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Exhibit 4.1    
    

ISOLAGEN, INC.,

as Issuer  

 THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee  

 INDENTURE  

 Dated as of November 3, 2004  

 3.5% CONVERTIBLE SUBORDINATED NOTES DUE 2024  

 

        INDENTURE, dated as of November 3, 2004, between Isolagen, Inc., a corporation duly organized and
existing under the laws of the State of Delaware, having its principal office at 2500 Wilcrest, 5th Floor, Houston, Texas 77042 (herein called the
"Company"), and The Bank of New York Trust Company, N.A., a national banking association, as Trustee hereunder (herein called the
"Trustee"). 

RECITALS OF THE COMPANY  

        The Company has duly authorized the creation of an issue of its 3.5% Convertible Subordinated Notes due 2024 (herein called the
"Securities"), of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture. 

        All
things necessary to make the Securities, when the Securities are executed by the Company and authenticated and delivered hereunder, the valid and legally binding obligations of the
Company and to make this Indenture a valid and legally binding agreement of the Company, in accordance with their and its terms, have been done. Further, all things necessary to duly authorize the
issuance of shares of common stock of the Company issuable upon the conversion of the Securities, and to duly reserve for issuance the number of shares of Common Stock issuable upon such conversion,
have been done. 

        NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION  

        SECTION 1.1 Definitions.

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

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

        (b)   all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States;
and 

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

        "Act," when used with respect to any Holder of a Security, has the meaning specified in  Section 1.4. 

        "Additional Interest" has the meaning specified in the Registration Rights Agreement. 

        "Additional Interest Notice" has the meaning specified in Section 3.1. 

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

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        "Aggregate Amount" has the meaning specified in Section 10.4(e). 

        "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, to the extent applicable to such transaction and as in effect from time to time. 

        "Authenticating Agent" means any Person authorized pursuant to Section 5.12 to act
on behalf of the Trustee to authenticate Securities. 

        "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. 

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

        "Business Day," when used with respect to any Place of Payment, Place of Conversion or any other place, as the case may be, means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in such Place of Payment, Place of Conversion or other place, as the case may be, are authorized or
obligated by law or executive order to close; provided, however, that a day on which banking
institutions in New York, New York are authorized or obligated by law or executive order to close shall not be a Business Day for purposes of  Section 9.6 or Section 10.5. 

        "Capital Stock" of any Person means any and all shares, interests, participations or other equivalents (however designated) of capital
stock of such Person and all warrants or options to acquire such capital stock. 

        "Cash Equivalents" means (1) securities issued or directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not
more than six months from the date of acquisition, (2) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500 million and a
Thompson Bank Watch Rating of "B" or better, (3) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (1) above
entered into with any financial institution meeting the qualifications specified in clause (2) above, (4) commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Ratings Services and in each case maturing within six months after the date of acquisition and (5) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (1)-(4) of this definition. 

        "Change in Control" means the occurrence at any time, after the original issuance of the Securities, of any of the following events: 

        (1)   any
Person or group (defined in accordance with Section 13(d)(3) of the Exchange Act) acquires beneficial ownership (determined in accordance with
Rule 13d-3 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company's Capital
Stock entitling that Person to exercise more than 50% of the total voting power of all shares of the Company's Capital Stock entitled to vote generally in elections of directors, provided that any
acquisition or ownership by the Company, its subsidiaries or its employee benefit plans will not trigger this provision; 

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        (2)   the
Company consolidates with, or merges with or into, any other Person or another Person merges into the Company, except if the transaction satisfies any of the
following: 

        (a)   the
transaction is a merger (A) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Company's Capital
Stock and (B) pursuant to which holders of the Common Stock immediately prior to the transaction have, directly or indirectly, 50% or more of the total voting power of all shares of Capital
Stock or other ownership interest in the continuing or surviving person entitled to vote generally in elections of directors of the continuing or surviving person immediately after the transaction; 

        (b)   the
transaction is a merger effected only to change the Company's jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding
shares of the Common Stock only into shares of Common Stock of the Company or another corporation; or 

        (c)   all
of the consideration for the Common Stock (excluding cash payments in lieu of fractional shares and cash payments made in respect of dissenters' appraisal rights) in
the transaction or transactions constituting a change in control consists of common stock traded on a U.S. national securities exchange or quoted on the Nasdaq National Market, or which will be so
traded or quoted when issued or exchanged in connection with the change in control, and as a result of such transaction or transactions the notes become convertible solely into such common stock; 

        (3)   the
Company conveys, transfers, sells, leases or otherwise disposes of all or substantially all of its assets to another person; 

        (4)   during
any consecutive two-year period, individuals who at the beginning of that two-year period constituted the Board of Directors (together
with any new directors whose election to the Board of Directors, or whose nomination for election by stockholders, was approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then
in office; or 

        (5)   the
Company's stockholders pass a resolution approving a plan of liquidation or dissolution and no additional approvals of stockholders are required under applicable law
to cause a liquidation or dissolution. 

        "Closing Sale Price" means the price of a share of Common Stock on the relevant date, determined (a) on the basis of the closing
per share sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on
such date on the U.S. principal securities exchange on which the Common Stock is listed; or (b) if the Common Stock is not listed on a U.S. national securities exchange, as reported by the
National Association of Securities Dealers Automated Quotation System; or (c) if not so quoted, as reported by National Quotation Bureau, Incorporated or a similar organization. In the absence
of a quotation, the Closing Sale Price shall be such price as the Company shall reasonably determine on the basis of such quotations as most accurately reflecting the price that a fully informed
buyer, acting on his own accord, would pay to a fully informed seller, acting on his own accord in an arms-length transaction, for a share of such Common Stock. 

        "Code" has the meaning specified in Section 2.1. 

        "Commission" means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such
duties at such time. 

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        "Common Stock" means the shares of the class designated as common stock of the Company at the date of this Indenture or as such stock may
be reconstituted from time to time. Subject to the provisions of Section 10.11, shares issuable on conversion or repurchase of Securities shall
include only shares of Common Stock or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof;  provided, however, that if at any time there shall be more than one such resulting class, the shares so
issuable on conversion of Securities shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion that the total number of
shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. 

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

        "Company Notice" has the meaning specified in Article Twelve. 

        "Company Request" or "Company Order" means a written request or order signed in the name
of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its President or a Vice President, and by its principal financial officer, Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. 

        "Constituent Person" has the meaning specified in Section 10.11. 

        "Conversion Agent" means any Person authorized by the Company to convert Securities in accordance with Article
Ten. The Company has initially appointed the Trustee as its Conversion Agent. 

        "Conversion Price" means the amount equal to U.S. $1,000 divided by the Conversion Rate. 

        "Conversion Rate" has the meaning specified in Section 10.1. 

        "Conversion Shares" has the meaning specified in Section 10.4(c). 

        "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 600 North Pearl Street, Suite 420, Dallas, Texas 75201, Attn: Corporate Trust Administration (Isolagen, Inc.)). 

        "Corporation" means a corporation, company, association, joint-stock company or business trust. 

        "Current Market Price" has the meaning specified in Section 10.4(h). 

        "Defaulted Interest" has the meaning specified in Section 2.8. 

        "Depositary" means, with respect to any Registered Securities, a clearing agency that is registered as such under the Exchange Act and is
designated by the Company to act as Depositary for such Registered Securities (or any successor securities clearing agency so registered). 

        "Designated Senior Debt" means the Company's obligations under any particular Senior Debt 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 indebtedness shall be "Designated Senior Debt" for
purposes of this Indenture (provided that such instrument, agreement or other document may place limitations and conditions on the right of such Senior
Debt to exercise the rights of Designated Senior Debt). 

        "Determination Date" has the meaning specified in Section 10.4(h). 

        "Distribution Date" has the meaning specified in Section 10.4(c). 

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

        "DTC" means The Depository Trust Company, a New York corporation. 

        "Effective Date" has the meaning specified in Section 12.5. 

        "Event of Default" has the meaning specified in Section 4.1. 

        "Exchange Act" means the United States Securities Exchange Act of 1934 (or any successor statute), as amended from time to time. 

        "Expiration Date" has the meaning specified in Section 10.4(e). 

        "Expiration Time" has the meaning specified in Section 10.4(e). 

        "Fundamental Change" means the occurrence at any time, after the original issuance of the Securities, of a Change in Control or
Termination of Trading. 

        "Fundamental Change Purchase Date" has the meaning specified in Section 12.5. 

        "Fundamental Change Purchase Notice" has the meaning specified in Section 12.5. 

        "Fundamental Change Purchase Price" has the meaning specified in Section 12.5. 

        "Global Security" means a Registered Security that is registered in the Security Register in the name of a Depositary or a nominee
thereof. 

        "Holder" means the Person in whose name the Security is registered in the Security Register. 

        "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. 

        "Initial Purchasers" means CIBC World Markets Corp., UBS Securities LLC and Adams Harkness, Inc. 

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

        "Make-Whole Premium" has the meaning specified in Section 12.5. 

        "Maturity," when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, exercise of the repurchase right set forth in Article
Twelve or otherwise. 

        "Member" means any member of, or participant in, the Depositary. 

        "Non-electing Share" has the meaning specified in Section 10.11. 

        "Notice of Default" has the meaning specified in Section 4.1. 

        "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and by the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee. 

        "Opinion of Counsel" means a written opinion of counsel, who may be counsel for or employed by the Company. 

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

        (1)   Securities
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; 

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

        (3)   Securities
that have been paid pursuant to Section 2.7 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; 

provided, however, that in determining whether the Holders of the requisite principal amount of
Outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such determination as to the presence of a quorum or upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor. 

        "Paying Agent" means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company
and, except as otherwise specifically set forth herein, such term shall include the Company if it shall act as its own Paying Agent. The Company has initially appointed the Trustee as its Paying
Agent. 

        "Payment Blockage Notice" has the meaning specified in Section 11.2. 

        "Person" means any individual, Corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated
organization or government or any agency or political subdivision thereof. 

        "Place of Conversion" has the meaning specified in Section 2.2. 

        "Place of Payment" has the meaning specified in Section 2.2. 

        "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.7 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. 

        "Purchase Agreement" means the Purchase Agreement, dated as of October 28, 2004, among the Company and the Initial Purchasers, as
such agreement may be amended from time to time. 

        "Purchased Shares" has the meaning specified in Section 10.4(e). 

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        "Purchasers" has the meaning specified in Section 9.9. 

        "Record Date" means any Regular Record Date or Special Record Date. 

        "Record Date Period" means the period from the close of business of any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date. 

        "Redemption Date" has the meaning specified in Section 12.2. 

        "Redemption Notice" has the meaning specified in Section 12.2. 

        "Redemption Price" has the meaning specified in Section 12.1. 

        "Registered Securities" has the meaning specified in Section 2.1. 

        "Registrable Securities" has the meaning specified in the Registration Rights Agreement. 

        "Registration Default" has the meaning specified in the Registration Rights Agreement. 

        "Registration Rights Agreement" means the Registration Rights Agreement, dated the date hereof, by and among the Company and the Initial
Purchasers. 

        "Regular Record Date" for interest payable in respect of any Registered Security on any Interest Payment Date means the April 15
and the October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 

        "Representative" means (1) the indenture trustee or other trustee, agent or representative for any Designated Senior Debt or
(2) with respect to Designated Senior Debt that does not have any such trustee, agent or other representative, (A) in the case of such Designated Senior Debt issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of such Designated Senior Debt, any holder or owner of such Designated Senior Debt acting with the consent of the required
Persons necessary to bind such holders or owners of such Designated Senior Debt and (B) in the case of all other such Designated Senior Debt, the holder or owner of such Designated Senior Debt. 

        "Repurchase Date" has the meaning specified in Section 12.1. 

        "Repurchase Price" has the meaning specified in Section 12.1. 

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

        "Restricted Global Security" has the meaning specified in Section 2.1. 

        "Restricted Securities Legend" means, collectively, the legends substantially in the forms of the legends required in the form of Security
attached hereto as Exhibit A to be placed upon each Security. 

        "Rights" has the meaning specified in Section 10.4(c). 

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

        "Rule 144A Information" has the meaning specified in Section 8.6. 

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

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        "Securities Act" means the United States Securities Act of 1933 (or any successor statute), as amended from time to time. 

        "Security Register" and "Security Registrar" have the respective meanings specified in  Section 2.6.

        "Senior Debt" means the principal of (and premium, if any) and 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) on, and rent payable on or in connection with, and
all fees, costs, claims, expenses and other amounts payable in connection with, the following, whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of
this Indenture or thereafter created, incurred or assumed: (1) all the Company's indebtedness evidenced by a credit or loan agreement, note, bond, debenture, or other similar instrument whether
or not the recourse of the lender is to all of the Company's assets or only to a portion, (2) all of the Company's indebtedness, obligations and other liabilities, contingent or otherwise, for
borrowed money, including, without limitation, overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements and any loans or advances from banks, whether
or not evidenced by notes or similar instruments, or bonds, debentures, notes or similar instruments, whether or not the recourse of the lender is to all of the Company's assets or only to a portion
thereof, (3) all of the Company's obligations as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles, (4) all
of the Company's obligations and other liabilities, contingent or otherwise, under any lease or related document, including a purchase agreement, in connection with the lease of real property or
improvements, or any personal property included as part of any such lease, which provides that the Company is contractually obligated to purchase or cause a third party to purchase the leased property
and thereby guarantee a residual value of leased property to the lessor and all of the Company's obligations under such lease or related document to purchase or cause a third party to purchase the
leased property, whether or not such lease transaction is characterized as an operating lease or capitalized lease in accordance with generally accepted accounting principles, (5) all of the
Company's obligations under interest rate and currency swaps, caps, floors, collars, hedge agreements, forward contracts, or similar agreements or arrangements, (6) all of the Company's
obligations with respect to letters of credit, bank guarantees, bankers' acceptances and similar facilities, including related reimbursement obligations, (7) all of the Company's obligations
issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business), (8) all of
the Company's obligations of the type referred to in clauses (1) through (7) above of another Person and all dividends of another Person, the payment of which, in either case, the
Company has
assumed or guaranteed or for which the Company is responsible or liable, directly or indirectly, jointly or severally, as obligor, guarantor or otherwise or which is secured by a lien on the Company's
property and (9) renewals, extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange for, any such indebtedness or obligation
described in clauses (1) through (8) of this definition; provided, however, that Senior
Debt shall not include (a) the Securities or (b) any indebtedness or obligation if the terms of such indebtedness or obligation (or the terms of the instrument under which such
indebtedness or obligation is issued) expressly provides that such indebtedness or obligation is not superior in right of payment to the Securities; and  provided, further, that Senior Debt shall not include accounts payable or other accrued liabilities or
obligations incurred in the ordinary course of business in connection with the obtaining of materials or services and any indebtedness or obligation that the Company may owe to any direct or indirect
Subsidiary. 

        "Shelf Registration Statement" has the meaning specified in the Registration Rights Agreement. 

        "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Company pursuant to  Section 2.8. 

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        "Stated Maturity," when used with respect to any Security or any installment of interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. 

        "Stock Price" has the meaning specified in Section 12.5. 

        "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 or other similar interests in the
corporation that ordinarily has or have voting power for the election of directors or Persons performing similar functions, whether at all times or only so long as no senior class of stock or other
interests has or have such voting power by reason of any contingency. 

        "Successor Security" of any particular Security means every Security issued after, and evidencing all or a portion of the same debt as
that evidenced by, such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.7
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. 

        "Termination of Trading" means the occurrence at any time, after the original issuance of the Securities, of an event or condition as a
result of which the Common Stock (or other Common Stock into which the Securities are then convertible) is neither listed for trading on a U.S. national securities exchange nor approved for trading on
an established automated over-the-counter market in the United States. 

        "Third Party Aggregate Amount" has the meaning specified in Section 10.4(f). 

        "Third Party Expiration Date" has the meaning specified in Section 10.4(f). 

        "Third Party Expiration Time" has the meaning specified in Section 10.4(f). 

        "Third Party Purchased Shares" has the meaning specified in Section 10.4(f). 

        "Trading Days" means (1) if the Common Stock is listed or admitted for trading on any national securities exchange, days on which
such national securities exchange is open for business; (2) if the Common Stock is quoted on the Nasdaq National Market or any other system of automated dissemination of quotations of
securities prices, days on which trades may be effected through such system; or (3) if the Common Stock is not listed or admitted for trading on any national securities exchange or quoted on
the Nasdaq National Market or any other system of automated dissemination of quotation of securities prices, days on which the Common Stock is traded regular way in the
over-the-counter market and for which a closing bid and a closing asked price for the Common Stock are available. 

        "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed;  provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. 

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

        "Underlying Shares" has the meaning specified in Section 10.4(b). 

        "United States" means the United States of America (including the several States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction (its "possessions" 

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including
Puerto Rico, the United States Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands). 

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

        SECTION 1.2 Compliance Certificates and Opinions.

        Upon
any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and, if required by the Trust Indenture Act, an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate
or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: 

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

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

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

        (d)   a
statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with; provided,
however, with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials. 

        SECTION 1.3 Form of Documents Delivered to the Trustee.

        In
any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. 

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

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

10

 

        SECTION 1.4 Acts of Holders of Securities.

        (a)   Any
request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of
Securities may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent or proxy duly appointed in writing by such
Holders. Such action shall become effective when such instrument or instruments is delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly
deliver to the Company copies of all such instruments delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders of Securities signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to  Section 5.1) conclusive in favor of the Trustee and the
Company if made in the manner provided in this  Section 1.4. 

        (b)   The
fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. 

        (c)   The
principal amount and serial number of any Registered Security held by any Person, and the date of his holding the same, shall be proved by the Security Register. 

        (d)   The
fact and date of execution of any such instrument or writing and the authority of the Person executing the same may also be proved in any other manner that the
Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this  Section 1.4. 

        (e)   The
Company may set any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or permitted by this Indenture to be given or taken by Holders. Promptly and in any case not later than ten days after setting a
record date, the Company shall notify the Trustee and the Holders of such record date. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the thirtieth day (or, if later, the date of the most recent list of Holders required
to be provided pursuant to Section 14.1) prior to such first solicitation or vote, as the case may be. With regard to any record date, the
Holders on such date (or their duly appointed agents or proxies), and only such Persons, shall be entitled to give or take, or vote on, the relevant action, whether or not such Holders remain Holders
after such record date. Notwithstanding the foregoing, the Company shall not set a record date for, and the provisions of this paragraph shall not apply with respect to, any notice, declaration or
direction referred to in the next paragraph. 

        Upon
receipt by the Trustee from any Holder of (1) any notice of default or breach referred to in Section 4.1(d), if such
default or breach has occurred and is continuing and the Trustee shall not have given such a notice to the Company, (2) any declaration of acceleration referred to in  Section 4.2, if an Event
of Default has occurred and is continuing and the Trustee shall not have given such a declaration to the Company, or
(3) any direction referred to in Section 4.12, if the Trustee shall not have taken the action specified in such direction, then, with
respect to clauses (2) and (3), a record date shall automatically and without any action by the Company or the Trustee be set for determining the Holders entitled to join in such declaration or
direction, which record date shall be the close of business on the tenth day (or, if such day is not a Business Day, the next succeeding Business Day) 

11

 

following
the day on which the Trustee receives such declaration or direction, and, with respect to clause (1), the Trustee may set any day as a record date for the purpose of determining the
Holders entitled to join in such notice of default. Promptly after such receipt by the Trustee of any such declaration or direction referred to in clause (2) or (3), and promptly after setting
any record date with respect to clause (1), and as soon as practicable thereafter, the Trustee shall notify the Company and the Holders of any such record date so fixed. The Holders on such
record date (or their duly appointed agents or proxies), and only such Persons, shall be entitled to join in such notice, declaration or direction, whether or not such Holders remain Holders after
such record date; provided, however, that, unless such notice, declaration or direction shall have
become effective by virtue of Holders of the requisite principal amount of Securities on such record date (or their duly appointed agents or proxies) having joined therein on or prior to the ninetieth
day after such record date, such notice, declaration or direction shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall be
construed to prevent a Holder (or a duly appointed agent or proxy thereof) from giving, before or after the expiration of such 90-day period, a notice, declaration or direction contrary to
or different from, or, after the expiration of such period, identical to, the notice, declaration or direction to which such record date relates, in which event a new record date in respect thereof
shall be set pursuant to this paragraph. In addition, nothing in this paragraph shall be construed to render ineffective any notice, declaration or direction of the type referred to in this paragraph
given at any time to the Trustee and the Company by Holders (or their duly appointed agents or proxies) of the requisite principal amount of Securities on the date such notice, declaration or
direction is so given. 

        (f)    Except
as provided in Sections 4.2 and 4.13, any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security. 

        SECTION 1.5 Notices, Etc., to Trustee and Company.

        Any
request, demand, authorization, direction, notice, consent, election, waiver or other Act of Holders of Securities or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with, 

        (a)   the
Trustee by any Holder of Securities or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the
Trustee and received at the Corporate Trust Office, Attention: Corporate Trust Administration, and shall be deemed given when received, 

        (b)   the
Company by the Trustee or by any Holder of Securities shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing,
mailed, first-class postage prepaid, or telecopied and confirmed by mail, first-class postage prepaid, or delivered by hand or overnight courier, addressed to the Company at 2500 Wilcrest,
5th Floor, Houston, Texas 77042, Attention: Robert Bitterman (telecopy no.: (713) 781-9396), or at any other address previously furnished in writing to the Trustee by
the Company, and shall be deemed given when received. 

        Any
request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication. 

        SECTION 1.6 Notice to Holders of Securities; Waiver.

        Except
as otherwise expressly provided herein, where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given to Holders if in
writing and mailed, 

12

 

first-class
postage prepaid, to each Holder of a Security affected by such event, at the address of such Holder as it appears in the Security Register, not earlier than the earliest date and not later
than the latest date prescribed for the giving of such notice. 

        Neither
the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail,
then such notification to Holders of Registered Securities as shall be made with the approval of the Trustee, which approval shall not be unreasonably withheld or delayed, shall constitute a
sufficient notification to such Holders for every purpose hereunder. 

        Such
notice shall be deemed to have been given when such notice is mailed. 

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

        SECTION 1.7 Effect of Headings and Table of Contents.

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

        SECTION 1.8 Successors and Assigns.

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

        SECTION 1.9 Separability Clause.

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

        SECTION 1.10 Benefits of Indenture.

        Except
as provided in the next sentence, nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors
and assigns hereunder and the Holders of Securities, any benefit or legal or equitable right, remedy or claim under this Indenture. The provisions of Article
Eleven are intended to be for the benefit of, and shall be enforceable directly by, the holders of Senior Debt. 

        SECTION 1.11 Governing Law.

        THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA,
INCLUDING, WITHOUT LIMITATION, THE NEW YORK GENERAL OBLIGATIONS LAW §5-1401.

        SECTION 1.12 Legal Holidays.

        In
any case where any Interest Payment Date, Redemption Date, Repurchase Date or Stated Maturity of any Security or the last day on which a Holder of a Security has a right to convert
his Security shall not be a Business Day at a Place of Payment or Place of Conversion, as the case may be, then (notwithstanding any other provision of this Indenture or of the Securities) payment of
principal of, premium, if any, or interest (including Additional Interest, if any) on, or the payment of the 

13

 

Repurchase
Price (whether the same is payable in cash or in shares of Common Stock or otherwise) with respect to, or delivery for conversion of, such Security need not be made at such Place of Payment
or Place of Conversion, as the case may be, on or by such day, but may be made on or by the next succeeding Business Day at such Place of Payment or Place of Conversion, as the case may be, with the
same force and effect as if made on the Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated Maturity or by such last day for conversion;  provided, however, that in the case that payment is made on such succeeding Business Day, no interest
shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date, Repurchase Date, Stated Maturity or last day for conversion, as the case may be. 

        SECTION 1.13 Conflict with Trust Indenture Act.

        If
any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be. Until such time as this Indenture shall be qualified under the Trust Indenture Act, this Indenture, the Company and the
Trustee shall be deemed for all purposes hereof to be subject to and governed by the Trust Indenture Act to the same extent as would be the case if this Indenture were so qualified on the date hereof. 

        SECTION 1.14 Counterparts.

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

ARTICLE TWO

THE SECURITIES  

        SECTION 2.1 Form Generally.

        The
Securities and the Trustee's Certificate of Authentication shall be in substantially the form set forth in Exhibit A hereto,
which Exhibit is a part of this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or the Internal Revenue Code of 1986, as
amended, and regulations thereunder (the "Code"), or as may, consistently herewith, be determined by the officers executing such Securities, as
evidenced by their execution thereof. All Securities shall be issued in registered form, as opposed to bearer form, and shall sometimes be referred to as the "Registered
Securities." 

        The
Securities shall be printed, lithographed, typewritten or engraved or produced by any combination of these methods on steel engraved borders, if so required by any securities
exchange upon which the Securities may be listed, or may be produced in any other manner permitted by the rules of any such securities exchange, or, if the Securities are not listed on a securities
exchange, in any other manner approved by the Company, all as determined by the officers executing such Securities, as evidenced by their execution thereof. 

        Upon
their original issuance, Securities shall be issued in the form of one or more Global Securities without interest coupons and shall be registered in the name of DTC, as Depositary,
or its nominee and deposited with the Trustee, as custodian for DTC, for credit by DTC to the respective accounts of beneficial owners of the Securities represented thereby (or such other accounts as
they may direct). Such Global Security, together with its Successor Securities that are Global Securities, are collectively herein called the "Restricted Global
Security." 

14

  

        SECTION 2.2 Title and Terms.

        The
aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is limited to U.S.$75,000,000 (or such greater amount necessary to reflect
exercise of the Initial Purchasers' option to purchase additional Securities in compliance with the Purchase Agreement, but not in excess of U.S.$90,000,000), except for Securities authenticated and
delivered in exchange for, or in lieu of, other Securities pursuant to Section 2.5, 2.6,  2.7,
7.5, 9.8 or  10.2. 

        The
Securities shall be known and designated as the "3.5% Convertible Subordinated Notes due 2024" of the Company. Their Stated Maturity shall be November 1, 2024 and they shall
bear interest on their principal amount from November 3, 2004, payable semiannually in arrears on May 1 and November 1 in each year, commencing May 1, 2005, at the rate of
3.5% per annum until the principal thereof is due and at the rate then in effect on any overdue principal and, to the extent permitted by law, on any overdue interest;  provided, however, that payments shall only be made on Business Days as provided in  Section 1.12. 

        The
principal of, premium, if any, and interest (including Additional Interest, if any) on the Securities shall be payable as provided in the form of Securities attached hereto as  Exhibit A, and the
Repurchase Price, whether payable in cash or in shares of Common Stock or otherwise, shall be payable at such places as are
identified in the Company Notice given pursuant to Section 12.3 (any city in which any Paying Agent is located being herein called a
"Place of Payment"). 

        The
Registrable Securities are entitled to the benefits of the Registration Rights Agreement as provided by the form of Securities attached hereto as  Exhibit A. The Securities are entitled to the
payment of Additional Interest as provided in the Registration Rights Agreement. 

        The
Securities shall be redeemable at the option of the Company, as provided in Article Nine and in the form of Securities attached hereto
as Exhibit A. 

        The
Securities shall be convertible as provided in Article Ten (any city in which any Conversion Agent is located being herein called a
"Place of Conversion"). 

        The
Securities shall be subordinated in right of payment to Senior Debt of the Company as provided in Article Eleven. 

        The
Securities shall be subject to repurchase by the Company at the option of the Holders as provided in Articles Twelve and  Thirteen. 

        SECTION 2.3 Denominations.

        The
Securities shall be issuable only in registered form, without coupons, in denominations of U.S.$1,000 and integral multiples thereof. 

        SECTION 2.4 Execution, Authentication, Delivery and Dating.  

        The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President, one of its Vice Presidents, its Chief Financial Officer, its Treasurer or its Controller and attested by its Secretary or one of its Assistant Secretaries. Any such signature may be manual
or facsimile. 

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

        At
any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee or to its order for
authentication, together with a Company Order for the authentication and delivery of such Securities, 

15

 

and
the Trustee in accordance with such Company Order shall authenticate and make available for delivery such Securities as provided in this Indenture and not otherwise. 

        Each
Security shall be dated the date of its authentication. 

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

        SECTION 2.5 Global Securities; Temporary Securities.

        (a)   Global Securities.

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

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

        (3)   If
any Global Security is to be exchanged for other Securities or cancelled in whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the
Trustee, as Security Registrar, for exchange or cancellation, as provided in this Article Two. If any Global Security is to be exchanged for other
Securities or cancelled in part, or if another Security is to be exchanged in whole or in part for a beneficial interest in any Global Security, in each case, as provided in  Section 2.6, then
either (A) such Global Security shall be so surrendered for exchange or cancellation, as provided in this  Article Two, or (B) the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or
cancelled or equal to the principal amount of such other Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of
the Trustee, as Security Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall instruct the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global Security, the Trustee shall, subject to Section 2.6(c) and as
otherwise provided in this Article Two, authenticate and make available for delivery any Securities issuable in exchange for such Global Security (or
any portion thereof) to or upon the order of, and registered in such names as may be directed by, the Depositary or its authorized representative. Upon the request of the Trustee in connection with
the occurrence of any of the events specified in the preceding paragraph, the Company shall promptly make available to the Trustee a reasonable supply of Securities that are not in the form
of Global Securities. The Trustee shall be entitled to rely upon any order, direction or request of the Depositary or its authorized representative, which is given or made pursuant to this  Article Two.

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

16

 

the
Depositary for such Global Security or a nominee thereof, in which case such Registered Security shall be authenticated and delivered in definitive, fully registered form, without interest
coupons. 

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

        (b)   Temporary Securities.

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

        If
temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to  Section 8.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. 

        SECTION 2.6 Registration, Registration of Transfer and Exchange; Restrictions on Transfer.

        (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 8.2 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Registered Securities and transfers and
exchanges of Registered Securities as herein provided. 

        Upon
surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to  Section 8.2 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture. 

