Document:

Exhibit 4.04

 

EXECUTION COPY

 

ADAPTEC, INC.

 

3% CONVERTIBLE SUBORDINATED NOTES DUE 2007

 

 

INDENTURE

 

DATED AS OF MARCH 5, 2002

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

AS TRUSTEE

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1

  	
  Definitions.

  
	
   

  	
  Section 1.2

  	
  Other Definitions.

  
	
   

  	
  Section
  1.3

  	
  Trust
  Indenture Act Provisions.

  
	
   

  	
  Section 1.4

  	
  Rules of
  Construction.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2  THE SECURITIES

  
	
   

  
	
   

  	
  Section 2.1

  	
  Form and Dating.

  
	
   

  	
  Section 2.2

  	
  Execution and
  Authentication.

  
	
   

  	
  Section 2.3

  	
  Registrar, Paying Agent and
  Conversion Agent.

  
	
   

  	
  Section
  2.4

  	
  Paying
  Agent To Hold Money in Trust.

  
	
   

  	
  Section 2.5

  	
  SecurityHolder Lists.

  
	
   

  	
  Section 2.6

  	
  Transfer and
  Exchange.

  
	
   

  	
  Section 2.7

  	
  Replacement
  Securities.

  
	
   

  	
  Section 2.8

  	
  Outstanding
  Securities.

  
	
   

  	
  Section 2.9

  	
  Treasury Securities.

  
	
   

  	
  Section 2.10

  	
  Temporary Securities.

  
	
   

  	
  Section 2.11

  	
  Cancellation.

  
	
   

  	
  Section
  2.12

  	
  Additional
  Transfer and Exchange Requirements.

  
	
   

  	
  Section 2.13

  	
  CUSIP Numbers.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3  REDEMPTION
  AND PURCHASES

  
	
   

  
	
   

  	
  Section
  3.1

  	
  Right
  To Redeem; Notice To Trustee.

  
	
   

  	
  Section
  3.2

  	
  Selection
  of Securities to be Redeemed.

  
	
   

  	
  Section 3.3

  	
  Notice of Redemption.

  
	
   

  	
  Section 3.4

  	
  Effect of
  Notice of Redemption.

  
	
   

  	
  Section 3.5

  	
  Deposit of
  Redemption Price.

  
	
   

  	
  Section 3.6

  	
  Securities
  Redeemed in Part.

  
	
   

  	
  Section
  3.7

  	
  Conversion
  Arrangement on Call For Redemption.

  
	
   

  	
  Section
  3.8

  	
  Purchase
  of Securities at Option of the Holder Upon Change in Control.

  
	
   

  	
  Section
  3.9

  	
  Effect
  of Change in Control Purchase Notice.

  
	
   

  	
  Section
  3.10

  	
  Deposit
  of Change in Control Purchase Price.

  
	
   

  	
  Section 3.11

  	
  Securities
  Purchased in Part.

  
	
   

  	
  Section
  3.12

  	
  Compliance
  with Securities Laws Upon Purchase of Securities.

  
	
   

  	
  Section 3.13

  	
  Repayment to the
  Company.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4  CONVERSION

  
	
   

  
	
   

  	
  Section 4.1

  	
  Conversion Privilege.

  
	
   

  	
  Section 4.2

  	
  Conversion Procedure.

  

 

i

 

	
   

  	
  Section 4.3

  	
  Fractional Shares.

  
	
   

  	
  Section 4.4

  	
  Taxes on Conversion.

  
	
   

  	
  Section 4.5

  	
  Company to
  Provide Stock.

  
	
   

  	
  Section
  4.6

  	
  Adjustment
  of Conversion Price.

  
	
   

  	
  Section 4.7

  	
  No Adjustment.

  
	
   

  	
  Section 4.8

  	
  Adjustment for
  Tax Purposes.

  
	
   

  	
  Section 4.9

  	
  Notice of Adjustment.

  
	
   

  	
  Section
  4.10

  	
  Notice of
  Certain Transactions.

  
	
   

  	
  Section 4.11

  	
  Effect of Reclassification,
  Consolidation, Merger or Sale on Conversion Privilege.

  
	
   

  	
  Section 4.12

  	
  Trustee’s
  Disclaimer..

  
	
   

  	
  Section 4.13

  	
  Voluntary Reduction.

  
	
   

  	
  Section 4.14

  	
  Company
  Determination Final.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5  SUBORDINATION

  
	
   

  
	
   

  	
  Section 5.1

  	
  Agreement of
  Subordination.

  
	
   

  	
  Section 5.2

  	
  Payments to Holders.

  
	
   

  	
  Section 5.3

  	
  Subrogation of
  Securities.

  
	
   

  	
  Section
  5.4

  	
  Authorization
  to Effect Subordination.

  
	
   

  	
  Section 5.5

  	
  Notice to Trustee.

  
	
   

  	
  Section
  5.6

  	
  Trustee’s
  Relation to Senior Indebtedness.

  
	
   

  	
  Section
  5.7

  	
  No
  Impairment of Subordination.

  
	
   

  	
  Section
  5.8

  	
  Certain
  Conversions Deemed Payment.

  
	
   

  	
  Section
  5.9

  	
  Article
  Applicable to Paying Agents.

  
	
   

  	
  Section
  5.10

  	
  Senior
  Indebtedness Entitled to Rely.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6  COVENANTS

  
	
   

  
	
   

  	
  Section 6.1

  	
  Payment of
  Securities.

  
	
   

  	
  Section 6.2

  	
  SEC Reports.

  
	
   

  	
  Section 6.3

  	
  Compliance
  Certificates.

  
	
   

  	
  Section 6.4

  	
  Further
  Instruments and Acts.

  
	
   

  	
  Section
  6.5

  	
  Maintenance
  of Corporate Existence.

  
	
   

  	
  Section
  6.6

  	
  Rule
  144A Information Requirement.

  
	
   

  	
  Section
  6.7

  	
  Stay,
  Extension and Usury Laws.

  
	
   

  	
  Section 6.8

  	
  Payment of
  Liquidated Damages.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7  CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  
	
   

  
	
   

  	
  Section
  7.1

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

  
	
   

  	
  Section 7.2

  	
  Successor
  Substituted.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8  DEFAULT AND REMEDIES

  
	
   

  
	
   

  	
  Section 8.1

  	
  Events of Default.

  
	
   

  	
  Section 8.2

  	
  Acceleration.

  

 

ii

 

	
   

  	
  Section 8.3

  	
  Other Remedies.

  
	
   

  	
  Section
  8.4

  	
  Waiver
  of Defaults and Events of Default.

  
	
   

  	
  Section 8.5

  	
  Control By Majority.

  
	
   

  	
  Section 8.6

  	
  Limitations on
  Suits.

  
	
   

  	
  Section
  8.7

  	
  Rights
  of Holders to Receive Payment and to Convert.

  
	
   

  	
  Section 8.8

  	
  Collection
  Suit By Trustee.

  
	
   

  	
  Section
  8.9

  	
  Trustee
  May File Proofs of Claim.

  
	
   

  	
  Section 8.10

  	
  Priorities.

  
	
   

  	
  Section 8.11

  	
  Undertaking for
  Costs.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9  TRUSTEE

  
	
   

  
	
   

  	
  Section 9.1

  	
  Duties of Trustee.

  
	
   

  	
  Section 9.2

  	
  Rights of Trustee.

  
	
   

  	
  Section 9.3

  	
  Individual
  Rights of Trustee.

  
	
   

  	
  Section 9.4

  	
  Trustee’s
  Disclaimer.

  
	
   

  	
  Section
  9.5

  	
  Notice
  of Default or Events of Default.

  
	
   

  	
  Section 9.6

  	
  Reports By
  Trustee To Holders.

  
	
   

  	
  Section 9.7

  	
  Compensation
  and Indemnity.

  
	
   

  	
  Section 9.8

  	
  Replacement of
  Trustee.

  
	
   

  	
  Section
  9.9

  	
  Successor
  Trustee By Merger, Etc.

  
	
   

  	
  Section
  9.10

  	
  Eligibility;
  Disqualification.

  
	
   

  	
  Section
  9.11

  	
  Preferential
  Collection of Claims Against Company.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10  SATISFACTION
  AND DISCHARGE OF INDENTURE

  
	
   

  
	
   

  	
  Section
  10.1

  	
  Satisfaction
  and Discharge of Indenture.

  
	
   

  	
  Section 10.2

  	
  Application
  of Trust Money.

  
	
   

  	
  Section 10.3

  	
  Repayment To
  Company.

  
	
   

  	
  Section 10.4

  	
  Reinstatement.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  
	
   

  
	
   

  	
  Section 11.1

  	
  Without
  Consent of Holders.

  
	
   

  	
  Section 11.2

  	
  With Consent of
  Holders.

  
	
   

  	
  Section
  11.3

  	
  Compliance
  With Trust Indenture Act.

  
	
   

  	
  Section
  11.4

  	
  Revocation
  and Effect of Consents.

  
	
   

  	
  Section
  11.5

  	
  Notation
  on or Exchange of Securities.

  
	
   

  	
  Section
  11.6

  	
  Trustee
  To Sign Amendments, Etc.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12   SECURITY

  
	
   

  
	
   

  	
  Section 12.1

  	
  Security.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13  MISCELLANEOUS

  
	
   

  
	
   

  	
  Section
  13.1

  	
  Trust
  Indenture Act Controls.

  
	
   

  	
  Section 13.2

  	
  Notices.

  

 

iii

 

	
   

  	
  Section
  13.3

  	
  Communications
  By Holders With Other Holders.

  
	
   

  	
  Section
  13.4

  	
  Certificate
  and Opinion as to Conditions Precedent.

  
	
   

  	
  Section
  13.5

  	
  Record
  Date for Vote or Consent of Securityholders.

  
	
   

  	
  Section
  13.6

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

  
	
   

  	
  Section 13.7

  	
  Legal Holidays.

  
	
   

  	
  Section 13.8

  	
  Governing Law.

  
	
   

  	
  Section
  13.9

  	
  No
  Adverse Interpretation of Other Agreements.

  
	
   

  	
  Section
  13.10

  	
  No Recourse
  Against Others.

  
	
   

  	
  Section 13.11

  	
  Successors.

  
	
   

  	
  Section 13.12

  	
  Multiple
  Counterparts.

  
	
   

  	
  Section 13.13

  	
  Separability.

  
	
   

  	
  Section
  13.14

  	
  Table
  of Contents, Headings, Etc.

  

 

 

iv

 

CROSS-REFERENCE TABLE*

 

	
   

  	
   

  	
   

  
	
  TIA SECTION

  	
   

  	
  INDENTURE

  SECTION

  
	
   

  	
   

  	
   

  
	
  Section

  	
  310(a)(1)

  	
  9.10

  
	
   

  	
  (a)(2)

  	
  9.10

  
	
   

  	
  (a)(3)

  	
  N.A.**

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  9.10

  
	
   

  	
  (b)

  	
  9.8; 9.10

  
	
   

  	
  (c)

  	
  N.A.

  
	
  Section

  	
  311(a)

  	
  9.11

  
	
   

  	
  (b)

  	
  9.11

  
	
   

  	
  (c)

  	
  N.A.

  
	
  Section

  	
  312(a)

  	
  2.5

  
	
   

  	
  (b)

  	
  13.3

  
	
   

  	
  (c)

  	
  13.3

  
	
  Section

  	
  313(a)

  	
  9.6

  
	
   

  	
  (b)(1)

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
  9.6

  
	
   

  	
  (c)

  	
  9.6; 13.2

  
	
   

  	
  (d)

  	
  9.6

  
	
  Section

  	
  314(a)

  	
  6.2; 6.3, 6.4; 13.2

  
	
   

  	
  (b)

  	
  12.1(e)

  
	
   

  	
  (c)(1)

  	
  13.4(a)

  
	
   

  	
  (c)(2)

  	
  13.4(a)

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (d)

  	
  12.1(d)

  
	
   

  	
  (e)

  	
  13.4(b)

  
	
   

  	
  (f)

  	
  N.A.

  
	
  Section

  	
  315(a)

  	
  9.1(b)

  
	
   

  	
  (b)

  	
  9.5; 13.2

  
	
   

  	
  (c)

  	
  9.1(a)

  
	
   

  	
  (d)

  	
  9.1(c)

  
	
   

  	
  (e)

  	
  8.11

  
	
  Section

  	
  316(a)(last sentence)

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
  8.5

  
	
   

  	
  (a)(1)(B)

  	
  8.4

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  8.7

  
	
   

  	
  (c)

  	
  13.5

  
	
  Section

  	
  317(a)(1)

  	
  8.8

  
	
   

  	
  (a)(2)

  	
  8.9

  
	
   

  	
  (b)

  	
  2.4

  

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

**           N.A. means Not Applicable.

 

v

 

THIS INDENTURE dated as of March
5, 2002 is between Adaptec, Inc., a Delaware corporation (the “Company”), and
Wells Fargo Bank, National Association, organized and existing under the laws
of the United States, as Trustee (the “Trustee”), having an office at 707
Wilshire Boulevard, 17th Floor, Los Angeles, California 90017.

