
relevant Repurchase Date until the close of business on the last Business Day
prior to the Repurchase Date stating:

 

(1)       the
certificate number of the Notes which the holder will deliver to be purchased
or the appropriate Depositary procedures if certificated Notes have not been
issued for such Note,

 

(2)       the
portion of the principal amount of the Note which the holder will deliver to be
purchased, which portion must be in principal amounts of $1,000 or an integral
multiple of $1,000, and

 

(3)       that
such Note shall be purchased by the Company as of the Repurchase Date pursuant
to the terms and conditions specified in the Securities and in this Indenture;
and

 

(B)      delivery
of such Note to the Paying Agent at any time after delivery of the Repurchase
Notice (together with all necessary endorsements) at the offices of the Paying
Agent, such delivery being a condition to receipt by the holder of the
Repurchase Price therefor; provided, however, that such Repurchase
Price shall be so paid pursuant to this Section 16.01 only if the Note so delivered
to the Paying Agent shall conform in all respects to the description thereof in
the related Repurchase Notice.

 

The Company
shall purchase from the holder thereof, pursuant to this Section 16.01, a
portion of a Note, if the principal amount of such portion is $1,000 or an
integral multiple of $1,000.  Provisions
of this Indenture that apply to the purchase of all of a Note also apply to the
purchase of such portion of such Note.

 

Any purchase
by the Company contemplated pursuant to the provisions of this Section 16.01
shall be consummated by the delivery of the consideration to be received by the
holder promptly following the later of the Repurchase Date and the time of
delivery of the Note.

 

Notwithstanding
anything herein to the contrary, any holder delivering to the Paying Agent the
Repurchase Notice contemplated by this Section 16.01 shall have the right to
withdraw such Repurchase Notice at any time prior to the close of business on
the Business Day prior to the Repurchase Date by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 16.03.

 

92

 

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

 

Section 16.02.  Repurchase at Option of Holders Upon a
Designated Event.

 

(a)          If
there shall occur a Designated Event at any time prior to maturity of the
Notes, then each Noteholder shall have the right, at such holder’s option, to
require the Company to repurchase all of such holder’s Notes, or any portion
thereof that is a multiple of $1,000 principal amount, on the date (the “Designated
Event Repurchase Date”) specified by the Company that is not less
than twenty (20) Business Days and not more than thirty (30) Business Days
after the date of the Designated Event Notice of such Designated Event at a
repurchase price equal to 100% of the principal amount thereof, together with
accrued and unpaid Liquidated Damages thereon, if any, to, but excluding, the
Designated Event Repurchase Date (the “ Designated Event Repurchase Price”).  If such Designated Event Repurchase Date
falls after a record date for the payment of Liquidated Damages and on or prior
to the corresponding payment date, the Company shall instead pay the full
amount of accrued and unpaid Liquidated Damages payable on such payment date to
the holder of record on the close of business on the corresponding record
date.  Repurchases of Notes under this
Section 16.02 shall be made, at the option of the holder thereof, upon:

 

(i)        delivery
to the Trustee (or other Paying Agent appointed by the Company) by a holder of
a duly completed notice (the “Designated Event Repurchase Notice”) in the
form set forth on the reverse of the Note prior to the close of business on the
Designated Event Repurchase Date; and

 

(ii)       delivery
or book-entry transfer of the Notes to the Trustee (or other Paying Agent
appointed by the Company) at any time after delivery of the Designated Event
Repurchase Notice (together with all necessary endorsements) at the Corporate
Trust Office of the Trustee (or other Paying Agent appointed by the Company) in
the Borough of Manhattan, such delivery being a condition to receipt by the
holder of the Repurchase Price therefor; provided that such Designated Event
Repurchase Price shall be so paid pursuant to this Section 16.02 only if the
Note so delivered to the Trustee (or other Paying Agent appointed by the
Company) shall conform in all respects to the description thereof in the
related Designated Event Repurchase Notice.

 

Any purchase
by the Company contemplated pursuant to the provisions of this Section 16.02
shall be consummated by the delivery of the consideration to be received by the
holder promptly following the later of the Designated Event Repurchase Date and
the time of the book-entry transfer or delivery of the Note.

 

93

 

Notwithstanding
anything herein to the contrary, any holder delivering to the Trustee (or other
Paying Agent appointed by the Company) the Designated Event Repurchase Notice
contemplated by this Section 16.02 shall have the right to withdraw such
Designated Event Repurchase Notice at any time prior to the close of business
on the Designated Event Repurchase Date by delivery of a written notice of
withdrawal to the Trustee (or other Paying Agent appointed by the Company) in
accordance with Section 16.03 below.

 

The Trustee
(or other Paying Agent appointed by the Company) shall promptly notify the
Company of the receipt by it of any Designated Event Repurchase Notice or
written notice of withdrawal thereof.

 

(b)           On
or before the tenth day after the occurrence of a Designated Event, the Company
shall mail to all holders of record of the Notes a notice (the “Designated
Event Notice”) of the occurrence of such Designated Event and of the
repurchase right at the option of the holders arising as a result thereof.  Such mailing shall be by first class
mail.  The Company shall also deliver a
copy of the Designated Event Notice to the Trustee and cause a copy of such
Designated Event Notice, or a summary of the information contained therein, to
be published once in a newspaper of general circulation in The City of New
York.  Concurrently with the mailing of
any Designated Event Notice, the Company shall issue a press release announcing
such Designated Event referred to in the Designated Event Notice, the form and
content of which press release shall be determined by the Company in its sole
discretion.  The failure to issue any
such press release or any defect therein shall not affect the validity of the
Designated Event Notice or any proceedings for the repurchase of any Note that
any Noteholder may elect to have the Company repurchase as provided in this
Section 16.02.

 

Each
Designated Event Notice shall specify the circumstances constituting the
Designated Event, the Designated Event Repurchase Date, the Designated Event
Repurchase Price, that the holder must exercise the repurchase right on or
prior to the close of business on the Designated Event Repurchase Date (the “Designated
Event Expiration Time”), that the holder shall have the right to
withdraw any Notes surrendered prior to the Designated Event Expiration Time, a
description of the procedure which a Noteholder must follow to exercise such
repurchase right and to withdraw any surrendered Notes, the place or places
where the holder is to surrender such holder’s Notes and the CUSIP number or
numbers of the Notes (if then generally in use) and include a form of Designated
Event Repurchase Notice.

 

No failure of
the Company to give the foregoing notices and no defect therein shall limit the
Noteholders’ repurchase rights or affect the validity of the proceedings for
the repurchase of the Notes pursuant to this Section 16.02.

 

94

 

Section 16.03.  Withdrawal of Repurchase Notice or
Designated Event Repurchase Notice.

 

(a)           A
Repurchase Notice or Designated Event Repurchase Notice may be withdrawn by
means of a written notice of withdrawal delivered to the Corporate Trust Office
of the Trustee (or other Paying Agent appointed by the Company) in accordance
with the Designated Event Repurchase Notice at any time prior to the close of
business on the Business Day prior to the Repurchase Date or prior to the close
of business on the Designated Event Repurchase Date, specifying:

 

(i)        the
certificate number, if any, of the Note in respect of which such notice of
withdrawal is being submitted, or the appropriate Depositary information if the
Note in respect of which such notice of withdrawal is being submitted is
represented by a Global Note,

 

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

 

(iii)      the
principal amount, if any, of such Note that remains subject to the original
Designated Event Repurchase Notice.

 

Section 16.04.  Deposit of Repurchase Price or Designated
Event Repurchase Price.