        At
the option of the Holder, and subject to the other provisions of this Section 2.6, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so
surrendered for exchange, and subject to the other provisions of this Section 2.6, the Company shall execute, and the Trustee shall authenticate
and make available for delivery, the Securities the Holder making the exchange is entitled to receive. Every Security presented or surrendered for registration of transfer or for exchange shall (if so
required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form 

17

 

satisfactory
to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. 

        All
Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, subject to the other provisions
of this Section 2.6, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or
exchange. 

        No
service charge shall be made for any registration of transfer or exchange of Securities except as provided in Section 2.7, but
the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 2.5, 7.5, 9.8
or 10.2 (other than where the shares of Common Stock are to be issued or delivered in a name other than that of the Holder of the Security) not
involving any transfer and other than any stamp and other duties, if any, that may be
imposed in connection with any such transfer or exchange by the United States or any political subdivision thereof or therein, which shall be paid by the Company. 

        In
the event of a redemption of the Securities, the Company shall not be required (1) to register the transfer of or exchange Securities for a period of 15 days immediately
preceding the date notice is given identifying the serial numbers of the Securities called for such redemption or (2) to register the transfer of or exchange any Security, or portion thereof,
called for redemption. 

        (b)   All
Securities shall bear the applicable Restricted Securities Legend subject to the following: 

        (1)   subject
to the following clauses of this Section 2.6(b), a Security or any portion thereof that is exchanged, upon
transfer or otherwise, for a Global Security or any portion thereof shall bear the Restricted Securities Legend borne by such Global Security while represented thereby; 

        (2)   subject
to the following clauses of this Section 2.6(b), a new Security that is not a Global Security and is
issued in exchange for another Security (including a Global Security) or any portion thereof, upon transfer or otherwise, shall bear the Restricted Securities Legend borne by such other Security; 

        (3)   any
Securities that are sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act (including the Shelf Registration
Statement), together with their Successor Securities, shall not bear a Restricted Securities Legend; the Company shall inform the Trustee in writing of the effective date of any such registration
statement registering the Securities under the Securities Act and shall notify the Trustee at any time when prospectuses may not be delivered with respect to Securities to be sold pursuant to such
registration statement. The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the aforementioned registration statement; 

        (4)   at
any time after the Securities may be freely transferred without registration under the Securities Act or without being subject to transfer restrictions pursuant to
the Securities Act, a new Security that does not bear a Restricted Securities Legend may be issued in exchange for or in lieu of a Security (other than a Global Security) or any portion thereof that
bears such a legend if the Trustee has received a certificate regarding the unrestricted nature of the Securities, satisfactory to the Trustee and duly executed by the Holder of such legended Security
or his attorney duly authorized in writing, and after such date and receipt of such certificate, the Trustee shall authenticate and make available for delivery such a new Security in exchange for or
in lieu of such other Security as provided in this Article Two; 

        (5)   a
new Security that does not bear a Restricted Securities Legend may be issued in exchange for or in lieu of a Security (other than a Global Security) or any portion
thereof that bears such a legend if, in the Company's judgment, placing such a legend upon such new Security 

18

 

is
not necessary to ensure compliance with the registration requirements of the Securities Act, and the Trustee, at the direction of the Company, shall authenticate and make available for delivery
such a new Security as provided in this Article Two; and 

        (6)   notwithstanding
the foregoing provisions of this Section 2.6(b), a Successor Security of a Security that does not
bear a particular form of Restricted Securities Legend shall not bear such form of legend unless the Company has reasonable cause to believe that such Successor Security is a "restricted security"
within the meaning of Rule 144 under the Securities Act, in which case the Trustee, at the direction of the Company, shall authenticate and make available for delivery a new Security bearing a
Restricted Securities Legend in exchange for such Successor Security as provided in this Article Two. 

        (c)   Neither
the Trustee, the Paying Agent nor any of their agents shall (1) have any duty to monitor compliance with or with respect to any federal or state or other
securities or tax laws or (2) have any duty to obtain documentation on any transfers or exchanges other than as specifically required hereunder. 

        SECTION 2.7 Mutilated, Destroyed, Lost or Stolen Securities.

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

        If
there be delivered to the Company and to the Trustee: 

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

        (b)   such
security or indemnity as may be satisfactory to the Company and the Trustee to save each of them and any agent of either of them harmless, 

then,
in the absence of actual notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall
execute and the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding. 

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

        Upon
the issuance of any new Security under this Section 2.7, 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 (other than any stamp and other duties, if any, that may be imposed in connection therewith by the United States or any
political subdivision thereof or therein, which shall be paid by the Company) and any other expenses (including the fees and expenses of the Trustee) connected therewith. 

        Every
new Security issued pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and such new
Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. 

        The
provisions of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies of any
Holder with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. 

19

 

        SECTION 2.8 Payment of Interest; Interest Rights Preserved.

        Interest
(including Additional Interest, if any) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. 

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

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

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

        Subject
to the foregoing provisions of this Section 2.8 and Section 2.6,
each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue,
that were carried by such other Security. 

        Interest
on any Security that is converted in accordance with Section 10.2 during a Record Date Period shall be payable in
accordance with the provisions of Section 10.2. 

        SECTION 2.9 Persons Deemed Owners.

        Prior
to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving payment of principal of, premium, if any, and (subject to Section 2.8)
interest (including Additional Interest, if any) on such Security and 

20

 

for
all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. 

        SECTION 2.10 Cancellation.

        All
Securities surrendered for payment, redemption, repurchase, registration of transfer or exchange or conversion shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Securities so delivered to the Trustee shall be cancelled promptly by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section 2.10. The Trustee shall dispose of all cancelled Securities in accordance with applicable law and its
customary practices in effect from time to time. 

        SECTION 2.11 Computation of Interest.

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

        SECTION 2.12 CUSIP Numbers.

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

ARTICLE THREE

SATISFACTION AND DISCHARGE  

        SECTION 3.1 Satisfaction and Discharge of Indenture.

        This
Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of conversion, or registration of transfer or exchange, or replacement of
Securities herein expressly provided for and any right to receive Additional Interest as provided in the form of Securities attached hereto as  Exhibit A and the Company's obligations to the Trustee
pursuant to Section 5.7), and the
Trustee, at the expense of the Company, shall execute proper instruments in form and substance satisfactory to the Trustee acknowledging satisfaction and discharge of this Indenture, when 

        (a)   either

        (1)   all
Securities theretofore authenticated and delivered (other than (A) Securities that have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.7 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 8.3) have been delivered to the Trustee
for cancellation; or 

        (2)   all
such Securities not theretofore delivered to the Trustee or its agent for cancellation (other than Securities referred to in clauses (A) and (B) of
clause (a)(1) above) 

          (i)  have
become due and payable, or 

         (ii)  will
have become due and payable at their Stated Maturity within one year, or 

21

 

        (iii)  are
to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, 

and
the Company, in the case of clause (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds (immediately available to the Holders in
the case of clause (i) above) an amount sufficient to pay and discharge the entire principal, premium, if any, and interest (including Additional Interest, if any) on such Securities not
theretofore delivered to the Trustee for cancellation, to the date of such deposit (in the case of Securities that have become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be; 

        (b)   the
Company has paid or caused to be paid all other sums payable hereunder by the Company; and 

        (c)   the
Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with. 

        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 5.7,
the obligations of the Company to any Authenticating Agent under Section 5.12, the obligation of the Company to pay Additional Interest, the
obligations of the Trustee under Section 3.2 and the last paragraph of Section 8.3, if
money shall have been deposited with the Trustee pursuant to clause (a)(2) of this Section 3.1, and the obligations of the Company and the
Trustee under Section 2.6 and Article Ten shall survive such satisfaction and discharge. Funds
held in trust pursuant to this Section 3.1 are not subject to the provisions of Article Eleven. 

        In
the event that the Company is required to pay Additional Interest to the Holders pursuant to the Registration Rights Agreement, the Company will provide written notice
("Additional Interest Notice") to the Trustee of its obligation to pay Additional Interest no later than 15 days prior to the proposed payment
date for the Additional Interest, and the Additional Interest Notice shall set forth the amount of Additional Interest to be paid by the Company on such payment date. The Trustee shall not at any time
be under any duty or responsibility to any Holder to determine the Additional Interest or with respect to the nature, extent or calculation of the amount of Additional Interest when made, or with
respect to the method employed in such calculation of the Additional Interest. Unless the Trustee receives an Additional Interest Notice within the time period specified above, the Trustee is entitled
to assume that no Additional Interest is due and payable. 

        SECTION 3.2 Application of Trust Money.

        Subject
to the provisions of the last paragraph of Section 8.3, all money deposited with the Trustee pursuant to  Section 3.1 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Persons entitled thereto, of the principal, premium, if any, and interest (including
Additional Interest, if any) for whose payment such money has been deposited with the Trustee. 

        All
moneys deposited with the Trustee pursuant to Section 3.1 (and held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon Company Request. 

22

 
ARTICLE FOUR

REMEDIES  

        SECTION 4.1 Events of Default.

        "Event of Default," wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article Eleven or be voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): 

        (a)   default
in the payment of the principal of or premium, if any, on any Security at its Maturity, whether or not the such payment is prohibited by the subordination
provisions of this Indenture; or 

        (b)   default
in the payment of any interest (including Additional Interest, if any) upon any Security when it becomes due and payable, and continuance of such default for a
period of 30 days, whether or not such payment is prohibited by the subordination provisions of this Indenture; or 

        (c)   failure
by the Company to give the Company Notice in accordance with Section 12.5, whether or not such notice is
prohibited by the subordination provisions of this Indenture; or 

        (d)   default
in the performance, or breach, of any covenant of the Company in this Indenture (other than a covenant a default in the performance or breach of which is
specifically dealt with elsewhere in this Section 4.1), and continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities,
a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or 

        (e)   default
in the payment when due of the principal of any indebtedness under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company
or any Subsidiary in excess of U.S. $5,000,000, whether such indebtedness now exists or shall hereafter be created, if the indebtedness is not discharged and such default continues for a period of
30 days or more, or if such indebtedness has been accelerated, such acceleration is not rescinded or annulled, within a period of 30 days after there shall have been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such
default and requiring the Company to cause such indebtedness to be discharged or such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; or 

        (f)    the
entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company or any Subsidiary in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (2) a decree or order adjudging the Company or any Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Subsidiary under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60
consecutive days; 

        (g)   the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company or any Subsidiary
in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other 

23

 

similar
law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or similar relief under
any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any Subsidiary in furtherance of any such action; or 

        (h)   the
failure by the Company to deliver shares of Common Stock, together with cash in lieu of fractional shares, when those shares of Common Stock and cash in lieu of
fractional shares are required to be delivered upon conversion of a Security, and such failure continues for 10 days after delivery by a Holder of upon delivery of the Security in accordance
with Article Ten. 

        SECTION 4.2 Acceleration of Maturity; Rescission and Annulment.

        If
an Event of Default (other than an Event of Default specified in Section 4.1(f) or  4.1(g) with respect to the Company) occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the
Holders), and upon any such declaration, such principal and all accrued interest (including Additional Interest, if any) thereon shall become immediately due and payable. If an Event of Default
specified in Section 4.1(f) or 4.1(g) with respect to the Company occurs, the principal of, and
accrued interest (including Additional Interest, if any) on, all the Securities shall ipso facto become immediately due and payable without any
declaration or other Act of the Holder or any act on the part of the Trustee. 

        At
any time after such declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this  Article Four provided,
the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if: 

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

        (1)   all
overdue interest (including Additional Interest, if any) on all Securities, 

        (2)   the
principal of and premium, if any, on any Securities that have become due otherwise than by such declaration of acceleration and any interest thereon (including
Additional Interest, if any) at the rate borne by the Securities, 

        (3)   to
the extent permitted by applicable law, interest upon overdue interest (including Additional Interest, if any) at the rate then in effect, and 

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

        (b)   all
Events of Default, other than the non-payment of the principal of, and any premium and interest on, Securities that have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 4.13. 

        No
rescission or annulment referred to above shall affect any subsequent default or impair any right consequent thereon. 

24

 

        SECTION 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee.

        The
Company covenants that if: 

        (a)   default
is made in the payment of any interest (including Additional Interest, if any) on any Security when it becomes due and payable and such default continues for a
period of 30 days, or 

        (b)   default
is made in the payment of the principal of or premium, if any, on any Security at the Maturity thereof, 

the
Company will upon demand of the Trustee pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, premium, if any, and
interest (including Additional Interest, if any), and, to the extent permitted by applicable law, any overdue interest at the rate then in effect, and in addition thereto, such further amount as shall
be sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel. 

        If
the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. 

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

        SECTION 4.4 Trustee May File Proofs of Claim.

        In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relating to the
Company or any other obligor upon the Securities or the property of the Company or of such other obligor or the creditors of either, the Trustee (whether or not the principal of, and any interest on,
the Securities shall then be due and payable as therein expressed or by declaration or otherwise and whether or not the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, 

        (a)   to
file and prove a claim for the whole amount of principal, premium, if any, and interest (including Additional Interest, if any) owing and unpaid in respect of the
Securities and take such other actions, including participating as a member, voting or otherwise, of any official committee of creditors appointed in such matter, and to file such other papers or
documents, in each of the foregoing cases, as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel) and of the Holders of Securities allowed in such judicial proceeding, and 

        (b)   to
collect and receive any moneys or other property payable or deliverable on any such claim and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders of Securities, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel and any other amounts due the Trustee under Section 5.7. 

25

 

        Nothing
herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Security in any such
proceeding; provided, however, that the Trustee may, on behalf of such Holders, vote for the election of
a trustee in bankruptcy or similar official. 

        SECTION 4.5 Trustee May Enforce Claims without Possession of Securities.

        All
rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, be for the ratable benefit of the Holders of the Securities
in respect of which judgment has been recovered. 

        SECTION 4.6 Application of Money Collected.

        Subject
to Article Eleven, any money collected by the Trustee pursuant to this Article
Four shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal, premium, if any,
or interest, upon presentation of the Securities and the notation thereon of 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 5.7; 

        SECOND:
To the payment of the amounts then due and unpaid for principal of, premium, if any, or interest (including Additional Interest, if any) on, the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any,
and interest (including Additional Interest, if any), respectively; and 

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

        SECTION 4.7 Limitation on Suits.

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

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

        (b)   the
Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder; 

        (c)   such
Holder or Holders have furnished to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance
with such request; 

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

        (e)   the
Trustee has not received any direction inconsistent with such written request from the Holders of a majority of the aggregate principal amount of the Outstanding
Securities during the 60 day period referred to in (d) above; 

26

 

it
being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such Holders. 

        SECTION 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest and to
Convert.

        Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of,
premium, if any, and (subject to Section 2.8) interest (including Additional Interest, if any) on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or repurchase, on the Redemption Date or Repurchase Date, as the case may be), and to convert such Security in accordance with  Article Ten, and to institute suit for the enforcement of any such payment and right to convert, and such rights shall not be impaired without the
consent of such Holder. 

        SECTION 4.9 Restoration of Rights and Remedies.

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

        SECTION 4.10 Rights and Remedies Cumulative.

        Except
as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of  Section 2.7, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or
remedy. 

        SECTION 4.11 Delay or Omission Not Waiver.

        No
delay or omission of the Trustee or of any Holder of any Security 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 Four or by law to the Trustee
or to the Holders of Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or (subject to the limitations contained in this Indenture) by the Holders
of Securities, as the case may be. 

        SECTION 4.12 Control by Holders of Securities.

        The
Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the Trustee, provided 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. 

27

 

        SECTION 4.13 Waiver of Past Defaults.

        The
Holders, either (a) through the written consent of not less than a majority in principal amount of the Outstanding Securities or (b) by the adoption of a resolution, at
a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least a majority in principal amount of the Outstanding Securities represented at such meeting,
may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of, premium, if any, interest
(including Additional Interest, if any) or the Repurchase Price, on any Security or (2) in respect of a covenant or provision hereof that under Article
Seven cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. 

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

        SECTION 4.14 Undertaking for Costs.

        All
parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this  Section 4.14 shall not apply to any suit instituted by
the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder,
or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder of any Security for the enforcement of the
payment of the principal of, premium, if any, or interest (including Additional Interest, if any) on any Security on or after the respective Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption or repurchase, on or after the Redemption Date or Repurchase Date, as the case may be) or for the enforcement of the right to convert any Security in accordance with  Article Ten. 

        SECTION 4.15 Waiver of Stay, Usury or Extension Laws.

        The
Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, usury or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede by reason of such law the execution of any power herein granted to the Trustee but will suffer and permit the execution of every such power as though no such law had been enacted. 

 
 

ARTICLE FIVE
  
    THE TRUSTEE    
    

        SECTION 5.1 Certain Duties and Responsibilities.

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

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

28

 

        (2)   in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision 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 but not to
verify the contents thereof. 

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

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

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

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

        (3)   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 a majority
in principal amount of the Outstanding Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and 

        (4)   no
provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. 

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

        SECTION 5.2 Notice of Defaults.

        Within
90 days after the occurrence of any default hereunder as to which a Responsible Officer of the Trustee has actually received written notice, the Trustee shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice of such default, unless such default shall have been cured or waived;  provided,
however, that, except in the case of a default in the payment of the principal of, premium, if
any, or interest (including Additional Interest, if any) on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders. For the purpose of this  Section 5.2, the term "default" means any event that is, or after notice or lapse of time or both would become, an Event of Default. 

29

 

        SECTION 5.3 Certain Rights of Trustee.

        Subject
to the provisions of Section 5.1: 

        (a)   the
Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, Officers' Certificate, other certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties; 

        (b)   any
request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of
Directors shall be sufficiently evidenced by a Board Resolution; 

        (c)   whenever
in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; 

        (d)   the
Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; 

        (e)   the
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of
Securities pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction; 

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

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

        (h)   in
no event shall the Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, loss
of profit), irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; 

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

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

30

   
        SECTION 5.4 Not Responsible for Recitals or Issuance of Securities.

        The
recitals contained herein and in the Securities (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture, of the Securities or of the Common Stock issuable upon the conversion of
the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. 

        SECTION 5.5 May Hold Securities, Act as Trustee under Other Indentures.

        The
Trustee, any Authenticating Agent, any Paying Agent, any Conversion Agent or any other agent of the Company or the Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such other
agent. 

        The
Trustee may become and act as trustee under other indentures under which other securities, or certificates of interest or participation in other securities, of the Company are
outstanding in the same manner as if it were not Trustee hereunder. 

        SECTION 5.6 Money Held in Trust.

        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 otherwise agreed in writing with the Company. 

        SECTION 5.7 Compensation and Reimbursement.

        The
Company agrees 

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

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

        (c)   to
fully indemnify the Trustee (and its directors, officers, employees and agents) for, and to hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income of the Trustee), incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs, expenses and reasonable attorneys' fees and expenses of defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. 

        When
the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 4.1(f) or  Section 4.1(g) with respect
to the Company, the expenses (including the reasonable charges of its counsel) and the compensation for the services
are intended to constitute expenses of the administration under any applicable federal or state bankruptcy, insolvency or other similar law. 

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        The
Trustee shall have a lien prior to the Securities as to all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this  Section 5.7, except with
respect to funds held in trust for the benefit of the Holders of particular Securities. 

        The
provisions of this Section 5.7 shall survive the termination of this Indenture or the earlier resignation or removal of the
Trustee. 

        SECTION 5.8 Corporate Trustee Required; Eligibility.

        There
shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, having a combined capital and surplus (or for
such purposes, the combined capital and surplus of any parent holding company) of at least U.S. $25,000,000, subject to supervision or examination by federal or state authority, in good standing and
having an established place of business or agency in the Borough of Manhattan, The City of New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes of this Section 5.8, the combined capital and surplus of such
corporation 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 5.8, it shall resign immediately in the manner and with the effect hereinafter specified in this  Article Five and
a successor shall be appointed pursuant to Section 5.9. 

        SECTION 5.9 Resignation and Removal; Appointment of Successor.

        (a)   No
resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article Five shall
become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 5.10. 

        (b)   The
Trustee may resign at any time by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by  Section 5.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the resigning
Trustee or the Company may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. 

        (c)   The
Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and the Company.
If the instrument of acceptance by a successor Trustee required by Section 5.10 shall not have been delivered to the Trustee within
30 days after the giving of such notice of removal, the removed Trustee or the Company may petition at the expense of the Company any court of competent jurisdiction for the appointment of a
successor Trustee. 

        (d)   If
at any time: 

        (1)   the
Trustee shall cease to be eligible under Section 5.8 and shall fail to resign after written request therefor
by the Company or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months, or 

        (2)   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,
(i) in any such case the Company may remove the Trustee, or (ii) in the case of clause (d)(1) above only and subject to  Section 4.14, any Holder of a Security who has been a
bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, petition any 

32

 

court
of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 

        (e)   If
the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company shall promptly
appoint a successor Trustee and shall comply with the applicable requirements of this Section 5.9 and  Section 5.10. If, within one year after
such resignation, removal or incapability, or occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable requirements of Section 5.10, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner
required by this Section 5.9 and Section 5.10, any Holder of a Security who has been a  bona fide
Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee. 

        (f)    The
successor Trustee shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders of Securities in
the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. 

        SECTION 5.10 Acceptance of Appointment by Successor.

        Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee. Such retiring Trustee shall, upon payment of its charges, promptly execute and deliver an instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. 

        No
successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be eligible under this Article
Five. 

        SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.

        Any
corporation 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 succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of the trust created by this
Indenture), shall be the successor of the Trustee hereunder (provided such corporation shall be otherwise eligible under this  Article Five), without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall
have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. 

33

 

        SECTION 5.12 Authenticating Agents.

        The
Trustee may, with the consent of the Company, appoint an Authenticating Agent or Agents acceptable to the Company with respect to the Securities, which shall be authorized to act on
behalf of the Trustee to authenticate Securities issued upon exchange or substitution pursuant to this Indenture. 

        Securities
authenticated by an Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder, and every reference in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be subject to acceptance by the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any state thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent and subject to supervision or examination by government or other fiscal authority. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section 5.12, such Authenticating Agent shall resign immediately in
the manner and with the effect specified in this Section 5.12. 

        Any
corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent (provided such corporation shall be otherwise eligible under this  Section 5.12), without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent. 

        An
Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof 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 such
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 5.12, the Trustee may appoint a successor
Authenticating Agent, which shall be subject to acceptance by the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 5.12. 

        The
Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this  Section 5.12. 

        If
an Authenticating Agent is appointed with respect to the Securities pursuant to this Section 5.12, the Securities may have
endorsed thereon, in addition to or in lieu of the Trustee's certification of authentication, an alternative certificate of authentication in the following form: 

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

By:
                                         
       ,

as Authenticating Agent 

By
                                         
         

Authorized Signature 

34

 

        SECTION 5.13 Disqualification; Conflicting Interests.

        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 as Trustee hereunder,
to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. 

        SECTION 5.14 Preferential Collection of Claims Against Company.  

        If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). 

ARTICLE SIX

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE  

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

        Without
the consent or affirmative vote of the Holders of each Outstanding Security, the Company shall not consolidate with or merge into any other Person or convey, transfer, sell or
lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into it or convey, transfer, sell or lease such
Person's properties and assets substantially as an entirety to it, unless: 

        (a)   the
Company is the surviving person or the Person formed by such consolidation or into which the Company is merged, or the Person to which the Company's properties and
assets are conveyed, transferred, sold or leased, shall be a corporation, limited liability company, partnership or trust organized and validly existing under the laws of the United States of America,
any state thereof or the District of Columbia and, if other than the Company, shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of, premium, if any, and interest (including Additional Interest, if any) on all of the Securities as applicable, and the performance or
observance of every covenant of this Indenture on the part of the Company to be performed or observed; 

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

        (c)   the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article Six and that all
conditions precedent herein provided for relating to such transaction have been complied with, together with any documents required under  Section 7.3. 

        SECTION 6.2 Successor Substituted.

        Upon
any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all the properties and assets of
the Company in accordance with Section 6.1, the successor Person formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and
the Securities. 

35

 

ARTICLE SEVEN

SUPPLEMENTAL INDENTURES  

        SECTION 7.1 Supplemental Indentures without Consent of Holders of
Securities.

        Without
the consent of any Holders of Securities, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto for any of the following purposes: 

        (a)   to
evidence the succession of another Person to the Company and the assumption by any such successor of the covenants and obligations of the Company herein and in the
Securities as permitted by this Indenture; or 

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

        (c)   to
secure the Securities; or 

        (d)   to
make provision with respect to the conversion rights of Holders of Securities pursuant to Section 10.11; or 

        (e)   to
make any changes or modifications to this Indenture necessary in connection with the registration of any Registrable Securities under the Securities Act as
contemplated by the Registration Rights Agreement (provided such action pursuant to this clause (e) shall not, in the judgment of the Company,
adversely affect the interests of the Holders of Securities in any material respect); or 

        (f)    to
comply with the requirements of the Trust Indenture Act or the rules and regulations of the Commission thereunder in order to effect or maintain the qualification of
this Indenture under the Trust Indenture Act, as contemplated by this Indenture or otherwise; or 

        (g)   to
evidence and provide for the acceptance of appointment hereunder by a successor Trustee; or 

        (h)   to
cure any ambiguity, to correct or supplement any provision herein that may be inconsistent with any other provision herein or that is otherwise defective, or to make
any other provisions with respect to matters or questions arising under this Indenture as the Company and the Trustee may deem necessary or desirable
(provided such action pursuant to this clause (h) shall not, in the judgment of the Company, adversely affect the interests of the Holders of
Securities in any material respect). 

        Upon
Company Request accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and subject to and upon receipt by the Trustee of the documents
described in Section 7.3 hereof, the Trustee shall join with the Company in the execution of any supplemental indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained. 

        SECTION 7.2 Supplemental Indentures with Consent of Holders of Securities.

        With
either (a) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by the Act of said Holders delivered to the
Company and the Trustee, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of a majority in principal
amount of the Outstanding Securities represented at such meeting, the Company, when authorized by a Board Resolution, and the Trustee may 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 of modifying in any manner the rights of the Holders of Securities under
this Indenture; provided, however, that no such supplemental indenture shall, without the consent or
affirmative vote of the Holder of each Outstanding Security affected thereby, 

36

 

        (l)    change
the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount, any premium or the rate of interest
payable thereon, or change the place at which or the coin or currency in which any Security or the interest (including Additional Interest, if any) or any premium thereon or any other amount in
respect thereof is payable; or 

        (2)   reduce
the amount payable on any Security upon redemption at the Company's option; or 

        (3)   impair
the right to institute suit for the enforcement of any payment in respect of any Security on or after the Stated Maturity thereof (or, in the case of redemption
or any repurchase, on or after the Redemption Date or Repurchase Date, as the case may be); or 

        (4)   except
as permitted by Section 10.11, adversely affect the right to convert any Security as provided in  Article Ten; or 

        (5)   modify
the provisions of this Indenture with respect to the subordination of the Securities in a manner adverse to the Holders of any Securities; or 

        (6)   reduce
the percentage in principal amount of the Outstanding Securities the consent of whose Holders is required for any supplemental indenture to modify or amend any
provision of this Indenture or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or 

        (7)   modify
any of the provisions of this Section 7.2 except to increase any percentage contained herein or therein or
to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; 

        (8)   amend
or modify the provisions of Article Twelve in a manner adverse to the Holders after the Holder's right to require
the Company to repurchase the Securities upon a Change in Control arises; or 

        (9)   amend
or modify the provisions of Article Thirteen in a manner adverse to the Holders. 

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

        The
quorum at any meeting called to adopt a resolution shall be Holders representing a majority in aggregate principal amount of Securities at the time Outstanding. 

        SECTION 7.3 Execution of Supplemental Indentures.

        In
executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article Seven or the
modifications thereby of the trusts created by this Indenture, the Trustee shall be provided with, and (subject to Sections 5.1 and  5.3) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and that such supplemental indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. 

        SECTION 7.4 Effect of Supplemental Indentures.

        Upon
the execution of any supplemental indenture under this Article Seven, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture 

37

 

for
all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder appertaining thereto shall be bound thereby. 

        SECTION 7.5 Reference in Securities to Supplemental Indentures.

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

        SECTION 7.6 Notice of Supplemental Indentures.

        Promptly
after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of  Section 7.2, the Company shall give notice to all Holders of Securities of such fact,
setting forth in general terms the substance of such
supplemental indenture, in the manner provided in Section 1.6. Any failure of the Company to give such notice, or any defect therein, shall not
in any way impair or affect the validity of any such supplemental indenture. 

ARTICLE EIGHT

COVENANTS  

        SECTION 8.1 Payment of Principal, Premium and Interest.

        The
Company covenants and agrees that it will duly and punctually pay the principal of and premium, if any, and interest (including Additional Interest, if any) on the Securities in
accordance with the terms of the Securities and this Indenture. The Company shall deposit or cause to be deposited with the Trustee, no later than 12:00 noon Eastern time on the date of the Stated
Maturity of any Security or no later than 12:00 noon Eastern time on the due date for any installment of interest, all payments so
due, which payments shall be in immediately available funds on the date of such Stated Maturity or due date, as the case may be. 

        SECTION 8.2 Maintenance of Offices or Agencies.

        The
Company hereby appoints the Corporate Trust Office or such other office or agency of the Trustee as its agent in the Borough of Manhattan, The City of New York, where Securities may
be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange, where Securities may be surrendered for conversion, and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be served. 

        The
Company may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes;  provided, however, that until all of the Securities have been delivered to the Trustee for cancellation,
or moneys sufficient to pay the principal of, premium, if any, and interest (including Additional Interest, if any) on the Securities have been made available for payment and either paid or returned
to the Company pursuant to the provisions of Section 8.3, the Company shall maintain in the Borough of Manhattan, The City of New York, an office
or agency where Securities may be presented or surrendered for payment and conversion, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served. The Company shall give prompt written notice to the Trustee, and notice to the Holders in accordance with  Section 1.6,
 of the appointment or termination of any such agents and of the location and any change in the location of any such office or
agency. 

38

 

        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, presentations and surrenders may be
made and notices and demands may be served on the Corporate Trust Office. 

        SECTION 8.3 Money for Security Payments to Be Held in Trust.

        If
the Company will act as its own Paying Agent, it shall, on or before each due date of the principal of, premium, if any, or interest (including Additional Interest, if any) on any of
the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal, premium, if any, or interest (including Additional Interest, if any)
so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and the Company will promptly notify the Trustee of its action or failure so to act. 