 

In consideration of the premises
and the purchase of the Securities by the Holders thereof, both parties agree
as follows for the benefit of the other and for the equal and ratable benefit
of the registered Holders of the Company’s 3% Convertible Subordinated Notes
due 2007.

 

ARTICLE 1

DEFINITIONS AND
INCORPORATION BY REFERENCE

 

SECTION
1.1        DEFINITIONS.

 

“Additional Pledged Securities” shall have the meaning
specified in the Collateral Pledge and Security Agreement.

 

“Affiliate” means, with respect
to any specified person, 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 person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

 

“Agent” means any Registrar,
Paying Agent or Conversion Agent.

 

 “Applicable Procedures” means, with respect to any transfer or
exchange of beneficial ownership interests in a Global Security, the rules and
procedures of the Depositary that are applicable to such transfer or exchange.

 

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

 

“Business Day” means each day
that is not a Legal Holiday.

 

“Capital Stock” of any Person
means any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of such Person, but excluding any debt securities convertible into such
equity.

 

“Cash” or “cash” means such coin
or currency of the United States as at any time of payment is legal tender for
the payment of public and private debts.

 

“Certificated Security” means a
Security that is in substantially the form attached hereto as Exhibit A
and that does not include the information or the schedule called for by
footnotes 1, 3 and 4 thereof.

 

“Closing Date” shall have the
meaning specified in the Purchase Agreement.

 

“Closing Price Per Share” means
the closing price per share of the Company’s Common Stock determined in
accordance with Section 4.6(d) hereof.

 

1

 

“Collateral Account” means an account established with
the Collateral Agent pursuant to the terms of the Collateral Pledge and
Security Agreement for the deposit of the Pledged Securities.

 

“Collateral Agent” means, initially, Wells Fargo Bank,
National Association, as collateral agent under the Collateral Pledge and
Security Agreement.

 

“Collateral Pledge and Security Agreement” means the
Collateral Pledge and Security Agreement, dated as of March 5, 2002, among the
Company, the Trustee and the Collateral Agent, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Common Stock” means the common
stock of the Company, par value $0.001 per share, as it exists on the date of
this Indenture and any shares of any class or classes of capital stock of the
Company resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion of Securities shall be substantially in
the proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.

 

“Company” means the party named
as such in this Indenture until a successor replaces it pursuant to this
Indenture, and thereafter means the successor.

 

“Continuing Directors” shall
mean, as of any date of determination, any member of the Board of Directors who
(i) was a member of the Board of Directors on the date of this Indenture or
(ii) was nominated for election or elected to the Board of Directors with the
approval of a majority of the Continuing Directors who were members of the
Board of Directors at the time of such nomination or election.

 

“Corporate Trust Office” means
the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the
execution of this Indenture is located at 707 Wilshire Boulevard, 17th
Floor, Los Angeles, California 90017, Attention: Corporate Trust Department, or
at any other time at such other address as the Trustee may designate from time
to time by notice to the Company.

 

“Default” or “default” means,
when used with respect to the Securities, any event which is or, after notice
or passage of time or both, would be an Event of Default.

 

“Designated Senior Indebtedness”
means any particular Senior Indebtedness in which the instrument creating or
evidencing the Senior Indebtedness or the assumption or guarantee thereof (or
any related documents or agreements to which the Company is a party) expressly
provides that such Indebtedness shall be “Designated Senior Indebtedness” for
purposes of this Indenture (provided that such instrument, agreement or other
document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness). If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior Indebtedness is rescinded
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission
or return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.

 

2

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.

 

“Final Maturity Date” means
March 5, 2007.

 

“First Closing Date” shall have
the meaning specified in the Purchase Agreement.

 

“GAAP” means generally accepted
accounting principles in the United States of America as in effect as of the
date of this Indenture, including those set forth in (1) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (2) the statements and pronouncements of the
Financial Accounting Standards Board, (3) such other statements by such other
entity as approved by a significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in registration
statements filed under the Securities Act and periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC.

 

“Global Security” means a
permanent Global Security that is in substantially the form attached hereto as
Exhibit A and that includes the information and schedule called for by
footnotes 1, 3 and 4 thereof and which is deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.

 

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

 

“Indebtedness” means, with
respect to any Person, without duplication, (1) all indebtedness, obligations
and other liabilities, contingent or otherwise, of such Person: (a) for
borrowed money, including obligations of such Person in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, interest rate
protection agreements, and any loans or advances from financial institutions,
whether or not evidenced by notes or similar instruments, or (b) evidenced by
bonds, debentures, notes or similar instruments, whether or not the recourse of
the holder is to all of such Person’s assets or to only a portion thereof,
other than any trade payable incurred in the ordinary course of business in
connection with the obtaining of materials or services; (2) all reimbursement
obligations and other liabilities, contingent or otherwise, of such Person with
respect to letters of credit, bank guarantees or bankers’ acceptances; (3) all
obligations and liabilities, contingent or otherwise, of such Person in respect
of leases of such Person required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease obligations on
the balance sheet of such Person, or under other leases for facilities,
equipment or related assets, whether or not capitalized, entered into or leased
for financing purposes; (4) all obligations and other liabilities, contingent
or otherwise, of such Person under any lease or related document, including a
purchase agreement, in connection with the lease of real property or
improvements thereon (or any personal property included as part of any such
lease) which provides that such Person 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 obligations of
such Person under such lease or related document to purchase or to cause a
third party to purchase the leased property (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with generally accepted accounting principles); (5) all obligations,
contingent or otherwise, of such Person with respect to an interest rate,
currency or other swap, cap, floor or collar agreement, hedge agreement,
forward contract, or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement; (6) all direct or
indirect guaranties or similar agreements by such Person to purchase or
otherwise acquire or otherwise assure a

 

3

 

creditor against loss in respect of indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(1) through (5); (7) any indebtedness or other obligations described in clauses
(1) through (6) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby has been assumed
by such Person, and (8) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (1)
through (7).

 

“Indenture” means this Indenture
as amended or supplemented from time to time pursuant to the terms of this
Indenture.

 

“Initial Pledged Securities” has the meaning specified
in the Collateral Pledge and Security Agreement.

 

“Lien” means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset given to secure Indebtedness, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction with respect to any such lien, pledge,
charge or security interest).

 

“Liquidated Damages” has the
meaning specified in Section 3(a) of the Registration Rights Agreement. All
references herein to interest accrued or payable as of any date shall include
any Liquidated Damages accrued or payable as of such date as provided in the
Registration Rights Agreement.

 

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

 

“Officers’ Certificate” means a
certificate signed by two Officers; provided,
however, that for purposes of 

Sections 4.11 and 6.3, “Officers’ Certificate” means a certificate signed by
the principal executive officer, principal financial officer or principal
accounting officer of the Company and by one other Officer.

 

“Opinion of Counsel” means a
written opinion from legal counsel. The counsel may be an employee of or
counsel to the Company or the Trustee.

 

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

 

“Pledged Securities” means the U.S. Government
Obligations to be purchased by the Company and held in the Collateral Account
in accordance with the Collateral Pledge and Security Agreement.

 

“Principal” or  “principal” 
of a debt security,  including
the Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.

 

4

 

“Purchase Agreement” means the
Purchase Agreement, dated as of February 27, 2002, among the Company and Bear,
Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Banc of America Securities LLC and Morgan Stanley & Co. Incorporated, as
initial purchasers.

 

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

 

“Redemption Price” or
“redemption price,” when used with respect to any Security to be redeemed,
means the price fixed for such redemption pursuant to this Indenture, as set
forth in the form of Security annexed as Exhibit A hereto.

 

“Registration Rights Agreement”
means the Registration Rights Agreement, dated as of March 5, 2002, among the
Company and Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Banc of America Securities LLC and Morgan Stanley & Co.
Incorporated, as initial purchasers.

 

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

 

“Restricted Certificated
Security” means a Certificated Security which is a Transfer Restricted
Security.

 

“Restricted Global Security”
means a Global Security that is a Transfer Restricted Security.

 

“Restricted Security” means a
Restricted Certificated Security or a Restricted Global Security.

 

“Rule 144” means Rule 144 under
the Securities Act or any successor to such Rule.

 

“Rule 144A” means Rule 144A
under the Securities Act or any successor to such Rule.

 

“SEC” means the Securities and
Exchange Commission.

 

“Securities” means the 3%
Convertible Subordinated Notes due 2007 or any of them (each, a “Security”), as
amended or supplemented from time to time, that are issued under this
Indenture.

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.

 

“Securities Custodian” means the
Trustee, as custodian with respect to the Securities in global form, or any
successor thereto.

 

“Senior Indebtedness” means the
principal of, premium, if any, interest, including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding, and rent payable on

 

5

 

or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company, including all deferrals, renewals,  extensions or refundings of, or amendments, modifications or
supplements to, the foregoing,  unless
in the case of any particular Indebtedness the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is on the same basis or
junior to the Securities. Notwithstanding the foregoing, any Indebtedness may
only be Senior Indebtedness if either (i) the Indebtedness is secured by a
mortgage, pledge, security interest, lien or similar encumbrance and shall
remain secured; or (ii) the instrument, indenture or agreement governing or
evidencing the Indebtedness, or any related agreement to which the Company is a
party, expressly provides that such Indebtedness shall be Senior Indebtedness for
purposes of this Indenture.  Senior
Indebtedness does not include any Indebtedness of the Company to any Subsidiary
of the Company, nor does it include any of the Company’s trade payables or
obligations with respect to its outstanding 43⁄4% Convertible Subordinated Notes
due 2004.  If any payment made to any
holder of any Senior Indebtedness or its Representative with respect to such
Senior Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the reinstated Indebtedness of the Company arising as a
result of such rescission or return shall constitute Senior Indebtedness
effective as of the date of such rescission or return.

 

“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.

 

“Subsidiary” means, in respect
of any Person, any corporation, association, partnership or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock or other equity interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, general partners or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person; (ii) such
Person and one or more Subsidiaries of such Person; or (iii) one or more
Subsidiaries of such Person.

 

“TIA” means the Trust Indenture
Act of 1939, as amended, as in effect on the date of this Indenture, except as
provided in Section 11.3, and except to the extent any amendment to the Trust
Indenture Act expressly provides for application of the Trust Indenture Act as
in effect on another date.

 

“Trading Day” means, with
respect to any security, each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not generally traded on the
principal exchange or market in which such security is traded.

 

“Trustee” means the party named
as such in this Indenture until a successor replaces it in accordance with the
provisions of this Indenture, and thereafter means the successor.

 

“Trust Officer” means, with
respect to the Trustee, any officer assigned to the Corporate Trust Office with
responsibility for the administration of this Indenture, and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer’s knowledge of and familiarity with the particular
subject.

 

“Unrestricted Certificated
Security” means a Certificated Security that is not a Transfer Restricted
Security.

 

6

 

“Unrestricted Global Security”
means a Global Security that is not a Transfer Restricted Security.

 

“U.S. Government Obligations” means securities that
are (i) direct obligations of the United States of America, the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by or acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer thereof
at any time prior to the Stated Maturity of the Securities, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation for the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

 

“Voting Stock” of a Person means
any class  or classes of  Capital Stock pursuant to which the holders
thereof under ordinary circumstances have the power to vote in the election of
the board of directors, managers or trustees of such Person or other Persons
performing similar functions irrespective of whether or not, at the time,
Capital Stock of any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency.

 

SECTION 1.2         OTHER DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
   

  	
  2.1

  
	
  “Bankruptcy Law”

  	
   

  	
   

  	
  8.1

  
	
  “beneficial owner”

  	
   

  	
   

  	
  3.8

  
	
  “beneficially owned”

  	
   

  	
   

  	
  3.8

  
	
  “Change in Control”

  	
   

  	
   

  	
  3.8

  
	
  “Change in Control Purchase
  Date”

  	
   

  	
   

  	
  3.8

  
	
  “Change in Control Purchase
  Notice”

  	
   

  	
   

  	
  3.8

  
	
  “Change in Control Purchase
  Price”

  	
   

  	
   

  	
  3.8

  
	
  “closing price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Company Order”

  	
   

  	
   

  	
  2.2

  
	
  “Conversion Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Conversion Date”

  	
   

  	
   

  	
  4.2

  
	
  “Conversion Price”

  	
   

  	
   

  	
  4.6

  
	
  “current market price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Custodian”

  	
   

  	
   

  	
  8.1

  
	
  “Depositary”

  	
   

  	
   

  	
  2.1

  
	
  “Determination Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “DTC”

  	
   

  	
   

  	
  2.1

  
	
  “Event of Default”

  	
   

  	
   

  	
  8.1

  
	
  “Expiration Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Expiration Time”

  	
   

  	
   

  	
  4.6(c)

  
	
  “group”

  	
   

  	
   

  	
  3.8

  
	
  “junior securities”

  	
   

  	
   

  	
  5.8

  
	
  “Legal Holiday”

  	
   

  	
   

  	
  13.7

  
	
  “NNM”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Paying Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Payment Blockage Notice”

  	
   

  	
   

  	
  5.2

  
	
  “person”

  	
   

  	
   

  	
  3.8

  
	
  “Primary Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Purchased Shares”

  	
   

  	
   

  	
  4.6(c)

  
	
  “PwC”

  	
   

  	
   

  	
  12.1

  
	
  “QIB”

  	
   

  	
   

  	
  2.1

  
	
  “Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “tender offer”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Transfer Certificate”

  	
   

  	
   

  	
  2.12

  
	
  “Transfer Restricted Security”

  	
   

  	
   

  	
  2.12

  
	
  “Trigger Event”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Triggering Distribution”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Unissued Shares”

  	
   

  	
   

  	
  3.8

  

 

7

 

SECTION 1.3         TRUST INDENTURE ACT PROVISIONS.