 

(a)           On
or prior to the Repurchase Date or Designated Event Repurchase Date, the
Company will deposit with the Trustee (or other Paying Agent appointed by the
Company or if the Company is acting as its own Paying Agent, set aside,
segregate and hold in trust as provided in Section 5.04) an amount of money
sufficient to repurchase on the Repurchase Date or Designated Event Repurchase
Date all of the Notes to be repurchased on such date at the appropriate
Repurchase Price or Designated Event Repurchase Price; provided that if such
payment is made on the Repurchase Date or Designated Event Repurchase Date it
must be received by the Trustee or Paying Agent, as the case may be, by 10:00
a.m. New York City time, on such date. Subject to receipt of funds and/or Notes
by the Trustee (or other Paying Agent appointed by the Company), payment for Notes
surrendered for repurchase (and not withdrawn) prior to the Designated Event
Expiration Time will be made promptly after the later of (x) the Repurchase
Date or Designated Event Repurchase Date with respect to such Note (provided
the holder has satisfied the conditions in Section 16.01 or Section 16.02, as
applicable) and (y) the time of delivery of such Note to the Trustee (or other
Paying Agent appointed by the Company) by the holder thereof in the manner
required by Section 16.01 or Section 16.02, as applicable) by mailing checks
for the amount payable to the holders of such Notes entitled thereto as they
shall appear in the Note Register, provided, however, that payments to
the Depositary shall be made by wire transfer of immediately available funds to
the account of

 

95

 

the Depositary or its nominee.  The Trustee shall, promptly after such
payment and upon written demand by the Company, return to the Company any funds
in excess of the Repurchase Price or Designated Event Repurchase Price.

 

(b)           If
the Trustee (or other Paying Agent appointed by the Company) holds money
sufficient to repurchase on the Repurchase Date or Designated Event Repurchase
Date all the Notes or portions thereof that are to be purchased as of the
Repurchase Date or Designated Event Repurchase Date, then on and after the
Business Day following the Repurchase Date or Designated Event Repurchase Date
(i) such Notes will cease to be outstanding, (ii) Liquidated Damages, if any,
will cease to accrue on such Notes, and (iii) all other rights of the holders
of such Notes will terminate, whether or not book-entry transfer of the Notes
has been made or the Notes have been delivered to the Trustee or Paying Agent,
other than the right to receive the Repurchase Price or Designated Event
Repurchase Price upon delivery of the Notes.

 

Section 16.05.  Covenant to Comply with Securities Laws.

 

When complying
with the provisions of this Article 16 (if any offer or purchase is made and
such offer or purchase constitutes an “issuer tender offer” for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), the
Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act, (ii) file a Schedule TO (or any successor
schedule, form or report) under the Exchange Act and (iii) otherwise comply
with any applicable federal and state securities laws so as to permit the
rights and obligations under Article 16 to be exercised in the time and in the
manner specified in this Article 16.

 

ARTICLE 17

MISCELLANEOUS PROVISIONS

 

Section 17.01.  Provisions Binding on Company’s Successors.  All the covenants, stipulations, promises
and agreements of the Company contained in this Indenture shall bind its
successors and assigns whether so expressed or not.

 

Section 17.02.  Official Acts by Successor Corporation.  Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee or officer of
any corporation that shall at the time be the lawful sole successor of the
Company.

 

96

 

Section 17.03.  Addresses for Notices, Etc.  Any notice or demand which by any provision
of this Indenture is required or permitted to be given or served by the Trustee
or by the holders of Notes on the Company shall be deemed to have been
sufficiently given or made, for all purposes if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Sepracor Inc., 84 Waterford Drive, Marlborough, MA 01752,
Attention: Chief Financial Officer.  Any
notice, direction, request or demand hereunder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box addressed to the Corporate Trust Office.

 

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

 

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

 

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

 

Section 17.04.  Governing Law.  THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.

 

Section 17.05.  Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. 
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers’ Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with, and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.

 

Each
certificate or opinion provided for by or on behalf of the Company in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in such
certificate or opinion is based; (3) a statement that, in the opinion of such
person, he has made

 

97

 

such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.

 

Section 17.06.  Legal Holidays.  In any case where the date of maturity of interest on
or principal of the Notes or the date fixed for repurchase of any Note will not
be a Business Day, then payment of such interest on or principal of the Notes
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the
date fixed for repurchase, and no interest shall accrue for the period from and
after such date.

 

Section 17.07.  No Security Interest Created.  Nothing in this Indenture or in the Notes,
expressed or implied, shall be construed to constitute a security interest
under the Uniform Commercial Code or similar legislation, as now or hereafter
enacted and in effect, in any jurisdiction.

 

Section 17.08.  Trust Indenture Act.  This Indenture is hereby made subject to,
and shall be governed by, the provisions of the Trust Indenture Act required to
be part of and to govern indentures qualified under the Trust Indenture Act; provided,
however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject
to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314
of the Trust Indenture Act as now in effect as hereafter amended or modified; providedfurther
that this Section 17.08 shall not require that this Indenture or the Trustee be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party hereto that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.

 

Section 17.09.  Benefits of Indenture.  Nothing in this Indenture or in the Notes,
expressed or implied, shall give to any person, other than the parties hereto,
any Paying Agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Obligations, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

 

Section 17.10.  Table of Contents, Headings, Etc.  The table of contents and the titles and
headings of the articles and sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.

 

98

 

Section 17.11.  Authenticating Agent.  The Trustee may appoint an authenticating agent which
shall be authorized to act on its behalf and subject to its direction in the
authentication and delivery of Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including under Section
2.04, Section 2.05, Section 2.06, Section 2.07 and Section 3.06, as fully to
all intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes.  For all purposes of this
Indenture, the authentication and delivery of Notes by the authenticating agent
shall be deemed to be authentication and delivery of such Notes “by the
Trustee” and a certificate of authentication executed on behalf of the Trustee
by an authenticating agent shall be deemed to satisfy any requirement hereunder
or in the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times
be a person eligible to serve as trustee hereunder pursuant to Section 8.09.

 

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

 

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

 

The Trustee
agrees to pay to the authenticating agent from time to time reasonable
compensation for its services (to the extent pre-approved by the Company in
writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.06.

 

The provisions
of Section 8.02, Section 8.03, Section 8.04, Section 9.03 and this Section
17.11 shall be applicable to any authenticating agent.

 

99

 

Section 17.12.  Execution in Counterparts.  This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

 

JPMorgan Chase
Bank hereby accepts the trusts in this Indenture declared and provided, upon
the terms and conditions hereinabove set forth.

 

100

 

IN WITNESS
WHEREOF, the parties hereto have caused this Indenture to be duly signed, and
their respective corporate seals to be hereunto affixed and attested, all as of
the date first written above.

 

	
   

  	
  SEPRACOR
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  J. Barberich

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy J.
  Barberich

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David P.
  Southwell

  	
   

  	
   

  
	
  Name:

  	
  David P.
  Southwell

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [seal]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rosa
  Ciacca

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Rosa
  Ciacca

  
	
   

  	
   

  	
  Title:

  	
   Trust
  Officer

  
									

 

 

SCHEDULE A

 

The following
table sets forth the hypothetical stock price and the number of Additional
Shares to be issuable per $1,000 principal amount of Notes:

 

	
   

  	
   

  	
  Stock
  Price

  	
   

  
	
  Effective Date

  	
   

  	
  $51.69

  	
   

  	
  $53.00

  	
   

  	
  $54.00

  	
   

  	
  $55.00

  	
   

  	
  $57.50

  	
   

  	
  $60.00

  	
   

  	
  $62.50

  	
   

  	
  $65.00

  	
   

  	
  $70.00

  	
   

  	
  $75.00

  	
   

  	
  $85.00

  	
   

  	
  $95.00

  	
   

  	
  $100.00

  	
   

  	
  $125.00

  	
   

  	
  $150.00

  	
   

  
	
  September 22, 2004

  	
   

  	
  4.7

  	
   

  	
  4.4

  	
   

  	
  4.3

  	
   

  	
  4.1

  	
   

  	
  3.7

  	
   

  	
  3.4

  	
   

  	
  3.1

  	
   

  	
  2.9

  	
   

  	
  2.4

  	
   

  	
  2.1

  	
   

  	
  1.5

  	
   

  	
  1.1

  	
   

  	
  1.0

  	
   

  	
  0.5

  	
   

  	
  0.3

  	
   

  
	
  October 15, 2005

  	
   

  	
  4.9

  	
   

  	
  4.6

  	
   

  	
  4.4

  	
   

  	
  4.3

  	
   

  	
  3.9

  	
   

  	
  3.5

  	
   

  	
  3.2

  	
   

  	
  2.9

  	
   

  	
  2.4

  	
   

  	
  2.0

  	
   

  	
  1.5

  	
   

  	
  1.1

  	
   

  	
  0.9

  	
   

  	
  0.4

  	
   

  	
  0.2

  	
   

  
	
  October 15, 2006

  	
   

  	
  5.0

  	
   

  	
  4.7

  	
   

  	
  4.5

  	
   

  	
  4.3

  	
   

  	
  3.9

  	
   