        Whenever
the Company shall have one or more Paying Agents, it will, no later than 12:00 noon Eastern time on each due date of the principal of, premium, if any, or interest (including
Additional Interest, if any) on any Securities, deposit with the Trustee a sum sufficient to pay the principal, premium, if any, or interest (including Additional Interest, if any) so becoming due,
such sum to be held for the benefit of the Persons entitled to such principal, premium, if any, or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of any failure so to act. 

        The
Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 8.3, that such Paying Agent will: 

        (a)   hold
all sums held by it for the payment of the principal of, premium, if any, or interest (including Additional Interest, if any) on Securities for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; 

        (b)   give
the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal, premium, if any, or interest
(including Additional Interest, if any); and 

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

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

        Anything
contained herein to the contrary notwithstanding, any money held by the Trustee or any Paying Agent in trust for the payment and discharge of the principal of, premium, if any,
or interest (including Additional Interest, if any) on any Security that remains unclaimed for two years after the date when each payment of such principal, premium, or interest (including Additional
Interest, if any) has become payable shall, upon the request of the Company, be repaid by the Trustee to the Company as its absolute property free from trust, and the Trustee shall thereupon be
released and discharged with respect thereto and the Holders shall look only to the Company for the payment of the principal, premium or interest (including Additional Interest, if any) on such
Security. The Trustee shall not be liable to the Company or any Holder for interest on funds held by it for the payment and discharge of the principal, premium or interest on any of the Securities to
any Holder. The Company shall not be liable for any interest on the sums paid to it pursuant to this paragraph and shall not be regarded as a trustee of such money. 

39

 

        SECTION 8.4 Existence.

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

        SECTION 8.5 Statement by Officers as to Default.

        The
Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate (one of the
signers of which shall be the Company's principal executive, principal financial or principal accounting officer), stating whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if
the Company shall be in default, specifying all such defaults and the nature and status thereof of which they have knowledge. 

        The
Company will deliver to the Trustee, forthwith upon becoming aware of any default in the performance or observance of any covenant, agreement or condition contained in this
Indenture, or any Event of Default, an Officers' Certificate specifying with particularity such default or Event of Default and further stating what action the Company has taken, is taking or proposes
to take with respect thereto. 

        Any
notice required to be given under this Section 8.5 shall be delivered to the Trustee at the Corporate Trust Office. 

        SECTION 8.6 Delivery of Certain Information.

        At
any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a Holder of a Security or the holder of shares of Common Stock issued
upon conversion thereof, the Company will promptly furnish or cause to be furnished Rule 144A Information to such Holder of Securities or such holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security designated by any such Holder or holder, as the case may be, to the extent required to permit compliance by such Holder or
holder with Rule 144A under the Securities Act (or any successor provision thereto) in connection with the resale of any such security; provided,  however, that the Company shall not be required to furnish such information in connection with any request made on or after the date that is two years
from the later of (a) the date such a security (or any such predecessor security) was last acquired from the Company or (b) the date such a security (or any such predecessor security)
was last acquired from an "affiliate" of the Company within the meaning of Rule 144 under the Securities Act (or any successor provision thereto). "Rule 144A
Information" shall be such information as is specified pursuant to Rule 144A(d) (4) under the Securities Act (or any successor provision thereto). 

ARTICLE NINE

REDEMPTION OF SECURITIES  

        SECTION 9.1 Right of Redemption.

        The
Securities may be redeemed in accordance with the provisions of the form of Securities attached hereto as Exhibit A. 

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        SECTION 9.2 Applicability of Article.

        Redemption
of Securities at the election of the Company or otherwise, as permitted or required by any provision of the Securities or this Indenture, shall be made in accordance with such
provision and this Article Nine. 

        SECTION 9.3 Election to Redeem; Notice to Trustee.

        In
case of any redemption at the election of the Company of any of the Securities, the Company shall, at least 65 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date. 

        SECTION 9.4 Selection by Trustee of Securities to Be Redeemed.

        If
less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected by the Trustee at least three Business Days prior to the date that the
notice described in Section 9.5 is given from the Outstanding Securities not previously called for redemption by lot or such method as the
Trustee may deem fair and appropriate. 

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

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

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

        SECTION 9.5 Notice of Redemption.

        Notice
of redemption shall be given in the manner provided in Section 1.6 to the Holders of Securities to be redeemed not less than
20 nor more than 60 days prior to the Redemption Date, and such notice shall be irrevocable. 

        All
notices of redemption shall identify the Securities to be redeemed (including CUSIP numbers) and shall state: 

        (a)   the
Redemption Date, 

        (b)   the
Redemption Price, and accrued interest, if any, 

        (c)   if
less than all Outstanding Securities are to be redeemed, the aggregate principal amount of Securities to be redeemed, 

        (d)   that
on the Redemption Date the Redemption Price, and accrued interest (including Additional Interest, if any) will become due and payable upon each such Security to be
redeemed, and that interest thereon shall cease to accrue on and after said date, 

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

        (f)    the
place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any. 

41

 

        Notice
of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name of and at
the expense of the Company. Notice of redemption of Securities to be redeemed at the election of the Company received by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company. 

        SECTION 9.6 Deposit of Redemption Price.

        Not
less than one Business Day prior to any Redemption Date, the Company shall deposit with the Trustee (or, if the Company is acting as its own Paying Agent, segregate and hold in trust
as provided in Section 8.3) an amount of money (which shall be in immediately available funds on such Redemption
Date) sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities that are to be redeemed on that date
other than any Securities called for redemption on that date that have been converted prior to the date of such deposit. 

        If
any Security called for redemption is converted, any money deposited with the Trustee or so segregated and held in trust for the redemption of such Security shall (subject to any
right of the Holder or such Security or any Predecessor Security to receive interest as provided in the last paragraph of Section 2.8) be paid to
the Company on Company Request or, if then held by the Company, shall be discharged from such trust. 

        SECTION 9.7 Securities Payable on Redemption Date.

        Notice
of redemption having been given as aforesaid, the Securities to be so redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and
from and after such date (unless the Company shall default in the payment of the Redemption Price, including accrued interest) such Securities shall cease to bear interest. Upon surrender of any
Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price together with accrued and unpaid interest (including Additional Interest, if
any) to the Redemption Date; provided, however, that installments of interest on Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to
their terms and the provisions of Section 2.8. 

        If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal amount of, premium, if any, and, to the extent permitted by applicable
law, accrued interest (including Additional Interest, if any) on such Security shall, until paid, bear interest from the Redemption Date at the rate then in effect, and such Security shall remain
convertible until the principal of such Security (or portion thereof, as the case may be) shall have been paid or duly provided for. 

        SECTION 9.8 Securities Redeemed in Part.

        Any
Security that is to be redeemed only in part shall be surrendered at an office or agency of the Company designated for that purpose pursuant to  Section 8.2 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Security without service charge, a new Registered Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security so surrendered. 

        If
the Company opts to redeem less than all of the Outstanding Securities, the Trustee shall select or cause to be selected the Securities or portions thereof of the Global Note or the
Securities in 

42

 

certificated
form to be redeemed (in principal amounts of $1,000 or integral multiples thereof) by lot, on a pro rata basis or by another method the
Trustee deems fair and appropriate. If any Security selected for partial redemption is submitted for conversion in part after such selection, the portion of such Security submitted for conversion
shall be deemed (so far as may be possible) to be from the portion selected for redemption. The Securities (or portions thereof) so selected shall be deemed duly selected for redemption for all
purposes hereof, notwithstanding that any such Security is submitted for conversion in part before the mailing of the Redemption Notice. 

        SECTION 9.9 Conversion Arrangement on Call for Redemption.

        In
connection with any redemption of the Securities, the Company may arrange for the purchase and conversion of any Securities by an agreement with one or more investment bankers or
other purchasers (the "Purchasers") to purchase such Securities by paying to the Trustee in trust for the Holders, on or before the Redemption Date, an
amount not less than the applicable Redemption Price, together with interest accrued and unpaid to the Redemption Date, of such Securities. Notwithstanding anything to the contrary contained in this  Article
Nine, the obligation of the Company to pay the Redemption Price, together with interest accrued and unpaid to the Redemption Date, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by such Purchasers. If such an agreement is entered into (a copy of which shall be filed with the Trustee prior to the close
of business on the second Business Day immediately prior to the Redemption Date), any Securities called for redemption that are not duly surrendered for conversion by the Holders thereof may, at the
option of the Company, be deemed, to the fullest extent permitted by law, and consistent with any agreement or agreements with such Purchasers, to be acquired by such Purchasers from such Holders and
(notwithstanding anything to the contrary contained in this Article Nine) surrendered by such Purchasers for conversion, all as of immediately prior to
the close of business on the Redemption Date (and the right to convert any such Securities shall be extended through such time), subject to payment of the above amount as aforesaid. At the direction
of the Company, the Trustee shall hold and dispose of any such amount paid to it by the Purchasers to the Holders in the same manner as it would monies deposited with it by the Company for the
redemption of Securities. Without the Trustee's prior written consent, no arrangement between the Company and such Purchasers for the purchase and conversion of any Securities shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this Indenture, and the Company agrees to indemnify the Trustee from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and conversion of any Securities between the Company and such Purchasers, including
the costs and expenses, including reasonable legal fees, incurred by the Trustee in the defense of any claim or liability arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture. 

ARTICLE TEN

CONVERSION OF SECURITIES  

        SECTION 10.1 Conversion Privilege and Conversion Rate.

        Subject
to and upon compliance with the provisions of this Article Ten, at the option of the Holder thereof, any Security or any portion
of the principal amount thereof that is U.S.$l,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock of the Company at the Conversion Rate, determined as hereinafter provided, in effect at the time of conversion. Such conversion right shall commence upon the
original issuance of the Securities and expire at the close of business on November 1, 2024, unless the Security has been previously redeemed or repurchased, subject, in the case of conversion
of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Company or the Holder thereof exercises his 

43

 

right
to require the Company to repurchase the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day
immediately preceding the Redemption Date or the Repurchase Date, as the case may be, unless the Company defaults in making the payment due upon redemption or repurchase, as the case may be (in each
case subject, as aforesaid, to any Applicable Procedures with respect to any Global Security). 

        The
rate at which shares of Common Stock shall be delivered upon conversion (herein called the "Conversion Rate") shall be initially
109.2001 shares of Common Stock for each U.S.$l,000 principal amount of Securities. The Conversion Rate shall be adjusted in certain instances as provided in this Article
Ten. 

        SECTION 10.2 Exercise of Conversion Privilege.

        In
order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Company or in blank, at any
office or agency of the Company maintained for that purpose pursuant to Section 8.2, accompanied by a duly signed and completed conversion notice
substantially in the form attached hereto as Exhibit C stating that the Holder elects to convert such Security or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof that has been called
for redemption on a Redemption Date, or is to be repurchased on a Repurchase Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and
the close of business on such Interest
Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date, with respect to any Security (or
portion thereof, if applicable) that is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on or after an
Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this
paragraph and subject to the last paragraph of Section 2.8, no cash payment or adjustment shall be made upon any conversion on account of any
interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any
dividends on the Common Stock issued upon conversion. The Company's delivery to the Holder of the number of shares of Common Stock (and cash in lieu of fractions thereof, as provided in this
Indenture) into which a Security is convertible and any rights and warrants pursuant to Section 10.4(c) will be deemed to satisfy the Company's
obligation to pay the principal amount of the Security. 

        Securities
shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of
the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on or after the conversion date, the Company shall issue and deliver to the Trustee, for delivery to the Holder, a certificate or
certificates for the number of full shares of Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in  Section 10.3. 

44

 

        All
shares of Common Stock delivered upon such conversion of Securities shall bear restrictive legends substantially in the form of the legends required to be set forth on the Securities
pursuant to Section 2.6 and shall be subject to the restrictions on transfer provided in such legends. Neither the Trustee nor any agent
maintained for the purpose of such conversion shall have any responsibility for the inclusion or content of any such restrictive legends on such Common Stock;  provided, however, that the Trustee or any agent maintained for the purpose of such conversion shall
have provided to the Company or to the Company's transfer agent for such Common Stock, prior to or concurrently with a request to the Company to deliver such Common Stock, written notice that the
Securities delivered for conversion are Securities. 

        In
the case of any Security that is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and make available for delivery to the
Holder thereof, at the expense of the Company, a new Registered Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal
amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted
is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$l,000 or any integral multiple of U.S.$l,000 in excess
thereof. 

        SECTION 10.3 Fractions of Shares.

        No
fractional shares of Common Stock shall be issued upon conversion of any Security or Securities. If more than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares that shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock that would otherwise be issuable upon conversion of any Security or Securities (or specified portions thereof), the Company shall calculate
and pay a cash adjustment in respect of such fraction (calculated to the nearest 1/100th of a share) in an amount equal to the same fraction of the Closing Sale Price at the close of business on the
day of conversion. 

        SECTION 10.4 Adjustment of Conversion Rate.

        The
Conversion Rate shall be subject to adjustment from time to time as follows: 

        (a)   In
case the Company shall (1) pay a dividend in shares of Common Stock to all or substantially all holders of Common Stock, (2) make a distribution in
shares of Common Stock to all or substantially all holders of Common Stock, (3) subdivide the outstanding shares of Common Stock into a greater number of shares of Common Stock or
(4) combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock, the Conversion Rate in effect immediately prior to such action shall be adjusted so that the
Holder of any Security thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock which such Holder would have owned immediately following such action had
such Securities been converted immediately prior thereto. Any adjustment made pursuant to this Section 10.4(a) shall become effective immediately
after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. 

        (b)   In
case the Company shall issue rights or warrants (other than pursuant to a stockholders' rights plan) to all or substantially all holders of Common Stock, entitling
them, for a period expiring not more than sixty (60) days immediately following the record date for the determination of holders of Common Stock entitled to receive such rights or warrants, to
subscribe for or purchase shares of Common Stock (or securities convertible into or exchangeable or exercisable for Common Stock), at a price per share (or having a conversion, exchange or exercise
price per share) less than the Current Market Price (as determined pursuant to Section 10.4(h)) of Common Stock on the record date for the
determination of holders of Common Stock entitled to receive 

45

 

such
rights or warrants, the Conversion Rate shall be increased by multiplying the Conversion Rate in effect immediately prior to such record date by a fraction of which (1) the numerator shall
be the sum of (i) the number of shares of Common Stock outstanding at the close of business on such record date and (ii) the aggregate number of shares (the
"Underlying Shares") of Common Stock underlying all such issued rights or warrants (whether by exercise, conversion, exchange or otherwise), and
(2) the denominator shall be the sum of (i) number of shares of Common Stock outstanding at the close of business on such record date and (ii) the number of shares of Common Stock
which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current
Market Price (as defined in pursuant to Section 10.4(h)). Such increase shall become effective immediately prior to the opening of business on
the day following such record date. In no event shall the Conversion Rate be decreased pursuant to this Section 10.4(b);  provided, however, that in
the event that such rights or warrants are not exercised before they expire, the Conversion Rate shall be adjusted to be the
Conversion Rate which would then be in effect if such expired rights or warrants had not been issued. 

        (c)   In
case the Company shall dividend or distribute to all or substantially all holders of Common Stock shares of Capital Stock of the Company (other than Common Stock),
evidences of indebtedness or other assets (other than dividends or distributions requiring an adjustment to the Conversion Rate in accordance with  Section 10.4(d), Section 10.4(e) or  Section 10.4(f)), or shall dividend or distribute to all or substantially all holders of Common Stock rights or warrants to subscribe for
or
purchase securities (other than those referred to in Section 10.4(b) (other than pursuant to a stockholders' rights plan)), then in each such
case the Conversion Rate shall be increased by multiplying the Conversion Rate in effect immediately prior to the close of business on the record date for the determination of shareholders entitled to
such dividend or distribution by a fraction of which (1) the numerator shall be the Current Market Price of Common Stock (as defined in pursuant to  Section 10.4(h)) on such record date and
(2) the denominator shall be an amount equal to (i) such Current Market Price less
(ii) the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), on such record date, of the
portion of the shares of Capital Stock, evidences of indebtedness, assets, rights and warrants to be dividend or distributed applicable to one share of Common Stock, such increase to become effective
immediately prior to the opening of business on the day following such record date; provided, however,
that if such denominator is equal to or less than zero, then, in lieu of the foregoing adjustment to the Conversion Rate, adequate provision shall be made so that each Holder shall have the right to
receive upon conversion of its Securities, in addition to the shares of Common Stock issuable (and cash, if any, payable) upon such conversion, an amount of shares of Capital Stock, evidences of
indebtedness, assets, rights and/or warrants that such Holder would have received had such Holder converted all of its Securities on such record date. Notwithstanding the foregoing, in the event that
the Company shall distribute rights or warrants (other than those referred to in Section 10.4(b)) (collectively,
"Rights") pro rata to holders of Common Stock, the Company may, in lieu of making any adjustment
pursuant to this Section 10.4(c), make proper provision so that each Holder of a Security who converts such Security (or any portion thereof) on
or after the record date for such distribution and prior to the expiration or redemption of the Rights shall be entitled to receive upon such conversion, in addition to the shares of Common Stock
issuable (and cash, if any, payable) upon such conversion (the "Conversion Shares"), a number of Rights to be determined as follows: (A) if such
conversion occurs on or prior to the date for the distribution to the holders of Rights of separate certificates evidencing such Rights (the "Distribution
Date"), the same number of Rights to which a holder of a number of shares of Common Stock equal to the number of shares of Conversion Shares would be entitled at the time of
such conversion in accordance with the terms and provisions of and applicable to the Rights; and (B) if such conversion occurs after the Distribution Date, the same number of Rights to which a
holder of the number of shares of Common Stock into which the 

46

 

principal
amount of the Security so converted was convertible immediately prior to the Distribution Date would have been entitled on the Distribution Date in accordance with the terms and provisions
of and applicable to the Rights. Any distribution of rights or warrants pursuant to a stockholders' rights plan complying with the requirements set forth in the preceding sentence of this paragraph
and with Section 10.13 shall not constitute a distribution of rights or warrants pursuant to this  Section 10.4(c). In no event shall the
Conversion Rate be decreased pursuant to this  Section 10.4(c). 

        (d)   In
case the Company shall, by dividend or otherwise, at any time make a distribution of cash (excluding any cash that is distributed as part of a distribution requiring
a Conversion Rate adjustment pursuant to Section 10.4(e) or Section 10.4(f)to all or
substantially all holders of Common Stock, the Conversion Rate shall be increased by multiplying the Conversion Rate in effect immediately prior to the close of business on the record date for the
determination of holders of Common Stock entitled to
such distribution by a fraction (1) whose numerator shall be the Current Market Price per share of Common Stock (as defined in pursuant to  Section 10.4(h)) on such record date and
(2) whose denominator shall be an amount equal to (i) such Current Market Price per share
of Common Stock less (ii) the amount of the distribution per share of Common Stock; provided,  however, that the Conversion Rate shall not be adjusted
pursuant to this Section 10.4(d) to the
extent, and only to the extent, such adjustment would cause the Conversion Price to be less than one cent ($0.01); provided further that, if the
denominator of such fraction shall be equal to or less than zero, the Conversion Rate shall be instead adjusted so that the Conversion Price is equal to one cent ($0.01). An adjustment to the
Conversion Rate pursuant to this Section 10.4(d) shall become effective immediately prior to the opening of business on the day immediately
following such record date. In no event shall the Conversion Rate be decreased pursuant to this Section 10.4(d). 

        (e)   In
case the Company or any Subsidiary shall distribute cash or other consideration in respect of a tender offer or exchange offer made by the Company or any Subsidiary
for all or any portion of the Common Stock where the sum of the aggregate amount of such cash distributed and the aggregate fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and set forth in a Board Resolution), as of the Expiration Date (as defined below), of such other consideration distributed (such sum, the
"Aggregate Amount") expressed as an amount per share of Common Stock validly tendered or exchanged, and not withdrawn, pursuant to such tender offer or
exchange offer as of the Expiration Time (as defined below) (such tendered or exchanged shares of Common Stock, the "Purchased Shares") exceeds the
Current Market Price per share of Common Stock (as defined in pursuant to Section 10.4(h)) on the last date (such last date, the
"Expiration Date") on which tenders or exchanges could have been made pursuant to such tender offer or exchange offer (as the same may be amended
through the Expiration Date), then the Conversion Rate shall be increased by multiplying the Conversion Rate in effect immediately prior to the close of business on the Expiration Date by a fraction
(1) whose numerator is equal to the sum of (i) the Aggregate Amount and (ii) the product of (A) the Current Market Price per share of Common Stock (as defined in pursuant
to Section 10.4(h)) on the Expiration Date and (B) an amount equal to (I) the number of shares of Common Stock outstanding as of
the last time (the "Expiration Time") at which tenders or exchanges could have been made pursuant to such tender offer or exchange offer (including all
Purchased Shares) less (II) the Purchased Shares and (2) whose denominator is equal to the product of (i) the number of shares of Common Stock outstanding as of the Expiration
Time (including all Purchased Shares) and (ii) the Current Market Price per share of Common Stock on the Expiration Date. 

An
increase, if any, to the Conversion Rate pursuant to this Section 10.4(e) shall become effective immediately prior to the opening of business
on the Business Day following the Expiration Date. In the event that the Company or a Subsidiary is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer,
but the Company or such Subsidiary is 

47

 

permanently
prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if such tender offer or exchange offer had not been made. If the application of this Section 10.4(e) to any tender offer or
exchange offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer or exchange offer under this  Section 10.4(e). 

        (f)    If
(1) a person other than the Company or any Subsidiary shall distribute cash or other consideration in respect of a tender or exchange offer made by such person
for all or any portion of the Common Stock; (2) as of the last date (the "Third Party Expiration Date") on which tenders
or exchanges could have been made pursuant to such tender offer or exchange offer (as the same may be amended through such date), the Board of Directors does not recommend rejection of such tender
offer or exchange offer; (3) such person (including such person's "affiliates," within the meaning of Rule 144(a)(1) under the Securities Act, and including any "syndicate" or "group,"
within the meaning of Section 13(d)(3) of the Exchange Act, that includes such person) would, assuming that all shares sought for tender or exchange pursuant to such tender or exchange offer
are validly tendered or exchanged pursuant to such tender or exchange offer, "beneficially own" (within the meaning of Rule 13d-3 under the Exchange Act) at least ten percent (10%)
of the total shares of Common Stock outstanding immediately after the Third Party Expiration Time (as defined below); and (4) the sum of the aggregate amount of such cash and the fair market
value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the Third Party Expiration Date, of such other
consideration (such sum, the "Third Party Aggregate Amount"), expressed as an amount per share of Common Stock validly tendered or exchanged, and not
withdrawn, pursuant to such tender offer or exchange offer as of the last time (the "Third Party Expiration Time") at which tenders or exchanges could
have been made pursuant to such tender offer or exchange offer (such tendered or exchanged shares of Common Stock, the "Third Party Purchased Shares"),
exceeds the Current Market Price per share of Common Stock (as defined in pursuant to Section 10.4(h)) on the Third Party Expiration Date, then
the Conversion Rate shall be adjusted by multiplying the Conversion Rate in effect immediately prior to the close of business on the Third Party Expiration Date by a fraction (i) whose
numerator is equal to the sum of (A) the Third Party Aggregate Amount and (B) the product of (I) the Current Market Price per share of Common Stock (as defined in pursuant to  Section 10.4(h)) on the Third Party Expiration Date and (II) an amount equal to (x) the number of shares of Common Stock
outstanding as of the Third Party Expiration Time (including all Third Party Purchased Shares) less (y) the Third Party Purchased Shares and (ii) whose denominator is equal to the
product of (A) the number of shares of Common Stock outstanding as of the Third Party Expiration Time (including all Third Party Purchased Shares) and (B) the Current Market Price per
share of Common Stock (as defined in pursuant to Section 10.4(h)) on the Third Party Expiration Date. 

An
adjustment, if any, to the Conversion Rate pursuant to this Section 10.4(f) shall become effective immediately prior to the opening of
business on the Business Day following the Third Party Expiration Date. In the event that such tender offer or exchange offer is permanently prevented by applicable law from being effected, or all
purchases pursuant to such tender offer or exchange offer are rescinded, then the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if such tender offer
or exchange offer had not been made. If the application of this Section 10.4(f) to any tender offer or exchange offer would result in a decrease
in the Conversion Rate, no adjustment shall be made for such tender offer or exchange offer under this Section 10.4(f). 

        (g)   In
addition to the foregoing adjustments in subsections (a), (b), (c), (d), (e) and (f) above, the Company, from time to time and to the extent permitted
by law and subject to any continued listing requirements applicable to the Common Stock, may increase the Conversion Rate 

48

 

by
any amount for a period of at least twenty (20) days or such longer period as may be required by law or the continued listing requirements applicable to the Common Stock, if the Board of
Directors has made a determination, which determination shall be conclusive, that such increase would be in the best interests of the Company. Such Conversion Rate increase shall be irrevocable during
such period. The Company shall give written notice to the Trustee and cause notice of such increase to be mailed to each Holder of Securities at such Holder's address as the same appears on the
registry books of the Registrar, at least fifteen (15) days prior to the date on which such increase commences. 

        (h)   For
the purpose of any computation under subsections (a), (b), (c) or (d) above of this  Section 10.4, the Current Market Price per share of Common Stock (the "Current Market
Price") on the date fixed for determination of the shareholders entitled to receive the issuance or distribution requiring such computation (the
"Determination Date") shall be deemed to be the average of the Closing Sale Price for the ten (10) consecutive Trading Days immediately preceding
the Determination Date, and, for the purpose of any computation under Section 10.4(e) or  Section 10.4(f) above, the Current Market Price per
share of Common Stock on the Expiration Date or Third Party Expiration Date, as the case may
be, for the tender offer or exchange offer requiring such computation shall be deemed to be the average of the Closing Sale Price for the ten (10) consecutive Trading Days immediately preceding
the Expiration Date or Third Party Expiration Date, as the case may be; provided, however, that
(1) if the "ex" date for any event (other than the event requiring such computation) that requires an adjustment to the Conversion Rate pursuant to subsections (a), (b), (c), (d),
(e) and (f) above occurs on or after the tenth (10th) Trading Day prior to the Determination Date, Expiration Date or Third Party Expiration Date, whichever is applicable, and prior to
the "ex" date for the issuance or distribution requiring such computation, the Closing Sale Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such
Closing Sale Price by the reciprocal of the fraction by which the Conversion Rate is so required to be adjusted as a result of such other event, (2) if the "ex" date for any event (other than
the event requiring such computation) that requires an adjustment to the Conversion Rate pursuant to subsections (a), (b), (c), (d), (e) and (f) above occurs on or after the "ex" date
for the issuance or distribution requiring such computation and on or prior to the Determination Date or the Expiration Date or Third Party Expiration Date, whichever is applicable, the Closing Sale
Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Sale Price by the same fraction by which the Conversion Rate is so required to
be adjusted as a result of such other event, and (3) if the "ex" date for the event requiring such computation is on or prior to the Determination Date or Expiration Date or Third Party
Expiration Date, whichever is applicable, after taking into account any adjustment required pursuant to clause (1) or (2) of this proviso, the Closing Sale Price for each Trading Day on
and after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined in good faith by the Board of Directors in a manner consistent with any
determination of such value for the purposes of this Section 10.4, whose determination shall be conclusive and described in a Resolution of the
Board of Directors) of the evidences of indebtedness, shares of Capital Stock or other securities or assets or cash being distributed (in the event requiring such computation) applicable to one share
of Common Stock as of the close of business on the day before such "ex" date. 

        For
purposes of this subsection, the term "ex" date, (i) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades the regular
way on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, (ii) when used with respect to
any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades the regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (iii) when used with respect to any tender offer or exchange offer means the first date on 

49

 

which
the Common Stock trades the regular way on such exchange or in such market after the expiration time of such tender offer or exchange offer (as it may be amended or extended). 

        SECTION 10.5 Notice of Adjustments of Conversion Rate.

        Whenever
the Conversion Rate is adjusted as herein provided: 

        (a)   the
Company shall compute the adjusted Conversion Rate in accordance with Section 10.4 and shall prepare a
certificate signed by the Chief Financial Officer of the Company setting forth the adjusted Conversion Rate and showing in reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with the Conversion Agent; and 

        (b)   upon
each such adjustment, a notice stating that the Conversion Rate has been adjusted and setting forth the adjusted Conversion Rate shall be required, and as soon as
practicable after it is required, such notice shall be provided by the Company to all Holders in accordance with Section 1.6. 

        Neither
the Trustee nor the Conversion Agent shall be under any duty or responsibility with respect to any such certificate or the information and calculations contained therein, except
to exhibit the same to any Holder of Securities desiring inspection thereof at its office during normal business hours. Unless and until a Responsible Officer of the Trustee and Conversion Agent
receive notice of an adjusted Conversion Rate, the Trustee and the Conversion Agent may rely without inquiry on the Conversion Rate most recently in effect. 

        SECTION 10.6 Notice of Certain Corporate Action.

        In
case: 

        (a)   the
Company shall declare a dividend (or any other distribution) on its Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively in
cash in an amount that would require any adjustment pursuant to Section 10.4; or 

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

        (c)   of
any reclassification of the Common Stock of the Company, or of any consolidation, merger or share exchange to which the Company is a party and for which approval of
any stockholders of the Company is required, or of the conveyance, sale, transfer or lease of all or substantially all of the assets of the Company; or 

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

then
the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of Securities pursuant to Section 8.2,
and shall cause to be provided to all Holders in accordance with Section 1.6, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record or effective date hereinafter specified, a notice stating (1) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options 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,
rights, options or warrants are to be determined or (2) the date on which such reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up. Neither the failure to give such notice or the notice
referred to in the following paragraph nor any defect therein shall affect the legality or validity of the proceedings described in clauses (a) through (d) of this  Section 10.6. If at the
time the Trustee shall not be the Conversion Agent, a copy of such notice shall also forthwith be filed by the Company
with the Trustee. 