 

Whenever this Indenture refers
to a provision of the TIA, that provision is incorporated by reference in and
made a part of this Indenture. The Indenture shall also include those
provisions of the TIA required to be included herein by the provisions of the
Trust Indenture Reform Act of 1990. The following TIA terms used in this
Indenture have the following meanings:

 

“indenture securities” means the
Securities;

 

“indenture security holder”
means a Securityholder;

 

“indenture to be qualified”
means this Indenture;

 

“indenture trustee” or
“institutional trustee” means the Trustee; and “obligor” on the indenture
securities means the Company or any other obligor on the Securities.

 

All other terms used in this
Indenture that are defined in the TIA, defined by TIA reference to another
statute or defined by any SEC rule and not otherwise defined herein have the
meanings assigned to them therein.

 

SECTION
1.4         RULES OF
CONSTRUCTION.

 

Unless the context otherwise
requires:

 

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

 

(ii)           an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

 

(iii)          words in the singular include the plural, and words in the
plural include the singular;

 

(iv)          provisions apply to successive events and transactions;

 

8

 

(v)           the term “merger” includes a statutory share exchange and
the term “merged” has a correlating meaning;

 

(vi)          the masculine gender includes the feminine and the neuter;

 

(vii)         references to agreements and other instruments include
subsequent amendments thereto; and

 

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

 

ARTICLE 2

THE SECURITIES

 

SECTION 2.1         FORM AND DATING.

 

The Securities and the Trustee’s
certificate of authentication shall be substantially in the respective forms
set forth in Exhibit A, which Exhibit is incorporated in and made part
of this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, provided that any such notation,
legend or endorsement required by usage is in a form acceptable to the
Company.  The Company shall provide any
such notations, legends or endorsements to the Trustee in writing. Each
Security shall be dated the date of its authentication. The Securities are
being offered and sold by the Company pursuant to the Purchase Agreement in
transactions exempt from, or not subject to, the registration requirements of
the Securities Act.

 

(a)           Restricted Global Securities. All of the Securities are
initially being offered and sold to qualified institutional buyers as defined
in Rule 144A (collectively, “QIBs” or individually, each a “QIB”) in reliance
on Rule 144A under the Securities Act and shall be issued initially in the form
of one or more Restricted Global Securities, which shall be deposited on behalf
of the purchasers of the Securities represented thereby with the Trustee, at
its Corporate Trust Office, as custodian for the depositary, The Depository
Trust Company (“DTC”) (such depositary, or any successor thereto, being
hereinafter referred to as the “Depositary”), and registered in the name of its
nominee, Cede & Co., duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the
Restricted Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Securities Custodian and the Depositary
as hereinafter provided, subject in each case to compliance with the Applicable
Procedures.

 

(b)           Global Securities In General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, purchases or
conversions of such Securities. Any endorsement of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Securities Custodian in accordance
with the standing instructions and procedures existing between the Depositary
and the Securities Custodian.

 

Members of, or participants in,
the Depositary (“Agent Members”) shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the Depositary or under
any Global Security, and the Depositary (including, for this purpose, its
nominee) may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of

 

9

 

such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall (A) prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or (B) impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.

 

(c)           Certificated Securities. Certificated Securities shall be
issued only under the limited circumstances provided in Section 2.12(a)(1)
hereof.

 

SECTION 2.2         EXECUTION AND AUTHENTICATION.

 

An Officer shall sign the
Securities for the Company by manual or facsimile signature attested by the
manual or facsimile signature of the Secretary, an Assistant Secretary of the
Company or an Officer (other than the Officer who signed the Securities).
Typographic and other minor errors or defects in any such facsimile signature
shall not affect the validity or enforceability of any Security which has been
authenticated and delivered by the Trustee.

 

If an Officer whose signature is
on a Security no longer holds that office at the time the Trustee authenticates
the Security, the Security shall be valid nevertheless.

 

A Security shall not be valid
until an authorized signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture.

 

The Trustee shall authenticate and
make available for delivery Securities for original issue in the aggregate
principal amount of up to $225,000,000 (plus up to an additional $25,000,000 in
aggregate principal amount issuable upon the exercise of the option described
in the Purchase Agreement) upon receipt of a written order or orders of the
Company signed by an Officer of the Company (a “Company Order”) without any
further action by the Company. The Company Order shall specify the amount of
Securities to be authenticated, shall provide that all such Securities shall be
represented by a Restricted Global Security and the date on which each original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $250,000,000 except as
provided in Section 2.7.

 

The Trustee shall act as the
initial authenticating agent. Thereafter, the Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Securities. An
authenticating agent may authenticate Securities whenever the Trustee may do
so. Each  reference in this  Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent shall have the
same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

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

 

SECTION 2.3         REGISTRAR, PAYING AGENT
AND CONVERSION AGENT.

 

The Company shall maintain one
or more offices or agencies where Securities may be presented for registration
of transfer or for exchange (each, a “Registrar”), one or more offices or
agencies where Securities may be presented for payment (each, a “Paying
Agent”), one or more offices or agencies where Securities may be presented for
conversion (each, a “Conversion Agent”) and one or more offices or agencies
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Company shall at all times maintain a
Paying Agent, Conversion Agent,

 

10

 

Registrar and an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served in the Borough of Manhattan, the City of New York. One
of the Registrars (the “Primary Registrar”) shall keep a register of the
Securities and of their transfer and exchange.

 

The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture. If the Company fails to maintain a
Registrar, Paying Agent, Conversion Agent or agent for service of notices and
demands in any place required by this Indenture, or fails to give the foregoing
notice, the Trustee shall act as such. The Company or any Affiliate of the
Company may act as Paying Agent (except for the purposes of 

Section 6.1 and Article 10).

 

The Company hereby initially
designates the Trustee as Paying Agent, Registrar, Custodian and Conversion
Agent, and each of the Corporate Trust Office of the Trustee and the office of
the Trustee, c/o Wells Fargo Bank, in the Borough of Manhattan, the City of New
York (which shall initially be located at 45 Broadway, 12th Floor,
New York, New York 10006, Attention: Corporate Trust Department), one such
office or agency of the Company for each of the aforesaid purposes.  The Company reserves the right to (i) vary
or terminate the appointment of the Registrar, Paying Agent or Conversion
Agent, (ii) appoint additional Paying Agents or Conversion Agents or (iii)
approve any change in the office through which any Registrar or Paying Agent or
Conversion Agent acts.

 

SECTION 2.4         PAYING AGENT TO HOLD MONEY IN TRUST.

 

Prior to 11:00 a.m., New York
City time, on each due date of the principal of or interest, if any, on any
Securities, the Company shall deposit with a Paying Agent a sum sufficient to
pay such principal or interest, if any, so becoming due. Subject to Section
5.2, a Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest, if any, on the Securities, and shall notify the Trustee of any
default by the Company (or any other obligor on the Securities) in making any
such payment. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall, before 11:00 a.m., New York City time, on each due date of the
principal of or interest on any Securities, segregate the money and hold it as
a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee, and the Trustee may at any time during
the continuance of any default, upon written request to a Paying Agent, require
such Paying Agent to forthwith pay to the Trustee all sums so held in trust by
such Paying Agent. Upon doing so, the Paying Agent (other than the Company)
shall have no further liability for the money.

 

SECTION 2.5         SECURITYHOLDER LISTS.

 

The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Primary Registrar, the Company shall furnish to the Trustee, on or before each
semiannual interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.

 

SECTION 2.6         TRANSFER AND EXCHANGE.

 

(a)           Subject to compliance with any applicable additional
requirements contained in Section 2.12, when a Security is presented to a
Registrar with a request to register a transfer thereof or to exchange such
Security for an equal principal amount of Securities of other authorized
denominations, the

 

11

 

Registrar shall register the transfer or make the
exchange as requested; provided, however,
that every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. To permit registration of transfers
and exchanges, upon surrender of any Security for registration of transfer or
exchange at an office or agency maintained pursuant to Section 2.3, the Company
shall execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar’s request. Any exchange or transfer shall be
without charge, except that the Company or the Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto, and provided, that this sentence shall not apply
to any exchange pursuant to Section 2.10, 2.12(a)(1), 3.6, 3.11, 4.2 (last
paragraph) or 11.5.

 

Neither the Company, any
Registrar nor the Trustee shall be required to exchange or register a transfer
of (a) any Securities for a period of 15 days next preceding any mailing of a
notice of Securities to be redeemed, (b) any Securities or portions thereof
selected or called for redemption (except, in the case of redemption of a
Security in part, the portion not to be redeemed) or (c) any Securities or
portions thereof in respect of which a Change in Control Purchase Notice has
been delivered and not withdrawn by the Holder thereof (except, in the case of
the purchase of a Security in part, the portion not to be purchased).

 

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

 

(b)           Any Registrar appointed pursuant to Section 2.3 hereof
shall provide to the Trustee such information as the Trustee may reasonably
require in connection with the delivery by such Registrar of Securities upon
transfer or exchange of Securities.

 

(c)           Each Holder of a Security agrees to indemnify the Company,
the Registrar and the Trustee against any liability that may result from the
transfer, exchange or assignment of such Holder’s Security in violation of any
provision of this Indenture and/or applicable United States federal or state
securities law.

 

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

 

SECTION 2.7         REPLACEMENT SECURITIES.

 

If any mutilated Security is
surrendered to the Company, a Registrar or the Trustee, or the Company, a
Registrar and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, the applicable Registrar and the Trustee such security or indemnity as
will be required by them to save each of them harmless, then, in the absence of
notice to the Company, such Registrar or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute, and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen

 

12

 

Security, a new Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.

 

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

 

Prior to the issuance of any new
Securities under this Section 2.7, the Company shall require the payment from
the Holder thereof of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the reasonable fees and expenses of the Trustee or the
Registrar) in connection 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 shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.

 

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

 

SECTION 2.8         OUTSTANDING SECURITIES.

 

Securities outstanding at any
time are all Securities authenticated by the Trustee, except for those canceled
by it, those paid pursuant to Section 3.1 or Section 3.8, those delivered to it
for cancellation and those described in this Section 2.8 as not outstanding.

 

If a Security is replaced
pursuant to Section 2.7, it ceases to be outstanding unless the Company
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.

 

If a Paying Agent (other than
the Company or an Affiliate of the Company) holds on a redemption date, a
Change in Control Purchase Date or the Final Maturity Date money sufficient to
pay the principal of (including premium, if any) and accrued interest on
Securities (or portions thereof) payable on that date, then on and after that
date such Securities (or portions thereof, as the case may be) will cease to be
outstanding and interest on them will cease to accrue.

 

Subject to the restrictions
contained in Section 2.9, a Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

 

If a Security is converted in
accordance with Article 4, then from and after the time of conversion on the
Conversion Date, such Security will cease to be outstanding and interest, if
any, will cease to accrue on such Security.

 

SECTION 2.9         TREASURY SECURITIES.

 

In determining whether the
Holders of the required principal amount of Securities have concurred in any
notice, direction, waiver or consent, Securities owned by the Company or any
other obligor on the Securities or by any Affiliate of the Company or of such other
obligor shall be disregarded, except that, for purposes of determining whether
the Trustee shall be protected in relying on any such

 

13

notice, direction, waiver or
consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith shall not be disregarded if the pledgee establishes to
the satisfaction of the Trustee the pledgee’s right so to act with respect to
the Securities and that the pledgee is not the Company or any other obligor on
the Securities or any Affiliate of the Company or of such other obligor.

 

SECTION 2.10       TEMPORARY SECURITIES.

 

Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that the Company with
the consent of the Trustee considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate and deliver definitive Securities in exchange for temporary
Securities.

 

SECTION 2.11       CANCELLATION.

 

The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar, the Paying Agent and the
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, redemption, payment or conversion.
The Trustee and no one else shall promptly cancel, in accordance with its
standard procedures, all Securities surrendered for transfer, exchange,
redemption, payment, conversion or cancellation and shall deliver the canceled
Securities to the Company. All Securities which are redeemed, purchased or
otherwise acquired by the Company or any of its Subsidiaries prior to the Final
Maturity Date shall be delivered to the Trustee for cancellation, and the
Company may not hold or resell such Securities or issue any new Securities to
replace any such Securities or any Securities that any Holder has converted
pursuant to Article 4. Without limitation to the foregoing, any Securities
acquired by any investment bankers or other purchasers pursuant to Section 3.7
shall be surrendered for conversion and thereafter cancelled, and may not be
reoffered, sold or otherwise transferred.