  	
  3.5

  	
   

  	
  3.2

  	
   

  	
  2.9

  	
   

  	
  2.3

  	
   

  	
  1.9

  	
   

  	
  1.3

  	
   

  	
  0.9

  	
   

  	
  0.8

  	
   

  	
  0.4

  	
   

  	
  0.2

  	
   

  
	
  October 15, 2007

  	
   

  	
  5.0

  	
   

  	
  4.7

  	
   

  	
  4.5

  	
   

  	
  4.3

  	
   

  	
  3.8

  	
   

  	
  3.4

  	
   

  	
  3.0

  	
   

  	
  2.7

  	
   

  	
  2.1

  	
   

  	
  1.7

  	
   

  	
  1.1

  	
   

  	
  0.7

  	
   

  	
  0.6

  	
   

  	
  0.2

  	
   

  	
  0.1

  	
   

  
	
  October 15, 2008

  	
   

  	
  4.8

  	
   

  	
  4.4

  	
   

  	
  4.2

  	
   

  	
  4.0

  	
   

  	
  3.4

  	
   

  	
  3.0

  	
   

  	
  2.6

  	
   

  	
  2.2

  	
   

  	
  1.7

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  	
  0.4

  	
   

  	
  0.3

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
  October 15, 2009

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  

 

A-1

 

Exhibit A

 

[FACE OF GLOBAL NOTE]

 

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

 

THIS SECURITY AND THE SHARES OF SEPRACOR INC.
(THE ‘‘COMPANY’’) COMMON STOCK (‘‘COMMON STOCK’’) ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE ‘‘SECURITIES ACT’’), OR ANY STATE SECURITIES LAWS. NONE OF THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
OR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

 

THE HOLDER OF THIS SECURITY, BY ITS
ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE (THE ‘‘RESALE RESTRICTION TERMINATION DATE’’) THAT IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED
INSTITUTIONAL BUYER’’ AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C)

 

 

PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE RIGHTS OF THE COMPANY AND THE TRUSTEE PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS
SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION
DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.

 

2

 

SEPRACOR INC.

 

0% Convertible
Senior Subordinated Notes due 2024

 

	
  No.

  	
   

  	
  $

  

 

CUSIP No. 817315 AV 6

 

Sepracor Inc.,
a corporation duly organized and validly existing under the laws of the State
of Delaware (herein called the “Company”, which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of
$                      
(which amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all
other outstanding Notes, shall not exceed
$                      
in aggregate at any time (or
$                      
if the option set forth in the Purchase Agreement is exercised in full by the
Initial Purchaser)) by adjustments made on the records of the Trustee as set
forth in Schedule I hereto, as Custodian of the Depositary, in accordance with
the rules and procedures of the Depositary) on October 15, 2024, and Liquidated
Damages in the manner, at the rates and to the persons set forth in the
Registration Rights Agreement.

 

Payment of the
principal of and Liquidated Damages accrued on this Note shall be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or, at the option of the holder of this Note,
at the Corporate Trust Office, in such lawful money of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts; provided, however, Liquidated Damages may be
paid by check mailed to your address as it appears in the Note register; provided
further, however, that, with respect to any holder of Notes with an
aggregate principal amount equal to or in excess of $2,000,000, at the request
of such holder in writing to the Company, Liquidated Damages on such holder’s
Notes shall be paid by wire transfer in immediately available funds in
accordance with the written wire transfer instruction supplied by such holder
from time to time to the Trustee and Paying Agent (if different from the
Trustee) at least two days prior to the applicable record date; provided
that any payment to the Depositary or its nominee shall be paid by wire
transfer in immediately available funds in accordance with the wire transfer
instruction supplied by the Depositary or its nominee from time to time to the
Trustee and Paying Agent (if different from Trustee) at least two days prior to
the applicable record date.

 

3

 

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

 

This Note
shall be deemed to be a contract made under the laws of the State of New York,
and for all purposes shall be construed in accordance with and governed by the
laws of said State (without regard to the conflicts of laws provisions
thereof).

 

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

 

[Remainder of
page intentionally left blank]

 

4

 

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

 

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Timothy J. Barberich

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: David P. Southwell

  	
   

  
	
  Title: Secretary

  	
   

  
	
   

  	
   

  
	
  Dated: 
  September      , 2004

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK,

  	
   

  
	
  as Trustee, certifies that this is one of
  the Notes described

  	
   

  
	
  in the within-named Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
							

 

5

 

[REVERSE OF
NOTE]

 

SEPRACOR INC.

 

0% Convertible
Senior Subordinated Notes due 2024

 

 

This Note is
one of a duly authorized issue of Notes of the Company, designated as its 0%
Convertible Senior Subordinated Notes due 2024 (herein called the “Notes”),
limited to the aggregate principal amount of
$                        
(or $                        
if the option set forth in the Purchase Agreement is exercised in full by the
Initial Purchaser) all issued or to be issued under and pursuant to an
Indenture dated as of September 22, 2004 (herein called the “Indenture”),
between the Company and JPMorgan Chase Bank, (herein called the “Trustee”), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Notes.  Additional Notes may be
issued in an unlimited aggregate principal amount, subject to certain
conditions specified in the Indenture.

 

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

 

The Indenture
contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the holders of the Notes, and in other
circumstances, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time for payment of Liquidated Damages thereon,
or reduce the principal amount thereof or premium, if any, thereon, or reduce
any amount payable on redemption or repurchase thereof, or impair, or change in
any respect adverse to the holder of Notes, the obligation of the Company to
repurchase any Note at the option of the holder upon the happening of a
Designated Event or any Repurchase Date, or change the time at which the Notes
may or must be redeemed or repurchased, or impair or adversely affect the right
of any Noteholder to institute suit for the payment thereof, or change the
currency in

 

6

 

which the Notes are payable, or
impair the right to convert the Notes into Common Stock, cash or other
property, subject to the terms set forth in the Indenture or reduce the number
of shares of Common Stock or the amount of any other property receivable upon
conversion, or modify the provisions of the Indenture in any material respect
with respect to the subordination of the Notes in a manner adverse to the
Noteholders, reduce the quorum or voting requirements under the Indenture with
respect to the Notes or, subject to certain exceptions, modify certain
provisions of the Indenture relating to these modification provisions, in each
case without the consent of the holder of each Note so affected, or (ii) reduce
the aforesaid percentage of Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Notes then outstanding.  It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate principal amount
of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default under the Indenture and its
consequences except (i) a default in the payment of Liquidated Damages or
premium, if any, on, or the principal of, the Notes when due which default has
not been cured, (ii) a failure by the Company to convert any Notes into Common
Stock or (iii) a default in respect of a covenant or provisions of the
Indenture which under Article 11 of the Indenture cannot be modified or amended
without the consent of the holders of all Notes then outstanding.  Any such consent or waiver by the holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Note
and any Notes which may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.

 

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

 

No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, and

 

7

 

Liquidated Damages on this Note
at the place, at the respective times, at the rate and in the lawful money
herein prescribed.

 

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

 

The Notes are
not subject to redemption through the operation of any sinking fund.  Prior to October 20, 2009, the Notes will
not be redeemable at the Company’s option. 
Subject to the terms and conditions of the Indenture, beginning on
October 20, 2009, the Company, at its option, may redeem the Notes for cash at
any time as a whole, or from time to time in part, at a price equal to the
principal amount of the Notes redeemed plus accrued and unpaid Liquidated
Damages, if any, on the Notes redeemed to (but excluding) the Redemption Date.

 

Subject to the
terms and conditions of the Indenture, the Company shall become obligated to
purchase, at the option of the holder, all or any portion of Notes held by such
holder on October 15, 2009, October 15, 2014 and October 15, 2019, in integral
multiples of $1,000 at a Repurchase Price equal to the principal amount of the
Notes repurchased plus accrued and unpaid Liquidated Damages, if any, on the
Notes repurchased to (but excluding) the Repurchase Date.

 

Upon the
occurrence of a “Designated Event,” the Noteholder has the right, at such
holder’s option, to require the Company to repurchase all of such holder’s
Notes or any portion thereof (in principal amounts of $1,000 or integral
multiples thereof) on the Designated Event Purchase Date at a price equal to
100% of the principal amount of the Notes such holder elects to require the
Company to repurchase, together with accrued and unpaid Liquidated Damages, if
any, to but excluding the date fixed for repurchase.  The Company or, at the written request of the Company, the
Trustee shall mail to all holders of record of the Notes a notice of the
occurrence of a Designated Event and of the repurchase right arising as a
result thereof on or before the tenth calendar day after the occurrence of such
Designated Event.