50

  

        The Company shall cause to be filed at each office or agency maintained for the purpose of conversion of Securities pursuant to  Section 8.2, and
shall cause to be provided to all Holders in accordance with Section 1.6,
notice of any tender offer by the Company or any Subsidiary for all or any portion of the Common Stock at or about the time that such notice of tender offer is provided to the public generally. 

        SECTION 10.7 Company to Reserve Common Stock.

        The
Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of
Securities, the full number of shares of Common Stock then issuable upon the conversion of all Outstanding Securities. 

        SECTION 10.8 Taxes on Conversions.

        Except
as provided in the next sentence, the Company will pay any and all taxes and duties that may be payable in respect of the issue or delivery of shares of Common Stock on conversion
of Securities pursuant hereto. The Company shall not, however, be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to
the Company the amount of any such tax or duty or has established to the satisfaction of the Company that such tax or duty has been paid. 

        SECTION 10.9 Covenant as to Common Stock.

        The
Company agrees that all shares of Common Stock that may be delivered upon conversion of Securities, upon such delivery, will have been duly authorized and validly issued and will be
fully paid and nonassessable and, except as provided in Section 10.8, the Company will pay all taxes, liens and charges with respect to the issue
thereof. 

        SECTION 10.10 Cancellation of Converted Securities.

        All
Securities delivered for conversion shall be delivered to the Trustee or its agent to be cancelled by or at the direction of the Trustee, which shall dispose of the same as provided
in Section 2.10. 

        SECTION 10.11 Provision in Case of Consolidation, Merger or Sale of Assets.

        In
case of any consolidation or merger of the Company with or into any other Person, any merger of another Person with or into the Company (other than a merger that does not result in
any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company) or any conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such merger or that acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then Outstanding shall have the right thereafter, during the period such Security shall be convertible as specified in  Section 11.l, to convert such
Security only into the kind and amount of securities, cash and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease by a holder of the number of shares of Common Stock of the Company into which such Security might have been converted immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease, assuming such holder of Common Stock of the Company (a) is not a Person with which the Company consolidated or merged with or into or
that merged into or with the Company or to which such conveyance, sale, transfer or lease was made, as the case may be (a "Constituent Person"), or an
Affiliate of a Constituent Person and (b) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease (provided that if the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, 

51

 

transfer,
or lease is not the same for each share of Common Stock of the Company held immediately prior to such consolidation, merger, conveyance, sale, transfer or lease by others than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("Non-electing Share"), then
for the purpose of this Section 10.11 the kind and amount of securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease by the holders of each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the
Non-electing Shares). Such supplemental indenture shall provide for adjustments that, for events subsequent to the effective date of such supplemental indenture, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article Ten. The above provisions of this  Section 10.11 shall similarly apply
to successive consolidations, mergers, conveyances, sales, transfers or leases. Notice of the execution of
such a supplemental indenture shall be given by the Company to the Holder of each Security as provided in Section 1.6 promptly upon such
execution. 

        Neither
the Trustee nor the Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either
to the kind
or amount of shares of stock or other securities or property or cash receivable by Holders of Securities upon the conversion of their Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Officers Certificate or an
Opinion of Counsel with respect thereto, which the Company shall cause to be furnished to the Trustee upon request. 

        SECTION 10.12 Responsibility of Trustee for Conversion Provisions.

        The
Trustee, subject to the provisions of Section 5.1, and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist that may require any adjustment of the Conversion Rate, or with respect to the nature or extent 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, or whether a supplemental indenture need be entered into.
Neither the Trustee, subject to the provisions of Section 5.1, nor any Conversion Agent shall be accountable with respect to the validity or
value (or the kind or amount) of any Common Stock, or of any other securities or property or cash, that may at any time be issued or delivered upon the conversion of any Security; and it or they do
not make any representation with respect thereto. Neither the Trustee, subject to the provisions of Section 5.1, nor any Conversion Agent shall
be responsible for any failure of the Company to make or calculate any cash payment or to issue, transfer or deliver any shares of Common Stock or share certificates or other securities or property or
cash upon the surrender of any Security for the purpose of conversion; and the Trustee, subject to the provisions of Section 5.1, and any
Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article
Ten. 

        SECTION 10.13 Rights Distributions Pursuant to a Stockholders' Rights Plan.  

        In the event that the Company implements a stockholders' rights plan after the date hereof, the Company shall provide that the Holders will receive upon
conversion of their Securities, in addition to shares of Common Stock issuable (and cash, if any, payable) upon such conversion, the rights described therein (whether or not the rights have been
separated from the Common Stock prior to the time of conversion). 

        SECTION 10.14 No Adjustment.  

        No adjustment in the Conversion Rate shall be required until cumulative adjustments amount to one percent (1%) or more of the Conversion Price as last adjusted
(or, if never adjusted, the initial Conversion Rate); provided, however, that any adjustments which by reason of this  Section 10.14 are not required
to be made shall be carried forward and taken into account in any subsequent adjustment. All
 

52

 

calculations
under this Article Ten shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. 

        If
any rights, options or warrants issued by the Company and requiring an adjustment to the Conversion Rate in accordance with  Section 10.4 are only exercisable upon the occurrence of certain
triggering events, then the Conversion Rate will not be adjusted as provided in  Section 10.4 until the earliest of such triggering event occurs. Upon the expiration or termination of any such
rights, options or warrants
without the exercise of such rights, options or warrants, the Conversion Rate then in effect shall be adjusted immediately to the Conversion Rate which would have been in effect at the time of such
expiration or termination had such rights, options or warrants, to the extent outstanding immediately prior to such expiration or termination, never been issued. 

        If
any dividend or distribution is declared and the Conversion Rate is adjusted pursuant to Section 10.4 on account of such
dividend or distribution, but such dividend or distribution is thereafter not paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would then be in effect had such
dividend or distribution not been declared. 

        No
adjustment to the Conversion Rate need be made for a transaction referred to in this Article Ten if Holders are to participate in the
transaction without conversion on a basis and with notice that the Board of Directors determines in good faith to be fair and appropriate in light of the basis and notice on which holders of Common
Stock participate in the transaction (which determination shall be described in a Board Resolution). A distribution of separate certificates representing any rights under a stockholders' rights plan
or the exercise of any such rights in accordance with any such stockholder rights plan, will not trigger a conversion rate adjustment. 

ARTICLE ELEVEN

SUBORDINATION OF SECURITIES  

        SECTION 11.1 Securities Subordinate to Senior Debt.

        The
Company covenants and agrees, and each Holder of a Security by his acceptance thereof likewise covenants and agrees, that to the extent and in the manner hereinafter set forth in
this Article Eleven (subject to the provisions of Article Three) the indebtedness represented by the
Securities and the payment of the principal of (and premium, if any) and interest (including Additional Interest, if any) on, and any payment of the Repurchase Price with respect to, each and all of
the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash or Cash Equivalents of all Senior Debt. 

        SECTION 11.2 No Payments in Certain Circumstances; Payment Over of Proceeds Upon Dissolution,
Etc.

        No
payment on account of principal of, premium, if any, or interest (and Additional Interest, if any) on, or redemption or repurchase of, the Securities shall be made if, at the time of
such payment: (a) a default in the payment of principal, premium, if any, or interest or other amounts due on or in connection with any Senior Debt, including any default under any redemption
or repurchase obligation, occurs and is continuing (or, in the case of Senior Debt for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if
any, specified in the instrument or lease evidencing such Senior Debt), unless and until such default shall have been cured or waived or shall have ceased to exist; or (b) a default, other than
a payment default, on Designated Senior Debt occurs and is continuing that then permits holders of such Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of the
default (a "Payment Blockage Notice") from the Company, a holder of Designated Senior Debt or a Representative. Notwithstanding the foregoing, the
Company may make, and the Trustee may receive and shall apply, any payment in respect of the Securities (for principal, premium, if any, or interest (and Additional Interest, if any) or repurchase) if 

53

 

such
payment was made prior to the occurrence of any of the contingencies specified in clauses (a) and (b) above. 

        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 11.2 unless and until
(1) at least 365 days shall have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (2) all scheduled payments of principal, premium, if any, and interest (including Additional Interest, if any) on the Securities that have come due have been paid in full in
cash. No nonpayment 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 unless such existing nonpayment default has been cured for a period of at least 90 days. 

        The
Company may and shall resume payments on and distributions in respect of the Securities (including missed payments, if any) upon the earlier of: (A) the date upon which the
default is cured or waived, or (B) in the case of a default referred to in clause (b) of the second preceding paragraph, 179 days after notice is received if the maturity of such
Designated Senior Debt has not been
accelerated such that such debt is then presently payable, unless this Indenture otherwise prohibits the payment or distribution at the time of such payment or distribution. 

        Upon
(i) any acceleration of the principal amount due on the Securities or (ii) any payment or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any dissolution, winding up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings, all principal of, premium, if any, sinking fund and interest or other amounts due, or to become due, upon or in connection with all Senior Debt shall
first be paid in full in cash or Cash Equivalents, or payment thereof provided for in cash or Cash Equivalents in accordance with its terms, before any payment is made on account of the principal of,
premium, if any, or interest (and Additional Interest, if any) on, or repurchase of, the indebtedness evidenced by the Securities, and upon any such dissolution or winding up or liquidation or
reorganization any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall 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 Securities or by the Trustee under this Indenture if received by them or it, as the case may be, directly to the holders of Senior Debt
(pro rata to each such holder on the basis of the respective amounts of Senior Debt held by such holder) or their representatives, to the extent
necessary to pay all Senior Debt in full, in cash or Cash Equivalents, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any payment or
distribution is made to the Holders of the Securities or to the Trustee under this Indenture. 

        In
the event that, contrary to the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than junior
securities, as defined in Section 11.11), shall be received by the Trustee or the Holders of the Securities before all Senior Debt is paid in
full in cash or Cash Equivalents or provision made for such payment in accordance with its terms, such payment or distribution shall be paid over or delivered to the holders of such Senior Debt or
their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any of such Senior Debt have been issued, as their respective
interests may appear, for application to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all such Senior Debt in full in cash or Cash Equivalents in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Debt. 

54

 

        Subject
to the payment in full in cash or Cash Equivalents of all Senior Debt, the Holders of the Securities (together with the holders of any other indebtedness of the Company that is
subordinated in right of payment to the payment in full of all Senior Debt that is not subordinated in right of payment to the Securities and that by its terms grants such right of subrogation to the
holders thereof) shall be subrogated to the rights of the holders of Senior Debt to receive payments or distributions of assets of the Company made on the Senior Debt until the principal of, premium,
if any, and interest on, or amounts payable upon repurchase of, the Securities shall be paid in full, and, for the purposes of such
subrogation, no payments or distributions to the holders of Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article Eleven, and no payment over pursuant to the provisions of this Article Eleven
to the holders of Senior Debt by the Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than the holders of Senior Debt, and the Holders of Securities, be
deemed to be a payment by the Company to the holders of or on account of Senior Debt, it being understood that the provisions of this Article Eleven are
and are intended solely for the purpose of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of Senior Debt, on the other hand. 

        SECTION 11.3 Trustee to Effectuate Subordination.

        Each
Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Eleven and appoints the Trustee his attorney-in-fact for any and all such purposes. 

        SECTION 11.4 No Waiver of Subordination Provisions.

        No
right of any present or future holder of any Senior Debt 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 of any Senior Debt or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. 

        Without
in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee
or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this  Article Eleven or the
obligations hereunder of the Holders of the Securities to the holders of Senior Debt, do any one or more of the following in good
faith: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Debt; (c) release any Person liable in any manner for the collection of Senior Debt; and (d) exercise or refrain from exercising any rights against the Company and any other
Person. 

        SECTION 11.5 Notice to Trustee.

        The
Company shall give prompt written notice to the Trustee of any fact known to the Company that would prohibit the making of any payment to or by the Trustee in respect of the
Securities. Notwithstanding the provisions of this Article Eleven or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or representative therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 5.1, shall be entitled in all respects to assume that no such facts exist;  provided, however, that if the Trustee shall not have received the notice
 

55

 

provided
for in this Section 11.5 prior to the date upon which by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (and premium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date. 

        Subject
to the provisions of Section 5.1, the Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Debt (or a trustee, agent or representative therefor) to establish that such notice has been given by a holder of Senior Debt (or a trustee, agent
or representative therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate
in any payment or distribution pursuant to this Article Eleven, the Trustee may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of Senior Debt 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 Eleven, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment. 

        SECTION 11.6 Reliance on Judicial Order or Certificate of Liquidating Agent.

        Upon
any payment or distribution of assets of the Company referred to in this Article Eleven, the Trustee, subject to the provisions of  Section 5.1, and
the Holders of the Securities shall be entitled to 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,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities,
for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt 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 Eleven. 

        SECTION 11.7 Trustee Not Fiduciary for Holders of Senior Debt.

        The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this  Article Eleven or
otherwise. With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article Eleven, and no implied covenants or obligations with respect to holders of Senior Debt shall
be read into this Indenture against the Trustee. 

        SECTION 11.8 Reliance by Holders of Senior Debt on Subordination Provisions.

        Each
Holder by accepting a Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of
any Senior Debt, whether such Senior Debt was created or acquired before or after the issuance of the Securities, to acquire and continue to hold, or to continue to hold, such Senior Debt, and such
holder of Senior Debt shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Debt. Such holders of the
Company's Senior Debt are intended by the parties to the Indenture to be third-party creditor beneficiaries under this Indenture for the purposes of enforcing the provisions of this  Article Eleven.

56

 

        SECTION 11.9 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights.

        The
Trustee in its individual capacity shall be entitled to all the rights set forth in this Article Eleven with respect to any Senior
Debt that may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. 

        Nothing
in this Article Eleven shall apply to claims of, or payments to, the Trustee under or pursuant to  Section 5.7. 

        SECTION 11.10 Article Applicable to Paying Agents.

        In
case 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 Eleven shall in such case
(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 Eleven in addition to or in place of the Trustee;  provided,
 however, that Section 11.9 shall not
apply to the Company or any Affiliate of the Company if the Company or any such Affiliate acts as Paying Agent. 

        SECTION 11.11 Certain Conversions and Repurchases Deemed Payment.

        For
the purposes of this Article Eleven only (a) the issuance and delivery of junior securities upon conversion of Securities in
accordance with Article Ten or upon the repurchase of Securities in accordance with Article Twelve shall
not be deemed to constitute a payment or distribution on account of the principal of or premium or interest or Additional Interest on Securities or on account of the purchase or other acquisition of
Securities, and (b) the payment, issuance or delivery of cash, property or securities (other than junior securities) upon conversion of a Security shall be deemed to constitute payment on
account of the principal of such Security. For the purposes of this Section 11.11, the term "junior securities" means (1) shares of any
stock of any class of the Company and any cash, property or securities into which the Securities are convertible pursuant to Article Ten and
(2) securities of the Company that are subordinated in right of payment to all Senior Debt 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 Securities are so subordinated as provided in this Article Eleven. Nothing contained in this  Article Eleven or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors and the Holders
of the Securities, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article Ten
or to exchange such Security for Common Stock in accordance with Article Twelve if the Company elects to satisfy the obligations under  Article Twelve by
the delivery of Common Stock. 

ARTICLE TWELVE

REDEMPTION AND REPURCHASE UPON A FUNDAMENTAL CHANGE  

        SECTION 12.1 Company's Right to Redeem.

        Prior
to November 1, 2009, the Securities shall not be redeemable at the Company's option. At any time on or after November 1, 2009 and prior to Stated Maturity, the
Company, at its option, may redeem the Securities, in whole or in part, in accordance with the provisions of this Article Twelve, and on the Redemption
Date for a redemption price (the "Redemption Price") in cash equal to 100% of the principal amount of the Securities plus accrued and unpaid interest
(including Additional Interest, if any) on the Securities to but not including the Redemption Date. 

57

 

        SECTION 12.2 Notice of Optional Redemption; Selection of Securities.

        (a)   In
case the Company shall desire to exercise the right to redeem all or, as the case may be, any part of the Securities pursuant to this Article
Twelve, it shall fix a date for redemption (the "Redemption Date") and it or, at its written request (which request must include
the information listed in and be received by the Trustee not fewer than thirty-five (35) days prior (or such shorter period of time as may be acceptable to the Trustee) to the
Redemption Date), the Trustee in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption (a "Redemption
Notice") not fewer than twenty (20) nor more than sixty (60) days prior to the Redemption Date to each holder of Securities so to be redeemed as a whole or in
part at its last address as the same appears on the Security Register; provided that if the Company shall give such notice, it shall also give written
notice of the Redemption Date to the Trustee. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any other Security. Concurrently with the mailing of any such Redemption Notice, the Company shall issue a press release
announcing such redemption, 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 Redemption Notice or any of the proceedings for the redemption of any Security called for redemption. 

        (b)   Each
such Redemption Notice shall specify the aggregate principal amount of Securities to be redeemed, the CUSIP, ISIN or similar number or numbers of the Securities
being redeemed, the Redemption Date (which shall be a Business Day), the Redemption Price at which Securities are to be redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Securities, that Interest accrued and unpaid up to but not including the Redemption Date will be paid as specified in said notice, and that on and after said date
Interest thereon or on the portion thereof to be redeemed will cease to accrue. Such notice shall also state the current Conversion Rate and the date on which the right to convert such Securities or
portions thereof into Common Shares will expire. If fewer than all the Securities are to be redeemed, the Redemption Notice shall identify the Securities to be redeemed (including CUSIP, ISIN or
similar number or numbers, if any). In case any Security is to be redeemed in part only, the Redemption Notice shall state the portion of the principal amount thereof to be redeemed and shall state
that, on and after the Redemption Date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion thereof will be issued. 

        (c)   On
or prior to the Redemption Date specified in the Redemption Notice given as provided in this, the Company will deposit with the Trustee or with one or more Paying
Agents an amount of money in immediately available funds sufficient to redeem on the Redemption Date all the Securities (or portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Shares) at the appropriate Redemption Price; provided that if such payment is made on the Redemption Date it must
be received by the Trustee or Paying Agent, as the case may be, by 10:00 a.m., New York City time, on such date. The Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any Paying Agent pursuant to this in excess of amounts required hereunder to pay the Redemption Price. If any Security called for redemption is converted pursuant hereto
prior to such Redemption Date, any money deposited with the Trustee or any Paying Agent or so segregated and held in trust for the redemption of such Security shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such trust. Whenever any Securities are to be redeemed, the Company will give the Trustee written notice in the form of an
Officers' Certificate not fewer than thirty-five (35) days (or such shorter period 

58

 

of
time as may be acceptable to the Trustee) prior to the Redemption Date as to the aggregate principal amount of Securities to be redeemed. 

        (d)   If
the Company opts to redeem less than all of the Outstanding Securities, the Trustee shall select or cause to be selected the Securities or portions thereof of the
Global Note or the Securities in certificated form to be redeemed (in principal amounts of $1,000 or integral multiples thereof) by lot, on a pro rata
basis or by another method the Trustee deems fair and appropriate. If any Security selected for partial redemption is submitted for conversion in part after such selection, the portion of such
Security submitted for conversion shall be deemed (so far as may be possible) to be from the portion selected for redemption. The Securities (or portions thereof) so selected shall be deemed duly
selected for redemption for all purposes hereof, notwithstanding that any such Security is submitted for conversion in part before the mailing of the Redemption Notice. 

        Upon
any redemption of less than all of the Outstanding Securities, the Company and the Trustee may (but need not), solely for purposes of determining the pro
rata allocation among such Securities as are unconverted and Outstanding at the time of redemption, treat as Outstanding any Securities surrendered for conversion during the
period of fifteen (15) days next preceding the mailing of a Redemption Notice and may (but need not) treat as Outstanding any Security authenticated and delivered during such period in exchange
for the unconverted portion of any Security converted in part during such period. 

        SECTION 12.3 Payment of Securities Called for Redemption by the Company.

        If
notice of redemption has been given as provided in this Article Twelve, the Securities or portion of Securities with respect to which
such notice has been given shall, unless converted into Common Shares pursuant to the terms hereof, become due and payable on the Redemption Date and at the place or places stated in such notice at
the applicable Redemption Price, unless the Company shall default in the payment of the Redemption Price. Interest on the Securities or portion of Securities so called for redemption shall cease to
accrue and after the close of business on the second Business Day immediately preceding the Redemption Date (unless the Company shall default in the payment of the Redemption Price), such Securities
shall cease to be convertible into Common Shares and, except as provided in the Securities, to be entitled to any benefit or security under this Indenture, and the holders thereof shall have no right
in respect of such Securities except the right to receive the Redemption Price thereof. On presentation and surrender of such Securities at a place of payment in said notice specified, the said
Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable Redemption Price; provided that if the
applicable Redemption Date is an Interest Payment Date, the Interest payable on such Interest Payment Date shall be paid on such Interest Payment Date to the holders of record of such Securities on
the applicable record date instead of the holders surrendering such Securities for redemption on such date. 

        Upon
presentation of any Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Security or Securities, of authorized denominations, in principal amount equal to the unredeemed portion of the Security or Securities so presented. 

        Notwithstanding
the foregoing, the Trustee shall not redeem any Securities or mail any Redemption Notices during the continuance of a default in payment of Interest on the Securities. If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, continue to bear interest at the rate borne by the
Security, compounded semi-annually, and such Security shall remain convertible into Common Shares, cash or a combination of cash and Common Shares until the principal and Interest shall
have been paid or duly provided for. The Company will notify all of the holders if the Company redeems any of the Securities. 

59

 

        SECTION 12.4 Conversion Arrangement on Call for Redemption.

        In
connection with any redemption of Securities, the Company may arrange for the purchase and conversion of any Securities by an agreement with one or more investment banks or other
purchasers to purchase such Securities by paying to the Trustee in trust for the Holders of Securities, on or before the date fixed for redemption, an amount not less than the applicable redemption
price, together with interest (including Additional Amounts, if any) accrued and unpaid to, but excluding, the date fixed for redemption, of such Securities. Notwithstanding anything to the contrary
contained in this Article Twelve, the obligation of the Company to pay the redemption price of such Securities, together with Interest accrued and
unpaid to, but excluding, the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, a copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Securities not duly surrendered for conversion by the holders thereof may, at the option of the Company, be deemed, to the fullest extent permitted by law, acquired by such purchasers
from such holders and surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the date fixed for redemption (and the right to convert any such Securities
shall be extended through such time), subject to payment of the above amount as aforesaid. At the direction of the Company, the Trustee shall hold and dispose of any such amount paid to it in the same
manner as it would monies deposited with it by the Company for the redemption of Securities. Without the Trustee's prior written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this Indenture. 

        SECTION 12.5 Purchase of Securities at Option of the Holder Upon Fundamental Change.

        (a)   If
there shall have occurred a Fundamental Change, all or any portion of the Securities of any Holder equal to $1,000 or a whole multiple of $1,000, shall be repurchased
by the Company, at the option of such Holder, at a repurchase price equal to 100% of the aggregate principal amount of the Securities to be repurchased, together with accrued and unpaid interest
(including Additional Interest, if any) to, but excluding, the purchase date (the "Fundamental Change Purchase Price"), on the date (the
"Fundamental Change Purchase Date") that is 45 days after the date the Company delivers the notice required under this  Section 12.5 (or if
such 45th day is not a Business Day, the next succeeding Business Day); provided,
however, that if the Fundamental Change Purchase Date is after a Regular Record Date but on or prior to the corresponding Interest Payment Date, the accrued and unpaid interest
becoming due on such Interest Payment Date shall be payable to the Holders of such Securities, or one or more predecessor Securities, registered as such on the relevant Regular Record Date according
to their terms. 

        If
there shall have occurred on or prior to November 1, 2009 a Fundamental Change consisting of a Change in Control described in clause (2) of the definition of a Change in
Control, the Company will pay on the Fundamental Change Purchase Date a Make-Whole Premium to the Holders of the Securities in addition to the Fundamental Change Purchase Price. The
Make-Whole Premium will also be paid on the Fundamental Change Purchase Date to the Holders of the Securities who convert their Securities on or after the date on which the Company has
given a notice to all Holders of Securities in accordance with this Section 12.5 and on or before the Fundamental Change Purchase Date. 

        The
"Make-Whole Premium" will be determined by reference to the table below and is based on the date on which the Fundamental
Change described in clause (2) of the definition of a Change in Control becomes effective (the "Effective Date") and the price (the
"Stock Price") paid per share of the Common Stock in the transaction constituting the Fundamental Change described in clause (2) of the
definition of a Change in Control. If the holders of the Common Stock receive only cash in the transaction, the Stock Price shall be the cash amount paid per share of the Common Stock. Otherwise, 

60

 

the
Stock Price shall be equal to the average Closing Sale Price of the Common Stock over the five Trading Day period ending on the Trading Day immediately preceding the Effective Date. 

        The
following table shows what the Make-Whole Premium would be for each hypothetical Stock Price and Effective Date set forth below, expressed as a percentage of the
principal amount of the Securities. No Make-Whole Premium shall be payable if the Effective Date is later than November 1, 2009. 

	Make-Whole Premium Upon a Change in Control (% of Principal Amount)
	 
	 
	 	Stock Price on Effective Date
	 
	Effective

Date
	 
	 	$6.66
	 	$8.00
	 	$9.00
	 	$10.00
	 	$11.00
	 	$12.00
	 	$13.00
	 	$14.00
	 	$15.00
	 	$20.00
	 	$25.00
	 	$30.00
	 	$40.00
	 	$50.00
	 
	11/3/04	 	0.00	%	19.07	%	27.80	%	27.68	%	26.12	%	24.79	%	23.64	%	22.65	%	21.78	%	18.83	%	17.23	%	16.26	%	15.28	%	14.83	%
	11/3/05	 	0.00	%	16.75	%	25.18	%	24.82	%	23.08	%	21.63	%	20.38	%	19.34	%	18.42	%	15.46	%	13.96	%	13.12	%	12.33	%	12.31	%
	11/3/06	 	0.00	%	14.26	%	22.27	%	21.61	%	19.66	%	18.06	%	16.72	%	15.62	%	14.69	%	11.82	%	10.53	%	9.88	%	9.33	%	9.14	%
	11/3/07	 	0.00	%	11.14	%	18.56	%	17.51	%	15.32	%	13.58	%	12.21	%	11.11	%	10.23	%	7.79	%	6.88	%	6.50	%	6.22	%	6.15	%
	11/3/08	 	0.00	%	6.93	%	13.36	%	11.76	%	9.36	%	7.65	%	6.43	%	5.56	%	4.92	%	3.50	%	3.19	%	3.09	%	3.03	%	3.03	%
	11/1/09	 	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%

        The actual Stock Price and Effective Date may not be set forth on the table, in which case: 

        (1)   if
the actual Stock Price on the Effective Date is between two Stock Prices on the table or the actual Effective Date is between two Effective Dates on the table, the
Make-Whole Premium will be determined by a straight-line interpolation between the Make-Whole Premiums set forth for the two Stock Prices and the two Effective
Dates on the table based on a 365-day year, as applicable; 

        (2)   if
the Stock Price on the Effective Date exceeds $50.00 per share (subject to adjustment described below), no Make-Whole Premium will be paid; and 

        (3)   if
the Stock Price on the Effective Date is less than $6.66 per share (subject to adjustment described below), no Make-Whole Premium will be paid. 

        The
Stock Prices set forth in the first column of the table above will be adjusted as of any date on which the Conversion Rate is adjusted. The adjusted Stock Prices will 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 so adjusted. 

        The
Company shall pay, at its option, the Fundamental Change Purchase Price and/or Make-Whole Premium in cash or shares of its Common Stock or, in the case of the
Make-Whole Premium, the same form of consideration used to pay for the shares of the Common Stock in connection with the transaction constituting the Fundamental Change. 

        If
the Company pays the Fundamental Change Purchase Price and/or Make-Whole Premium in shares of its Common Stock, the value of its Common Stock to be delivered in respect of
the Fundamental Change Purchase Price and/or Make-Whole Premium shall be deemed to be equal to the average Closing Sale Price per share over the ten Trading Day period ending on the
Trading Day immediately preceding the Fundamental Change Purchase Date. The Company may pay the Fundamental Change Purchase Price and/or Make-Whole Premium in shares of its Common Stock
only if the information necessary to calculate the Closing Sale Price per share is published in a daily newspaper of general circulation or by other appropriate means. 

        If
the Company pays the Make-Whole Premium in the same form of consideration used to pay for the shares of the Common Stock in connection with the transaction constituting
the Change in Control, 

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the
value of the consideration to be delivered in respect of the Make-Whole Premium will be calculated as follows: 

          (i)  securities
that are traded on a United States national securities exchange or approved for quotation on the Nasdaq National Market or any similar system of automated
dissemination of quotations of securities prices will be valued based on the average Closing Sale Price or last sale price, as applicable, over the ten Trading Day period ending on the Trading Day
immediately preceding the Fundamental Change Purchase Date; 

         (ii)  other
securities, assets or property (other than cash) will be valued based on 98% of the average of the fair market value of such securities, assets or property (other
than cash) as determined by two independent nationally recognized investment banks selected by the trustee; and 

        (iii)  100%
of any cash. 

        Whenever
in this Indenture or Exhibit A annexed hereto there is a reference, in any context, to the principal of any Security as of any time, such reference shall be deemed to
include reference to the Fundamental Change Purchase Price in respect to such Security to the extent that such Fundamental Change Purchase Price is, was or would be so payable at such time,  plus any
applicable Make-Whole Premium, and express mention of the Fundamental Change Purchase Price in any provision of this Indenture
shall not be construed as excluding the Fundamental Change Purchase Price in those provisions of this Indenture when such express mention is not made. 

        (b)   The
following are conditions to the Company's election to pay for the Fundamental Change Purchase Price and Make-Whole Premium in Common Stock: 

          (i)  The
shares of Common Stock to be issued upon repurchase of Securities hereunder: 

        (A)  shall
not require registration under any federal securities law before such shares may be freely transferable without being subject to any transfer restrictions under
the Securities Act upon repurchase or, if such registration is required, such registration shall be completed and shall become effective prior to the Fundamental Change Purchase Date; and 

        (B)  shall
not require registration with, or approval of, any governmental authority under any state law or any other federal law before shares may be validly issued or
delivered upon repurchase or if such registration is required or such approval must be obtained, such registration shall be completed or such approval shall be obtained prior to the Fundamental Change
Purchase Date. 