 

SECTION
2.12       ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS.

 

(a)           Transfer And Exchange Of Global Securities.

 

(1)           Certificated Securities shall be
issued in exchange for interests in the Global Securities only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
depositary for the Global Securities or if it at any time ceases to be a
“clearing agency” registered under the Exchange Act, if so required by
applicable law or regulation and a successor depositary is not appointed by the
Company within 90 days, or (y) an Event of Default has occurred and is
continuing. In either case, the Company shall execute, and the Trustee shall,
upon receipt of a Company Order (which the Company agrees to delivery
promptly), authenticate and deliver Certificated Securities in an aggregate
principal amount equal to the principal amount of such Global Securities in
exchange therefor. Only Restricted Certificated Securities shall be issued in
exchange for beneficial interests in Restricted Global Securities, and only
Unrestricted Certificated Securities shall be issued in exchange for beneficial  interests in Unrestricted Global Securities.
Certificated Securities issued in exchange for beneficial interests in Global
Securities shall be registered in such names and shall be in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver or cause to be delivered such Certificated Securities to the
persons in whose names such Securities are so registered. Such exchange shall
be effected in accordance with the Applicable Procedures.

 

14

 

(2)           Notwithstanding any other provisions
of this Indenture other than the provisions set forth in Section 2.12(a)(1), a
Global Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.

 

(b)           Transfer And Exchange Of Certificated Securities.
In the event that Certificated Securities are issued in exchange for beneficial
interests in Global Securities in accordance with Section 2.12(a)(1) of this
Indenture, on or after such event when Certificated Securities are presented by
a Holder to a Registrar with a request:

 

(x)            to register the transfer of the
Certificated Securities to a person who will take delivery thereof in the form
of Certificated Securities only; or

 

(y)           to exchange such Certificated
Securities for an equal principal amount of Certificated Securities of other
authorized denominations, such Registrar shall register the transfer or make
the exchange as requested;

 

provided, however, that the Certificated Securities presented or surrendered for register
of transfer or exchange:

 

(1)           shall be duly endorsed or accompanied
by a written instrument of transfer in accordance with the proviso to the first
paragraph of Section 2.6; and

 

(2)           in the case of a Restricted Certificated
Security, such request shall be accompanied by the following additional
information and documents, as applicable:

 

(i)            if such Restricted Certificated
Security is being delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, or such Restricted Certificated
Security is being transferred to the Company or a Subsidiary of the Company, a
certification to that effect from such Holder (in substantially the form set
forth in the Transfer Certificate);

 

(ii)           if such Restricted Certificated
Security is being transferred to a person the Holder reasonably believes is a
QIB in accordance with Rule 144A or pursuant to an effective registration
statement under the Securities  Act,
a  certification  to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate); or

 

(iii)          if such Restricted Certificated
Security is being transferred (i) pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144 or
(ii) pursuant to an exemption from the registration requirements of the
Securities Act (other than pursuant to Rule 144A or Rule 144) and as a result
of which, in the case of a Security transferred pursuant to this clause (ii),
such Security shall cease to be a “restricted security” within the meaning of
Rule 144, a certification to that effect from the Holder (in substantially the
form set forth in the Transfer Certificate) and, if the Company or such
Registrar so requests, a customary opinion of counsel, certificates and other
information reasonably acceptable to the Company and such Registrar to the
effect that such transfer is in compliance with the registration requirements
of the Securities Act.

 

15

 

(c)           Transfer of a Beneficial Interest in a Restricted
Global Security for a Beneficial Interest in an Unrestricted Global Security.
Any person having a beneficial interest in a Restricted Global Security may
upon request, subject to the Applicable Procedures, transfer such beneficial
interest to a person who is required or permitted to take delivery thereof in
the form of an Unrestricted Global Security. Upon receipt by the Trustee of
written instructions, or such other form of instructions as is customary for
the Depositary, from the Depositary or its nominee on behalf of any person
having a beneficial interest in a Restricted Global Security and the following
additional information and documents in such form as is customary for the
Depositary from the Depositary or its nominee on behalf of the person having
such beneficial interest in the Restricted Global Security (all of which may be
submitted by facsimile or electronically):

 

(1)           if such beneficial interest is being
transferred pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the transferor (in
substantially the form set forth in the Transfer Certificate); or

 

(2)           if such beneficial interest is being
transferred (i) pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 or (ii) pursuant to an exemption
from the registration requirements of the Securities Act (other than pursuant
to Rule 144A or Rule 144) and as a result of which, in the case of a Security
transferred pursuant to this clause (ii), such Security shall cease to be a
“restricted security” within the meaning of Rule 144, a certification to that
effect from the transferor (in substantially the form set forth in the Transfer
Certificate) and, if the Company or the Trustee so requests, a customary
opinion of counsel, certificates and other information reasonably acceptable to
the Company and the Trustee to the effect that such transfer is in compliance
with the registration requirements of the Securities Act, the Trustee, as a
Registrar and Securities Custodian, shall reduce or cause to be reduced the
aggregate principal amount of the Restricted Global Security by the appropriate
principal amount and shall increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Security by a like principal
amount. Such transfer shall  otherwise
be effected in accordance with the Applicable Procedures. If no Unrestricted
Global Security is then outstanding, the Company shall execute and the Trustee
shall, upon receipt of a Company Order (which the Company agrees to deliver
promptly), authenticate and deliver an Unrestricted Global Security.

 

(d)           Transfer of a Beneficial Interest in an Unrestricted
Global Security for a Beneficial Interest In a Restricted Global Security.
Any person having a beneficial interest in an Unrestricted Global Security may
upon request, subject to the Applicable Procedures, transfer such beneficial
interest to a person who is required or permitted to take delivery thereof in
the form of a Restricted Global Security (it being understood that only QIBs
may own beneficial interests in Restricted Global Securities). Upon receipt by
the Trustee of written instructions or such other form of instructions as is
customary for the Depositary, from the Depositary or its nominee, on behalf of
any person having a beneficial interest in an Unrestricted Global Security and,
in such form as is customary for the Depositary, from the Depositary or its nominee
on behalf of the person having such beneficial interest in the Unrestricted
Global Security (all of which may be submitted by facsimile or electronically)
a certification from the transferor (in substantially the form set forth in the
Transfer Certificate) to the effect that such beneficial interest is being
transferred to a person that the transferor reasonably believes is a QIB in
accordance with Rule 144A. The Trustee, as a Registrar and Securities
Custodian, shall reduce or cause to be reduced the aggregate principal amount
of the Unrestricted Global Security by the appropriate principal amount and
shall increase or cause to be increased the aggregate principal amount of the
Restricted Global Security by a like principal amount. Such transfer shall otherwise
be effected in accordance with the Applicable Procedures. If no Restricted
Global Security is then outstanding, the

 

16

 

Company shall execute and the Trustee shall, upon
receipt of a Company Order (which the Company agrees to deliver promptly),
authenticate and deliver a Restricted Global Security.

 

(e)           Transfers of Certificated Securities for Beneficial
Interest in Global Securities. In the event that Certificated
Securities are issued in exchange for beneficial interests in Global Securities
and, thereafter, the events or conditions specified in Section 2.12(a)(1) which
required such exchange shall cease to exist, the Company shall mail notice to
the Trustee and to the Holders stating that Holders may exchange Certificated
Securities for interests in Global Securities by complying with the procedures
set forth in this Indenture and briefly describing such procedures and the
events or circumstances requiring that such notice be given. Thereafter, if Certificated
Securities are presented by a Holder to a Registrar with a request:

 

(x)            to register the transfer of such
Certificated Securities to a person who will take delivery thereof in the form
of a beneficial interest in a Global Security, which request shall specify
whether such Global Security will be a Restricted Global Security or an
Unrestricted Global Security; or

 

(y)           to exchange such Certificated
Securities for an equal principal amount of beneficial interests in a Global
Security, which beneficial interests will be owned by the Holder transferring
such Certificated Securities (provided that in the case of such an exchange,
Restricted Certificated Securities may be exchanged only for Restricted  Global 
Securities and Unrestricted Certificated Securities may be exchanged
only for Unrestricted Global Securities), the Registrar shall register the
transfer or make the exchange as requested by canceling such Certificated
Security and causing, or directing the Securities Custodian to cause, the aggregate
principal amount of the applicable Global Security to be increased accordingly
and, if no such Global Security is then outstanding, the Company shall issue
and the Trustee shall authenticate and deliver a new Global Security;

 

provided, however, that the Certificated Securities presented or surrendered for
registration of transfer or exchange:

 

(1)           shall be duly endorsed or accompanied
by a written instrument of transfer in accordance with the proviso to Section
2.6;

 

(2)           in the case of a Restricted Certificated
Security to be transferred for a beneficial interest in an Unrestricted Global
Security, such request shall be accompanied by the following additional
information and documents, as applicable:

 

(i)            if such Restricted Certificated
Security is being transferred pursuant to an effective registration statement
under the Securities Act, a certification to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate); or

 

(ii)           if such Restricted Certificated
Security is being transferred pursuant to (i) an exemption from the
registration requirements of the Securities Act in accordance with Rule 144 or
(ii) pursuant to an exemption from the registration requirements of the
Securities Act (other than pursuant to Rule 144A or Rule 144) and as a result
of which, in the case of a Security transferred pursuant to this clause (ii),
such Security shall cease to be a “restricted security” within the meaning of
Rule 144, a certification to that effect from such Holder (in substantially the
form set forth in the Transfer Certificate), and, if the Company or the
Registrar so requests, a customary

 

17

 

opinion of counsel, certificates
and other information reasonably acceptable to the Company and the Trustee to
the effect that such transfer is in compliance with the registration
requirements of the Securities Act;

 

(3)           in the case of a Restricted
Certificated Security to be transferred or exchanged for a beneficial interest
in a Restricted Global Security, such request shall be accompanied by a
certification from such Holder (in substantially the form set forth in the
Transfer Certificate) to the effect that such Restricted Certificated Security
is being transferred to a person the Holder reasonably believes is a QIB
(which, in the case of an exchange, shall be such Holder) in accordance with
Rule 144A;

 

(4)           in the case of an Unrestricted
Certificated Security to be transferred or exchanged for a beneficial interest
in an Unrestricted Global Security, such request need not be accompanied by any
additional information or documents; and

 

(5)           in the case of an Unrestricted
Certificated Security to be transferred or exchanged for a beneficial interest
in a Restricted Global Security, such request shall be accompanied by a
certification from such Holder (in substantially the form set forth in the
Transfer Certificate) to the effect that such Unrestricted Certificated
Security is being transferred to a person the Holder reasonably believes is a
QIB (which, in the case of an exchange, shall be such Holder) in accordance
with Rule 144A.

 

(f)            Legends.

 

(1)           Except as permitted by the following
paragraphs (2) and (3), each Global Security and Certificated Security (and all
Securities issued in exchange therefor or upon registration of transfer or
replacement thereof) shall bear a legend in substantially the form called for
by footnote 2 to Exhibit A hereto (each a “Transfer Restricted Security”
for so long as it is required by this Indenture to bear such legend). Each
Transfer Restricted Security shall have attached thereto a certificate (a
“Transfer Certificate”) in substantially the form called for by footnote 5 to Exhibit
A hereto.

 

(2)           Upon any sale or transfer of a
Transfer Restricted Security (w) after the expiration of the holding period
applicable to sales of the Securities under Rule 144(k) of the Securities Act,
(x) pursuant to Rule 144, (y) pursuant to an effective registration statement
under the Securities Act or (z) pursuant to any other available exemption
(other than Rule 144A) from the registration requirements of the Securities Act
and as a result of which, in the case of a Security transferred pursuant to
this clause (z), such Security shall cease to be a “restricted security” within
the meaning of Rule 144:

 

(i)            in the case of any Restricted
Certificated Security, any Registrar shall permit the Holder thereof to
exchange such Restricted Certificated Security for an Unrestricted Certificated
Security, or (under the circumstances 
described in Section 2.12(e)) to transfer such Restricted Certificated
Security to a transferee who shall take such Security in the form of a
beneficial interest in an Unrestricted Global Security, and in each case shall
rescind any restriction on the transfer of such Security; provided, however,
that the Holder of such Restricted Certificated Security shall, in connection
with such exchange or transfer, comply with the other applicable provisions of
this Section 2.12; and

 

18

 

(ii)           in the case of any beneficial
interest in a Restricted Global Security, the Trustee shall permit the
beneficial owner thereof to transfer such beneficial interest to a transferee
who shall take such interest in the form of a beneficial interest in an
Unrestricted Global Security and shall rescind any restriction on transfer of
such beneficial interest; provided, that such Unrestricted Global Security
shall continue to be subject to the provisions of Section 2.12(a)(2); and
provided, further, that the owner of such beneficial interest shall, in
connection with such transfer, comply with the other applicable provisions of
this Section 2.12.