 

Subject to the
provisions of the Indenture, the holder hereof has the right, at its option,
upon the occurrence of certain conditions specified in the Indenture and prior
to the close of business on the business day immediately preceding

 

8

 

October 15, 2024, to convert
any Notes or portion thereof which is $1,000 or an integral multiple thereof,
at a Conversion Rate specified in the Indenture, as adjusted from time to time
as provided in the Indenture, upon surrender of this Note, together with a
conversion notice as provided in the Indenture and this Note, to the Company at
the office or agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, or at the option of such holder, the
Corporate Trust Office, and, unless the shares issuable on conversion are to be
issued in the same name as this Note, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by, the
holder or by his duly authorized attorney. 
The initial Conversion Rate shall be 14.8816 shares for each $1,000
principal amount of Notes.  No
fractional shares of Common Stock will be issued upon any conversion, but an
adjustment in cash will be paid to the holder, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Note or Notes for conversion. 
No adjustment shall be made for dividends or any shares issued upon
conversion of such Note except as provided in the Indenture.

 

Upon due
presentment for registration of transfer of this Note at the office or agency
of the Company in the Borough of Manhattan, The City of New York, a new Note or
Notes of authorized denominations for an equal aggregate principal amount will
be issued to the transferee in exchange thereof, subject to the limitations
provided in the Indenture, without charge except for any tax, assessments or
other governmental charge imposed in connection therewith.

 

The Company,
the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent
and any Note registrar may deem and treat the registered holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any Paying Agent nor any other Conversion
Agent nor any Note registrar shall be affected by any notice to the
contrary.  Notwithstanding the
foregoing, the Indenture provides that owners of beneficial interests in a
Global Note may directly enforce against the Company such owners’ right to
exchange such beneficial interest for Notes in certificated form. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

 

No recourse
for the payment of the principal of or any premium or Liquidated Damages on
this Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or

 

9

 

agreement of the Company in the
Indenture or any indenture supplemental thereto or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

 

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

 

10

 

[ABBREVIATIONS]

 

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

 

	
  TEN COM - as tenants in common

  	
  UNIF GIFT MIN ACT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Custodian

  
	
   

  	
  (Cust)

  	
   

  
	
   

  	
   

  	
   

  
	
  TEN ENT - as tenants by the entireties

  	
   

  	
   

  
	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
   

  
	
  JT TEN - as joint tenants with right of

  	
   

  	
   

  
	
  survivorship and not as tenants in common

  	
  Uniform Gifts to Minors Act
               
  (State)

  

 

Additional abbreviations may also be used

though not in the above list.

 

11

 

[FORM OF
CONVERSION NOTICE]

 

To: 
Sepracor Inc.

 

The
undersigned registered owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion hereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, into cash and shares
of Common Stock, if any, in accordance with the terms of the Indenture referred
to in this Note, and directs that the shares issuable and deliverable upon such
conversion, if any, together with any check in payment of the Principal Return
(as defined in the Indenture) and for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below.  If shares or any portion of this
Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.  Any amount required to be paid
to the undersigned on account of interest accompanies this Note.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee

  	
   

  
	
   

  	
   

  
	
  Signature(s) must be guaranteed by an
  eligible Guarantor Institution (banks, stock brokers, savings and loan
  associations and credit unions) with membership in an approved signature
  guarantee medallion program pursuant to Securities and Exchange Commission
  Rule 17Ad-15 if shares of Common Stock are to be issued, or Notes to be
  delivered, other than to and in the name of the registered holder.

  	
   

  	
   

  
							

 

12

 

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

 

	
   

  	
   

  
	
  (Name)

  
	
   

  
	
   

  	
   

  
	
  (Street Address)

  
	
   

  
	
   

  	
   

  
	
  (City, State and Zip Code)

  
			

 

Please print name and address

 

	
   

  	
  Principal amount to be converted (if less
  than all): $            ,000

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer 

  Identification Number

  

 

13

 

[FORM OF
OPTION TO ELECT REPAYMENT]

UPON A
DESIGNATED EVENT

 

To: Sepracor Inc.

 

The
undersigned registered owner of this Note hereby acknowledges receipt of a
notice from Sepracor Inc. (the “Company”) as to the occurrence of a Designated
Event with respect to the Company and requests and instructs the Company to
repay the entire principal amount of this Note, or the portion thereof (which
is $1,000 principal amount or an integral multiple thereof) below designated,
in accordance with the terms of the Indenture referred to in this Note,
together with accrued Liquidated Damages, if any, to, but excluding, such date,
to the registered holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer 

  Identification Number

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal
  amount to be repaid (if less than all): 
  $          ,000

  

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

  	
   

  
						

 

14

 

[FORM OF
OPTION TO ELECT REPAYMENT]

ON A
REPURCHASE DATE

To: Sepracor Inc.

 

The
undersigned registered owner of this Note hereby requests and instructs
Sepracor Inc. to repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note, together with accrued Liquidated Damages, if any, to, but excluding, such
date, to the registered holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer 

  Identification Number

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal
  amount to be repaid (if less than all): 
  $          ,000

  

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

  	
   

  
						

 

15

 

[FORM OF ASSIGNMENT AND TRANSFER]

 

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

 

In connection
with any transfer of the within Note occurring prior to the Resale Restriction
Termination Date, as defined in the Indenture governing such Note (unless such
Note is being transferred pursuant to a registration statement that has been
declared effective under the Securities Act), the undersigned confirms that
such Note is being transferred:

 

o            *To Sepracor Inc. or a subsidiary thereof; or

 

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

 

o            *Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;

 

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

 

o            *The transferee is an Affiliate of the Company.

 

16

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature(s)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee

  	
   

  
	
   

  	
   

  
	
  Signature(s) must
  be guaranteed by an eligible Guarantor Institution (banks, stock brokers,
  savings and loan associations and credit unions) with membership in an
  approved signature guarantee medallion program pursuant to Securities and
  Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued,
  or Notes to be delivered, other than to and in the name of the registered
  holder.

  	
   

  	
   

  
						

 

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

 

17

 

Schedule I

 

SEPRACOR INC.

0% Convertible Senior Subordinated Notes Due 2024

 

	
  Date

  	
   

  	
  Principal Amount

  	
   

  	
  Notation Explaining Principal

  Amount Recorded

  	
   

  	
  Authorized Signature

  of Trustee or

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

18Exhibit 10.1

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

between

SEPRACOR INC.

as Issuer,

and

MORGAN STANLEY & CO.
INCORPORATED, 

as Initial Purchaser

 

Dated
as of September 22, 2004

 

 

THIS REGISTRATION RIGHTS AGREEMENT dated as of September 22, 2004
between Sepracor Inc., a Delaware corporation (the “Company”), and Morgan Stanley & Co. Incorporated (the “Initial Purchaser”), is entered into
pursuant to the Purchase Agreement dated September 17, 2004 (the “Purchase Agreement”), between the Company
and the Initial Purchaser.  In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement.

 

The Company agrees with the Initial Purchaser, (i) for its benefit as
Initial Purchaser and (ii) for the benefit of the beneficial owners (including
the Initial Purchaser) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a “Holder” and together the “Holders”), as follows:

 

Section 1. 
Definitions.  Capitalized
terms used herein without definition shall have their respective meanings set
forth in the Purchase Agreement.  As
used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means, with
respect to any specified person, an “affiliate,” as defined in Rule 144, of
such person.

 

“Amendment Effectiveness Deadline
Date” has the meaning set forth in Section 2(d) hereof.

 

“Business Day” means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York are authorized or obligated by law
or executive order to close.

 

“Common Stock” means the
shares of common stock, $.10 par value per share, of the Company, and any other
shares of common stock as may constitute “Common Stock” for purposes of the
Indenture, including the Underlying Common Stock.

 

“Conversion Price” means
$1,000 divided by the then-applicable Conversion Rate.

 

“Conversion Rate” has the
meaning assigned such term in the Indenture.

 

“Damages Accrual Period”
has the meaning set forth in Section 2(e) hereof.