         (ii)  The
shares of Common Stock to be listed upon repurchase of Securities hereunder are, or shall have been, approved for listing on the American Stock Exchange or listed
on another national securities exchange, in any case, prior to the Fundamental Change Purchase Date. 

        (iii)  All
shares of Common Stock which may be issued upon repurchase of Securities will be issued out of the Company's authorized but unissued Common Stock and will, upon
issue, be duly and validly issued and fully paid and nonassessable and free of any preemptive or similar rights. 

        (iv)  If
any of the conditions set forth in clauses (i) through (iii) of this are not satisfied in accordance with the terms thereof, the Fundamental Change
Purchase Price and Make-Whole Premium shall be paid by the Company only in cash. The Company may not change the form of consideration to be paid with respect to the Fundamental Change
Purchase Price and Make-Whole Premium once it has given notice set forth in to Holders, except as described in the immediately preceding sentence. 

        (c)   Prior
to or on the 30th day after the occurrence of a Fundamental Change, the Company, or, at the written request and expense of the Company prior to or on the 30th day
after such occurrence, 

62

 

the
Trustee, shall give to all Holders, in the manner provided in hereof, notice of the occurrence of the Fundamental Change and of the purchase right set forth herein arising as a result thereof. The
Company shall also deliver a copy of such notice of a purchase right to the Trustee. The notice shall include a form of Fundamental Change Purchase Notice to be completed by the Holder and shall
state: 

          (i)  briefly,
the events causing a Fundamental Change and the date of such Fundamental Change; 

         (ii)  the
date by which the Fundamental Change Purchase Notice pursuant to this must be given; 

        (iii)  the
Fundamental Change Purchase Date; 

        (iv)  the
Fundamental Change Purchase Price and whether the Fundamental Change Purchase Price will be payable in cash or Common Stock; 

         (v)  the
name and address of the Paying Agent and the Conversion Agent, if applicable; 

        (vi)  that
Securities as to which a Fundamental Change Purchase Notice has been given may be converted pursuant to this  Section 12.5 only if the Fundamental Change Purchase Notice has been withdrawn in
accordance with the terms of this Indenture; 

       (vii)  that
Securities must be surrendered to the Paying Agent to collect payment; 

      (viii)  that
the Fundamental Change Purchase Price for any Security as to which a Fundamental Change Purchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Fundamental Change Purchase Date and the time of surrender of such Security as described above; 

        (ix)  briefly,
the procedures the Holder must follow to exercise rights under this Article Twelve; 

         (x)  briefly,
the conversion rights of the Securities, including the Conversion Rate and any adjustments thereto; 

        (xi)  the
procedures for withdrawing a Fundamental Change Purchase Notice; 

       (xii)  the
CUSIP number of the Securities; 

      (xiii)  whether
a Make-Whole Premium shall be paid by the Company and the form of consideration to be paid in respect of the Make-Whole Premium; and 

      (xiv)  if
a Make-Whole Premium is paid by the Company, that a Make-Whole Premium shall be paid by the Company on the Fundamental Change Purchase Date
to Holders of Securities who have converted their Securities into the Common Stock on or after the date the Company has given notice to all Holders in accordance with and on or before the Fundamental
Change Purchase Date. 

        (d)   A
Holder may exercise its rights specified in this upon delivery of a written notice of purchase ("Fundamental Change Purchase
Notice") to the Paying Agent prior to the Fundamental Change Purchase Date, stating: 

          (i)  the
certificate number of the Security, if any, which the Holder will deliver to be purchased or the appropriate Depositary procedures if the Securities are not in
certificated form; 

         (ii)  the
portion of the principal amount of the Security which the Holder will deliver to be purchased, which portion must be $1,000 or any whole multiple thereof; and 

        (iii)  that
such Security shall be purchased pursuant to the terms and conditions specified on the reverse side of the Securities and in this Indenture. 

63

 

        If
the Securities are not in certificated form, a Holder's Fundamental Change Purchase must comply with the Applicable Procedures. 

        The
delivery of such Security to the Paying Agent prior to the Fundamental Change Purchase Date (together with all necessary endorsements) at the offices of the Paying Agent shall be a
condition to the receipt by the Holder of the Fundamental Change Purchase Price therefor; provided, however, that such Fundamental Change Purchase Price
shall be so paid pursuant to this Section 12.5 only if the Security so delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Fundamental Change Purchase Notice. 

        The
Company shall purchase from the Holder thereof a portion of a Security so delivered for purchase 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 Security also apply to the purchase of such portion of such Security. 

        Any
purchase by the Company contemplated pursuant to the provisions of this shall be consummated by the delivery of the consideration to be received by the Holder promptly following the
later of the Fundamental Change Purchase Date and the time of delivery of the Security to the Paying Agent in accordance with this Section 12.5. 

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

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

        SECTION 12.6 Effect of Fundamental Change Purchase Notice.

        Upon
receipt by the Paying Agent of the Fundamental Change Purchase Notice specified in Section 12.5, the Holder of the Security in
respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Fundamental Change Purchase Price with respect to such Security. Such Purchase Price (along with the Make-Whole Premium, if any) shall be paid to such
Holder, subject to receipt of consideration for the Securities by the Paying Agent, promptly following the later of (x) the Fundamental Change Purchase Date with respect to such Security
(provided the conditions in Section 12.5 have been satisfied) or (y) the time of delivery of such Security to the Paying Agent by the
Holder thereof in the manner required by this Article Twelve, as the case may be. Securities in respect of which a Fundamental Change Purchase Notice
has been given by the Holder thereof may not be converted pursuant to Article Ten hereof on or after the date of the delivery of such Fundamental Change
Purchase Notice unless such Fundamental Change Purchase Notice has first been validly withdrawn as specified in the following two paragraphs. 

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

        (a)   the
certificate number of the Security in respect of which such notice of withdrawal is being submitted or, if not in certificated form, the applicable Depositary
procedures, 

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

64

 

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

        There
shall be no purchase of any Securities pursuant to this Section 12.5 if there has occurred (prior to, on or after, as the
case may be, the giving, by the Holders of such Securities, of the required Fundamental Change Purchase Notice) and is continuing an Event of Default (other than a default in the payment of the
Fundamental Change Purchase Price with respect to such Securities). The Paying Agent will promptly return to the respective Holders thereof any Securities (x) with respect to which a
Fundamental Change Purchase Notice has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment of
the Fundamental Change Purchase Price with respect to such Securities) in which case, upon such return, the Fundamental Change Purchase Notice with respect thereto shall be deemed to have been
withdrawn. 

        SECTION 12.7 Deposit of Fundamental Change Purchase Price.

        Prior
to 10:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in) an amount of cash (in immediately available funds if deposited on such
Business Day) or Common Stock sufficient to pay the aggregate Fundamental Change Purchase Price of all the Securities or portions thereof which are to be purchased as of the Fundamental Change
Purchase Date and an amount in cash or shares of Common Stock sufficient to pay any Make-Whole Premium. 

        If
the Trustee or other Paying Agent appointed by the Company, or the Company or an Affiliate of the Company, if it or such Affiliate is acting as the Paying Agent, holds cash or shares
of Common Stock sufficient to pay the aggregate Fundamental Change Purchase Price of all the Securities or portions thereof that are to be purchased as of the Fundamental Change Purchase Date and an
amount in cash or shares of Common Stock sufficient to pay any Make-Whole Premium, then immediately after the Fundamental Change Purchase Date (i) such Securities will cease to be
outstanding, (ii) interest on such Securities will cease to accrue and (iii) all other rights of the holders of
such Securities will terminate other than the right to receive the Fundamental Change Purchase Price and the Make-Whole Premium, if any, upon delivery of the Securities, whether or not
book-entry transfer of the Securities has been made or the Securities have been delivered to the Trustee or Paying Agent. 

        SECTION 12.8 Securities Purchased in Part.

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

        SECTION 12.9 Covenant to Comply with Securities Laws Upon Purchase of Securities.

        In
connection with any offer to purchase or purchase of Securities under hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), the Company shall (i) comply
with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act which may then be applicable, (ii) file the related Schedule TO (or any
successor schedule, form or report) or any other schedule required under the Exchange Act, and 

65

 

(iii) otherwise
comply with all federal and state securities laws so as to permit the rights and obligations under this Article Twelve to be
exercised in the time and in the manner specified herein. 

        SECTION 12.10 Repayment to the Company.  

        The Trustee and the Paying Agent shall return to the Company any cash or shares of Common Stock that remains unclaimed, together with interest or dividends, if
any, thereon, held by them for the payment of the Fundamental Change Purchase Price and Make-Whole Premium, if any; provided, however, that
to the extent that the aggregate amount of cash or shares of Common Stock deposited by the Company pursuant to exceeds the aggregate Fundamental Change Purchase Price of the Securities and
Make-Whole Premium, if any, or portions thereof which the Company is obligated to purchase as of the Fundamental Change Purchase Date then promptly after
the Business Day following the Fundamental Change Purchase Date the Trustee shall return any such excess to the Company together with interest or dividends, if any, thereon. 

 
 

ARTICLE THIRTEEN
  
    PURCHASE AT THE OPTION OF HOLDERS ON SPECIFIC DATES    
    

        SECTION 13.1 Optional Put.

        (a)   Subject
to the provisions of this Article Thirteen, each Holder shall have the right, at the Holder's option, to require
the Company to purchase, and upon the exercise of such right, the Company shall purchase, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount
thereof that is equal to $1,000 or an integral multiple thereof, as directed by such Holder pursuant to this Section 13.1, on each of
November 1, 2009, November 1, 2014 and November 1, 2019 (each a "Purchase Date"). The Company shall be required to purchase such
Securities at a purchase price in cash equal to 100% of the principal amount plus accrued and unpaid interest (including Additional Interest, if any) to, but excluding, the Purchase Date (the
"Purchase Price"). 

        (b)   No
later than 22 Business Days prior to each Purchase Date, the Company shall mail a written notice of the purchase right by first class mail to the Trustee (and the
Paying Agent if the Trustee is not then acting as a Paying Agent) and to each Holder at its address shown in the Register of the Registrar, and to beneficial owners as required by applicable law. The
notice shall include a form of Purchase Notice to be completed by the Holder and shall briefly state, as applicable: 

          (i)  the
date by which the Purchase Notice must be delivered to the Paying Agent in order for a Holder to exercise the purchase right pursuant to this  Section 13.1; 

         (ii)  the
Purchase Date; 

        (iii)  the
Purchase Price; 

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

         (v)  briefly,
the conversion rights of the Securities, if any, and that the Holder must satisfy the requirements set forth in the Indenture in order to convert the
Securities; 

        (vi)  the
Conversion Rate and any adjustments thereto; 

       (vii)  that
the Securities as to which a Purchase Notice has been given may be converted into Common Stock if they are otherwise convertible pursuant to this Indenture only
if the Purchase Notice has been withdrawn in accordance with the terms of this Indenture; 

      (viii)  that
the Securities must be surrendered to the Paying Agent to collect payment; 

66

 

        (ix)  that
the Purchase Price for any Securities as to which a Purchase Notice has been duly given and not withdrawn shall be paid promptly following the later of the
Purchase Date and the time of surrender of such Securities as described in Section 13.1(b)(viii); 

         (x)  the
procedures the Holder must follow to exercise its rights under this Section 13.1 and a brief description of
such rights; 

        (xi)  the
procedures for withdrawing a Purchase Notice, including a form of notice of withdrawal; 

       (xii)  that,
unless the Company defaults in making payment of such Purchase Price, interest (including any Additional Interest), if any, on Securities surrendered for
purchase by the Company shall cease to accrue on and after the Purchase Date; and 

      (xiii)  the
CUSIP number(s) of the Securities. 

        At
the Company's request, the Trustee shall give the notice of purchase right in the Company's name and at the Company's expense;  provided, however, that the
Company makes such request at least five Business Days (unless a shorter
period shall be satisfactory to the Trustee) prior to the date by which such notice of purchase right must be given to the Holders in accordance with this  Section 13.1(b); provided, further, that the text
of the notice of purchase right shall be prepared by the Company. 

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

        Simultaneously
with delivering the written notice pursuant to this Section 13.1(b), the Company shall make a Public Notice
containing all information specified in such written notice. 

        (c)   A
Holder may exercise its rights specified in clause (a) of this Section 13.1 upon delivery of a written
notice (which shall be in substantially the form included on the reverse side of the Securities entitled "Option of Holder to Elect Purchase" hereto and which may be delivered by letter, overnight
courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary's
customary procedures) of the exercise of such rights (a "Purchase Notice") to the Paying Agent at any time from the opening of business on the date that is 22 Business Days prior to the relevant
Purchase Date until the close of business on the second Business Day prior to such Purchase Date. 

        The
Purchase Notice delivered by a Holder shall state (i) the relevant Purchase Date, (ii) if certificated Securities, the serial number or numbers of the Security or
Securities which the Holder shall deliver to be purchased (if not certificated, the notice must comply with Applicable Procedures), (iii) the portion of the principal amount of the Security
which the Holder shall deliver to be purchased, which portion must be $1,000 or an integral multiple thereof, and (iv) that such Security shall be purchased pursuant to the terms and conditions
specified in the Securities and this Indenture. 

        Delivery
of a Security to the Paying Agent by book-entry transfer or physical delivery prior to, on or after the applicable Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent is a condition to receipt by the Holder of the Purchase Price therefor; provided,  however, that such
Purchase Price shall be so paid pursuant to this Section 13.1 only if the
Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice, as determined by the Company. 

        The
Company shall purchase from the Holder thereof, pursuant to this Section 13.1, a portion of a Security if the principal amount
of such portion is $1,000 or an integral multiple thereof. Provisions of 

67

 

this
Indenture that apply to the purchase of all of a Security pursuant to Section 13.1 through  Section 13.7 also apply to the purchase of such
portion of such Security. 

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

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

        SECTION 13.2 Effect of Purchase Notice; Withdrawal of Purchase Notice.

        (a)   Upon
receipt by the Paying Agent of the Purchase Notice specified in Section 13.1(c), the Holder of the Security
in respect of which such Purchase Notice was given shall (unless such Purchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Purchase Price
with respect to such Security. Such Purchase Price shall be paid to such Holder, subject to receipt of cash by the Paying Agent, promptly following the later of (i) the Purchase Date with
respect to such Security (provided the conditions in Section 13.1(c) have been satisfied) and
(ii) the time of book-entry transfer or delivery of such Security to the Paying Agent by the Holder thereof in the manner required by  Section 13.1(c). Securities in respect of which a Purchase
Notice has been given by the Holder thereof may not be converted pursuant to  Article Ten on or after the date of the delivery of such Purchase Notice unless such Purchase Notice has first been validly
withdrawn as specified in
the following paragraph. 

        (b)   A
Purchase Notice may be withdrawn by means of a written notice (which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any
other written form and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary's customary procedures) of withdrawal delivered by the
Holder to the Paying Agent at any time prior to the close of business on the Business Day immediately preceding the Purchase Date, specifying (i) the principal amount of the Security or portion
thereof (which must be a principal amount of $1,000 or an integral multiple thereof) with respect to which such notice of withdrawal is being submitted, (ii) if certificated Securities have
been issued, the serial numbers of the withdrawn Securities, or if not certificated, such notice must comply with Applicable Procedures, and (iii) the principal amount, if any, which remains
subject to the Purchase Notice. If a Purchase Notice has been properly withdrawn pursuant to this Section 13.2(b) prior to the Purchase Date, the
Company shall not be obligated to purchase those Securities so identified in such notice of withdrawal. 

        SECTION 13.3 Deposit of Purchase Price.

        Prior
to 10:00 a.m., New York City time, on the applicable Purchase Date, the Company shall irrevocably deposit with the Paying Agent an amount of cash (in immediately available
funds if deposited on such Business Day) sufficient to pay the aggregate Purchase Price of all the Securities or portions thereof which are to be purchased as of such Purchase Date. 

        If
the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the applicable Purchase Date, cash sufficient to pay the Purchase Price of
any Securities for which a Purchase Notice has been tendered and not withdrawn pursuant to Section 13.2(b), then, on such Purchase Date, such
Securities shall cease to be outstanding and interest and Additional Interest, if any, on such Securities shall cease to accrue, whether or not such Securities are delivered to the Paying Agent, and
the rights of the Holders in respect thereof shall terminate (other than the right to receive the Purchase Price upon delivery of such Securities). 

        The
Company shall make a Public Notice of the aggregate principal amount of Securities purchased on the applicable Purchase Date on such date or as soon as practicable thereafter. 

68

 

        SECTION 13.4 Certificated Securities Purchased in Part.

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

        SECTION 13.5 Covenant to Comply with Securities Laws Upon Purchase of Securities.

        When
complying with the provisions of Article Thirteen, and subject to any exemptions available under applicable law, the Company shall: 

        (a)   if
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, (i) if applicable, comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act and (ii) file the related Schedule TO (or any successor schedule, form or report) if required under the Exchange Act; and 

        (b)   otherwise
comply with all applicable federal and state securities laws so as to permit the rights and obligations under this Article
Thirteen to be exercised in the time and in the manner specified therein. 

        SECTION 13.6 Repayment to the Company.

        To
the extent that the aggregate amount of cash deposited by the Company pursuant to Section 13.3 exceeds the aggregate Purchase
Price of the Securities or portions thereof which the Company is obligated to purchase as of the applicable Purchase Date, then, promptly after such Purchase Date, the Paying Agent shall return any
such excess to the Company, together with interest, if any, thereon. 

        SECTION 13.7 No Purchase Upon Event of Default.

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

ARTICLE FOURTEEN

HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE  

        SECTION 14.1 Company to Furnish Trustee Names and Addresses of
Holders.

        The
Company will furnish or cause to be furnished to the Trustee: 

        (a)   semi-annually,
not more than 15 days after the Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities as of such Regular Record Date, and 

69

 

        (b)   at
such other times as the Trustee may reasonably request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is furnished; 

provided, however, that no such list need be furnished so long as the Trustee is acting as Security Registrar. 

        SECTION 14.2 Preservation of Information.

        (a)   The
Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the
Trustee as provided in Section 14.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 14.1 upon receipt of a new list so furnished. 

        (b)   After
this Indenture has been qualified under the Trust Indenture Act, the rights of Holders to communicate with other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. 

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

        SECTION 14.3 No Recourse Against Others.

        An
incorporator or any past, present or future director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such
liability. Such waiver and release shall be part of the consideration for the issue of the Securities. 

        SECTION 14.4 Reports by Trustee.

        (a)   After
this Indenture has been qualified under the Trust Indenture Act, the Trustee shall transmit to Holders such reports 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 therein. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each Interest Payment Date following the date of this Indenture, deliver to Holders a brief report, dated as of such Interest Payment Date, that complies with the
provisions of such Section 313(a). 

        (b)   After
this Indenture has been qualified under the Trust Indenture Act, a copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will promptly notify the Trustee when the Securities are listed on any
stock exchange. 

        SECTION 14.5 Reports by Company.

        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, 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 therein;  provided, however, 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. 

70

 

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

[Signature Page Follows]

71

 

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

	 	 	Isolagen, Inc.
	

 	
 	

By	

    
 Name:

Title:
	

 	
 	

The Bank of New York Trust

Company, N.A., as Trustee
	

 	
 	

By	

    
 Name:

Title:

72

   EXHIBIT A  

[FORM OF FACE]  

        THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY BENEFICIAL INTEREST IN
THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF SUCH BENEFICIAL INTEREST IN THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR OTHER EXEMPTIONS THEREFROM.

        EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY THIS NOTE (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY HOLDING THIS NOTE THAT IS SHOWN
AS HOLDING SUCH AN INTEREST ON THE RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF ISOLAGEN, INC. THAT (I) ANY
BENEFICIAL INTEREST IN THIS NOTE AND ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) TO A PERSON THAT THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT WHO PRIOR TO SUCH TRANSFER PROVIDES
TO THE TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE
TRUSTEE OF THE NOTES), (4) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO ISOLAGEN, INC.) OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS AND THAT (II) THE BENEFICIAL OWNER WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY THIS NOTE
OR ANY COMMON STOCK ISSUABLE UPON CONVERSION THEREOF IS REQUIRED TO, NOTIFY ANY PURCHASER OF ANY BENEFICIAL INTEREST IN THE NOTE OR SUCH COMMON STOCK ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

        THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE
RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH
SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

A-1

 

        THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
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.

A-2

 
ISOLAGEN, INC.  

3.5% CONVERTIBLE SUBORDINATED NOTE DUE NOVEMBER 1, 2024  

No.
                                        U.S.
$              

 CUSIP No. 46488NAA1  

        Isolagen, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company," which term includes any
successor Person 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                        
United States Dollars (U.S.$            ) (which principal 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 Securities, shall not exceed U.S. $75,000,000 in the aggregate at any time, unless the Initial Purchasers exercise their option, in which case the principal amount of the
Outstanding Securities shall not exceed U.S. $90,000,000) by adjustments made on the records of the Trustee hereinafter referred to in accordance with the Indenture) on November 1, 2024, unless
redeemed, repurchased or converted on an earlier date, and to pay interest thereon, from November 3, 2004, or from the most recent Interest Payment Date (as defined below) to which interest has
been paid or duly provided for, semiannually in arrears on May 1 and November 1 in each year (each, an "Interest Payment Date"), commencing May 1, 2005, at the rate of 3.5% per
annum, until the principal hereof is due, and at the rate then in effect on any overdue principal and premium, if any, and, to the extent permitted by law, on any overdue interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the October 15 and April 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the Company, notice whereof shall be given to Holders of Registered Securities not less than ten days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender of this Security at the option of the Holder at the Corporate Trust Office or at
such other office or agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private debts, or at such other offices or agencies as the Company may designate, by United States Dollar check drawn on, or
wire transfer to, a United States Dollar account (such a wire transfer to be made only to a Holder of an aggregate principal amount of Registered Securities in excess of U.S.$2,000,000 and only if
such Holder shall have furnished wire instructions in writing to the Trustee no later than 15 days prior to the relevant payment date) maintained by the payee. Payment of interest on this
Security may be made by United States Dollar check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or, upon written application by the Holder
to the Security Registrar setting forth wire instructions not later than the relevant Record Date, by wire transfer to a United States dollar account (such a wire transfer to be made only to a Holder
of an aggregate principal amount of Registered Securities in excess of U.S.$2,000,000 and only if such Holder shall have furnished wire instructions in writing to the Trustee no later than
15 days prior to the relevant payment date) maintained by the payee. 

A-3

 

        Except
as specifically provided herein and in the Indenture, the Company shall not be required to make any payment with respect to any tax, assessment or other governmental charge
imposed by any government or any political subdivision or taxing authority thereof or therein. 

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

        Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their
respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

A-4

 

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

	 	 	ISOLAGEN, INC.
	

 	
 	

By:	

    
 Name:

Title:

Attest:

	
 Name:	 

Dated: November 3, 2004 

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

The
Bank of New York Trust Company, N.A.,

as Trustee 

	

By:	
 	

    
 Authorized Signatory	
 	

 	
 	

 

A-5

 
[FORM OF REVERSE]  

        This Security is one of a duly authorized issue of securities of the Company designated as its "3.5% Convertible Subordinated Notes due November 1, 2024"
(herein called the "Securities"), limited in aggregate principal amount to U.S.$75,000,000 (U.S.$90,000,000 if the initial purchasers' option is fully exercised), issued and to be issued under an
Indenture, dated as of November 3, 2004 (herein called the "Indenture"), between the Company and The Bank of New York Trust Company, N.A., as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt and the Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. As provided in the Indenture and subject to certain limitations set forth therein, Registered Securities are exchangeable for a like aggregate principal amount of
Registered Securities of any authorized denominations as requested by the Holder surrendering the same upon surrender of the Registered Security or Registered Securities to be exchanged at the
Corporate Trust Office. The Trustee upon such surrender by the Holder will issue the new Registered Securities in the requested denominations. 

        No
sinking fund is provided for the Securities. 

        The
Securities are subject to redemption at the option of the Company at any time on or after November 1, 2009 and before November 1, 2024 ("Provisional Redemption"), in
whole or in part, upon not less than 20 nor more than 60 days' notice to the Holders prior to the Redemption Date at a Redemption Price equal to 100% of the principal amount, together, in each
case, with accrued and unpaid interest (including, Additional Interest, if any) to, but excluding, the Redemption Date, if the Shelf Registration Statement is effective and available for use and is
expected to remain effective and available for use for the 30 days following the Redemption Date, unless registration is no longer required. Upon any Provisional Redemption, the Company will
pay to the Holders cash with respect to the Securities called for Provisional Redemption, including any Security converted after the date of the notice of Provisional Redemption and before to the date
of the Provisional Redemption. 

        In
the event of a redemption of the Securities, the Company will not be required (a) to register the transfer or exchange of Registered Securities for a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption (it being understood that the Company will not be required to identify the
serial numbers of Outstanding Securities if all such Securities are called for redemption) or (b) to register the transfer or exchange of any Registered Security, or portion thereof, called for
redemption. 

        Notice
to the Holders will be given not less than 20 nor more than 60 days prior to the Redemption Date as provided in the Indenture. 

        In
any case where the due date for the payment of the principal of, premium, if any, or interest (including Additional Interest, if any) on any Security or the last day on which a Holder
of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of
Conversion are authorized or obligated by law or executive order to close, then payment of principal, premium, if any, or interest (including Additional Interest, if any) or delivery for conversion of
such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or
obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion,
and no interest shall accrue on the amount so payable for the period from and after such due date. 

A-6

 

        Subject
to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled, at its option, at any time following the original issue date of the
Securities and on or before the close of business on November 1, 2024, or in case this Security or a portion hereof is called for redemption or the Holder hereof has exercised his right to
require the Company to repurchase this Security or such portion hereof, then in respect of this Security until and including, but (unless the Company defaults in making the payment due upon redemption
or repurchase, as the case may be) not after, the close of business on the Business Day immediately preceding the Redemption Date or the Repurchase Date, as the case may be, to convert this Security
or any portion of the principal amount hereof that is an integral multiple of U.S.$1,000 (provided that the unconverted portion of such principal amount
is U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof) into fully paid and nonassessable shares of Common Stock of the Company at an initial Conversion Rate of 109.2001 shares of
Common Stock per $1,000 principal amount of Securities (or at the current adjusted Conversion Rate if an adjustment has been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank and, in case such surrender shall be made during the period from the close of business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date (except if this Security has been called for redemption on a Redemption Date or is repurchasable on a Repurchase Date, with the
consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date), also accompanied by payment in New
York Clearing House or other funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security then being converted, and
also the conversion notice hereon duly executed, to the Company at the Corporate Trust Office, or at such other office or agency of the Company, subject to any laws or regulations applicable thereto
and subject to the right of the Company to terminate the appointment of any Conversion Agent (as defined below) as may be designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate (each a "Conversion Agent"), provided,  further, that in case surrender of this
Security for conversion shall be made during the period from the close of business on any Regular Record Date
next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and if this Security or portion hereof has been called for redemption on a Redemption Date or is
repurchasable on a Repurchase Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment
Date, then the Holder of this Security will be entitled to receive the interest accruing hereon from the Interest Payment Date next preceding the date of such conversion to such succeeding Interest
Payment Date and shall not be required to pay such interest upon surrender of this Security for conversion. Subject to the provisions of the preceding sentence and, in the case of a conversion after
the close of business on the Regular Record Date next preceding any Interest Payment Date and on or before the close of business on such Interest Payment Date, to the right of the Holder of this
Security (or any Predecessor Security of record as of such Regular Record Date) to receive the related installment of interest to the extent and under the circumstances provided in the Indenture, no
cash payment or adjustment is to be made on conversion for interest accrued hereon from the Interest Payment Date next preceding the day of conversion, or for dividends on the Common Stock issued on
conversion hereof. The Company shall thereafter deliver to the Holder the fixed number of shares of Common Stock (together with any cash adjustment or rights or warrants, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to satisfy the Company's obligation to pay the principal amount of this Security. No fractions of shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional interest (calculated to the nearest 1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Rate is subject to adjustment as provided in the Indenture. In addition, the Indenture provides that in case of certain consolidations or mergers to which the Company is a
party or the conveyance, transfer, sale or lease of all or substantially all of the property and assets of the Company, 

A-7

 

the
Indenture shall be amended, without the consent of any Holders of Securities, so that this Security, if then Outstanding, will be convertible thereafter, during the period this Security shall be
convertible as specified above, only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock of the Company into which this Security could have been converted immediately prior to such consolidation, merger, conveyance, transfer, sale or lease (assuming such
holder of Common Stock is not a Constituent Person or an Affiliate of a Constituent Person, failed to exercise any rights of election and received per share the kind and amount received per share by a
plurality of Non-electing Shares). No adjustment in the Conversion Rate will be made until such adjustment would require an increase or decrease of at least one percent of such rate,  provided that any
adjustment that would otherwise be made will be carried forward and taken into account in the computation of any subsequent
adjustment. 

        Subject
to certain limitations in the Indenture, at any time when the Company is not subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as
amended, upon the request of a Holder of a Security or the holder of shares of Common Stock issued upon conversion thereof, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder of Securities or such holder of shares of Common Stock issued upon conversion of Securities, or to a prospective purchaser of any such security designated
by any such Holder or holder, as the case may be, to the extent required to permit compliance by such Holder or holder with Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the resale of any such security. "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d) (4) under the
Securities Act (or any successor provision thereto). 

        The
Holder of this Security (including any Person that has a beneficial interest in this Security) and the Common Stock issuable upon conversion hereof is entitled to the benefits of a
Registration Rights Agreement, dated as of November 3, 2004 (the "Registration Rights Agreement"), executed by the Company. Pursuant to the Registration Rights Agreement, the Company has agreed
for the benefit of the Holders from time to time of Registered Securities and the Common Stock issuable upon conversion thereof, in each case, that are Registrable Securities, at the Company's
expense, (a) to file on or before 90 days after the first date of original issuance of the Securities, a shelf registration statement (the "Shelf Registration Statement") with the
Commission with respect to resales of the Registrable Securities, (b) thereafter to use its reasonable efforts to cause such Shelf Registration Statement to be declared effective by the
Commission on or before 180 days after the first date of original issuance of the Securities, and (c) to use its reasonable efforts to maintain such Shelf Registration Statement
continuously effective under the Securities Act until the earlier of (1) the sale under the Shelf Registration Statement of all the Registrable Securities registered thereunder or
(2) the expiration of the holding period applicable to such Registrable Securities held by persons that are not affiliates of the Company under Rule 144(k) under the Securities Act or
any successor previously subject to specific permitted exceptions. The Company is required to pay Additional Interest to holders of Registrable Securities for failure to comply with the foregoing
registration obligations, all as more fully set forth in the Registration Rights Agreement. 