 

(3)           Upon the exchange, registration of
transfer or replacement of Securities not bearing the legend described in
paragraph (1) above, the Company shall execute, and the Trustee shall
authenticate and deliver Securities that do not bear such legend and that do
not have a Transfer Certificate attached thereto.

 

(4)           After the expiration of the holding
period pursuant to Rule 144(k) of the Securities Act, the Company may with the
consent of the Holder of a Restricted Global Security or Restricted
Certificated Security, remove any restriction of transfer on such Security, and
the Company shall execute, and the Trustee shall authenticate and deliver
Securities that do not bear such legend and that do not have a Transfer
Certificate attached thereto.

 

(g)           Transfers to the Company. Nothing in this
Indenture or in the Securities shall prohibit the sale or other transfer of any
Securities (including beneficial interests in Global Securities) to the Company
or any of its Subsidiaries, which Securities shall thereupon be cancelled in
accordance with Section 2.11.

 

SECTION 2.13       CUSIP NUMBERS.

 

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

 

ARTICLE 3

REDEMPTION AND PURCHASES

 

SECTION
3.1         RIGHT TO REDEEM;
NOTICE TO TRUSTEE.

 

The Securities may be redeemed
at the election of the Company, as a whole or from time to time in part, at any
time on or after March 9, 2005, on at least 30 days’ and no more than 60 days’
notice at the redemption prices specified in paragraph 5 of the form of
Security attached hereto as Exhibit A, together with accrued and unpaid
interest up to, but not including, the Redemption Date; provided that if the Redemption Date is an
interest payment date, interest shall be payable to the Holders in whose name
the Securities are registered at the close of business on the relevant record
dates for payment of such interest.

 

If the Company elects to redeem
Securities pursuant to this Section 3.1 and paragraph 5 of the Securities, it
shall notify the Trustee in writing, at the earlier of the time the Company
notifies the Holders of such redemption or 45 days prior to the redemption date
as fixed by the Company (unless a

 

19

 

shorter notice shall be satisfactory to the
Trustee), of the redemption date and the principal amount of Securities to be
redeemed. If fewer than all of the Securities are to be redeemed, the record
date relating to such redemption shall be selected by the Company and given to
the Trustee, which record date shall not be less than ten days after the date
of notice to the Trustee.

 

SECTION
3.2         SELECTION OF
SECURITIES TO BE REDEEMED.

 

If less than all of the
Securities are to be redeemed, the Trustee shall, not more than 60 days prior
to the redemption date, select the Securities to be redeemed. The Trustee shall
make the selection from the Securities outstanding and not previously called
for redemption, by lot, or in its discretion, on a pro rata basis. Securities
in denominations of $1,000 may only be redeemed in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Company
promptly of Securities or portions of Securities to be redeemed.

 

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

 

SECTION
3.3         NOTICE OF
REDEMPTION.

 

At least 30 days but not more
than 60 days before a Redemption Date, the Company shall mail or cause to be
mailed a notice of redemption to each Holder of Securities to be redeemed at
such Holder’s address as it appears on the Primary Registrar’s books.

 

The notice shall identify the
Securities (including CUSIP numbers) to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price;

 

(3)           the then current Conversion Price;

 

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

 

(5)           that Securities called for redemption must be presented
and surrendered to a Paying Agent to collect the redemption price;

 

(6)           that Holders who wish to convert Securities must surrender
such Securities for conversion no later than the close of business on the
second Business Day immediately preceding the redemption date and must satisfy
the other requirements set forth in paragraph 8 of the Securities;

 

(7)           that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption shall cease accruing on
and after the redemption date and the only remaining right of the Holder shall
be to receive payment of the redemption price, plus accrued and unpaid
interest, if any, upon presentation and surrender to a Paying Agent of the
Securities; and

 

20

 

(8)           if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
redemption date, upon presentation and surrender of such Security, a new
Security or Securities in aggregate principal amount equal to the unredeemed
portion thereof will be issued.

 

If any of the Securities to be
redeemed 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 redemptions. At the Company’s written request, which
request shall (i) be irrevocable once given and (ii) set forth all relevant
information required by clauses (1) through (8) of the preceding paragraph, the
Trustee shall give the notice of redemption in the Company’s name and at the
Company’s expense.

 

SECTION
3.4         EFFECT OF NOTICE
OF REDEMPTION.

 

Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice, together with
accrued and unpaid interest, if any, except for Securities that are converted
in accordance with the provisions of Article 4. Upon presentation and surrender
to a Paying Agent, Securities called for redemption shall be paid at the
redemption price, plus accrued and unpaid interest up to but not including the
redemption date; provided that if
the redemption date is an interest payment date, interest shall be payable to
the Holders in whose names the Securities are registered at the close of
business on the relevant record dates for payment of such interest.

 

SECTION
3.5         DEPOSIT OF
REDEMPTION PRICE.

 

The Company, prior to 11:00 a.m.
New York City time, on the Redemption Date, shall deposit with a Paying Agent
(or, if the Company acts as Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued and unpaid interest
on all Securities to be redeemed on that date, other than Securities or
portions thereof called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation or have been converted. The
Paying Agent shall, as promptly as practicable, return to the Company any money
not required for that purpose because of the conversion of Securities pursuant
to Article 4 or, if such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from the trust.

 

SECTION
3.6         SECURITIES
REDEEMED IN PART.

 

Upon presentation and surrender
of a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.

 

SECTION
3.7         CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION.

 

In connection with any
redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or
more investment bankers or other purchasers to purchase such Securities by
paying to a Paying Agent (other than the Company or any of its Affiliates) in
trust for the Holders, on or before 11:00 a.m. New York City time on the
Redemption Date, an amount that, together with any amounts deposited with such
Paying Agent by the Company for the redemption of such Securities, is not less
than the Redemption Price, together with interest accrued and unpaid to, but
not including, the Redemption Date, of such Securities. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Securities, including all accrued
and unpaid interest, shall be deemed to

 

21

 

be satisfied and discharged to the extent such
amount is so paid by such purchasers; provided,
however, that nothing in this Section 3.7 shall relieve the Company
of its obligation to pay the Redemption Price, plus accrued and unpaid interest
to but excluding the relevant redemption date, on Securities called for
redemption. If such an agreement with one or more investment banks or other
purchasers is entered into, any Securities called for redemption and not
surrendered for conversion by the Holders thereof prior to the relevant
redemption date may, at the option of the Company upon written notice to the
Trustee, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all as
of 11:00 a.m. New York City time on the Redemption Date, subject to payment of
the above amount as aforesaid. The Paying Agent shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase in the same manner as it would money deposited with it by the
Company for the redemption of Securities. Without the Paying Agent’s prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect
any of the powers, duties, responsibilities or obligations of the Paying Agent
as set forth in this Indenture, and the Company agrees to indemnify the Paying
Agent from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Company and such purchasers, including
the costs and expenses incurred by the Paying Agent in the defense of any claim
or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this
Indenture.

 

SECTION
3.8         PURCHASE OF
SECURITIES AT OPTION OF THE HOLDER UPON CHANGE IN CONTROL.

 

(a)           If at any time that Securities remain outstanding there
shall occur a Change in Control, Securities shall be purchased by the Company
at the option of the Holders thereof on the date that is a Business Day
designated by the Company no earlier than 30 days nor more than 60 days from
the date that the Change in Control Notice referred to in Section 3.8(b) below
is mailed (the “Change in Control Purchase Date”) at a purchase price equal to
100% of the principal amount of the Securities, plus accrued and unpaid
interest to, but excluding, the Change in Control Purchase Date (the “Change in
Control Purchase Price”), subject to satisfaction by or on behalf of any Holder
of the requirements set forth in subsection (c) of this Section 3.8.

 

A “Change in Control” shall be
deemed to have occurred if any of the following occurs after the date hereof:

 

(1)           any “person” or “group” (as such
terms are defined below) is or becomes the “beneficial owner” (as defined
below), directly or indirectly, of shares of Voting Stock of the Company
representing 50% or more of the total voting power of all outstanding classes
of Voting Stock of the Company or has the power, directly or indirectly, to
elect a majority of the members of the Board of Directors of the Company; or

 

(2)           the Company consolidates with, or
merges with or into, another Person or the Company sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of the
assets of the Company, or any Person consolidates with, or merges with or into,
the Company, in any such event other than pursuant to a transaction in which
the Persons that “beneficially owned” (as defined below), directly or
indirectly, shares of Voting Stock of the Company immediately prior to such
transaction “beneficially own” (as defined below), directly or indirectly,
shares of Voting Stock of the Company representing at least a majority of the
total voting power of all outstanding classes of Voting Stock of the surviving
or transferee Person; or

 

22

 

(3)           Continuing Directors do not
constitute a majority of the Board of Directors (or, if applicable, the board
of directors of a successor corporation to the Company); or

 

(4)           there shall occur the liquidation or
dissolution of the Company.

 

For the purpose of the
definition of “Change in Control”, (i) “person” and “group” have the meanings
given such terms under Section 13(d) and 14(d) of the Exchange Act or any
successor provisions to either of the foregoing, and the term “group” includes
any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or
any successor provision thereto, (ii) a “beneficial owner” shall be determined
in accordance with Rule 13d-3 under the Exchange Act, as in effect on the date
of this Indenture, except that the number of shares of Voting Stock of the
Company shall be deemed to include, in addition to all outstanding shares of
Voting Stock of the Company and Unissued Shares deemed to be held by the
“person” or “group” (as such terms are defined above) or other Person with
respect to which the Change in Control determination is being made, all
Unissued Shares deemed to be held by all other Persons, and (iii) the terms
“beneficially owned” and “beneficially own” shall have meanings correlative to
that of “beneficial owner”. The term “Unissued Shares” means shares of Voting
Stock of the Company not outstanding that are subject to options, warrants,
rights to purchase or conversion privileges exercisable within 60 days of the
date of determination of a Change in Control.

 

Notwithstanding anything to the
contrary set forth in this Section 3.8, a Change in Control shall not be deemed
to have occurred if either:

 

(5)           the closing price (determined in
accordance with Section 4.6(d) of this Indenture) of the Common Stock for any
five Trading Days within:

 

(i)            the period of the ten consecutive
Trading Days immediately after the later of the Change in Control or the public
announcement of the Change in Control, in the case of a Change in Control
resulting solely from a Change in Control under Section 3.8(a)(1); or

 

(ii)           the period of the ten consecutive
Trading Days immediately preceding the Change in Control, in the case of a
Change in Control resulting from a Change in Control under Section 3.8(a)(2),
(3) or (4),

 

is
at least equal to 105% of the Conversion Price in effect on such Trading Day;
or

 

(6)           all of the consideration (excluding
cash payments for fractional shares, or upon exercise of dissenters’ or
appraisal rights) in the transaction constituting the Change in Control
consists of common stock traded on a United States 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 such Change in Control) and as a
result of such transaction or transactions the Securities become convertible
solely into (or are exchanged solely for) such common stock (and any rights
attached thereto).

 

(b)           Within 10 Business Days after the occurrence of a Change
in Control, the Company shall mail a written notice of the Change in Control to
the Trustee (and the Paying Agent if the Trustee is not then acting as Paying
Agent) and to each Holder (and to beneficial owners as required by applicable
law). The notice shall include the form of a Change in Control Purchase Notice
to be completed by the Holder and shall state:

 

23

 

(1)           the date of such Change in Control
and, briefly, the events causing such Change in Control;

 

(2)           the date by which the Change in
Control Purchase Notice pursuant to this Section 3.8 must be given;

 

(3)           the Change in Control Purchase Date;

 

(4)           the Change in Control Purchase Price;

 

(5)           briefly, the conversion rights of the
Securities;

 

(6)           the name and address of each Paying
Agent and Conversion Agent;

 

(7)           the Conversion Price and any
adjustments thereto;

 

(8)           that Securities as to which a Change
in Control Purchase Notice has been given may be converted into Common Stock
pursuant to Article 4 of this Indenture only to the extent that the Change in
Control Purchase Notice has been withdrawn in accordance with the terms of this
Indenture;

 

(9)           the procedures that the Holder must
follow to exercise rights under this Section 3.8;

 

(10)         the procedures for withdrawing a Change
in Control Purchase Notice, including a form of notice of withdrawal; and

 

(11)         that the Holder must satisfy the
requirements set forth in the Securities in order to convert the Securities.

 

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 repurchase of Global Securities.

 

(c)           A Holder may exercise its rights specified in subsection
(a) of this Section 3.8 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A 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 “Change in Control
Purchase Notice”) to any Paying Agent at any time prior to the close of
business on the fifth (5th) Business Day prior to the Change in
Control Purchase Date.

 

The delivery of such Security to
any Paying Agent (together with all necessary endorsements) at the office of
such Paying Agent shall be a condition to the receipt by the Holder of the
Change in Control Purchase Price therefor.