 

“Damages Payment Date”
means each April 15 and October 15.

 

“Deferral Notice” has the
meaning set forth in Section 3(i) hereof.

 

 

“Deferral Period” has the
meaning set forth in Section 3(i) hereof.

 

“Effectiveness Deadline Date”
has the meaning set forth in Section 2(a) hereof.

 

“Effectiveness Period”
means the period commencing on the date hereof and ending on the earlier of (i)
the date that there are no longer any Registrable Securities outstanding and
(ii) two years after the effective date of the Shelf Registration Statement.

 

“Event” has the meaning set
forth in Section 2(e) hereof.

 

“Event
Date” has the meaning set forth in Section 2(e) hereof.

 

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

 

“Filing Deadline Date” has
the meaning set forth in Section 2(a) hereof.

 

“Holder” has the meaning
set forth in the second paragraph of this Agreement.

 

“Indenture” means the
Indenture, dated as of September 22, 2004, between the Company and
JPMorgan Chase Bank, as trustee, pursuant to which the Notes are being issued.

 

“Initial Purchaser” means
Morgan Stanley & Co. Incorporated.

 

“Initial Shelf Registration Statement”
has the meaning set forth in Section 2(a) hereof.

 

“Issue Date” means the
first date of original issuance of the Notes.

 

“Liquidated Damages Amount”
has the meaning set forth in Section 2(e) hereof.

 

“Losses”
has the meaning set forth in Section 6 hereof.

 

“Material Event” has the
meaning set forth in Section 3(i) hereof.

 

“Notice and Questionnaire”
means a written notice delivered to the Company containing substantially the
information called for by the Selling Securityholder Notice and Questionnaire
attached as Annex A to the Offering Memorandum of the Company dated
September 17, 2004 relating to the Notes.

 

3

 

“Notes” means the 0%
Convertible Subordinated Notes Due 2024 of the Company to be purchased pursuant
to the Purchase Agreement.

 

“Notice Holder” means, on
any date, any Holder that has delivered a Notice and Questionnaire to the
Company on or prior to such date.

 

“Purchase Agreement” has
the meaning set forth in the preamble hereof.

 

“Prospectus” means the
prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement thereto, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

 

“Record Holder” means,
with respect to any Damages Payment Date relating to any Notes or Underlying
Common Stock as to which any Liquidated Damages Amount has accrued, the
registered holder of such Note or Underlying Common Stock on the April 1
immediately preceding a Damages Payment Date occurring on a April 15, and
on the October 1 immediately preceding a Damages Payment Date occurring on
a October 15.

 

“Registrable Securities”
means the Notes until such Notes have been converted into Underlying Common
Stock and, at all times subsequent to any such conversion, the Underlying
Common Stock and any securities into or for which such Underlying Common Stock
has been converted, and any security issued with respect thereto upon any stock
dividend, stock split or similar event until, in the case of any such security,
the earliest of (i) its resale in accordance with the Registration Statement
covering offers and sales by the Holders of such security, (ii) expiration of
the holding period for non-affiliates that would be applicable thereto under
Rule 144(k), (iii) its sale to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the Securities Act, or (iv)
such securities shall cease to be outstanding.

 

“Registration Statement”
means any registration statement of the Company that covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

“Restricted Securities”
means “Restricted Securities” as defined in Rule 144.

 

4

 

“Rule 144” means Rule 144
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.

 

“Rule 144A” means Rule
144A under the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the SEC.

 

“SEC” means the Securities
and Exchange Commission.

 

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

 

“Shelf Registration Statement”
has the meaning set forth in Section 2(a) hereof.

 

“Special Counsel” means
Davis Polk & Wardwell or one such other successor counsel as shall be
specified by the Holders of a majority of the Registrable Securities, but which
may, with the written consent of the Initial Purchaser (which shall not be unreasonably
withheld), be another nationally recognized law firm experienced in securities
law matters designated by the Company, the reasonable fees and expenses of
which will be paid by the Company pursuant to Section 5 hereof.  For purposes of determining the holders of a
majority of the Registrable Securities in this definition, Holders of Notes
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Notes are or would be convertible as of the date the consent
is requested.

 

“Subsequent Shelf Registration
Statement” has the meaning set forth in Section 2(b) hereof.

 

“TIA” means the Trust
Indenture Act of 1939, as amended.

 

“Trustee” means, JPMorgan
Chase Bank, the Trustee under the Indenture.

 

“Underlying Common Stock”
means the Common Stock into which the Notes are convertible or issued upon any
such conversion.

 

Section 2. 
Shelf Registration.  (a)  The
Company shall prepare and file or cause to be prepared and filed with the SEC,
on or before the date (the “Filing Deadline
Date”) ninety (90) days after the Issue Date, a Registration
Statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act (a “Shelf
Registration Statement”) registering the resale from time to time by
Holders thereof of all of the Registrable Securities (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement
shall be on Form S-3 or another appropriate form permitting

 

5

 

registration of such Registrable Securities for resale by such Holders
in accordance with the methods of distribution elected by the Holders and set
forth in the Initial Shelf Registration Statement, subject to the limitations
set forth in Section 8(j).  The
Company shall use its reasonable best efforts to cause the Initial Shelf
Registration Statement to be declared effective under the Securities Act on or
before the date (the “Effectiveness Deadline
Date”) that is one hundred and eighty (180) days after the Issue
Date, and to keep the Initial Shelf Registration Statement (or any Subsequent
Shelf Registration Statement) continuously effective under the Securities Act
until the expiration of the Effectiveness Period.  At the time the Initial Shelf Registration Statement is declared
effective, each Holder that became a Notice Holder on or prior to the date ten
(10) Business Days prior to such time of effectiveness shall be named as a
selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with
applicable law.  None of the Company’s
security holders (other than the Holders of Registrable Securities) shall have
the right to include any of the Company’s securities in the Shelf Registration
Statement.

 

(b)                                 If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement (as
defined below) ceases to be effective for any reason at any time during the
Effectiveness Period (other than because there are no longer any Registrable
Securities outstanding or such Registrable Securities shall have otherwise
ceased to be Registrable Securities), the Company shall use its reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf
Registration Statement”).  If
a Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

 

(c)                                  The Company shall
supplement and amend the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement, if required by the Securities
Act or as reasonably requested by the Initial Purchaser or by the Trustee on
behalf of the Holders of the Registrable Securities covered by such Shelf
Registration Statement to correct any material misstatements or omissions with
respect to any Holder or as necessary to name a Notice Holder as a selling
securityholder in accordance with Section 2(d) below.

 

6

 

(d)                                 Each Holder agrees
that if such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(d) and Section 3(i) of this Agreement.  Following the date that the Initial Shelf
Registration Statement is declared effective, each Holder wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
ten (10) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement.  From and after the date the Initial Shelf Registration Statement
is declared effective, the Company shall, as promptly as practicable after the
date a Notice and Questionnaire is delivered pursuant to Section 8(c), and
in any event upon the later of (x) fifteen (15) Business Days after such date
or (y) fifteen (15) Business Days after the expiration of any Deferral Period
in effect when the Notice and Questionnaire is delivered or put into effect
within fifteen (15) Business Days of such delivery date:

 

(i)             if required by applicable law, file with
the SEC a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that the Holder delivering
such Notice and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of the Registrable
Securities in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its
reasonable best efforts to cause such post-effective amendment to be declared
effective under the Securities Act by the date (the “Amendment Effectiveness Deadline Date”) that is sixty (60)
days after the date such post-effective amendment is required by this clause to
be filed;

 

(ii)          provide such Holder copies of any documents
filed pursuant to Section 2(d)(i); and

 

(iii)       notify such Holder as promptly as practicable
after the effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(d)(i);

 

provided, that if
such Notice and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and Questionnaire and
shall take the actions set forth in clauses (i), (ii) and (iii) above upon
expiration of the Deferral Period in accordance with Section 3(i).  Notwithstanding anything contained herein to
the contrary, (i) the Company shall be under no obligation to name any Holder
that is not a Notice Holder as a selling

 

7

 

securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) Business Days from the expiration of a Deferral Period (and the Company
shall incur no obligation to pay Liquidated Damages during such extension) if
such Deferral Period shall be in effect on the Amendment Effectiveness Deadline
Date.