        Whenever
in this Security there is a reference, in any context, to the payment of the principal of, premium, if any, or interest on, or in respect of, any Security such mention shall be
deemed to include mention of the payment of Additional Interest payable as described in the Registration Rights Agreement to the extent that, in such context, Additional Interest are, were or would be
payable in respect of this Security pursuant to the Registration Rights Agreement, and an express mention of the payment of Additional Interest (if applicable) in any provisions of this Security shall
not be construed as excluding Additional Interest in those provisions of this Security where such express mention is not made. If the Holder of this Security (including any Person that has a
beneficial interest in this Security) elects to sell this Security pursuant to the Shelf Registration Statement then, by its acceptance hereof, 

A-8

 

such
Holder of this Security agrees to be bound by the terms of the Registration Rights Agreement relating to the Registrable Securities which are the subject of such election. 

        If
a Fundamental Change occurs, the Holder of this Security, at the Holder's option, shall have the right, in accordance with the provisions of the Indenture, to require the Company to
repurchase this Security (or any portion of the principal amount hereof that is equal to U.S.$1,000 or any greater integral multiple of U.S.$1,000) for cash at a Repurchase Price equal to 100% of the
principal amount thereof plus interest accrued (including any Additional Interest, if any) to, but excluding, the Repurchase Date. At the option of the Company, the Repurchase Price may be paid in
cash or, subject to the conditions provided in the Indenture, by delivery of shares of Common Stock or in a combination of cash and Common Stock, having a fair market value equal to the Repurchase
Price. For purposes of this paragraph, the fair market value of shares of Common Stock shall be determined by the Company and shall be equal to 100% of the average of the closing sale price per share
for the ten consecutive Trading Days immediately preceding and including the third Trading Day prior to the Repurchase Date. Whenever in this Security there is a reference, in any context, to the
principal of any Security as of any time, such reference shall be deemed to include reference to the Repurchase Price payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase Price in any provision of this Security shall not be construed as excluding the Repurchase Price so payable in those
provisions of this Security when such express mention is not made; provided, however, that, for the
purposes of the paragraph below concerning the consequences of an Event of Default, such reference shall be deemed to include reference to the Repurchase Price only to the extent the Repurchase Price
is payable in cash. 

        In
the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, redemption, repurchase or conversion of this Security in part only, the Trustee,
as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the Applicable Procedures. 

        The
indebtedness evidenced by this Security is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full in
cash or Cash Equivalents of all Senior Debt of the Company, and this Security is issued subject to such provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the
same, 

        (a)   agrees
to and shall be bound by such provisions, 

        (b)   authorizes
and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and 

        (c)   appoints
the Trustee his attorney-in-fact for any and all such purposes. 

        If
an Event of Default shall occur and be continuing, the principal of all the Securities, together with accrued and unpaid interest, if any, to the date of declaration, may be declared
due and payable in the manner and with the effect provided in the Indenture. Upon payment (i) of the amount of principal so declared due and payable, together with accrued and unpaid interest
to the date of declaration, and (ii) of interest on any overdue principal and, to the extent permitted by applicable law, overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Securities shall terminate. 

        The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders
of the Securities under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of a majority in principal amount of the Securities at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to
waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture 

A-9

 

and
their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security
issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Security. 

        As
provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and furnished the
Trustee indemnity reasonably acceptable to it, the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity, and the
Trustee has not received any direction inconsistent with such written request from the Holders of a majority of the aggregate principal amount of the Outstanding Securities during such 60 day
period. The foregoing shall not apply
to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof, premium, if any, Additional Interest, if any, or interest hereon on or after the
respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. 

        No
reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, premium, if any, Additional Interest, if any, and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture. 

        As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of Registered Securities is registrable on the Security Register upon surrender of a
Registered Security for registration of transfer at the Corporate Trust Office of the Trustee or at such other office or agency of the Company as may be designated by it for such purpose in the
Borough of Manhattan, The City of New York, or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Registered Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees by the Registrar. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith. 

        Prior
to due presentation of a Registered Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name
such Registered Security is registered as the owner thereof for all purposes, whether or not such Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary. 

        Interest
on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. The Indenture and this Security shall be governed by and
construed in accordance with the laws of the State of New York, United States of America, including, without limitation, Section 5-1401 of the New York General Obligations Law. 

        All
terms used in this Security, which are defined in the Indenture, shall have the meanings assigned to them in the Indenture. 

A-10

   EXHIBIT B  

ELECTION OF HOLDER TO REQUIRE REPURCHASE  

        1.     Pursuant
to Section            of the Indenture, the undersigned hereby elects to have this Security repurchased by the Company. 

        2.     The
undersigned hereby directs the Trustee or the Company to pay it or                        an amount in cash equal to 100% of the
principal amount to be repurchased (as set
forth below), plus interest accrued to the Repurchase Date or, at the Company's election, Common Stock, valued as set forth in the Indenture. 

	

 	
 	
Dated:	

    

	

 	
 	

    
 Signature
	

 	
 	

Signature Guaranteed
	

 	
 	

    

Principal amount to be repurchased:

	
(must be equal to U.S.$1,000 or any greater integral multiple of U.S.$1,000):	 
	
Remaining principal amount following such repurchase:
	

	

 
	
NOTICE:    The signature to the foregoing election must correspond to the name as written upon the face of this Security in every particular, without alteration or any
change whatsoever.

B-1

   EXHIBIT C  

CONVERSION NOTICE  

        The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or any portion of the principal amount hereof (which is
an integral multiple of U.S.$1,000) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Security and directs that such shares, together with
a check in payment for any fractional share and any Securities representing any unconverted principal amount hereof, be delivered to and be registered in the name of the undersigned unless a different
name has been indicated below. If shares of Common Stock or Securities are to be registered 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 by the undersigned on account of interest accompanies this Security. 

Dated:
  

If
shares or Registered Securities are to be registered in the name of a Person other than the Holder, please print such Person's name and address: 

Address 

Social Security or other Taxpayer Identification Number, if any 

[Signature Guaranteed] 

  

Signature 

If
only a portion of the Securities is to be converted, please indicate: 

	
1.
	Principal
 amount to be converted: 

U.S.$                        

(any integral multiple of U.S. $1,000) 

	2.
	Principal
amount and denomination of Registered Securities representing unconverted principal amount to be issued: 

Amount:
U.S.$                         

C-1

   TABLE OF CONTENTS  

	 
	 	 
	 	PAGE

	ARTICLE ONE    DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	1
	 	SECTION 1.1	 	Definitions	 	1
	 	SECTION 1.2	 	Compliance Certificates and Opinions	 	10
	 	SECTION 1.3	 	Form of Documents Delivered to the Trustee	 	10
	 	SECTION 1.4	 	Acts of Holders of Securities	 	11
	 	SECTION 1.5	 	Notices, Etc., to Trustee and Company	 	12
	 	SECTION 1.6	 	Notice to Holders of Securities; Waiver	 	12
	 	SECTION 1.7	 	Effect of Headings and Table of Contents	 	13
	 	SECTION 1.8	 	Successors and Assigns	 	13
	 	SECTION 1.9	 	Separability Clause	 	13
	 	SECTION 1.10	 	Benefits of Indenture	 	13
	 	SECTION 1.11	 	Governing Law	 	13
	 	SECTION 1.12	 	Legal Holidays	 	13
	 	SECTION 1.13	 	Conflict with Trust Indenture Act	 	14
	 	SECTION 1.14	 	Counterparts	 	14
	ARTICLE TWO    THE SECURITIES	 	14
	 	SECTION 2.1	 	Form Generally	 	14
	 	SECTION 2.2	 	Title and Terms	 	15
	 	SECTION 2.3	 	Denominations	 	15
	 	SECTION 2.4	 	Execution, Authentication, Delivery and Dating	 	15
	 	SECTION 2.5	 	Global Securities; Temporary Securities	 	16
	 	SECTION 2.6	 	Registration, Registration of Transfer and Exchange; Restrictions on Transfer	 	17
	 	SECTION 2.7	 	Mutilated, Destroyed, Lost or Stolen Securities	 	19
	 	SECTION 2.8	 	Payment of Interest; Interest Rights Preserved	 	20
	 	SECTION 2.9	 	Persons Deemed Owners	 	20
	 	SECTION 2.10	 	Cancellation	 	21
	 	SECTION 2.11	 	Computation of Interest	 	21
	 	SECTION 2.12	 	CUSIP Numbers	 	21
	ARTICLE THREE    SATISFACTION AND DISCHARGE	 	21
	 	SECTION 3.1	 	Satisfaction and Discharge of Indenture	 	21
	 	SECTION 3.2	 	Application of Trust Money	 	22
	ARTICLE FOUR    REMEDIES	 	23
	 	SECTION 4.1	 	Events of Default	 	23
	 	SECTION 4.2	 	Acceleration of Maturity; Rescission and Annulment	 	24
	 	SECTION 4.3	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	25
	 	SECTION 4.4	 	Trustee May File Proofs of Claim	 	25
	 	SECTION 4.5	 	Trustee May Enforce Claims without Possession of Securities	 	26
	 	SECTION 4.6	 	Application of Money Collected	 	26
	 	SECTION 4.7	 	Limitation on Suits	 	26
	 	SECTION 4.8	 	Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert	 	27
	 	SECTION 4.9	 	Restoration of Rights and Remedies	 	27
	 	SECTION 4.10	 	Rights and Remedies Cumulative	 	27
	 	SECTION 4.11	 	Delay or Omission Not Waiver	 	27
	 	SECTION 4.12	 	Control by Holders of Securities	 	27
	 	SECTION 4.13	 	Waiver of Past Defaults	 	28
	 	SECTION 4.14	 	Undertaking for Costs	 	28
	 	 	 	 	 

i

 

	 	SECTION 4.15	 	Waiver of Stay, Usury or Extension Laws 37	 	 
	ARTICLE FIVE    THE TRUSTEE	 	28
	 	SECTION 5.1	 	Certain Duties and Responsibilities	 	28
	 	SECTION 5.2	 	Notice of Defaults	 	29
	 	SECTION 5.3	 	Certain Rights of Trustee	 	30
	 	SECTION 5.4	 	Not Responsible for Recitals or Issuance of Securities	 	31
	 	SECTION 5.5	 	May Hold Securities, Act as Trustee under Other Indentures	 	31
	 	SECTION 5.6	 	Money Held in Trust	 	31
	 	SECTION 5.7	 	Compensation and Reimbursement	 	31
	 	SECTION 5.8	 	Corporate Trustee Required; Eligibility	 	32
	 	SECTION 5.9	 	Resignation and Removal; Appointment of Successor	 	32
	 	SECTION 5.10	 	Acceptance of Appointment by Successor	 	33
	 	SECTION 5.11	 	Merger, Conversion, Consolidation or Succession to Business	 	33
	 	SECTION 5.12	 	Authenticating Agents	 	34
	 	SECTION 5.13	 	Disqualification; Conflicting Interests	 	35
	 	SECTION 5.14	 	Preferential Collection of Claims Against Company.	 	35
	ARTICLE SIX    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	 	35
	 	SECTION 6.1	 	Company May Consolidate, Etc., Only on Certain Terms	 	35
	 	SECTION 6.2	 	Successor Substituted	 	35
	ARTICLE SEVEN    SUPPLEMENTAL INDENTURES	 	36
	 	SECTION 7.1	 	Supplemental Indentures without Consent of Holders of Securities	 	36
	 	SECTION 7.2	 	Supplemental Indentures with Consent of Holders of Securities	 	36
	 	SECTION 7.3	 	Execution of Supplemental Indentures	 	37
	 	SECTION 7.4	 	Effect of Supplemental Indentures	 	37
	 	SECTION 7.5	 	Reference in Securities to Supplemental Indentures	 	38
	 	SECTION 7.6	 	Notice of Supplemental Indentures	 	38
	ARTICLE EIGHT    COVENANTS	 	38
	 	SECTION 8.1	 	Payment of Principal, Premium and Interest	 	38
	 	SECTION 8.2	 	Maintenance of Offices or Agencies	 	38
	 	SECTION 8.3	 	Money for Security Payments to Be Held in Trust	 	39
	 	SECTION 8.4	 	Existence	 	40
	 	SECTION 8.5	 	Statement by Officers as to Default	 	40
	 	SECTION 8.6	 	Delivery of Certain Information	 	40
	ARTICLE NINE    REDEMPTION OF SECURITIES	 	40
	 	SECTION 9.1	 	Right of Redemption	 	40
	 	SECTION 9.2	 	Applicability of Article	 	41
	 	SECTION 9.3	 	Election to Redeem; Notice to Trustee	 	41
	 	SECTION 9.4	 	Selection by Trustee of Securities to Be Redeemed	 	41
	 	SECTION 9.5	 	Notice of Redemption	 	41
	 	SECTION 9.6	 	Deposit of Redemption Price	 	42
	 	SECTION 9.7	 	Securities Payable on Redemption Date	 	42
	 	SECTION 9.8	 	Securities Redeemed in Part	 	42
	 	SECTION 9.9	 	Conversion Arrangement on Call for Redemption	 	43
	ARTICLE TEN    CONVERSION OF SECURITIES	 	43
	 	SECTION 10.1	 	Conversion Privilege and Conversion Rate	 	43
	 	SECTION 10.2	 	Exercise of Conversion Privilege	 	44
	 	SECTION 10.3	 	Fractions of Shares	 	45
	 	SECTION 10.4	 	Adjustment of Conversion Rate	 	45
	 	SECTION 10.5	 	Notice of Adjustments of Conversion Rate	 	50
	 	SECTION 10.6	 	Notice of Certain Corporate Action	 	50
	 	SECTION 10.7	 	Company to Reserve Common Stock	 	51
	 	SECTION 10.8	 	Taxes on Conversions	 	51
	 	SECTION 10.9	 	Covenant as to Common Stock	 	51
	 	 	 	 	 

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	 	SECTION 10.10	 	Cancellation of Converted Securities	 	51
	 	SECTION 10.11	 	Provision in Case of Consolidation, Merger or Sale of Assets	 	51
	 	SECTION 10.12	 	Responsibility of Trustee for Conversion Provisions	 	52
	ARTICLE ELEVEN    SUBORDINATION OF SECURITIES	 	53
	 	SECTION 11.1	 	Securities Subordinate to Senior Debt	 	53
	 	SECTION 11.2	 	No Payments in Certain Circumstances; Payment Over of Proceeds Upon Dissolution, Etc	 	53
	 	SECTION 11.3	 	Trustee to Effectuate Subordination	 	55
	 	SECTION 11.4	 	No Waiver of Subordination Provisions	 	55
	 	SECTION 11.5	 	Notice to Trustee	 	55
	 	SECTION 11.6	 	Reliance on Judicial Order or Certificate of Liquidating Agent	 	56
	 	SECTION 11.7	 	Trustee Not Fiduciary for Holders of Senior Debt	 	56
	 	SECTION 11.8	 	Reliance by Holders of Senior Debt on Subordination Provisions	 	56
	 	SECTION 11.9	 	Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights	 	57
	 	SECTION 11.10	 	Article Applicable to Paying Agents	 	57
	 	SECTION 11.11	 	Certain Conversions and Repurchases Deemed Payment	 	57
	ARTICLE TWELVE    REDEMPTION AND REPURCHASE UPON A FUNDAMENTAL CHANGE	 	57
	 	SECTION 12.1	 	Company's Right to Redeem	 	57
	 	SECTION 12.2	 	Notice of Options Redemption; Selection of Securities	 	58
	 	SECTION 12.3	 	Payment of Securities Called for Redemption by the Company	 	59
	 	SECTION 12.4	 	Conversion Arrangement on Call for Redemption	 	60
	 	SECTION 12.5	 	Purchase of Securities at Option of the Holder Upon Fundamental Change	 	60
	 	SECTION 12.6	 	Effect of Fundamental Change Purchase Notice	 	64
	 	SECTION 12.7	 	Deposit of Fundamental Change Purchase Price	 	65
	 	SECTION 12.8	 	Securities Purchased in Part	 	65
	 	SECTION 12.9	 	Covenant to Comply with Securities Laws Upon Purchase of Securities	 	65
	 	SECTION 12.10	 	Repayment to the Company	 	66
	ARTICLE THIRTEEN    PURCHASE AT THE OPTION OF HOLDERS ON SPECIFIC DATES	 	66
	 	SECTION 13.1	 	Optional Put	 	66
	 	SECTION 13.2	 	Effect of Purchase Notice; Withdrawal of Purchase Notice	 	68
	 	SECTION 13.3	 	Deposit of Purchase Price	 	68
	 	SECTION 13.4	 	Certificated Securities Purchased in Part	 	69
	 	SECTION 13.5	 	Covenant to Comply with Securities Laws Upon Purchase of Securities	 	69
	 	SECTION 13.6	 	Repayment to the Company	 	69
	 	SECTION 13.7	 	No Purchase Upon Event of Default	 	69
	ARTICLE FOURTEEN    HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE	 	69
	 	SECTION 14.1	 	Company to Furnish Trustee Names and Addresses of Holders	 	69
	 	SECTION 14.2	 	Preservation of Information	 	70
	 	SECTION 14.3	 	No Recourse Against Others	 	70
	 	SECTION 14.4	 	Reports by Trustee	 	70
	 	SECTION 14.5	 	Reports by Company	 	70

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QuickLinks

Exhibit 4.1

ARTICLE FIVE THE TRUSTEE

ARTICLE THIRTEEN PURCHASE AT THE OPTION OF HOLDERS ON SPECIFIC DATESQuickLinks
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ISOLAGEN, INC.  

$75,000,000 Principal Amount 

3.5%
Convertible Subordinated Notes due 2024 

Purchase
Agreement 

October 28,
2004 

CIBC WORLD MARKETS CORP.

UBS SECURITIES LLC

ADAMS HARKNESS, INC.

 
3.5%
Convertible Subordinated Notes due 2024 

of  ISOLAGEN, INC.

CIBC WORLD MARKETS CORP.

UBS SECURITIES LLC

ADAMS HARKNESS, INC.  

October 28, 2004 

CIBC
World Markets Corp.

417 Fifth Avenue, 2nd Floor

New York, New York 10016 

UBS
Securities LLC

299 Park Avenue

New York, New York 10171 

Adams
Harkness, Inc.

99 High Street

Boston, Massachusetts 02110 

Dear
Sirs and Mesdames: 

        Isolagen, Inc.,
a Delaware corporation (the "Company"), proposes to issue and sell to CIBC World Markets Corp.
("CIBC"), UBS Securities LLC ("UBS") and Adams Harkness, Inc.
("AH" and collectively with CIBC and UBS, the "Initial Purchasers") an aggregate of $75,000,000 in
principal amount of its 3.5% Convertible Subordinated Notes due November 1, 2024 (the "Firm Notes"), subject to the terms and conditions set
forth herein. The Company also proposes to issue and sell to the Initial Purchasers not more than an additional $15,000,000 aggregate principal amount of its 3.5% Convertible Subordinated Notes due
November 1, 2024 (the "Additional Notes"), if requested by CIBC and UBS as provided in Section 2 hereof. The Firm Notes and the Additional
Notes are herein collectively referred to as the "Notes." The Notes are to be issued pursuant to the provisions of an indenture (the
"Indenture"), to be dated as of the Closing Date (as hereinafter defined), between the Company, and The Bank of New York, as trustee (the
"Trustee"), pursuant to which the Notes, as provided therein, will be convertible at the option of the holders thereof into shares of the Company's
common stock, par value $0.001 per share (the "Common Stock"). The Notes and the Common Stock issuable upon conversion thereof, which the Initial
Purchasers may elect to purchase pursuant to this Agreement, are herein collectively referred to as the "Securities." The Securities and the Indenture
are more fully described in the Offering Memorandum (as hereinafter defined). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Indenture. 

         11.   Offering Memorandum. The Notes will be offered and sold to the Initial Purchasers pursuant to one or
more exemptions from
the registration requirements under the Securities Act of 1933, as amended (the "Act"). The Company has prepared a preliminary Offering Memorandum,
dated October 25, 2004, with appendices thereto (the "Preliminary Offering Memorandum") and a final Offering Memorandum, dated October 28,
2004, with appendices thereto (the "Offering Memorandum"), relating to the Notes. 

        Upon
original issuance thereof, and until such time as the same is no longer required pursuant to the Indenture, the Notes (and all securities issued in exchange therefor, in
substitution thereof or upon conversion thereof) shall bear the following legend: 

"THIS
NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR 

1

 

OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR OTHER EXEMPTIONS THEREFROM. 

THIS
NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT
IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT PRIOR TO SUCH TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE TRUSTEE OF THE NOTES),
(4) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO ISOLAGEN, INC.) OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. 

THIS
NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT." 

         2.     Agreements to Sell and Purchase.

        (a)   On
the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions contained herein, the Company agrees
to issue and sell to the Initial Purchasers, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company the principal amount of Firm Notes set forth opposite its name
on Schedule A hereto at a purchase price equal to 96.5% of the principal amount thereof (the "Purchase Price"). 

        (b)   On
the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions contained herein, (i) the
Company agrees to issue and sell the Additional Notes and (ii) each Initial Purchaser shall have a right, but not the obligation, to purchase, severally and not jointly, its pro rata portion of
the Additional Notes from the Company at the Purchase Price. CIBC and UBS may exercise the Initial Purchasers' right to purchase Additional Notes in whole or in part from time to time by giving
written notice thereof to the Company at any time prior to or within 30 days after, the Closing Date. Such notice shall 

2

 

specify
the aggregate principal amount of Additional Notes to be purchased pursuant to such exercise and the date for payment and delivery thereof. The date specified in any such notice shall be a
business day (i) no earlier than the Closing Date, (ii) no later than ten business days after such notice has been given and (iii) no earlier than two business days after such
notice has been given. If any Additional Notes are to be purchased, each Initial Purchaser agrees, severally and not jointly, to purchase from the Company the principal amount of Additional Notes
which bears the same proportion to the total principal amount of Additional Notes to be purchased from the Company as the principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule A bears to the total principal amount of Firm Notes. 

         3.     Terms of Offering. The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the
"Exempt Resales") of the Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to persons whom
the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("Eligible Purchasers").
The Initial Purchasers will offer the Notes to Eligible Purchasers initially at a price equal to 100% of the principal amount thereof. Such price may be changed at any time without notice. 

        Holders
(including subsequent transferees) of the Securities will have the registration rights set forth in the registration rights agreement (the "Registration
Rights Agreement"), to be dated the Closing Date, in substantially the form of Exhibit A hereto, for so long as such Securities constitute
"Restricted Securities" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"), under the circumstances set forth therein, a shelf registration statement pursuant to
Rule 415 under the Act (the "Registration Statement") relating to the resale by certain holders of the Securities and to use its reasonable best
efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement. This Agreement, the Indenture, the Notes,
and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "Operative Documents." 

         4.     Delivery and Payment.

        (a)   Delivery
of, and payment of the Purchase Price for, the Firm Notes shall be made at the offices of Latham & Watkins LLP, 885 Third Avenue, Suite 1000, New York,
New York 10022, or such other
location as may be mutually acceptable. Such delivery and payment shall be made at 9:00 a.m., New York City time, on November 3, 2004 or at such other time on the same date or such other
date as CIBC, UBS and the Company shall agree in writing. The time and date of such delivery and the payment for the Firm Notes are herein called the "Closing
Date." 

        (b)   Delivery
of, and payment for, any Additional Notes to be purchased by the Initial Purchasers shall be made at the offices of Latham & Watkins LLP, 885 Third
Avenue, Suite 1000, New York, New York 10022 at 9:00 a.m., New York City time, on the date specified in the exercise notice given by CIBC and UBS pursuant to Section 2(b) or such other
time on the same or such other date as CIBC, UBS and the Company shall agree in writing. The time and date of delivery and payment for any Additional Notes are hereinafter referred to as an
"Option Closing Date." 

        (c)   One
or more of the Notes in definitive global form, registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate principal amount of the Notes (collectively, the
"Global Note"), shall be delivered by the Company to the Initial Purchasers (or as the Initial Purchasers direct) in each case with any transfer taxes
thereon duly paid by the Company against payment by the Initial Purchasers, severally and not jointly, of the Purchase Price thereof by wire transfer in same day funds to the order of the Company. The
Global Note shall be made available to the Initial 

3

 

Purchasers
for inspection not later than 9:30 a.m., New York City time, on the business day immediately preceding the Closing Date. 

        5.     Agreements of the Company. The Company hereby agrees with each Initial Purchaser as follows:

        (a)   To
advise such Initial Purchaser promptly and, if requested by such Initial Purchaser, to confirm such advice in writing of (i) the issuance by any state
securities commission of any stop order suspending the qualification or exemption from qualification of any Notes for offering or sale in any jurisdiction designated by such Initial Purchaser pursuant
to Section 5(e), or the initiation of any proceeding by any state securities commission or any other federal or state regulatory authority for such purpose and (ii) the happening of any
event during the period referred to in Section 5(c) below that makes any statement of a material fact made in the Preliminary Offering Memorandum or the Offering Memorandum untrue or that
requires any additions to or changes in the Preliminary Offering Memorandum or the Offering Memorandum in order to make the statements therein not misleading. The Company shall use its reasonable best
efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of any Notes under any state securities or Blue Sky laws and, if at any time any state securities
commission or other federal or state regulatory authority shall issue an order suspending the qualification or exemption of any Notes under any state securities or Blue Sky laws, the Company shall use
all reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time. 

        (b)   To
furnish such Initial Purchaser and those persons identified by such Initial Purchaser to the Company as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum, any documents incorporated by reference therein, and any amendments or supplements thereto, as such Initial Purchaser may reasonably request for the time period specified in
Section 5(c). Subject to such Initial Purchaser's compliance with its representations and warranties and agreements set forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, any documents incorporated by reference therein, and any amendments and supplements thereto required pursuant hereto, by such Initial
Purchaser in connection with Exempt Resales. 

        (c)   During
such period as in the reasonable opinion of counsel for such Initial Purchaser an Offering Memorandum is required by law to be delivered in connection with Exempt
Resales by such Initial Purchaser, (i) not to make any amendment or supplement to the Offering Memorandum of which such Initial Purchaser shall not previously have been advised or to which such
Initial Purchaser shall reasonably object after being so advised and (ii) to prepare promptly upon such Initial Purchaser's reasonable request any amendment or supplement to the Offering
Memorandum that may be necessary or advisable in connection with such Exempt Resales. 

        (d)   If,
during the period referred to in Section 5(c) above, any event shall occur or condition shall exist as a result of which, in the opinion of counsel to such
Initial Purchaser, it becomes necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances when the Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of counsel to such Initial Purchaser, it is necessary to amend or supplement the Offering Memorandum to comply with any
applicable law, forthwith to prepare an appropriate amendment or supplement to the Offering Memorandum so that the statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Offering Memorandum will comply with applicable law, and to furnish to such Initial Purchaser and such other persons as such
Initial Purchaser may designate such number of copies thereof as such Initial Purchaser may reasonably request. 

4

 

        (e)   Prior
to the sale of all Notes pursuant to Exempt Resales as contemplated hereby, to cooperate with such Initial Purchaser and counsel to such Initial Purchaser in
connection with the registration or qualification of the Notes for offer and sale to such Initial Purchaser and pursuant to Exempt Resales under the securities or Blue Sky laws of such jurisdictions
as such Initial Purchaser may request and to continue such registration or qualification in effect so long as required for Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or qualification; provided, however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or
taxation, other than as to matters and transactions relating to the Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction in which it is not now so subject. 

        (f)    So
long as the Notes are outstanding, (i) to mail and make generally available as soon as practicable after the end of each fiscal year to the record holders of
the Notes a financial report of the Company and its subsidiaries on a consolidated basis (and a similar financial report of all unconsolidated subsidiaries, if any), it being agreed that all such
financial reports will include a consolidated balance sheet, a consolidated statement of operations, a consolidated statement of cash flows and a consolidated statement of stockholders' equity as of
the end of and for such fiscal year, together with comparable information as of the end of and for the preceding year, certified by the Company's independent public accountants and (ii) to mail
and make generally available as soon as practicable after the end of each quarterly period (except for the last quarterly period of each fiscal year) to such holders, a consolidated balance sheet a
consolidated statement of operations and a consolidated statement of cash flows (and similar financial reports of all unconsolidated subsidiaries, if any) as of the end of and for such period, and for
the period from the beginning of such year to the close of such quarterly period, together with comparable information for the corresponding periods of the preceding year; provided, however, the
Company's filing of information specified herein with the Commission by EDGAR shall satisfy this provision with respect to such information. 

        (g)   So
long as the Notes are outstanding, to furnish to such Initial Purchaser as soon as available copies of all reports or other communications furnished by the Company to
its security holders or furnished to or filed with the Commission or any securities exchange on which any class of securities of the Company is listed and such other publicly available information
concerning the Company and/or its subsidiaries as such Initial Purchaser may reasonably request; provided, however, the Company's filing of information specified herein with the Commission by EDGAR
shall satisfy this provision with respect to such information. 

        (h)   So
long as any of the Notes remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to make available to any holder of Securities in connection with any sale thereof and any prospective purchaser
of such Securities from such holder the information ("Rule 144A Information") required by Rule 144A(d)(4) under the Act. 