 

The Company shall purchase from
the Holder thereof, pursuant to this Section 3.8, a portion of a Security if
the principal amount of such portion is $1,000 or an integral multiple of
$1,000. Provisions of the Indenture that apply to the purchase of all of a
Security pursuant to Sections 3.8 through 3.13 also apply to the purchase of
such portion of such Security.

 

24

 

Notwithstanding anything herein
to the contrary, any Holder delivering to a Paying Agent the Change in Control
Purchase Notice contemplated by this subsection (c) shall have the right to
withdraw such Change in Control Purchase Notice in whole or in a portion
thereof that is a principal amount of $1,000 or in an integral multiple thereof
at any time prior to the close of business on the Business Day next preceding
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.9.

 

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

 

Anything herein to the contrary
notwithstanding, in the case of Global Securities, any Change in Control
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
3.9         EFFECT OF CHANGE
IN CONTROL PURCHASE NOTICE.

 

Upon receipt by any Paying Agent
of the Change in Control Purchase Notice specified in Section 3.8(c), the
Holder of the Security in respect of which such Change in Control Purchase
Notice was given shall (unless such Change in Control Purchase Notice is
withdrawn as specified below) thereafter be entitled to receive the Change in
Control Purchase Price with respect to such Security. Such Change in Control
Purchase Price shall be paid to such Holder promptly following the later of (a)
the Change in Control Purchase Date with respect to such Security (provided the
conditions in Section 3.8(c) have been satisfied) and (b) the time of delivery
of such Security to a Paying Agent by the Holder thereof in the manner required
by Section 3.8(c). Securities in respect of which a Change in Control Purchase
Notice has been given by the Holder thereof may not be converted into shares of
Common Stock pursuant to Article 4 on or after the date of the delivery of such
Change in Control Purchase Notice unless such Change in Control Purchase Notice
has first been validly withdrawn.

 

A Change in Control 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 a Paying Agent at any time
prior to the close of business on the Business Day immediately preceding the
Change in Control Purchase Date, specifying the principal amount of the
Security or portion thereof (which must be a principal amount of $1,000 or an
integral multiple of $1,000 in excess thereof) with respect to which such
notice of withdrawal is being submitted.

 

SECTION
3.10       DEPOSIT OF CHANGE
IN CONTROL PURCHASE PRICE.

 

On or before 11:00 a.m. New York
City time on the Change in Control Purchase Date, the Company shall deposit
with the Trustee or with a Paying Agent (other than the Company or an Affiliate
of the Company) an amount of money (in immediately available funds if deposited
on such Change in Control Purchase Date) sufficient to pay the aggregate Change
in Control Purchase Price of all the Securities or portions thereof that are to
be purchased as of such Change in Control Purchase Date. The manner in which
the deposit required by this Section 3.10 is made by the Company shall be at
the option of the Company, provided that such deposit shall be made in a manner
such that the Trustee or a Paying Agent shall have immediately available funds
on the Change in Control Purchase Date.

 

If a Paying Agent holds, in
accordance with the terms hereof, money sufficient to pay the Change in Control
Purchase Price of any Security for which a Change in Control Purchase Notice
has

 

25

 

been tendered and not withdrawn in accordance
with this Indenture then, on the Change in Control Purchase Date, such Security
shall cease to be outstanding and the rights of the Holder in respect thereof
shall terminate (other than the right to receive the Change in Control Purchase
Price as aforesaid). The Company shall publicly announce the principal amount
of Securities purchased as a result of such Change in Control on or as soon as
practicable after the Change in Control Purchase Date.

 

SECTION
3.11       SECURITIES
PURCHASED IN PART.

 

Any Security that is to be
purchased only in part shall be surrendered at the office of a Paying Agent and
promptly after the Change in Control Purchase Date 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 such 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
3.12       COMPLIANCE WITH
SECURITIES LAWS UPON PURCHASE OF SECURITIES.

 

In connection with any offer to
purchase or purchase of Securities under Section 3.8, the Company shall (a)
comply with Rule 13e-4 and Rule 14e-1 (or any successor to either such Rule),
if applicable, under the Exchange Act, (b) file the related Schedule TO (or any
successor or similar schedule, form or report) if required under the Exchange
Act, and (c) otherwise comply with all federal and state securities laws in
connection with such offer to purchase or purchase of Securities, all so as to
permit the rights of the Holders and obligations of the Company under Sections
3.8 through 3.11 to be exercised in the time and in the manner specified
therein.

 

SECTION
3.13       REPAYMENT TO THE
COMPANY.

 

To the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.10 exceeds the
aggregate Change in Control Purchase Price together with interest, if any,
thereon of the Securities or portions thereof that the Company is obligated to
purchase, then promptly after the Change in Control Purchase Date the Trustee
or a Paying Agent, as the case may be, shall return any such excess cash to the
Company.

 

ARTICLE 4

CONVERSION

 

SECTION
4.1         CONVERSION
PRIVILEGE.

 

Subject to the further
provisions of this Article 4, a Holder of a Security may convert the principal
amount of such Security (or any portion thereof equal to $1,000 or any integral
multiple of $1,000 in excess thereof) into Common Stock at any time prior to
the close of business on the Final Maturity Date, at the Conversion Price then
in effect; provided, however, that, if such Security is called for redemption
or submitted or presented for purchase pursuant to Article 3, such conversion
right shall terminate at the close of business on the second Business Day
immediately preceding the redemption date or Change in Control Purchase Date,
as the case may be, for such Security or such earlier date as the Holder
presents such Security for redemption or for purchase (unless the Company shall
default in making the redemption payment or Change in Control Purchase Price
payment when due, in which case the conversion right shall terminate at the
close of business on the date such default is cured and such Security is
redeemed or purchased, as the case may be). 
If such Security is submitted or presented for purchase pursuant to
Article 3 and is then subsequently withdrawn, such conversion right shall no
longer be terminated, and the Holder of such Security may convert such Security
pursuant to this Section 4.1.

 

26

 

The number of shares of Common Stock issuable
upon conversion of a Security shall be determined by dividing the principal
amount of the Security or portion thereof surrendered for conversion by the
Conversion Price in effect on the Conversion Date. The initial Conversion Price
is set forth in paragraph 8 of the Securities and is subject to adjustment as
provided in this Article 4.

 

Provisions of this Indenture
that apply to conversion of all of a Security also apply to conversion of a
portion of a Security.

 

A Security in respect of which a
Holder has delivered a Change in Control Purchase Notice pursuant to

Section 3.8(c) exercising the option of such Holder to require the Company to
purchase such Security may be converted only if such Change in Control Purchase
Notice is withdrawn by a written notice of withdrawal delivered to a Paying
Agent prior to the close of business on the Business Day immediately preceding
the Change in Control Purchase Date in accordance with Section 3.9.

 

A Holder of Securities is not
entitled to any rights of a holder of Common Stock until such Holder has
converted its Securities to Common Stock, and only to the extent such
Securities are deemed to have been converted into Common Stock pursuant to this
Article 4.

 

SECTION
4.2         CONVERSION PROCEDURE.

 

To convert a Security, a Holder
must (a) complete and manually sign the conversion notice on the back of the
Security and deliver such notice to a Conversion Agent, (b) surrender the
Security to a Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent, and (d)
pay any transfer or similar tax, if required. The first Business Day on which
the Holder satisfies all of those requirements is the “Conversion Date.” As
soon as practicable after the Conversion Date, the Company shall deliver to the
Holder through a Conversion Agent a certificate for the number of whole shares
of Common Stock issuable upon the conversion and cash in lieu of any fractional
shares pursuant to

Section 4.3. Anything herein to the contrary notwithstanding, in the case of
Global Securities, conversion notices may be delivered and such Securities may
be surrendered for conversion in accordance with the Applicable Procedures as
in effect from time to time.

 

The person in whose name the
Common Stock certificate is registered shall be deemed to be a stockholder of
record on the Conversion Date; provided,
however, that no surrender of a Security on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; and provided further, that such conversion
shall be at the Conversion Price in effect on the Conversion Date as if the
stock transfer books of the Company had not been closed. Upon conversion of a
Security, such person shall no longer be a Holder of such Security. No payment
or adjustment will be made for dividends or distributions on shares of Common
Stock issued upon conversion of a Security.

 

Securities so surrendered for
conversion (in whole or in part) during the period from the close of business
on any regular record date to the opening of business on the next succeeding
interest payment date (excluding Securities or portions thereof called for
redemption on a Redemption Date during the period beginning at the close of
business on a regular record date and ending at the opening of business on the
first Business Day after the next succeeding interest payment date, or if such
interest

 

27

 

payment date is not a Business Day, the second
such Business Day) shall also be accompanied by payment in 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 then being converted, and such
interest shall be payable to such registered Holder notwithstanding the conversion
of such Security, subject to the provisions of this Indenture relating to the
payment of defaulted interest by the Company. Except as otherwise provided in
this

Section 4.2, no payment or adjustment will be made for accrued interest on a
converted Security. If the Company defaults in the payment of interest payable
on such interest payment date, the Company shall promptly repay such funds to
such Holder.

 

Nothing in this Section 4.2
shall affect the right of a Holder in whose name any Security is registered at
the close of business on a record date to receive the interest payable on such
Security on the related interest payment date in accordance with the terms of
this Indenture and the Securities. If a Holder converts more than one Security
at the same time, the number of shares of Common Stock issuable upon the
conversion shall be based on the aggregate principal amount of Securities
converted.

 

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

 

SECTION
4.3         FRACTIONAL
SHARES.

 

The Company will not issue
fractional shares of Common Stock upon conversion of Securities. In lieu
thereof, the Company shall pay an amount in cash based upon the current market
price (determined as set forth in Section 4.6(d)) of the Common Stock on the
Trading Day immediately prior to the Conversion Date.

 

SECTION
4.4         TAXES ON
CONVERSION.

 

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

 

SECTION
4.5         COMPANY TO
PROVIDE STOCK.

 

The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be
necessary, reserve, out of its authorized but unissued Common Stock, a
sufficient number of shares of Common Stock to permit the conversion of all
outstanding Securities into shares of Common Stock (including any rights
attached thereto).

 

All shares of Common Stock
delivered upon conversion of the Securities shall be newly issued shares, shall
be duly authorized, validly issued, fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim.

 

The Company shall endeavor
promptly to comply with all federal and state securities laws regulating the
offer and delivery of shares  of Common
Stock upon conversion of Securities, if any, and shall list or cause to have
quoted such shares of Common Stock on each national securities exchange

 

28

 

or on the Nasdaq National Market or other
over-the-counter market or such other market on which the Common Stock is then
listed or quoted; provided, however,
that if rules of such automated quotation system or exchange permit the Company
to defer the listing of such Common Stock until the first conversion of the
Notes into Common Stock in accordance with the provisions of this Indenture,
the Company covenants to list such Common Stock issuable upon conversion of the
Notes in accordance with the requirements of such automated quotation system or
exchange at such time.  Any Common Stock
issued upon conversion of a Security hereunder which at the time of conversion
is a “restricted security” under the Securities Act will also be a restricted
security.

 

SECTION
4.6         ADJUSTMENT OF
CONVERSION PRICE.

 

The conversion price as stated
in paragraph 8 of the Securities (the “Conversion Price”) shall be adjusted
from time to time by the Company as follows:

 

(a)           In case the Company shall (i) pay a dividend on its Common
Stock in shares of Common Stock, (ii) make a distribution on its Common Stock
in shares of Common Stock, (iii) subdivide its outstanding Common Stock into a
greater number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares
of Common Stock which it would have owned had such Security been converted
immediately prior to the happening of such event. An adjustment made pursuant
to this subsection (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 subdivision or combination.

 

(b)           In case the Company shall issue rights or warrants to all
or substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not
more than 60 days after such record date) to subscribe for or purchase shares
of Common Stock (or securities convertible into Common Stock) at a price per
share (or having a conversion price per share) less than the then current
market price per share of Common Stock (as determined in accordance with
subsection (d) of this Section 4.6) on the record date for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
in effect immediately prior thereto shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on such record date
plus the number of shares which the aggregate offering price of the total number
of shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered, which shall be determined by multiplying the
number of shares of Common Stock issuable upon conversion of such convertible
securities by the conversion price per share of Common Stock pursuant to the
terms of such convertible securities) would purchase at the then current market
price per share (as defined in subsection (d) of this Section 4.6) of Common
Stock on such record date, and of which the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become
effective immediately after such record date. If at the end of the period
during which such rights or warrants are exercisable not all rights or warrants
shall have been exercised, the adjusted Conversion Price shall be immediately
readjusted to what it would have been based upon the number of additional
shares of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued).