 

(e)                                  The parties hereto
agree that the Holders of Registrable Securities will suffer damages, and that
it would not be feasible to ascertain the extent of such damages with
precision, if

 

(i)             the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date,

 

(ii)          the Initial Shelf Registration Statement has
not been declared effective under the Securities Act on or prior to the
Effectiveness Deadline Date; provided, that at least one Holder becomes
a Notice Holder prior to the Effectiveness Deadline Date,

 

(iii)       the Company has failed to perform its
obligations set forth in Section 2(d)(i) within the time period required
therein,

 

(iv)      any post-effective amendment to a Shelf
Registration Statement filed pursuant to Section 2(d)(i) has not become
effective under the Securities Act on or prior to the Amendment Effectiveness
Deadline Date, or

 

(v)         the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period
pursuant to Section 3(i) hereof.

 

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an “Event.”  For purposes of this Agreement, each Event
set forth above shall begin and end on the dates set forth in the table set
forth below:

 

	
  Type of Event by

  Clause

  	
   

  	
  Beginning

  Date

  	
   

  	
  Ending

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Filing Deadline Date

  	
   

  	
  the date the Initial Shelf Registration Statement is filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Effectiveness Deadline Date; provided, that at least one Holder
  becomes a Notice Holder prior to the Effectiveness Deadline Date

  	
   

  	
  the date the Initial Shelf Registration Statement becomes effective
  under the Securities Act

  

 

8

 

	
  Type of Event by

  Clause

  	
   

  	
  Beginning

  Date

  	
   

  	
  Ending

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  the date by which the Company is required to perform its obligations
  under Section 2(d)(i)

  	
   

  	
  the date the Company performs its obligations set forth in
  Section 2(d)(i)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  the Amendment Effectiveness Deadline Date

  	
   

  	
  the date the applicable post-effective amendment to a Shelf
  Registration Statement becomes effective under the Securities Act

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  the date on which the aggregate duration of Deferral Periods in any
  period exceeds the number of days permitted by Section 3(i)

  	
   

  	
  termination of the Deferral Period that caused the limit on the
  aggregate duration of Deferral Periods to be exceeded

  

 

Subject to Section 3(i), for purposes of this Agreement, Events
shall begin on the dates set forth in the table above and shall continue until
the ending dates set forth in the table above.

 

Commencing on (and including) any date that an Event has begun (the “Event Date”)
and ending on (but excluding) the next date on which there are no Events that
have occurred and are continuing (a “Damages
Accrual Period”), the Company shall pay, as liquidated damages and
not as a penalty, to Record Holders of Registrable Securities an amount (the “Liquidated Damages Amount”) accruing, for
each day in the Damages Accrual Period, (i) in respect of any Note that is a
Registrable Security, (x) for the first 90 days starting from (and including)
the Event Date, at a rate per annum equal to 0.25% of the aggregate principal
amount of such Note outstanding on the Event Date, and (y) from (and including)
the date immediately following 90 days from (and including) the Event Date, at
a

 

9

 

rate per annum equal to 0.5% of the aggregate principal amount of such
Note outstanding on such date, and (ii) in respect of each share of Underlying
Common Stock that has been issued upon conversion of a Note, (x) for the first
90 days starting from (and including) the Event Date, at a rate per annum equal
to 0.25% of the Conversion Price on the Event Date, and (y) from (and
including) the date immediately following 90 days from (and including) the
Event Date, at a rate per annum equal to 0.5% of the Conversion Price on such
date; provided that in the case
of a Damages Accrual Period that is in effect solely as a result of an Event of
the type described in clause (iii) or (iv) of the preceding paragraph, such
Liquidated Damages Amount shall be paid only to the Holders (as set forth in
the succeeding paragraph) that have delivered Notices and Questionnaires that
caused the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event.  In calculating the Liquidated Damages Amount on any date on which
no Notes are outstanding, the Conversion Price and the Liquidated Damages
Amount shall be calculated as if the Notes were still outstanding.  Notwithstanding the foregoing, no Liquidated
Damages Amount shall accrue as to any Registrable Security from and after the
earlier of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period. 
The rate of accrual of the Liquidated Damages Amount with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events.

 

The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damage Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the
Registrable Securities entitled thereto; provided
that any Liquidated Damages Amount accrued with respect to any Note or portion
thereof redeemed by the Company on a redemption date or converted into
Underlying Common Stock on a conversion date prior to the Damages Payment Date,
shall, in any such event, be paid instead to the Holder who submitted such Note
or portion thereof for redemption or conversion on the applicable redemption
date or conversion date, as the case may be, on such date (or promptly
following the conversion date, in the case of conversion); provided further, that, in the case of an
Event of the type described in clause (iii) or (iv) of the first paragraph of
this Section 2(e), such Liquidated Damages Amount shall be paid only to
the Holders entitled thereto pursuant to such first paragraph by check mailed
to the address set forth in the Notice and Questionnaire delivered by such
Holder.

 

The Trustee shall be entitled, on behalf of registered holders of Notes
or Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of such Liquidated Damages Amount.  Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages. Nothing shall preclude any Holder from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.

 

All of the Company’s obligations set forth in this Section 2(e)
that are outstanding with respect to any Registrable Security at the time such
security

 

10

 

ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

 

The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may
be incurred by Holders of Registrable Securities by reason of the failure of
the Shelf Registration Statement to be filed or declared effective or available
for effecting resales of Registrable Securities in accordance with the
provisions hereof.

 

Section 3. 
Registration Procedures.  In
connection with the registration obligations of the Company under
Section 2 hereof, the Company shall:

 

(a)                                  Prepare and file with
the SEC a Registration Statement or Registration Statements on any appropriate
form under the Securities Act available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof, as specified in writing by the Holders of
Registrable Securities, and use its reasonable best efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided that before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto with the SEC, the Company shall furnish to the Initial
Purchaser and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed and use its reasonable efforts to reflect in
each such document when so filed with the SEC such comments as the Initial
Purchaser or the Special Counsel, if any, reasonably shall propose within three
(3) Business Days of the delivery of such copies to the Initial Purchaser and
the Special Counsel.

 

(b)                                 Prepare and file with
the SEC such amendments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration Statement continuously
effective for the applicable period specified in Section 2(a); cause the
related Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) under the Securities Act; and use its reasonable best efforts to
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all securities covered by such Registration Statement
during the Effectiveness Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement as
so amended or such Prospectus as so supplemented.

 

(c)                                  As promptly as
practicable give notice to the Notice Holders, the Initial Purchaser and the
Special Counsel, (i) when any Prospectus, prospectus supplement, Registration
Statement or post-effective amendment to a Registration Statement has been
filed with the SEC and, with respect to a Registration Statement or any
post-effective amendment, when the same has been declared

 

11

 

effective, (ii) of any request, following the effectiveness of the
Initial Shelf Registration Statement under the Securities Act, by the SEC or
any other federal or state governmental authority for amendments or supplements
to any Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Registration Statement or the initiation or threatening of any proceedings for
that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (v) upon becoming
aware of the occurrence of (but not the nature or details concerning) a
Material Event (provided, that no notice by the Company shall be required to
be given pursuant to this clause (v) in the event that the Company either
promptly files a prospectus supplement to update the Prospectus or a Form 8-K
or other appropriate Exchange Act report that is incorporated by reference into
the Shelf Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such Shelf
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading) and (vi) of the determination by the Company
that a post-effective amendment to a Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in
which event the provisions of Section 3(i) shall apply.

 

(d)                                 Use its reasonable
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case as promptly as practicable, and provide prompt notice to
each Notice Holder and the Initial Purchaser of the withdrawal of any such
order.

 

(e)                                  If reasonably
requested by the Initial Purchaser or any Notice Holder, as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
to a Registration Statement such information as the Initial Purchaser and the
Special Counsel, or such Notice Holder, shall on the basis of a written opinion
of nationally-recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such prospectus supplement or post-effective amendment; provided,
that the Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable written opinion of nationally
recognized counsel for the Company experienced in such matters, in compliance
with applicable law.

 

12

 

(f)                                    As promptly as
practicable furnish to each Notice Holder, the Special Counsel and the Initial
Purchaser, without charge, at least one (1) conformed copy of the Registration
Statement and any amendment thereto, including exhibits and, if requested, all
documents incorporated or deemed to be incorporated therein by reference.