        (i)    Whether
or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the
performance of the obligations of the Company under this Agreement, including: (i) the fees, disbursements and expenses of counsel to the Company and accountants of the Company in connection
with the sale and delivery of the Notes to the Initial Purchasers and pursuant to Exempt Resales, and all other fees and expenses in connection with the preparation, printing, filing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum, any documents incorporated by reference and all amendments and supplements to any of the foregoing (including financial statements),
including the mailing and delivering of copies thereof to the Initial Purchasers and 

5

 

persons
designated by them in the quantities specified herein, (ii) all costs and expenses related to the transfer and delivery of the Notes to such Initial Purchaser and pursuant to Exempt
Resales, including any transfer or other taxes payable thereon, (iii) all costs of printing or producing this Agreement, the other Operative Documents and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Securities, (iv) all expenses in connection with the registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or producing any preliminary and supplemental Blue Sky memoranda in connection therewith (including the filing fees and fees
and disbursements of counsel for the Initial Purchasers in connection with such registration or qualification and memoranda relating thereto), (v) the cost of printing certificates representing
the Securities, (vi) all expenses and listing fees in connection with the application for quotation of the Notes in The PORTAL Market of the National Association of Securities
Dealers, Inc. ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's counsel in connection with the Indenture and the
Notes, (viii) the costs and charges of any transfer agent, registrar and/or depositary (including DTC), (ix) any fees charged by rating agencies for the rating of the Notes,
(x) all costs and expenses of the Registration Statement, as set forth in the Registration Rights Agreement, (xi) all expenses and listing fees in connection with the application for
listing the Common Stock issuable upon conversion of the Notes on the American Stock Exchange (the "AMEX") and (xii) and all other costs and
expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. 

        (j)    To
use its reasonable best efforts to effect the inclusion of the Notes in PORTAL and to maintain the listing of the Notes on PORTAL for so long as the Notes are
outstanding. 

        (k)   To
obtain the approval of DTC for "book-entry" transfer of the Notes, and to comply with all of its agreements set forth in the representation letters of the
Company to DTC relating to the approval of the Notes by DTC for "book-entry" transfer. 

        (l)    To
cause the Common Stock issuable upon conversion of the Notes to be duly included for quotation on the AMEX prior to the Firm Closing Date, subject to notice of
official issuance. The Company will ensure that such Common Stock remains included for quotation on the AMEX or any other national securities exchange following the Firm Closing Date for so long as
any shares of Common Stock remain registered under the Exchange Act. 

        (m)  The
Company shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock (other than the issuance of Common Stock upon conversion of the Notes) or any securities
convertible into or exercisable or exchangeable for Common Stock, for a period of 90 days after the date hereof without the prior written consent of CIBC and UBS. Notwithstanding the foregoing,
during such period (i) the Company may grant securities convertible into or exercisable or exchangeable for Common Stock pursuant to the Company's existing stock option or stock purchase plans
or in connection with the granting of options to new hires and (ii) the Company may issue shares of Common Stock upon the conversion or exchange of a convertible or exchangeable security
outstanding on the date hereof. The Company shall, prior to or concurrently with the execution of this Agreement, deliver an agreement executed by each of the directors and executive officers of the
Company, other than Frank DeLape and Michael Macaluso, to the effect that such person will not, during the period commencing on the date such person signs such agreement and ending 90 days
after the date hereof, without the prior written consent of CIBC and UBS, directly or indirectly, make any offer, sale, assignment, transfer, encumbrance, contract to sell, grant of an option to
purchase or other disposition of any Common Stock beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) on the date of such
agreement or thereafter acquired, other than Common Stock transferred as a gift or gifts 

6

 

(provided
that any donee thereof agrees in writing to be bound by the terms thereof). The Company shall, prior to or concurrently with the execution of this Agreement, deliver an agreement executed by
each of Frank DeLape, Michael Macaluso, Olga Marko, Michael Avignon and Timothy J. Till, who are each party to a purchase agreement with the Company pursuant to which the Company will buy shares of
Common Stock of the Company held by them, to the effect that such person will not, during the period commencing on the date such person signs such agreement and ending 270 days after the date
hereof, without the prior written consent of CIBC and UBS, directly or indirectly, make any offer, sale, assignment, transfer, encumbrance, contract to sell, grant of an option to purchase or other
disposition of any Common Stock beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) on the date of such agreement or
thereafter acquired, other than (i) Common Stock to be purchased by the Company pursuant to a Share Purchase Agreement between the Company and such holder, (ii) Common Stock transferred
as a gift or gifts (provided that any donee thereof agrees in writing to be bound by the terms thereof) and (iii) after 180 days from the date hereof, Common Stock up to an aggregate of
25% of the shares of Common Stock owned of record by such holder as of the date hereof. 

        (n)   Not
to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act) that would be integrated with the sale of
the Notes to the Initial Purchasers or pursuant to Exempt Resales in a manner that would require the registration of any such sale of the Notes under the Act. 

        (o)   Not
to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of any Notes. 

        (p)   To
comply with all of its agreements set forth in the Registration Rights Agreement. 

        (q)   To
continue to reserve, free of any preemptive or similar rights, a sufficient number of authorized but unissued shares of Common Stock to satisfy the conversion rights
of the Notes and issue the shares of Common Stock issuable upon conversion of the Notes. 

        (r)   To
use its reasonable best efforts to do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date and
to satisfy all conditions precedent to the delivery of the Notes. 

        (s)   To
apply the net proceeds from the sale of the Notes as set forth under "Use of Proceeds" in the Offering Memorandum. 

        (v)   Not
take any action prohibited by Regulation M under the Exchange Act, in connection with the distribution of the Securities contemplated hereby. 

        6.     Representations, Warranties and Agreements of the Company. As of the date hereof, the Company
represents and warrants to,
and agrees with, each of the Initial Purchasers that: 

        (a)   The
Preliminary Offering Memorandum and the Offering Memorandum (including the information incorporated by reference therein, collectively, (the
"Incorporated Documents")) do not, and any supplement or amendment to them will 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, except that the
representations and warranties contained in this paragraph (a) shall not apply to statements in or omissions from the Preliminary Offering Memorandum or the Offering Memorandum (or any
supplement or amendment thereto) based upon information relating to the Initial Purchasers furnished to the Company in writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or supplement thereto, or any order asserting that any 

7

 

of
the transactions contemplated by this Agreement are subject to the registration requirements of the Act, has been issued. The Incorporated Documents, at the time they were or hereafter are filed or
last amended, as the case may be, with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act. 

        (b)   Each
of the Company and its subsidiaries has the corporate power and authority to carry on its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum. The Company and each of its subsidiaries, including each entity (corporation, partnership, joint venture, association or other business organization) controlled directly or
indirectly by the Company, is duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation or organization. The Company and each of its
subsidiaries is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification, except for such jurisdictions where the failure to so qualify individually or in the aggregate would not have a material adverse
effect on the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as a whole
(a "Material Adverse Effect"); and to the Company's knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. The Company's subsidiaries are as follows: Isolagen Technologies, Inc., a wholly-owned subsidiary
of the Company, Isolagen Europe Limited, a wholly-owned subsidiary of Isolagen Technologies, Inc., Isolagen International S.A., a wholly-owned subsidiary of Isolagen Technologies, Inc.,
and Isolagen Australia Pty Limited, a wholly-owned subsidiary of Isolagen Technologies, Inc. 

        (c)   All
outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights, and there are no restrictions upon the voting or transfer of the Common Stock pursuant to the Company's charter or by-laws or other governing documents or,
except as set forth herein, any agreement or other instrument to which the Company is a party or by which it may be bound. The Company has the authorized and outstanding capital stock as set forth in
the Offering Memorandum, and there have been no changes in the outstanding capital stock of the Company since the date set forth under the heading "Capitalization" in the Preliminary Offering
Memorandum and the Offering Memorandum, except to the extent that certain outstanding options and warrants set forth in the footnotes thereto may have been exercised. 

        (d)   All
of the outstanding shares of capital stock of each of the Company's subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through one or more subsidiaries, free and clear of any security interest, claim, lien, encumbrance or adverse interest
of any nature (each, a "Lien"). 

        (e)   This
Agreement has been duly authorized, executed and delivered by the Company. 

        (f)    The
Indenture has been duly authorized by the Company and, when duly executed and delivered by the Company, and assuming the due authority, execution and delivery by the
Trustee, will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "Trust Indenture Act"), and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. 

8

 

        (g)   The
Notes have been duly authorized and, when duly executed, delivered and authenticated in accordance with the provisions of the Indenture and when delivered and paid
for by the Initial Purchasers in accordance with the terms of this Agreement, the Notes will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. 

        (h)   The
Notes are convertible into Common Stock in accordance with the terms of the Indenture; the shares of Common Stock initially issuable upon conversion of the Notes
have been duly authorized and reserved for issuance upon such conversion and, when issued upon such conversion, will be validly issued, fully paid and nonassessable, will conform in all material
respects to the description thereof contained in the Offering Memorandum and will be duly authorized for listing on the AMEX, subject to notice of official issuance. The stockholders of the Company or
other holders of the Company's securities have no pre-emptive or similar rights with respect to the Notes or the Common Stock issuable upon conversion of the Notes. The certificates
evidencing the Common Stock issuable upon conversion of the Notes will be in due and proper legal form. 

        (i)    The
Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered by the Company, and assuming the due execution and
delivery by the Initial Purchasers, will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally, (ii) rights of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability, and (iii) the indemnification provisions of Section 5 thereof may be limited by applicable law. 

        (j)    Neither
the Company nor any of its subsidiaries is in violation of any term or provision of (i) its charter or by-laws or (ii) of any
franchise, license, permit, judgment, decree, order, statute, rule or regulation. 

        (k)   The
execution, delivery and performance of this Agreement and the other Operative Documents by the Company will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or governmental body or agency (except such as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of, or a default under, the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company and its subsidiaries, taken as a whole, (iii) violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any court or any governmental body or agency having jurisdiction over the Company, any of its subsidiaries or their respective property,
(iv) result in the imposition or creation of (or the obligation to create or impose) a Lien under, any agreement or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property is bound, or (v) result in the termination, suspension or revocation of any Authorization (as defined below) of the
Company or any of its subsidiaries or result in any other impairment of the rights of the holder of any such Authorization, in the case of (iv), which would have a Material Adverse Effect. 

        (l)    There
are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject that might result, singly or in the aggregate, in a Material Adverse Effect. 

9

 

        (m)  The
Company and each of its subsidiaries has all requisite corporate power and authority, and all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies or any other person or entity (collectively, the "Permits"), to own, lease
and license its assets and properties and conduct its business, all of which are valid and in full force and effect, except where the lack of such Permits, individually or in the aggregate, would not
have a Material Adverse Effect. The Company and each of its subsidiaries has fulfilled and performed in all material respects all of its material obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder. Except as
may be required under the Securities Act and state and foreign Blue Sky laws, no other Permits are required to enter into, deliver and perform this Agreement and to issue and sell the Notes or the
Common Stock issuable upon conversion of the Notes. 

        (n)   (i) Each
of the Company and each of its subsidiaries is in compliance in all material respects with all rules, laws and regulation relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the environment ("Environmental Law") which are applicable to its business;
(ii) neither the Company nor its subsidiaries has received any notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of the
Company and each of its subsidiaries has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all
terms and conditions of any such permit, license or approval, provided that Isolagen Europe Limited does not require any permits, licenses or other approvals under applicable Environmental Laws to
conduct its business; (iv) to the
Company's knowledge, no facts currently exist that will require the Company or any of its subsidiaries to make future material capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, leased or occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise designated as a contaminated site under applicable
state or local law. Neither the Company nor any of its subsidiaries has been named as a "potentially responsible party" under the CERCLA. 

        (o)   In
the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which the Company identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect. 

        (p)   The
operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of it subsidiaries with respect to the Money Laundering Laws
is pending, or to the best knowledge of the Company, threatened. 

        (q)   Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the 

10

 

U.S.
Treasury Department ("OFAC"); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC. 

        (r)   Except
as described in the Offering Memorandum or in the documents incorporated by reference into the Prospectus, the Company has not sold or issued any shares of Common
Stock during the six-month period preceding the date of the Offering Memorandum, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options, rights or warrants. 

        (s)   The
Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder with respect to each "plan" as defined in Section 3(3) of ERISA and such
regulations and published interpretations in which its employees are eligible to participate and each such plan is in compliance in all material respects with the presently applicable provisions of
ERISA and such regulations and published interpretations. No "Reportable Event" (as defined in 12 ERISA) has occurred with respect to any "Pension Plan" (as defined in ERISA) for which the Company
could have any liability. 

        (t)    Except
as described in the Offering Memorandum or in the documents incorporated by reference into the Offering Memorandum, the Company's board of directors has validly
appointed an audit committee whose composition satisfies the requirements of Section 121B(2) of the American Stock Exchange Company Guide. The Company's board of directors and/or the audit
committee has adopted a charter that satisfies the requirements of Section 121B(1) of the American Stock Exchange Company Guide. Neither the Company's board of directors nor the audit committee
has been informed, nor is any director of the Company aware, of (i) any significant deficiencies in the design or operation of the Company's internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data or any material weakness in the Company's internal controls; or (ii) any fraud, whether or not material, that involves
management or other employees of the Company who have a significant role in the Company's internal controls. 

        (u)   The
Company has materially complied with, is not in material violation of, and has not received any written notices of violation with respect to, any foreign, federal,
state or local statute, law or regulation, including without limitation all statutes, rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product or product candidate manufactured or distributed by the Company
("Applicable Laws"), or any license, certificate, approval, clearance, authorization, permit, supplement or amendment required by any Applicable Laws
("Authorizations"). The Company possesses all material Authorizations and such material Authorizations are in full force and effect. The Company is, and
its products or product candidates are, in compliance in all material respects with all Authorizations and Applicable Laws, including, but not limited to, all laws, statutes, rules, regulations, or
orders administered, issued or enforced by the Federal Food and Drug Administration (the "FDA") or any other federal or foreign governmental authority
having authority over the Company or any of its products or product candidates ("Governmental Authority"). The Company has not received from the FDA or
any other Governmental Authority any notice of adverse findings, regulatory letters, notices of violations, Warning Letters, criminal proceeding notices under Section 305 of the Federal Food,
Drug, and Cosmetic Act, or other similar communication from the FDA or other Governmental Authority alleging or asserting material noncompliance with Applicable Laws or any Authorizations, and there
have been no seizures conducted or threatened by the FDA or other 

11

 

Governmental
Authority, and no recalls, market withdrawals, field notifications, notifications of misbranding or adulteration, safety alerts or similar actions relating to the safety or efficacy of
the Company's products conducted, requested or threatened by the FDA or other Governmental Authority relating to the products sold by the Company. The Company has not, either voluntarily or
involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal, safety alert, "dear doctor" letter, or other similar notice or action
relating to the alleged lack of safety or efficacy of any of the Company's products or any alleged product defect or violation, and the Company has no knowledge that any Governmental Authority has
initiated, conducted or intends to initiate any such notice or action. The Company has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other similar action from any Governmental Authority alleging that any product operation or activity is in material violation of any Applicable Laws or Authorizations and has no knowledge that any
such Governmental Authority is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding. Each regulatory submission for the Company's products has been filed,
cleared and maintained in compliance in all material respects with all Applicable Laws and Authorizations, including without limitation applicable federal statutes, rules, regulations or orders
administered or promulgated by the FDA or other Governmental Authority, and all laboratory and clinical studies, and tests that the Company has conducted and is conducting to demonstrate the safety
and efficacy of its products and product candidates are in all material respects in compliance with accepted professional scientific standards and all Applicable Laws and Authorizations in all
material respects. No filing or submission to the FDA or any other Governmental Authority, intended to be the basis for any Authorization, contains any material omission or material false information
or presents data and results from the studies in any manner other than fair, accurate, and complete presentation. The Company is not aware, directly or indirectly of any other studies, tests, trials,
presentations, publications or other information that could reasonably call into question the validity, completeness, or accuracy of any study, test, trial, results or data relating to the Company's
products or product candidates. Except as described in the Prospectus, the Company has not received any notices or correspondence from any Governmental Authority (including, but not limited to, the
FDA) requiring suspension of any studies, tests, or clinical trials conducted by or on behalf of the Company. The Company is not aware of any facts which are reasonably likely to cause (A) the
nonapproval or non-clearance, withdrawal, or recall of
any products sold or intended to be sold by the Company, or (B) a suspension or revocation of any of the Company's Authorizations. The Company has not received notice (whether complete or
pending) of any proceeding seeking recall, suspension or seizure of any products or product candidates sold or proposed to be sold by the Company. 

        (v)   Each
of the Company and its subsidiaries has such permits, licenses, consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and given all notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation under any applicable Environmental Laws, as are necessary to own, lease, license and operate its respective properties
and to conduct its business, except where the failure to have any such Authorization or to make any such filing or notice would not, singly or in the aggregate, have a Material Adverse Effect. Each
such Authorization is valid and in full force and effect and each of the Company and its subsidiaries is in compliance with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto; and no event has occurred (including without limitation the receipt of any notice from any authority or governing body)
that allows or, after notice or lapse of time or both, would allow, revocation, suspension or termination of any such Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization; and such Authorizations contain no restrictions that are burdensome to the 

12

 

Company
or any of its subsidiaries, except where such failure to be valid and in full force and effect or to be in compliance, the occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect. 

        (w)  Except
as otherwise described in the Offering Memorandum, the Company and each of its subsidiaries has good and marketable title in fee simple to all real property, and
good and marketable title to all other property owned by it, in each case free and clear of all liens, encumbrances, claims, security interests and defects, except such as do not materially affect the
value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company and its subsidiaries. All property held under lease by the Company and
its subsidiaries is held by them under valid, existing and enforceable leases, free and clear of all liens, encumbrances, claims, security interests and defects, except such as are not material and do
not materially interfere with the use made or proposed to be made of such property by the Company and its subsidiaries. 

        (x)   The
Company and each of its subsidiaries owns or possesses legally enforceable rights to use all patents, patent rights, inventions, trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses, know-how and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of its business. Neither the Company nor any of its subsidiaries has received any notice of, or is aware of,
any infringement of or conflict with asserted rights of others with respect to any Intangibles. 

        (y)   There
is no document, contract or other agreement required to be described in the Preliminary Offering Memorandum, the Offering Memorandum or the Incorporated Documents
which is not described or filed as required by the Securities Act or Rules. Each description of a contract, document or other agreement in the Preliminary Offering Memorandum or Offering Memorandum
accurately reflects in all respects the terms of the underlying contract, document or other agreement. Each contract, document or other agreement described in the Preliminary Offering Memorandum or
Offering Memorandum or incorporated by reference is in full force and effect and is valid and enforceable by and against the Company or its subsidiary, as the case may be, in accordance with its
terms. Neither the Company nor any of its subsidiaries, if a subsidiary is a party, nor to the Company's knowledge, any other party to such agreement is in default in the observance or performance of
any term or obligation to be performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case which
default or event, individually or in the aggregate, would have a Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse of time or both would constitute a
default, in the due performance and observance of any term, covenant or condition, by the Company or its subsidiary, if a subsidiary is a party thereto, of any other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which Company or its properties or business or a subsidiary or its properties or business may be bound or affected which default or event,
individually or in the aggregate, would have a Material Adverse Effect. 

        (z)   No
transaction has occurred between or among the Company and any of its officers or directors, stockholders or any affiliate or affiliates of any such officer or
director or stockholder that is required to be described in and is not described in the Preliminary Offering Memorandum or the Offering Memorandum or in the documents incorporated by reference into
the Preliminary Offering Memorandum or the Offering Memorandum. The Company has not, directly or indirectly, including through any subsidiary, extended or maintained credit, or arranged for the
extension or credit, or renewed an extension of credit, in the form of a personal loan to or for any of its directors or executive officers in violation of applicable laws, including
Section 402 of the Sarbanes-Oxley Act (the "Sarbanes-Oxley Act"). 

13

 

        (aa) Neither
the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute
would have a Material Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or pending litigation between the Company or its subsidiaries and any of its executive officers which, if adversely determined,
could have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment of the Company. 

        (bb) The
Company and each of its subsidiaries has timely filed all Federal, state, local and foreign tax returns which are required to be filed through the date hereof,
which returns are true and correct in all material respects or has received timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent
that the same are material and have become
due. There are no tax audits or investigations pending, which if adversely determined would have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the
Company or any of its subsidiaries. 

        (cc) The
chief executive officer and the chief financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act and any related rules and
regulations promulgated by the Commission, and the statements contained in any such certification are complete and correct; the Company maintains "disclosure controls and procedures" (as defined in
Rule 13a-14(c) under the Exchange Act); the Company is otherwise in compliance in all material respects with all applicable effective provisions of the Sarbanes-Oxley Act and is
actively taking steps to ensure that it will be in compliance with other applicable provisions of the Sarbanes-Oxley Act upon the effectiveness of such provisions. 

        (dd) The
Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in
the businesses in which they are engaged or propose to engage after giving effect to the transactions described in the Offering Memorandum; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or the Company's or its subsidiaries' respective businesses, assets, employees, officers and directors are in full force and effect; the Company and
each of its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and neither the Company nor any subsidiary of the Company has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at
a cost that is not materially greater than the current cost. Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied. 

        (ee) There
are no affiliations with the NASD among the Company's officers, directors or, to the best of the knowledge of the Company, any five percent or greater stockholder
of the Company, except as set forth in the Offering Memorandum or otherwise disclosed in writing to the Initial Purchasers. 

        (ff)  The
accountants BDO Seidman LLP and Pannell Kerr Forster of Texas, P.C., that have certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum, are independent public accountants with respect to the Company, as required by the Act and the Exchange Act and are not in violation of the
auditor independence requirements of the Sarbanes-Oxley Act of 2002. 

        (gg) The
historical financial statements, together with related schedules and notes forming part of the Preliminary Offering Memorandum and the Offering Memorandum (and any
amendment or supplement thereto), present fairly the consolidated financial position, results of operations and 

14

 

changes
in financial position of the Company and its subsidiaries on the basis stated or incorporated by reference in the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved;
and the other financial and statistical information and data set forth or incorporated by reference in the Preliminary Offering Memorandum and the Offering Memorandum (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. There are no material
off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other relationships with unconsolidated entities or other persons, that may have a
material current or, to the Company's knowledge, a material future effect on the Company's financial condition, changes in financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses. 

        (hh) The
Company is not and, after giving effect to the offering and sale of the Notes and the application of the net proceeds thereof as described in the Offering
Memorandum, will not be, an "investment company," as such term is defined in the Investment Company Act of 1940, as amended. 

        (ii)   There
are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the Company or to require the Company to include such securities with the Notes registered pursuant to any registration
statement. 

        (jj)   Neither
the Company nor any of its subsidiaries nor any agent thereof acting on the behalf of any of them has taken, and none of them will take, any action that might
cause this Agreement or the issuance or sale of the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System. 

        (kk) No
"nationally recognized statistical rating organization" as such term is defined for the purpose of Rule 436(g)(1) under the Act (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial or otherwise) on the Company's retaining any rating assigned to the Company, any securities of the Company or
(ii) has indicated to the Company that it is considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (B) any change in the outlook for any rating of the Company or any securities of the Company. 

        (ll)   Since
the respective dates as of which information is given in the Offering Memorandum, other than as set forth in the Offering Memorandum (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement), (i) there has not occurred any material adverse change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as a whole, (ii) there has not been any material adverse change in the capital stock or in the long-term debt of
the Company or any of its subsidiaries, (iii) neither the Company nor any of its subsidiaries has incurred any material liability or obligation, direct or contingent, (iv) neither the
Company nor any of its subsidiaries has sustained any material loss or interference with their respective assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree that would have a Material Adverse
Effect; and (v) since the date of the latest consolidated balance sheet included in the Preliminary Offering Memorandum and the Offering Memorandum, except as reflected therein, neither the
Company nor any of its 

15

 

subsidiaries
has (A) issued any securities other than the issuance of securities pursuant to the exercise of options granted under stock option plans or agreements existing prior to the date of
the latest consolidated balance sheet included in the Preliminary Offering Memorandum and the Offering Memorandum, (B) entered into any material transaction not in the ordinary course of
business or (C) declared or paid any dividend or made any distribution on any shares of its capital stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise
acquire any shares of its capital stock. 

        (mm) The
books, records and accounts of each of the Company and each of its subsidiaries accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company and its subsidiaries, as applicable. Each of the Company and each of its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principals and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. 

        (nn) Each
of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date, contains all the information specified in, and meets the requirements of,
Rule 144A(d)(4) under the Act. 

        (oo) When
the Notes are issued and delivered pursuant to this Agreement, the Notes will not be of the same class (within the meaning of Rule 144A under the Act) as
any security of the Company that is listed on a national securities exchange registered under Section 6 of the Exchange Act or that is quoted in a United States automated inter-dealer quotation
system. 

        (pp) No
form of general solicitation or general advertising (as defined in Regulation D under the Act) was used by the Company, or any of its representatives (other
than the Initial Purchaser, as to whom the Company makes no representation) in connection with the offer and sale of the Notes contemplated hereby, including without limitation articles, notices or
other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the Notes have been issued and sold by the Company within the six-month period immediately prior to the date hereof. 

        (qq) The
Company has not taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in, or that has
constituted or that might reasonably be expect to constitute, the stabilization or manipulation of the price of the Common Stock. 

        (rr)  Prior
to the effectiveness of any Registration Statement, the Indenture is not required to be qualified under the TIA. 

        (ss)  No
registration under the Act of the Securities is required for the sale of the Securities to the Initial Purchasers as contemplated hereby or for the Exempt Resales
assuming the accuracy of the Initial Purchasers' representations and warranties and agreements set forth in Section 7 hereof. 

        (tt)  Each
certificate signed by any officer of the Company and delivered to the Initial Purchasers or counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by the Company to the Initial Purchasers as to the matters covered thereby. 

16

 

        The
Company acknowledges that the Initial Purchasers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 9 hereof, counsel to the
Company and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and hereby consents to such reliance. 

        7.     Initial Purchasers' Representations and Warranties. Each Initial Purchaser, severally and not
jointly, represents and
warrants to, and agrees with, the Company: 

        (a)   Such
Initial Purchaser is either a qualified institutional buyer as defined in Rule 144A under the Act (a "QIB"),
with such knowledge and experience in financial and business matters as is necessary in order to evaluate the merits and risks of an investment in the Notes. 

        (b)   Such
Initial Purchaser (A) is not acquiring the Securities with a view to any distribution thereof or with any present intention of offering or selling any of the
Securities in a transaction that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction and (B) will be reoffering and reselling the
Securities only to QIBs in reliance on the exemption from the registration requirements of the Act provided by Rule 144A. 

        (c)   Such
Initial Purchaser agrees that no form of general solicitation or general advertising (within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in connection with the offer and sale of the Securities pursuant hereto, including without limitation articles, notices or other
communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or
general advertising. 

        (d)   Such
Initial Purchaser agrees that, in connection with Exempt Resales, such Initial Purchaser will solicit offers to buy the Securities only from, and will offer to sell
the Securities only to, Eligible Purchasers. Such Initial Purchaser further agrees that it will offer to sell the Securities only to, and will solicit offers to buy the Securities only from, Eligible
Purchasers that such Initial Purchaser reasonably believes are QIBs, that agree that (A) the Securities purchased by them may be offered, resold, pledged or otherwise transferred within the
time period referred to under Rule 144(k) (taking into account the provisions of Rule 144(d) under the Act, if applicable) under the Act, as in effect on the date of the transfer of such
Securities, only (I) to a person whom the seller reasonably believes is a QIB acquiring for its own account or for the account of a QIB in a transaction meeting the requirements of
Rule 144A under the Act, (ii) pursuant to an exemption from registration under the Act provided by Rule 144 thereunder (if available), (iii) pursuant to an exemption from
registration under the Act (if available) or (iv) pursuant to an effective registration statement and, in each case, in accordance with the applicable securities laws of the United States or
other jurisdictions and (B) such Eligible Purchasers will deliver to each person to whom such Securities or an interest therein is transferred a notice substantially to the effect of the
foregoing. 

        (e)   Such
Initial Purchaser acknowledges that the Company, for purposes of the opinions to be delivered to each Initial Purchaser pursuant to Section 9 hereof, counsel
to the Company and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and each Initial Purchaser hereby consents to such reliance. 

         8.     Indemnification.

        (a)   The
Company agrees to indemnify and hold harmless each Initial Purchaser, its respective directors and officers and each person, if any, who controls such Initial
Purchaser (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities and judgments (including
without limitation any legal or other expenses incurred in connection with investigating or defending any matter, including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in the Offering 

17

 

Memorandum
(or any amendment or supplement thereto), the Preliminary Offering Memorandum or any Rule 144A Information provided by the Company to any holder or prospective purchaser of
Securities pursuant to Section 5(h) or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information
relating to any Initial Purchaser furnished in writing to the Company by such Initial Purchaser. 

        (b)   Each
Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company to the same extent as the foregoing indemnity from the Company to such Initial Purchaser but
only with reference to information relating to such Initial Purchaser furnished in writing to the Company by such Initial Purchaser expressly for use in the Preliminary Offering Memorandum or the
Offering Memorandum; provided, however, that in no case shall such Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions received by such Initial Purchaser. 

        (c)   In
case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as they are incurred (except that in the case of any action in respect of which indemnity may be sought
pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to assume the defense of such action pursuant to this Section 8(c) but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it that are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties, and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by CIBC and UBS, in the case of the parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities
and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than
twenty business days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and
expenses are at the expense of the indemnifying party) and, prior to the date of such 

18

 

settlement,
the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity
or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of the indemnified party. 

        (d)   To
the extent the indemnification provided for in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities 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 Company, on the one hand, and
the Initial Purchaser, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (after Initial Purchasers' discounts or commissions, but before deducting expenses) received by the Company, and the total discounts and commissions
received by the Initial Purchasers bear to the total price to investors of the Securities, in each case as set forth on the cover page of the Offering Memorandum. The relative fault of the Company, on
the one hand, and the Initial Purchaser, 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 Company, on the one hand, or the Initial Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission. 

        The
Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of 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, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such indemnified party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser exceeds the amount of any damages that such Initial Purchaser 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 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations to contribute pursuant
to this Section 8(d) are several in proportion to the respective principal amount of Securities purchased by each of the Initial Purchasers hereunder and not joint. 

19

 

        (e)   The
remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified party
at law or in equity. 