 

29

 

(c)           In case the Company shall distribute to all or
substantially all holders of its Common Stock any shares of capital stock of
the Company (other than Common Stock), evidences of indebtedness or other
non-cash assets (excluding (1) dividends or distributions paid exclusively in
cash referred to in subsection (c)(1) below or (2) dividends or distributions
referred to in subsection (a) of this Section 4.6), or shall distribute to all
or substantially all holders of its Common Stock rights or warrants to
subscribe for or purchase any of its securities (excluding those rights and
warrants referred to in subsection (b) of this Section 4.6), then in each such
case the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the current Conversion Price by a fraction of
which the numerator shall be the current market price per share (as defined in
subsection (d) of this Section 4.6) of the Common Stock on the record date
mentioned below less the fair market value on such record date (as determined
by the Board of Directors, whose determination shall be conclusive evidence of
such fair market value and which shall be evidenced by an Officers’ Certificate
delivered to the Trustee) of the portion of the capital stock, evidences of
indebtedness or other non-cash assets so distributed or of such rights or
warrants applicable to one share of Common Stock (determined on the basis of
the number of shares of Common Stock outstanding on the record date), and of
which the denominator shall be the current market price per share (as defined
in subsection (d) of this Section 4.6) of the Common Stock on such record date.
Such adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.

 

Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company’s Capital Stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): 
(i) are deemed to be transferred with such shares of Common Stock;
(ii) are not exercisable; and (iii) are also issued in respect of
future issuances of Common Stock, shall be deemed not to have been distributed
for purposes of this Section 4.6 (and no adjustment to the Conversion
Price under this Section 4.6 shall be required) until the occurrence of
the earliest Trigger Event, whereupon such rights and warrants shall be deemed
to have been distributed and an appropriate adjustment (if any is required) to
the Conversion Price shall be made under this Section 4.6(c).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 4.6 was made, (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such
rights or warrants which shall all have expired or been terminated without
exercise by any holders thereof, the Conversion Price shall be readjusted as if
such rights and warrants had not been issued.

 

(1)           In case the Company shall, by
dividend or otherwise, at any time distribute (a “Triggering Distribution”) to
all or substantially all holders of its Common Stock cash in an aggregate
amount that, together with the aggregate amount of (A) any cash and the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive

 

30

 

evidence thereof and which shall
be evidenced by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.6 has been made
and (B) all other all-cash distributions to all or substantially all holders of
its Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.6 has been made, exceeds an amount equal to 10.0% of
the product of the current market price per share of Common Stock (as determined
in accordance with subsection (d) of this Section 4.6) on the Business Day (the
“Determination Date”) immediately preceding the day on which such Triggering
Distribution is declared by the Company multiplied by the number of shares of
Common Stock outstanding on the Determination Date (excluding shares held in
the treasury of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price in
effect immediately prior to the Determination Date by a fraction of which the
numerator shall be the current market price per share of the Common Stock (as
determined in accordance with subsection (d) of this Section 4.6) on the
Determination Date less the sum of the aggregate amount of cash and the
aggregate fair market value (determined as aforesaid in this Section  4.6(c)(1)) of any such other consideration
so distributed, paid or payable within such 12 months (including, without
limitation, the Triggering Distribution) applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Determination Date) and the denominator shall be such
current market price per share of the Common Stock (as determined in accordance
with subsection (d) of this Section 4.6) on the Determination Date, such
reduction to become effective immediately prior to the opening of business on
the day following the date on which the Triggering Distribution is paid.

 

(2)           In case any tender offer made by the
Company or any of its Subsidiaries for Common Stock shall expire and such
tender offer (as amended upon the expiration thereof)  shall  involve the payment
of aggregate consideration in an amount (determined as the sum of the aggregate
amount of cash consideration and the aggregate fair market value (as determined
by the Board of Directors, whose determination shall be conclusive evidence
thereof and which shall be evidenced by an Officers’ Certificate delivered to
the Trustee thereof) of any other consideration) that, together with the
aggregate amount of (A) any cash and the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive evidence
thereof and which shall be evidenced by an Officers’ Certificate delivered to the
Trustee) of any other consideration payable in respect of any other tender
offers by the Company or any Subsidiary of the Company for Common Stock
consummated within the 12 months preceding the date of the Expiration Date (as
defined below) and in respect of which no Conversion Price adjustment pursuant
to this Section 4.6 has been made and (B) all-cash distributions to all or
substantially all holders of its Common Stock made within the 12 months
preceding the Expiration Date and in respect of which no Conversion Price
adjustment pursuant to this Section 4.6 has been made, exceeds an amount equal
to 10.0% of the product of the current market price per share of Common Stock
(as determined in accordance with subsection (d) of this Section 4.6) as of the
last date (the “Expiration Date”) tenders could have been made pursuant to such
tender offer (as it may be amended) (the last time at which such tenders could
have been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”) multiplied by the number of shares of Common Stock
outstanding (including tendered shares but excluding any shares held in the
treasury of the Company) at the Expiration Time, then, immediately prior to the
opening of business on the day after the Expiration Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the Expiration Date by a fraction of which the numerator shall be

 

31

 

the product of the number of
shares of Common Stock outstanding (including tendered shares but excluding any
shares held in the treasury of the Company) at the Expiration Time multiplied
by the then current market price per share of the Common Stock (as determined
in accordance with subsection (d) of this Section 4.6) on the Trading Day next
succeeding the Expiration Date and the denominator shall be the sum of (x) the
aggregate consideration (determined as aforesaid) payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the tender
offer) of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the “Purchased Shares”) and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares and excluding any shares
held in the treasury of the Company) at the Expiration Time and the current
market price per share of Common Stock (as determined in accordance with
subsection (d) of this Section 4.6) on the Trading Day next succeeding the
Expiration Date, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Date. In the event that
the Company is obligated to purchase shares pursuant to any such tender offer,
but the Company is permanently prevented by applicable law from effecting any
or all such purchases or any or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
have been in effect based upon the number of shares actually purchased. If the
application of this Section 4.6(c)(2) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this

Section 4.6(c)(2).

 

(3)           For purposes of this Section 4.6(c),
the term “tender offer” shall mean and include both tender offers and exchange
offers, all references to  “purchases”
of shares in tender offers (and all similar references) shall mean and include
both the purchase of shares in tender offers and the acquisition of shares
pursuant to exchange offers, and all references to “tendered shares” (and all
similar references) shall mean and include shares tendered in both tender
offers and exchange offers.

 

(d)           For the purpose of any computation under subsections (b)
and (c) of this Section 4.6, the current market price per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices for
the 30 consecutive Trading Days commencing 45 Trading Days before (i) the
Determination Date or the Expiration Date, as the case may be, with respect to
distributions or tender offers under subsection (c) of this Section 4.6 or (ii)
the record date with respect to distributions, issuances or other events
requiring such computation under subsection (b) or (c) of this Section 4.6. The
closing price for each day shall be the last reported sales price or, in case
no such reported sale takes place on such date, the average of the reported
closing bid and asked prices in either case on the Nasdaq National Market (the
“NNM”) or, if the Common Stock is not listed or admitted to trading on the NNM,
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to trading on the
NNM or any national securities exchange, the last reported sales price of the
Common Stock as quoted on NASDAQ or, in case no reported sales takes place, the
average of the closing bid and asked prices as quoted on NASDAQ or any
comparable system or, if the Common Stock is not quoted on NASDAQ or any
comparable system, the closing sales price or, in case no reported sale takes
place, the average of the closing bid and asked prices, as furnished by any two
members of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose. If no such prices are available,
the current market price per share shall be the fair value of a share of Common
Stock as determined by the Board of Directors (which shall be evidenced by an
Officers’ Certificate delivered to the Trustee).

 

(e)           In any case in which this Section 4.6 shall require that
an adjustment be made following a record date or a Determination Date or
Expiration Date, as the case may be, established for purposes of this Section
4.6, the Company may elect to defer (but only until five Business Days
following

 

32

 

the filing by the Company with the Trustee of the
certificate described in Section 4.9) issuing to the Holder of any Security
converted after such record date or Determination Date or Expiration Date the
shares of Common Stock and other capital stock of the Company issuable upon
such conversion over and above the shares of Common Stock and other capital
stock of the Company issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the shares the issuance
of which is so deferred, the Company shall issue or cause its transfer agents
to issue due bills or other appropriate evidence prepared by the Company of the
right to receive such shares. If any distribution in respect of which an adjustment
to the Conversion Price is required to be made as of the record date or
Determination Date or Expiration Date therefor is not thereafter made or paid
by the Company for any reason, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect if such record date had not been
fixed or such effective date or Determination Date or Expiration Date had not
occurred.

 

SECTION
4.7         NO ADJUSTMENT.

 

No adjustment in the Conversion
Price shall be required unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Price as last adjusted; provided, however, that any adjustments
which by reason of this Section 4.7 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article 4 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.

 

No adjustment need be made for
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest or for a change in the par value or a change to no par
value of the Common Stock.

 

To the extent that the
Securities become convertible into the right to receive cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.

 

SECTION
4.8         ADJUSTMENT FOR
TAX PURPOSES.

 

The Company shall be entitled to
make such reductions in the Conversion Price, in addition to those required by
Section 4.6, as it in its discretion shall determine to be advisable in order
that any stock dividends, subdivisions of shares, distributions of rights to
purchase stock or securities or distributions of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.

 

SECTION
4.9         NOTICE OF ADJUSTMENT.

 

Whenever the Conversion Price or
conversion privilege is adjusted, the Company shall promptly mail to
Securityholders a notice of the adjustment and file with the Trustee an
Officers’ Certificate briefly stating the facts requiring the adjustment and
the manner of computing it. Unless and until the Trustee shall receive an
Officers’ Certificate setting forth an adjustment of the Conversion Price, the
Trustee may assume without inquiry that the Conversion Price has not been
adjusted and that the last Conversion Price of which it has knowledge remains
in effect.

 

SECTION
4.10       NOTICE OF CERTAIN TRANSACTIONS.

 

In the event that:

 

(1)           the Company takes any action which would require an
adjustment in the Conversion Price;

 

33

 

(2)           the Company consolidates or merges with, or transfers all
or substantially all of its property and assets to, another corporation and
stockholders of the Company must approve the transaction; or

 

(3)           there is a dissolution or liquidation of the Company,

 

the Company shall mail to
Holders and file with the Trustee a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least
ten days before such date. Failure to mail such notice or any defect therein
shall not affect the validity of any transaction referred to in clause (1), (2)
or (3) of this Section 4.10.

 

SECTION
4.11       EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
ON CONVERSION PRIVILEGE.

 

If any of the following shall
occur, namely: (a) any reclassification or change of shares of Common Stock
issuable upon conversion of the Securities (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination, or any other change for which an
adjustment is provided in Section 4.6); (b) any consolidation or merger or
combination to which the Company is a party other than a merger in which the
Company is the continuing corporation and which does not result in any
reclassification of, or change (other than in par value, or from par value to
no par value, or from no par value to par value, or as a result of a
subdivision or combination) in, outstanding shares of Common Stock; or (c) any
sale or conveyance as an entirety or substantially as an entirety of the
property and assets of the Company, directly or indirectly, to any person, then
the Company, or such successor, purchasing or transferee corporation, as the
case may be, shall, as a condition precedent to such reclassification, change,
combination, consolidation, merger, sale or conveyance, execute and deliver to
the Trustee a supplemental indenture providing that the Holder of each Security
then outstanding shall have the right to convert such Security into the kind
and amount of shares of stock and other securities and property (including
cash) receivable upon such reclassification, change, combination,
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock deliverable upon conversion of such Security immediately prior
to such reclassification, change, combination, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article 4. If, in
the case of any such consolidation, merger, combination, sale or conveyance,
the stock or other securities and property (including cash) receivable
thereupon by a holder of Common Stock include shares of stock or other
securities and property of a person other than the successor, purchasing or
transferee corporation, as the case may be, in such consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing. The
provisions of this Section 4.11 shall similarly apply to successive
reclassifications, changes, combinations, consolidations, mergers, sales or
conveyances.

 

In the event the Company shall
execute a supplemental indenture pursuant to this Section 4.11, the Company
shall promptly file with the Trustee (x) an Officers’ Certificate briefly
stating the reasons therefor, the kind or amount of shares of stock or other
securities or property (including cash) receivable by Holders of the Securities
upon the conversion of their Securities after any such reclassification,
change, combination, consolidation, merger, sale or conveyance, any adjustment
to be made with respect thereto and that all conditions precedent have been
complied with and (y) an Opinion of Counsel that all conditions precedent have
been complied with, and shall promptly mail notice thereof to all Holders.

 

34

 

SECTION
4.12       TRUSTEE’S DISCLAIMER..

 

The Trustee shall have no duty
to determine when an adjustment under this Article 4 should be made, how it
should be made or what such adjustment should be, but may accept as conclusive
evidence of that fact or the correctness of any such adjustment, and shall be
protected in relying upon, an Officers’ Certificate including the Officers’
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 4.9. The Trustee makes no representation as to
the validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company’s failure
to comply with any provisions of this Article 4.

 

The Trustee shall not be under
any responsibility to determine the correctness of any provisions contained in
any supplemental indenture executed pursuant to Section 4.11, but may accept as
conclusive evidence of the correctness thereof, and shall be fully protected in
relying upon, the Officers’ Certificate with respect thereto which the Company
is obligated to file with the Trustee pursuant to Section 4.11.

 

SECTION
4.13       VOLUNTARY REDUCTION.