 

(g)                                 During the
Effectiveness Period, deliver to each Notice Holder, the Special Counsel, if
any, and the Initial Purchaser, in connection with any sale of Registrable
Securities pursuant to a Registration Statement, without charge, as many copies
of the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not
been revoked) to the use of such Prospectus or each amendment or supplement
thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto in the manner set forth therein.

 

(h)                                 Prior to any public
offering of the Registrable Securities pursuant to a Registration Statement,
use its reasonable best efforts to register or qualify or cooperate with the
Notice Holders and the Special Counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire); prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable best efforts
to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period in connection with such Notice
Holder’s offer and sale of Registrable Securities pursuant to such registration
or qualification (or exemption therefrom) and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the
relevant Registration Statement and the related Prospectus; provided that the Company will not be
required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Agreement or (ii) take any action that would subject it to general service
of process in suits or to taxation in any such jurisdiction where it is not
then so subject.

 

(i)                                     Upon the Company
becoming aware of (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event
or the existence of any fact (a “Material
Event”) as a result of which any Registration Statement shall
contain any untrue statement of a material fact or

 

13

 

omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (C) the occurrence or existence of any pending or prospective
corporate development that, in the reasonable discretion of the Company, makes
it appropriate to suspend the availability of the Shelf Registration Statement
and the related Prospectus:

 

(i)                           in the case of clause (B)
above, subject to the next sentence, as promptly as practicable prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use its reasonable best efforts to cause it to be declared effective
as promptly as is practicable, and

 

(ii)                        give notice to the Notice
Holders, and the Special Counsel, if any, that the availability of the Shelf
Registration Statement is suspended (a “Deferral
Notice”) and, upon receipt of any Deferral Notice, each Notice
Holder agrees not to sell any Registrable Securities pursuant to the
Registration Statement until such Notice Holder (i) shall have received copies
of the supplemented or amended Prospectus provided for in clause (i) above,
and, if so directed by the Company, such Holder shall deliver to the Company
(at the Company’s expense) all copies, other than permanent file copies, then
in such Holder’s possession of the Prospectus covering such Registrable
Securities at the time of receipt of such notice, or (ii) is advised in writing
by the Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.

 

The Company will use its reasonable best efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of

 

14

 

the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter and (z)
in the case of clause (C) above, as soon as in the reasonable discretion of the
Company, such suspension is no longer appropriate.  The Company shall be entitled to exercise its right under this
Section 3(i) to suspend the availability of the Shelf Registration
Statement or any Prospectus, without incurring or accruing any obligation to
pay liquidated damages pursuant to Section 2(e), for a period not to
exceed 45 days (a “Deferral Period”);
provided that the aggregate
duration of any Deferral Periods shall not exceed 45 days in any three month
period (or 60 days in any three month period in the event of a Material Event
pursuant to which the Company has delivered a second notice as permitted below)
or an aggregate of 90 days for all periods in any twelve (12) month period; provided further that in the case of a
Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay liquidated damages
pursuant to Section 2(e), deliver to Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the Deferral
Period by up to an additional 15 days, or such shorter period of time as is
specified in such second notice.

 

(j)                                     No more than twice
in any 12 month period, if requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration Statement,
make reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Registrable Securities, any
broker-dealers, attorneys and accountants retained by such Notice Holders, and
any attorneys or other agents retained by a broker-dealer engaged by such
Notice Holders, such relevant financial records, corporate documents and other
information as may be reasonably requested by such representative for the
Notice Holders, or any such broker-dealers, attorneys or accountants, in
connection with such disposition as part of a customary “due diligence”
examination and is material to an understanding of the Company and its
subsidiaries taken as a whole; provided that
such persons shall first agree in writing with the Company that any information
that is reasonably and in good faith designated by the Company as confidential
at the time of delivery of such information shall be kept confidential by such
persons and shall be used solely for the purposes of exercising rights under
this Agreement, unless (i) disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law (including
any disclosure requirements pursuant to federal securities laws in connection
with the filing of any Registration Statement or the use of any prospectus
referred to in this Agreement), (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to
safeguard by any such person or (iv) such information becomes

 

15

 

available to any such person from a source other than the Company and
such source is not bound by a confidentiality agreement, and provided further that the foregoing
inspection and information gathering shall, to the greatest extent possible, be
coordinated on behalf of all the Notice Holders and the other parties entitled
thereto by Special Counsel.  Any person
legally compelled to disclose any such confidential information made available
for inspection shall provide the Company with prompt prior written notice of
such requirement so that the Company may seek a protective order or other
appropriate remedy.

 

(k)                                  Comply with all
applicable rules and regulations of the SEC and make generally available to its
securityholders earning statements (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) for a 12-month
period commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Registration Statement, which
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days if the 12-month period coincides with the fiscal
year of the Company.

 

(l)                                     Cooperate with
each Notice Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities sold or to be sold pursuant to
a Registration Statement, which certificates shall not bear any restrictive
legends, and cause such Registrable Securities to be in such denominations as
are permitted by the Indenture and registered in such names as such Notice
Holder may request in writing at least one (1) Business Day prior to any sale of
such Registrable Securities.

 

(m)                               Provide a CUSIP number
for all Registrable Securities covered by each Registration Statement not later
than the effective date of such Registration Statement and provide the Trustee
and the transfer agent for the Common Stock with printed certificates for the
Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.

 

(n)                                 Cooperate and assist
in any filings required to be made with the National Association of Securities
Dealers, Inc and the American Stock Exchange in connection with the sale of the
Registrable Securities pursuant to the Shelf Registration Statement.

 

(o)                                 Upon (i) the filing of
the Initial Shelf Registration Statement and (ii) the effectiveness of the
Initial Shelf Registration Statement, issue a press release announcing the
same, in each case by release to Reuters Economic Services and Bloomberg
Business News or other reasonable means of distribution.

 

Section 4. 
Holder’s Obligations.  Each
Holder agrees, by acquisition of the Registrable Securities, that no Holder
shall be entitled to sell any of such

 

16

 

Registrable Securities pursuant to the Shelf Registration Statement or
to receive a Prospectus relating thereto, unless such Holder has furnished the
Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in
such Notice and Questionnaire) and the information set forth in the next sentence.
 Each Notice Holder agrees promptly to
furnish to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Notice Holder
not misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company may from time to
time reasonably request.  Any sale of
any Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to
or provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.  Each
Holder further agrees not to sell any Registrable Securities pursuant to the
Shelf Registration Statement without delivering, or causing to be delivered, a
Prospectus to the purchaser thereof and, following termination of the
Effectiveness Period, to notify the Company, within ten (10) Business Days of a
request by the Company, of the amount of Registrable Securities sold pursuant
to the Shelf Registration Statement and, in the absence of a response, the
Company may assume that all of the Holder’s Registrable Securities were so
sold.  Each Holder of Registrable
Securities agrees that upon receipt of any Deferral Notice from the Company,
such Holder shall forthwith discontinue (and cause any placement or sales agent
or underwriters acting on their behalf to discontinue) the disposition of
Registrable Securities pursuant to the registration statement applicable to
such Registrable Securities until such Holder (i) shall have received copies of
such amended or supplemented Prospectus and, if so directed by the Company,
such Holder shall deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies, then in such Holder’s possession of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice or (ii) shall have received notice from the Company that the disposition
of Registrable Securities pursuant to the Shelf Registration Statement may
continue.

 

Section 5. 
Registration Expenses.  The
Company shall bear all fees and expenses incurred in connection with the
performance by the Company of its obligations under Sections 2 and 3 of this
Agreement whether or not any Registration Statement is declared effective.  Such fees and expenses shall include,
without limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (x) with respect to filings required to be made
with the National

 

17

 

Association of Securities Dealers, Inc. and the American Stock Exchange
and (y) of compliance with federal and state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of the
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as Notice Holders of a majority
of the Registrable Securities being sold pursuant to a Registration Statement
may designate), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities in a form eligible for
deposit with The Depository Trust Company), (iii) duplication expenses relating
to copies of any Registration Statement or Prospectus delivered to any Holders
hereunder, (iv) fees and disbursements of counsel for the Company and the
Special Counsel in connection with the Shelf Registration Statement, (v)
reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock and (vi) any Securities Act
liability insurance obtained by the Company in its sole discretion.  In addition, the Company shall pay the
internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing by the Company of the Registrable Securities on any securities
exchange on which similar securities of the Company are then listed and the
fees and expenses of any person, including special experts, retained by the
Company.  Notwithstanding the foregoing,
the Holders of the Registrable Securities being registered shall pay all
placement agent fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than the counsel and experts specifically
referred to above.