        9.     Conditions of the Initial Purchasers' Obligations. The obligations
of the Initial Purchasers to
purchase the Firm Notes under this Agreement on the Closing Date and the Additional Notes, if any, on any Option Closing Date are subject to the satisfaction of each of the following conditions: 

        (a)   All
the representations and warranties of the Company contained in this Agreement shall be true and correct on the Closing Date, or on each Option Closing Date, if any,
with the same force and effect as if made on and as of the Closing Date or on each Option Closing Date, if any. 

        (b)   On
or after the date hereof, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential
or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in,
any rating of the Company or any securities of the Company (including without limitation the placing of any of the foregoing ratings on credit watch with negative or developing implications or under
review with an uncertain direction) by any "nationally recognized statistical rating organization" as such term is defined for the purpose of Rule 436(g)(i) under the Act,
(ii) there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the outlook for any rating of the Company or any securities of the
Company by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Notes than that on
which the Notes were marketed. 

        (c)   Since
the respective dates as of which information is given in the Offering Memorandum, other than as set forth in the Offering Memorandum (exclusive of any amendments
or supplements thereto after the date of this Agreement), (i) there shall not have occurred any change or any development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company and its subsidiaries, taken as a whole, (ii) there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of the Company or any of its subsidiaries, (iii) neither the Company nor any of its subsidiaries shall have incurred
any liability or obligation, direct or contingent, and (iv) neither the Company nor any of its subsidiaries shall have sustained any loss or interference with their respective assets,
businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree that, in case of any event described in the foregoing clause (i), (ii), (iii) or (iv), would have a Material Adverse Effect the effect of
which, in your judgment, is material and adverse and, in your judgment, makes it impracticable to market the Securities on the terms and in the manner contemplated in the Offering Memorandum. 

        (d)   The
Initial Purchasers shall have received on the Closing Date a certificate, dated the Closing Date, and on an Option Closing Date, if any, dated such Option Closing
Date, signed by the President and the Chief Financial Officer of the Company, confirming the matters set forth in Sections 6(ll), 9(a) and 9(b) and stating that the Company has complied with all the
agreements and satisfied all of the conditions herein contained and required to be complied with or satisfied on or prior to the Closing Date or Relevant Option Closing Date, as the case may be. 

        (e)   The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Dilworth Paxson LLP, counsel for the Company, an opinion,
addressed to the 

20

 

Initial
Purchasers and dated such Closing Date or Option Closing Date, as applicable, and stating in effect that: 

        (i)    The
Company and its U.S. Subsidiary (defined as Isolagen Technologies, Inc., a Delaware corporation) have been duly organized and are each validly existing as
corporations in good standing under the laws of the State of Delaware. Each of the Company and its U.S. Subsidiaries is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction in which the character or location of its assets or properties or the nature of its business makes such qualification necessary, except where the failure to so qualify
or to be in good standing, individually or in the aggregate, would not have a Material Adverse Effect. 

        (ii)   Each
of the Company and its U.S. Subsidiaries has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as
now being conducted and as described in the Preliminary Offering Memorandum and Offering Memorandum, except where the absence of such corporate power and authority, individually or in the aggregate,
would not have a Material Adverse Effect. The Company has all requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue and sell the
Securities. 

        (iii)  The
authorized, issued and outstanding capital stock of the Company is as set forth in the Preliminary Offering Memorandum and Offering Memorandum under the caption
"Capitalization" as of the dates stated therein and, since such dates, there has been no change in the capital stock of the Company except for subsequent issuances, if any, pursuant to this Agreement
or pursuant to reservations, agreements or employee benefit plans referred to in the Offering Memorandum or pursuant to the exercise of convertible securities or options referred to in the Offering
Memorandum; all of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable and none of them was issued in violation
of any preemptive or, to the Company's knowledge, other similar right. To such counsel's knowledge, except as disclosed in the Preliminary Offering Memorandum and Offering Memorandum, there is no
outstanding option, warrant or other right calling for the issuance of, and no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into, exercisable
for, or exchangeable for stock of the Company. To such counsel's knowledge, there are no persons with registration rights or other similar rights to have any securities registered under the Securities
Act, it being understood that the Company has filed a Registration Statement on Form S-1 with the Commission (No. 333-108769). 

        (iv)  The
Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and
paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, and will be entitled to the benefits of the Indenture and the Registration Rights Agreement. 

        (v)   The
Common Stock to be issued upon conversion of the Notes has been duly authorized and reserved and, when issued upon conversion of the Notes in accordance with the
terms of the Notes and the Indenture, will be validly issued, fully paid and non-assessable. The issuance of the Common Stock is not subject to any preemptive or other similar rights of
any securityholder of the Company. To such counsel's knowledge, except as disclosed in the Preliminary Offering Memorandum or Offering Memorandum, there are no preemptive or, to counsel's knowledge,
other rights to subscribe for or to purchase or any restriction upon the voting or transfer of any securities of the Company pursuant to the Company's Certificate of 

21

 

Incorporation
or By-laws or other governing documents or any agreements or other instruments to which the Company is a party or by which it is bound. 

        (vi)  All
necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of the Purchase Agreement and the
issuance and sale of the Securities. This Agreement has been duly and validly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Initial
Purchasers, this Agreement constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by general equitable
principles. 

        (vii) Neither
the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including,
without limitation, the issuance and sale by the Company of the Firm Shares and the Company Option Shares) will give rise to a right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of, or constitute a default (or any event which with notice or lapse of time, or both, would constitute a default) under, or require
consent or waiver under, or result in the execution or imposition of any lien, charge, claim, security interest or encumbrance upon any properties or assets of the Company or any Subsidiary pursuant
to the terms of, any indenture, mortgage, deed trust, note or other agreement or instrument of which such counsel is aware and to which the Company or any Subsidiary is a party or by which either the
Company or any Subsidiary or any of its assets or properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation, domestic or foreign, of
which such counsel has knowledge or violate any provision of the charter or by-laws of the Company or the U.S. Subsidiary. 

        (viii) No
consent, approval, authorization, license, registration, qualification or order of any court or governmental agency or regulatory body is required for the due
authorization, execution, delivery or performance by the Company of its obligations under the Purchase Agreement, the Indenture, the Registration Rights Agreement or the Securities, except such as
have been obtained under the
Securities Act and such as may be required under state securities or Blue Sky laws in connection with the offer and sale of the Securities and by Federal and state securities laws with respect to the
Company's obligations under the Registration Rights Agreement expressly contemplated by the provisions thereof. 

        (ix)  The
Preliminary Offering Memorandum and Offering Memorandum comply as to form in all material respects with the requirements of the Securities Act and the Rules and the
documents incorporated by reference in the Preliminary Offering Memorandum and Offering Memorandum and any further amendment or supplement to any such incorporated document made by the Company (except
for the financial statements and schedules and other financial data included therein, as to which such counsel expresses no opinion) complied as to form in all material respects with the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder. 

        (x)   To
such counsel's knowledge, there is no any action, suit, proceeding or other investigation, before any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses of, the Company which is required to be disclosed in the Preliminary Offering Memorandum and the Offering Memorandum and is not so
disclosed or which could reasonably be expected to have a Material Adverse Effect. 

22

 

        (xi)  Each
of the Indenture and the Registration Rights Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable against the Company in accordance with its terms. 

        (xii) The
Company is not an "investment company" or an entity controlled by an "investment company" as such terms are defined in the Investment Company Act of 1940, as
amended. 

        (xiii) The
statements in the Offering Memorandum under the captions "Description of the Notes," "Description of Capital Stock" and "Plan of Distribution," insofar as such
statements constitute a summary of documents referred to therein or matters of law, are accurate in all material respects and accurately present the information with respect to such documents and
matters. All contracts and other documents required to be described in the Preliminary Offering Memorandum and Offering Memorandum are fairly described in the Preliminary Offering Memorandum and
Offering Memorandum. 

        (xiv) (A)
To such counsel's knowledge, each of the Company and its U.S. Subsidiaries is in compliance in all material respects with all applicable Environmental Laws;
(B) none of the Company or its U.S.
Subsidiaries has received any notice from any governmental authority or third party of an asserted claim under any Environmental Law; (C) each of the Company and its U.S. Subsidiaries has
received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit,
license or approval, except where such failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or other approvals
would not, singly or in the aggregate, have a Material Adverse Effect; and (D) no property which is or has been owned, leased or occupied by the Company or its U.S. Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated
as a contaminated site under applicable state or local law. 

        (xv) The
statements in the Offering Memorandum under the caption "Certain Federal Income Tax Considerations," insofar as such statements constitute a summary of the United
States federal tax laws referred to therein, are accurate and fairly summarize the matters referred to therein in all material respects. 

        (xvi) Assuming
(i) each Initial Purchaser is a "qualified institutional buyer" within the meaning of Rule 144A of the Act and (ii) the accuracy of the
representations and warranties and compliance with the agreements of the Company in Section 6(pp) of the Purchase Agreement and of the Initial Purchasers in Section 7 of the Purchase
Agreement, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers under the Purchase Agreement or in connection with the initial resale of the
Securities by the Initial Purchasers in accordance with Section 7 of the Purchase Agreement and the Offering Memorandum to register the Securities under the Act, or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended, it being understood that no opinion is expressed as to any subsequent resale of any of the Notes or the Common Stock issuable upon conversion of any
of the Notes. 

        To
the extent deemed advisable by such counsel, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials and on the
opinions of other counsel satisfactory to the Initial Purchasers as to matters which are governed by laws other than the laws of the State of New York, the General Corporation Law of the State of
Delaware and the Federal laws of the United States; provided that such counsel shall state that in their opinion the Initial 

23

 

Purchasers
and they are justified in relying on such other opinions. Copies of such certificates and other opinions shall be furnished to the Initial Purchasers and counsel for the Initial Purchasers. 

        In
addition, such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the Initial Purchasers
and representatives of the independent certified public accountants of the Company, at which conferences the contents of the Preliminary Offering Memorandum and Offering Memorandum and related matters
were discussed and, although such counsel is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Preliminary Offering Memorandum and Offering Memorandum (except as specified in the foregoing opinion), on the basis of the foregoing, no
facts have come to the attention of such counsel which lead such counsel to believe that (i) the Preliminary Offering Memorandum and Offering Memorandum contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Preliminary Offering Memorandum and Offering
Memorandum or (ii) any document incorporated by reference in the Preliminary Offering Memorandum and Offering Memorandum contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein not misleading, or, in the case of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading. 

        (f)    The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Baker & McKenzie, counsel for the Company in the United
Kingdom, an opinion, addressed to the Initial Purchasers and dated on the Closing Date or Option Closing Date, as applicable, and stating in effect that: 

        (i)    Isolagen
Europe Limited, a wholly-owned subsidiary of Isolagen Technologies, Inc., a wholly-owned subsidiary of the Company, ("Isolagen Europe") is a company duly
incorporated under the laws of England and Wales as a private limited liability company and is in good standing; by "good standing" (a phrase which has
no recognised meaning under English law) such counsel means that Isolagen Europe has, according to the documents on the file of Isolagen Europe in the custody of the Registrar, been in continuous and
unbroken existence since the date of its incorporation and no action is currently being taken by the Registrar for striking Isolagen Europe off the register and dissolving it as defunct, and as far as
the Registrar is aware Isolagen Europe is not in liquidation or subject to an administration order and no receiver or manager of Isolagen Europe's property has been appointed. 

        (ii)   Isolagen
Europe has corporate power under its memorandum of association to carry on business as a general commercial company and to own property for the purposes of
such business. 

        (iii)  The
authorised share capital of Isolagen Europe consists of 1000 ordinary shares of £1 each, of which 1 has been issued; all of such shares have been duly
authorised and (in the case of the issued share) has been validly issued and is fully paid. 

        (iv)  The
issued share in the capital of Isolagen Europe is registered in the name of Isolagen Technologies, Inc. 

        (g)   The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Baker & McKenzie, Zurich, counsel for the Company in
Switzerland, an 

24

 

opinion,
addressed to the Initial Purchasers and dated on the Closing Date or Option Closing Date, as applicable, and stating in effect that: 

        (i)    Isolagen
International S.A., a wholly-owned subsidiary of Isolagen Technologies, Inc., a wholly-owned subsidiary of the Company, has been duly organized and is
validly existing as a corporation in good standing under the laws of Switzerland. 

        (ii)   Isolagen
International S.A. is duly qualified to transact business in Switzerland and has all requisite corporate power and authority under Swiss law to own, lease and
operate its properties and to conduct its business to the extent described in the Preliminary Offering Memorandum or Offering Memorandum and as now being purportedly conducted based on the public
documents examined and listed in the opinion. 

        (iii)  According
to the excerpt from the commercial register of the Canton of Neuchâtel and the confirmation of the Debt Collection Authority of
Neuchâtel, no debt collection or bankruptcy proceedings have been initiated against Isolagen International S.A. nor has there been any commencement of any voluntary
winding-up proceedings in respect of Isolagen International S.A. 

        (h)   The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Baker & McKenzie, counsel for the Company in Australia,
an opinion, addressed to the Initial Purchasers and dated on the Closing Date or an Option Closing Date, as applicable, and stating in effect that: 

        (i)    Isolagen
Australia Pty Limited, a wholly-owned subsidiary of Isolagen Technologies, Inc., a wholly-owned subsidiary of the Company ("Isolagen Technologies
Australia") has been duly organised and is validly existing as a corporation under the laws of Australia. 

        (ii)   Isolagen
Technologies Australia is duly qualified under the terms of its constitution to transact business in Australia. 

        (iii)  Isolagen
Technologies Australia has all requisite corporate power subject to Australian law to own, lease and operate its properties and to conduct its business as now
being purportedly conducted and as described in the Preliminary Offering Memorandum and Offering Memorandum. 

        (iv)  Isolagen
Technologies Australia is licensed to manufacture Therapeutic Goods within the meaning of the Therapeutic Goods Act 1989 (Commonwealth). 

        (i)    The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Kleinfeld, Kaplan and Becker, LLP, FDA regulatory counsel to
the Company, an opinion, addressed to the Initial Purchasers and dated the Closing Date or an Option Closing Date, as applicable, and stating in effect that, based upon review of documents provided by
the Company: 

        (i)    The
Offering Memorandum in all material respects adequately and accurately describes the legal status of the Company and its product candidates and the legal
requirements under the Federal Food, Drug and Cosmetic Act and the rules, regulations and guidances promulgated thereunder applicable to the Company, its manufacturing operations and/or its product
candidates and for obtaining and maintaining FDA approval to commercialize its products in the United States. 

        (ii)   Counsel
is not aware of any lawsuit or regulatory proceeding, pending or threatened, brought by or before the FDA, in which the Company or any of its officers or
directors, in their capacity as such, is or would be the defendant or respondent, except as described in the 

25

 

Prospectus,
and, without an independent inquiry, counsel is not aware of any lawsuit or regulatory proceeding, pending or threatened, by federal regulatory authorities in which the Company is or would
be the defendant or respondent, except as described in the Offering Memorandum. 

        (iii)  The
statements in the Offering Memorandum under the captions "Risk Factors—Obtaining FDA and other regulatory approvals is complex, time consuming and
expensive, and the outcomes are uncertain," "Our Failure to comply with extensive governmental regulation may significantly affect our operating results," and the statements in the Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2003 under the caption "Business—Government Regulation—Domestic Regulation,—FDA
Approval Process,—Ongoing FDA Requirements," incorporated by reference into the Offering Memorandum, insofar as such statements constitute a summary of documents referred to therein or
matters of law, are accurate in all material respects and accurately present the information with respect to such documents and matters. 

        (j)    The
Initial Purchasers shall have received on the Closing Date and on an Option Closing Date, if any, from Fish & Richardson PC, intellectual property counsel for
the Company, an opinion, addressed to the Initial Purchasers and dated the Closing Date or an Option Closing Date, as applicable, and substantively stating in effect that: 

        (i)    Representatives
of the Company have reported to such counsel that the description of the Isolagen Process in the Offering Memorandum is correct. Inasmuch as the process
must produce fibroblasts that are substantially free of immunogenic proteins to fall within the Company's patent claims, that is, to be "proprietary", such counsel inquired about that aspect, and a
representative of the Company reported that fibroblasts shipped to physicians are in fact substantially free of immunogenic proteins. 

        (ii)   To
the best of such counsel's knowledge, the intellectual property "Risk Factors" in the Offering Memorandum, to the extent they constitute matters of law, summarize
legal matters, or present legal conclusions fairly and correctly present the risks generally with respect to one's own patents and possible patents of others. To the best of such counsel's knowledge,
the statements in the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2003 under the caption "Business-Intellectual Property," incorporated by reference
into the Offering Memorandum, to the extent that they constitute matters of law, summarize legal matters or legal conclusions, are correct in all material respects and fairly and correctly presents
the uncertainties associated with one's own patents and trade secrets and the uncertainties regarding patents of others. 

        (iii)  To
the best of such counsel's knowledge, there is no pending or threatened legal or governmental proceeding relating to patent rights, trade secrets, trademarks,
service marks or know-how of the Company and its Subsidiaries, nor any allegations of infringement relating thereto by any person. 

        (iv)  To
the best of such counsel's knowledge, neither the Company nor any of its Subsidiaries is infringing or otherwise violating any patents, trade secrets, trademarks,
service marks, copyrights or know-how of any persons. To the best of such counsel's knowledge, no person is infringing any patent, trademark, service mark, trade secret, copyright or
know-how of the Company or any of its Subsidiaries. 

        (v)   With
respect to the Company's proposed businesses of repair of skin defects, repair of vocal cord defects, and repair of urinary defects, to the best of such counsel's
knowledge, the Company and its Subsidiaries do not lack patent license rights under existing patents that 

26

 

are
needed to practice the Isolagen Process for such applications, or trademark, service mark, trade secret or know-license rights for that purpose. 

        (vi)  Such
counsel is not aware of prior art references that have caused such counsel to conclude that any Company Patent is invalid. Further, such counsel has no information
that has caused such counsel to believe that the Company's Patents would be unenforceable. To the best of such counsel's knowledge, there are no asserted or unasserted claims of any person relating to
the scope or ownership of any of the Company's Patents or to the ownership of the Company's Applications. Such counsel is not aware of any lien against any of these Patents and Applications, based on
such counsel's review of the United States Patent and Trademark Office assignment records on-line database. To the best of such counsel's knowledge, there are no invalidating defects in
the preparation or filing of the Applications. Applications that such counsel is prosecuting for the Company are being prosecuted diligently at the Company's direction, and none is either abandoned or
rejected finally, that is, subject only to appeal. To the best of such counsel's knowledge, the Company is listed in the records of the U.S. Patent and Trademark Office and foreign patent offices as
sole assignee of its Patents and Applications. 

        (vii) Except
for patent applications recently purchased, whose prosecution such counsel is only now beginning to undertake and as to which such counsel is therefore not yet
in a position to evaluate, nothing has come to such counsel's attention that leads such counsel to believe that any of the Company's patent Applications will not eventuate in an issued patent or that
the issued patent will not be valid or will not afford the Company and its Subsidiaries patent protection described by the claims therein. 

        (viii) Nothing
has come to such counsel's attention to cause such counsel to believe that any license the Company may have was not duly executed or is not validly binding in
accordance with its terms or that the Company is in default of any material provision thereof. 

        (ix)  With
respect to Patents such counsel has obtained and with respect to Applications such counsel is prosecuting, such counsel has requested from the Company all
pertinent prior art references known to the Company, and such counsel has disclosed to the U.S. Patent and Trademark Office all such references of which such counsel has been made aware. Such counsel
has no information which would indicate that not all such references have been disclosed to such counsel and cited to the U.S. Patent and Trademark Office. 

        (x)   Such
counsel has filed for the Company an "intent-to-use" U.S. trademark application and an "intent-to-use" U.S. service
mark application for the mark ISOLAGEN. To the best of such counsel's knowledge, there are no asserted or unasserted claims of any person relating to the scope or ownership of either ISOLAGEN mark, no
liens have been filed against either application, and there were no invalidating defects of form in the preparation or filing of the applications. 

        (xi)  Nothing
has come to such counsel's attention to cause such counsel to believe that any trade secret the Company may have is not being protected adequately. 

        (xii) Nothing
has come to our attention to cause such counsel to believe that any agreement between the Company and any of its employees, consultants or other advisors
respecting trade secrets is not valid, binding and enforceable according to its terms. 

        To
the extent deemed advisable by such counsel, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials and on the
opinions of other counsel satisfactory to you as to matters which are governed by laws other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States; provided that such counsel shall state 

27

 

that
in their opinion the Underwriters and they are justified in relying on such other opinions. Copies of such certificates and other opinions shall be furnished to you. 

        (k)   All
proceedings taken in connection with the sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Initial
Purchasers and their counsel and the Initial Purchasers shall have received from Latham & Watkins LLP a favorable opinion, addressed to the Initial Purchasers and dated the Closing Date or an
Option Closing Date, as applicable, with respect to the Securities, the Purchase Agreement, the Registration Rights Agreement and the Indenture, and such other related matters as CIBC and UBS may
reasonably request, and the Company shall have furnished to Latham & Watkins LLP such documents as they may reasonably request for the purpose of enabling them to pass upon such matters. 

        (l)    The
Initial Purchasers shall have received, at the time this Agreement is executed and at the Closing Date and each Option Closing Date, if any, letters dated the date
hereof or the Closing Date or an Option Closing Date, as the case may be, from BDO Seidman LLP and Pannell Kerr Forster of Texas, P.C., independent public accountants, in form and substance
satisfactory to CIBC and UBS containing the information and statements of the type ordinarily included in accountants' "comfort letters" with respect to the financial statements and certain financial
information contained in the Offering Memorandum. 

        (m)  The
Notes shall have been approved by the National Association of Securities Dealers, Inc. for trading and duly listed in PORTAL. 

        (n)   The
Initial Purchasers shall have received a counterpart, conformed as executed, of the Indenture which shall have been entered into by the Company and the Trustee. 

        (o)   The
Company shall have executed the Registration Rights Agreement, and the Initial Purchasers shall have received an original copy thereof, duly executed by the Company. 

        (p)   The
Company shall not have failed at or prior to the Closing Date or each Option Closing Date, if any, as the case may be, to perform or comply with all of the
agreements contained herein and required to be performed or complied with by the Company at or prior to the Closing Date or Option Closing Date, as the case may be. 

        (q)   On
or before the Closing Date, the Company shall have purchased up to 2,000,000 shares of Common Stock of the Company from each of Frank DeLape, Michael Macaluso, Olga
Marko, Michael Avignon and Timothy J. Till pursuant to stock purchase agreements entered into with the Company. 

         10.   Effectiveness of Agreement and Termination.

        (a)   This
Agreement may be terminated at any time on or prior to the Closing Date by CIBC and UBS by written notice to the Company if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic conditions or in the financial markets of the United States or
elsewhere that, in the judgment of CIBC and UBS, is material and adverse and, in your judgment, makes it impracticable to market the Securities on the terms and in the manner contemplated in the
Offering Memorandum, (ii) the suspension or material limitation of trading in securities or other instruments on the New York Stock Exchange, the American Stock Exchange, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the AMEX or limitation on prices for securities or other instruments on any such exchange or the AMEX, (iii) the
suspension of trading of any securities of the Company on any exchange or in the over-the-counter market, (iv) the enactment, publication, decree or other promulgation
of any federal or state statute, regulation, rule or order of any court or other governmental authority that 

28

 

in
your judgment has had, or will have, a Material Adverse Effect, (v) the declaration of a banking moratorium by either federal or New York state authorities or (vi) the taking of any
action by any federal, state or local government or agency in respect of its monetary or fiscal affairs that in your judgment has a material adverse effect on the financial markets in the United
States. 

        (b)   If
on the Closing Date or an Option Closing Date, if any, as the case may be, an Initial Purchaser shall fail or refuse to purchase the Notes that it has agreed to
purchase hereunder on such date and the aggregate principal amount of the Notes that such defaulting Initial Purchaser agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Notes to be purchased on such date by all Initial Purchaser, the non-defaulting Initial Purchaser shall be obligated to purchase the Notes that
such defaulting Initial Purchaser agreed but failed or refused to purchase on such date; provided, however, that in no event shall the aggregate
principal amount of the Notes that any Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such principal amount of the Notes without the written consent of such Initial Purchaser. If on the Closing Date, or an Option Closing Date, if any, as the case may be, an
Initial Purchaser shall fail or refuse to purchase the Notes and the aggregate principal amount of the Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Notes to be purchased by the Initial Purchaser and arrangements satisfactory to the Initial Purchaser and the Company for purchase of such the Notes are not made
within 48 hours after such default, this Agreement will terminate without liability on the part of the non-defaulting Initial Purchaser and the Company. In any such case that does
not result in termination of this Agreement, either you or the Company shall have the right to postpone the Closing Date, or such Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering Memorandum or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve
the defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement. 

         11.   Miscellaneous.

        (a)   Notices
given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company to Isolagen, Inc., 2500 Wilcrest,
5th Floor, Houston, Texas 77042, Attention: Robert Bitterman, with a copy to Susan Stranahan Ciallella, Dilworth Paxson LLP, 3200 Mellon Bank Center, 1735 Market Street, Philadelphia,
Pennsylvania 19103 and (ii) if to the Initial Purchasers, to CIBC World Markets Corp., 2460 Sand Hill Road, Suite 300, Menlo Park, CA 94025, Attention: Michael Fekete and to UBS Securities LLC,
299 Park Avenue, New York, New York 10171 Attention: Daniel Klausner, in each case with a copy to Patrick A. Pohlen and William C. Davisson III, Latham & Watkins LLP, 135 Commonwealth Drive,
Menlo Park, California 94025, in any case to such other address as the person to be notified may have requested in writing. 

        (b)   The
respective indemnities, contribution agreements, representations, warranties and other statements of the Company and the Initial Purchasers set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect and will survive delivery of and payment for the Securities regardless of (i) any investigation, or statement as
to the results thereof, made by or on behalf of the Initial Purchasers, the officers or directors of the Initial Purchasers, any person controlling the Initial Purchasers, the Company, the officers or
directors of the Company, or any person controlling the Company, (ii) acceptance of the Securities and payment for them hereunder and (iii) termination of the Agreement. 

        (c)   If
for any reason the Notes are not delivered by or on behalf of the Company as provided herein (other than as a result of any termination of this Agreement pursuant to
Section 10(b)), the Company agrees to reimburse the Initial Purchasers for all out-of-pocket expenses (including the 

29

 

fees
and disbursements of counsel) incurred by them. Notwithstanding any termination of this Agreement, the Company shall be liable for all expenses which it has agreed to pay pursuant to
Section 5(i). The Company also agrees to reimburse the Initial Purchasers and the officers, directors and each person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and expenses (including without limitation the fees and expenses of counsel) incurred by them in connection
with enforcing their rights under this Agreement (including without limitation its rights under Section 8). 

        (d)   Except
as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Initial Purchasers, the Initial
Purchasers' directors and officers, any controlling persons referred to herein, the directors of the Company and their respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include a purchaser of any of the Securities from any
Initial Purchaser merely because of such purchase. 

        (e)   No
failure or delay on the part of the Company or any Initial Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein
are cumulative and are not exclusive of any remedies that may be available to the Company or any Initial Purchaser at law or in equity or otherwise. No waiver of or consent to any departure by the
Company or any Initial Purchaser from any provision of this Agreement shall be effective unless signed in writing by the party entitled to the benefit thereof;  provided that notice of any such waiver
shall be given to each party hereto as set forth below. Except as otherwise provided herein, no amendment,
modification or termination of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and each of CIBC and UBS. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or CIBC and UBS from the terms of any provision of
this Agreement shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or
demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances. 

        (f)    This
Agreement shall be governed and construed in accordance with the laws of the State of New York, including without limitation, Section 5-1401 of
the New York General Obligations Law. 

        (g)   Except
as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern District of New York, which courts shall have exclusive jurisdiction over the adjudication of such matters, and the Company consents
to the jurisdiction of such courts and personal service with respect thereto. The Company hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or
in any way relating to this Agreement is brought by any third party against the Initial Purchasers or any indemnified party. Each of the Initial Purchasers and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment. 

30

 

        (h)   This
Agreement may be signed in various counterparts, which together shall constitute one and the same instrument. 

[Signature Page Follows]

31

 

        Please
confirm that the foregoing correctly sets forth the agreement between the Company and the Initial Purchasers by signing in the space provided below. 

	 	 	 	 	 	Very truly yours,
	

 	

 	
 	

 	
 	

ISOLAGEN, INC.
	

 	

 	
 	

 	
 	

By:	

  

	 	 	 	 	 	 	Name:	 	Robert J. Bitterman
	 	 	 	 	 	 	Title:	 	President and Chief Executive Officer
	

CIBC WORLD MARKETS CORP.	

 	
 	

 
	

By:	

CIBC WORLD MARKETS CORP.	

 	
 	

 
	

By:	

  
	
 	

 	

 	
 	

 
	 	Name:	 	Michael Fekete	 	 	 	 	 
	 	Title:	 	Managing Director	 	 	 	 	 
	

UBS SECURITIES LLC	

 	
 	

 
	

By:	

UBS SECURITIES LLC	
 	

 	

 	
 	

 
	

By:	

  
	
 	

 	

 	
 	

 
	 	Name:	 	Kevin Sheridan	 	 	 	 	 
	 	Title:	 	Director	 	 	 	 	 
	

By:	

  
	
 	

 	

 	
 	

 
	 	Name:	 	            
	 	 	 	 	 
	 	Title:	 	            
	 	 	 	 	 
	

ADAMS, HARKNESS & HILL, INC.	
 	

 	

 	
 	

 
	

By:	

  
	
 	

 	

 	
 	

 
	 	Name:	 	            
	 	 	 	 	 
	 	Title:	 	            
	 	 	 	 	 

32

  

 
 

SCHEDULE A    
    

	Initial Purchaser
 
	 	Principal Amount

of Notes

	CIBC World Markets Corp.	 	$	35,625,000.00
	UBS Securities LLC	 	$	35,626,000.00
	Adams Harkness, Inc.	 	$	3,750,000.00
	 	Total	 	$	75,000,000.00

A-1

 
 

EXHIBIT A
  Form of Registration Rights Agreement    
    

QuickLinks

SCHEDULE A

EXHIBIT A Form of Registration Rights Agreement

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