 

Section 6.  Indemnification And Contribution.

 

(a)                                  The Company agrees to
indemnify and hold harmless each Notice Holder, each person, if any, who
controls any Notice Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of
any Notice Holder within the meaning of Rule 405 under the Securities Act
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
(collectively, “Losses”) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as
such Losses are caused by any such untrue statement or omission or alleged
untrue statement or omission

 

18

 

based upon information relating to any Notice Holder furnished to the
Company in writing by or on behalf of such Notice Holder expressly for use
therein; provided, however, that the foregoing indemnity with respect
to any Registration Statement shall not inure to the benefit of any Notice
Holder from whom the person asserting any such Losses, or any person
controlling or who is an affiliate of such Notice Holder, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Notice Holder to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Registrable Security to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such Losses, unless
such failure is the result of noncompliance by the Company with Section 2(d)
hereof.

 

(b)                                 Indemnification by Notice Holders.  Each Notice Holder agrees severally and not
jointly to indemnify and hold harmless the Company, the directors of the
Company, the officers of the Company who sign the Registration Statement, and
each person, if any, who controls the Company (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act)
or any other Notice Holder, to the same extent as the foregoing indemnity from
the Company to such Notice Holder, but only with reference to information
relating to such Notice Holder furnished to the Company in writing by or on
behalf of such Notice Holder expressly for use in such Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.

 

(c)                                  Conduct of Indemnification Proceedings.  In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 6(a) or 6(b) hereof,
such person (the “indemnified party”)
shall promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding.  In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.  It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be

 

19

 

liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties, and that all
such fees and expenses shall be reimbursed as they are incurred.  Such firm shall be designated in writing by,
in the case of parties indemnified pursuant to Section 6(a), the Notice
Holders of a majority (with Notice Holders of Notes deemed to be the Notice
Holders, for purposes of determining such majority, of the number of shares of
Underlying Common Stock into which such Notes are or would be convertible as of
the date on which such designation is made) of the Registrable Securities
covered by the Registration Statement held by Notice Holders that are
indemnified parties pursuant to Section 6(a), and in the case of parties
indemnified pursuant to Section 6(b), by the Company.  The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 90 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement (other than reimbursement for fees
and expenses that the indemnifying party is contesting in good faith). No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.

 

(d)                                 Contribution.  To the extent that the indemnification provided for in
Section 6(a) or 6(b) is unavailable to an indemnified party or
insufficient in respect of any Losses referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements

 

20

 

or omissions that resulted in such Losses, as well as any other
relevant equitable considerations.  The
relative benefits received by the Company shall be deemed to be equal to the
total net proceeds from the initial placement pursuant to the Purchase
Agreement (before deducting expenses) of the Registrable Securities to which
such Losses relate.  The relative
benefits received by any Notice Holder shall be deemed to be equal to the value
of receiving the Registrable Securities that are registered under the
Securities Act.  The relative fault of
the Notice Holders on the one hand and the Company on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Notice Holders or
by the Company, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The Notice Holders’
respective obligations to contribute pursuant to this Section 6 are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.

 

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified party as a result of
the Losses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding this Section 6, no indemnifying party that
is a selling Notice Holder shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities sold
by it and distributed to the public exceeds the amount of any damages that such
indemnifying party has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.  The
remedies provided for in this Section 6 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

 

(e)                                  The indemnity,
contribution and expense reimbursement obligations of the parties hereunder
shall be in addition to any liability any indemnified party may otherwise have
hereunder, under the Purchase Agreement or otherwise.

 

(f)                                    The indemnity and
contribution provisions contained in this Section 6 shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Notice Holder,
any person controlling any Notice Holder or any affiliate of any

 

21

 

Notice Holder or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) the sale of any
Registrable Securities by any Notice Holder.

 

Section 7. 
Information Requirements.  The
Company covenants that, if at any time before the end of the Effectiveness
Period the Company is not subject to the reporting requirements of the Exchange
Act, it will cooperate with any Holder and take such further reasonable action
as any Holder may reasonably request in writing (including, without limitation,
making such reasonable representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act and customarily taken in connection with sales
pursuant to such exemptions.  Upon the
written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company’s most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act.  Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of
its securities (other than the Underlying Common Stock) under any
section of the Exchange Act.

 

Section 8. 
Miscellaneous.

 

(a)                                  No Conflicting Agreements.  The Company is not, as of the date hereof, a party to,
nor shall it, on or after the date of this Agreement, enter into, any agreement
with respect to its securities that conflicts with the rights granted to the
Holders in this Agreement.  The Company
represents and warrants that the rights granted to the Holders hereunder do not
in any way conflict with the rights granted to the holders of the Company’s
securities under any other agreements.

 

(b)                                 Amendments and Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of a majority of
the then outstanding Underlying Common Stock constituting Registrable
Securities (with Holders of Notes deemed to be the Holders, for purposes of
this Section, of the number of outstanding shares of Underlying Common Stock
into which such Notes are or would be convertible as of the date on which such
consent is requested).  Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders may be given by Holders
of at least a majority of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement; provided
that the provisions of this sentence may not be amended,

 

22

 

modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. 
Notwithstanding the foregoing two sentences, this Agreement may be
amended by written agreement signed by the Company and the Initial Purchaser,
without the consent of the Holders of Registrable Securities, to cure any
ambiguity or to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provision contained herein, or to
make such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Securities.  Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 8(b), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.

 

(c)                                  Notices. 
All notices and other communications provided for or permitted hereunder
shall be made in writing by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by a recognized overnight courier,
or (iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows:

 

(i)                           if to a Holder, at the most
current address given by such Holder to the Company in a Notice and Questionnaire
or any amendment thereto;

 

(ii)                        if to the Company, to:

 

Sepracor Inc. 

84 Waterford Drive

Marlborough, MA 01752

Attention: Robert Scumaci

Telecopy No.: (508) 357-7494

 

and

 

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 021091

Attention: Mark G. Borden, Esq.

Telecopy No.: (617) 526-5000

 

23

 

(iii)       if to the Initial Purchaser, to:

 

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Attention: Global Capital Markets

Telecopy No.: (212) 761-0538

 

or to such other address as such person may
have furnished to the other persons identified in this Section 8(c) in
writing in accordance herewith.

 

(d)                                 Approval of Holders.  Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchaser
or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

 

(e)                                  Successors and Assigns.  Any person who purchases any Registrable Securities
from the Initial Purchaser shall be deemed, for purposes of this Agreement, to
be an assignee of the Initial Purchaser. 
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties and shall inure to the benefit of
and be binding upon each Holder of any Registrable Securities, provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture.  If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities, such
person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

 

(f)                                    Counterparts.  This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be original and all of which taken together shall constitute
one and the same agreement.

 

(g)                                 Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 

24

 

(h)                                 Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

 

(i)                                     Severability.  If any term provision, covenant or restriction of this Agreement
is held to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, and the parties hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

 

(j)                                     Entire Agreement.  This Agreement is intended by the parties as
a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities.  Except as provided in the Purchase
Agreement, there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the Registrable
Securities.  This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights.  No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement.  In no event
will such methods of distribution take the form of an underwritten offering of
the Registrable Securities without the prior written agreement of the Company.

 

(k)                                  Termination.  This
Agreement and the obligations of the parties hereunder shall terminate upon the
end of the Effectiveness Period, except for any liabilities or obligations
under Section 4, 5 or 6 hereof and the obligations to make payments of and
provide for liquidated damages under Section 2(e) hereof to the extent
such damages accrue prior to the end of the Effectiveness Period, each of which
shall remain in effect in accordance with its terms.

 

25

 

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

 

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Southwell

  	
   

  
	
   

  	
   

  	
  Name:  David P. Southwell

  	
   

  
	
   

  	
   

  	
  Title:  Chief Financial
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Confirmed and accepted as of the date first
  above

  written:

  MORGAN STANLEY & CO. INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Kenneth G. Potts

  	
   

  
	
   

  	
  Name:  Kenneth G. Potts

  
	
   

  	
  Title:  Managing Director

  
						

 

26

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