 

The Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and if the reduction is irrevocable during the
period if the Board of Directors determines that such reduction would be in the
best interest of the Company and the Company provides 15 days’ prior notice of
any reduction in the Conversion Price; provided,
however, that in no event may the Company reduce the Conversion
Price to be less than the par value of a share of Common Stock.

 

SECTION
4.14       COMPANY DETERMINATION FINAL.

 

Any determination that the
Company or the Board of Directors must make pursuant to Sections 4.3, 4.6, 4.7,
4.8, 4.11 or 4.13 shall be conclusive, absent manifest error.

 

ARTICLE 5

SUBORDINATION

 

SECTION
5.1         AGREEMENT OF SUBORDINATION.

 

The Company covenants and
agrees, and each Holder of Securities issued hereunder by its acceptance
thereof likewise covenants and agrees, that all Securities shall be issued
subject to the provisions of this Article 5; and each Person holding any
Security, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees to be bound by such provisions.

 

The payment of the principal of,
premium, if any, and interest (including Liquidated Damages, if any) on all
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption or the Change in Control Purchase Price
with respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture) issued hereunder, and any other payment with
respect to the Securities, shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full in cash or payment satisfactory to the holders of Senior Indebtedness
of all Senior Indebtedness, whether outstanding at the date of this Indenture
or thereafter incurred.

 

No provision of this Article 5
shall prevent the occurrence of any default or Event of Default hereunder.

 

35

SECTION
5.2         PAYMENTS TO HOLDERS.

 

No payment shall be made with
respect to the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on the Securities (including, but not limited to,
the redemption price with respect to the Securities to be called for redemption
or the Change in Control Purchase Price with respect to the Securities subject
to purchase in accordance with Article 3 as provided in this Indenture or any
other purchase or acquisition with respect to the Securities), or any other
payment with respect to the Securities, whether in cash, property or
securities, except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 5.5, if:

 

(i)            a default in the payment of principal, premium, if any,
interest or other obligations due on any Designated Senior Indebtedness occurs
and is continuing (or, in the case of Designated Senior Indebtedness 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 Designated Senior Indebtedness), unless and until such default shall have
been cured or waived or shall have ceased to exist; or

 

(ii)           a default, other than a default referred to in clause (i)
of this Section 5.2, on a Designated Senior Indebtedness occurs and is
continuing that then permits holders of such Designated Senior Indebtedness to
accelerate its maturity and the Trustee receives a notice of the default (a
“Payment Blockage Notice”) from a Representative or holder of Designated Senior
Indebtedness.

 

Subject to the provisions of
Section 5.5, if the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise ceased to exist and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.

 

The Company may and shall resume
payments on and distributions in respect of the Securities:

 

(a)           in the case of a default referred to in clause (i) above,
the date upon which the default is cured or waived or ceases to exist, or

 

(b)           in the case of a default referred to in clause (ii) above,
the earlier of the date on which such default is cured or waived or ceases to
exist or 179 days pass after receipt of the Payment Blockage Notice, unless
this Article 5 otherwise prohibits the payment or distribution at the time of
such payment or distribution.

 

Upon any payment by the Company,
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any dissolution or winding-up
or liquidation or reorganization of the Company (whether voluntary or
involuntary) or in bankruptcy, insolvency, receivership or similar proceedings,
all amounts due or to become due upon all Senior Indebtedness shall first be
paid in full in cash, or other payments satisfactory to the holders of Senior
Indebtedness, before any payment is made on account of the principal of,
premium, if any, or interest (including Liquidated Damages, if any) on the
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption or the Change in Control Purchase Price
with respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture, but excluding payments made pursuant to Article
10 from monies deposited with the Trustee pursuant thereto

 

36

 

prior to commencement of proceedings for such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or the Trustee would be entitled, except for the provision of this Article 5,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment
or distribution, or by the Holders of the Securities or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, or as otherwise required by law or
a court order) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full in cash,
or other payment satisfactory to the holders of Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Indebtedness, before any payment or distribution is made to the
Holders of the Securities or to the Trustee.

 

For purposes of this Article 5,
the words, “cash, property or securities” shall not be deemed to include (a)
cash paid or other distributions of property or securities made from the
Collateral Account pursuant to the Collateral Pledge and Security Agreement or
(b) shares of stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article 5 with respect to the Securities to the
payment of all Senior Indebtedness which may at the time be outstanding;
provided that (i) the Senior Indebtedness is assumed by the new corporation, if
any, resulting from any reorganization or readjustment, and (ii) the rights of
the holders of Senior Indebtedness (other than leases which are not assumed by
the Company or the new corporation, as the case may be) are not, without the
consent of such Holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance, transfer, sale or lease of its property as an entirety, or substantially
as an entirety, to another corporation upon the terms and conditions provided
for in Article 7 shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 5.2 if such other corporation
shall, as a part of such consolidation, merger, conveyance, transfer, sale or
lease comply with the conditions stated in Article 7.

 

In the event of the acceleration
of the Securities because of an Event of Default, no payment or distribution
shall be made to the Trustee or any Holder of Securities in respect of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on the Securities (including, but not limited to, the redemption price
with respect to the Securities called for redemption or the Change in Control
Purchase Price with respect to the Securities subject to purchase in accordance
with Article 3 as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 5.5, until all Senior Indebtedness has been paid in full in cash or
other payment satisfactory to the holders of Senior Indebtedness or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness of such
acceleration.

 

In the event that,
notwithstanding the foregoing provisions, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Indebtedness is paid in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, or provision is
made for such payment thereof in accordance with its terms in cash or other
payment satisfactory to the holders of Senior Indebtedness,

 

37

 

such payment or distribution shall be held in
trust for the benefit of and shall be paid over or delivered to the holders of
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full, in cash or other payment satisfactory to
the holders of Senior 
Indebtedness,  after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness.

 

Nothing in this Section 5.2
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 9.7. This Section 5.2 shall be subject to the further provisions of
Section 5.5.

 

SECTION
5.3         SUBROGATION OF
SECURITIES.

 

Subject to the payment in full,
in cash or other payment satisfactory to the holders of Senior Indebtedness, of
all Senior Indebtedness, the rights of the Holders of the Securities shall be
subrogated to the extent of the payments or distributions made to the holders
of such Senior Indebtedness pursuant to the provisions of this Article 5
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Securities are subordinated and is
entitled to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest (including Liquidated Damages, if any)
on the Securities, and any other obligation with respect to the Securities,
shall be paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness 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 5, and no payment over
pursuant to the provisions of this Article 5, to or for the benefit of the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities pursuant to the subrogation provisions of this
Article 5, which would otherwise have been paid to the holders of Senior
Indebtedness shall be deemed to be a payment by the Company to or for the
account of the Securities. It is understood that the provisions of this Article
5 are and are intended solely for the purposes of defining the relative rights
of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.

 

Nothing contained in this
Article 5 or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 5 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

 

Upon any payment or distribution
of assets of the Company referred to in this Article 5, the Trustee, subject to
the provisions of Section 9.1, and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent  jurisdiction in which such bankruptcy,

 

38

 

dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon and all
other facts pertinent thereto or to this Article 5.

 

SECTION
5.4         AUTHORIZATION TO
EFFECT SUBORDINATION.

 

Each Holder of a Security by the
Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 5 and appoints the Trustee to act as
the Holder’s attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in Section 5.3 hereof at least 30 days before the
expiration of the time to file such claim, the holders of any Senior
Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.

 

SECTION
5.5         NOTICE TO
TRUSTEE.

 

The Company shall give prompt
written notice in the form of an Officers’ Certificate to a Trust Officer of
the Trustee and to any Paying Agent of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee or any
Paying Agent in respect of the Securities pursuant to the provisions of this
Article 5. Notwithstanding the provisions of this Article 5 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 5, unless and until a Trust Officer of the Trustee
shall have received written notice thereof at the Corporate Trust Office from
the Company (in the form of an Officers’ Certificate) or a Representative or a
Holder or Holders of Senior Indebtedness or from any trustee thereof; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 9.1, shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not fewer than one Business Day
prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the
principal of, or premium, if any, or interest on any Security) the Trustee
shall not have received, with respect to such monies, the notice provided for
in this Section 5.5, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received
by it on or after such prior date. Notwithstanding anything in this Article 5
to the contrary, nothing shall prevent any payment by the Trustee to the
Holders of monies deposited with it pursuant to Article 10, and any such
payment shall not be subject to the provisions of Article 5.

 

The Trustee, subject to the
provisions of Section 9.1, shall be entitled to rely on the delivery to it of a
written notice by a Representative or a person representing himself to be a
holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a Representative or a holder of
Senior Indebtedness or a trustee on behalf of any such holder or holders. 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
Indebtedness to participate in any payment or distribution pursuant to this
Article 5, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
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 5, and if such evidence is not furnished the
Trustee may

 

39

 

defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

 

SECTION
5.6         TRUSTEE’S
RELATION TO SENIOR INDEBTEDNESS.

 

The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article 5 in
respect of any Senior Indebtedness at any time held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in Section 9.11 or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.

 

With respect to the holders of
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in this Article
5, and no implied covenants or obligations with respect to the holders of
Senior Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 9.1, the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to Holders of Securities, the Company or any other person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article 5 or otherwise.

 

SECTION
5.7         NO IMPAIRMENT OF
SUBORDINATION.

 

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

 

SECTION
5.8         CERTAIN
CONVERSIONS DEEMED PAYMENT.

 

For the purposes of this Article
5 only, (1) the issuance and delivery of junior securities upon conversion of
Securities in accordance with Article 4 shall not be deemed to constitute a
payment or distribution on account of the principal of (or premium, if any) or
interest on Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 4.3), 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 5.8, the term “junior securities” means (a)
shares of any stock of any class of the Company, or (b) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which 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. Nothing contained
in this Article 5 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders, the right, which is absolute
and unconditional, of the Holder of any Security to convert such Security in
accordance with Article 4.

 

SECTION
5.9         ARTICLE
APPLICABLE TO PAYING AGENTS.

 

If at any time any Paying Agent
other than the Trustee shall have been appointed by the Company and be then
acting hereunder, the term “Trustee” as used in this Article shall (unless the
context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in

 

40

 

place of the Trustee; provided, however, that the
first paragraph of Section 5.5 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.

 

SECTION
5.10       SENIOR
INDEBTEDNESS ENTITLED TO RELY.

 

The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
and their representatives shall have the right to rely upon this Article 5, and
no provision contained herein may be amended, supplemented or otherwise
modified without the prior written consent of such holders or their representatives
in accordance with the documents governing the terms of such Senior
Indebtedness.

 

ARTICLE 6

COVENANTS

 

SECTION
6.1         PAYMENT OF
SECURITIES.

 

The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities and this Indenture. An installment of principal or
interest or Liquidated Damages, if any, shall be considered paid on the date it
is due if the Paying Agent (other than the Company) holds by 11:00 a.m., New
York City time, on that date money, deposited by the Company or an Affiliate
thereof (or, in the case of the first six interest payments, available in the
Collateral Account), sufficient to pay the installment. The Company shall, to
the fullest extent permitted by law, pay interest on overdue principal
(including  premium, if any) and overdue
installments of interest at the rate borne by the Securities per annum.

 

Payment of the principal of (and
premium, if any) and any interest on the Securities shall be made at the Corporate
Trust Office of the Trustee in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address appears in
the Register; and provided further,
that a Holder with an aggregate principal amount in excess of $2,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company at
least 10 Business Days prior to the payment date.

 

SECTION 6.2         SEC REPORTS.

 

The Company shall file all
reports and other information and documents which it is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and within 15 days
after it files them with the SEC, the Company shall file copies of all such
reports, information and other documents with the Trustee.

 

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

 

SECTION
6.3         COMPLIANCE
CERTIFICATES.

 

The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending March 31, 2002), an Officers’
Certificate as

 

41

 

to the signer’s knowledge of the Company’s
compliance with all conditions and covenants on its part contained in this
Indenture and stating whether or not the signer knows of any default or Event
of Default.  If such signer knows of
such a default or Event of Default, the Officers’ Certificate shall describe
the default or Event of Default and the efforts to remedy the same. For the
purposes of this Section 6.3, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of
this Indenture.

 

SECTION
6.4         FURTHER
INSTRUMENTS AND ACTS.

 

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

 

SECTION
6.5         MAINTENANCE OF
CORPORATE EXISTENCE.

 

Subject to Article 7, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.

 

SECTION
6.6         RULE 144A
INFORMATION REQUIREMENT.

 

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

 

SECTION
6.7         STAY, EXTENSION
AND USURY LAWS.

 

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

 

SECTION
6.8         PAYMENT OF
LIQUIDATED DAMAGES.

 

If Liquidated Damages are
payable by the Company pursuant to the Registration Rights Agreement, the
Company shall deliver to the Trustee a certificate to that effect stating (i)
the amount of

 

42

 

such Liquidated Damages that is payable and (ii)
the date on which such Liquidated Damages are payable. Unless and until a Trust
Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no such Liquidated Damages are payable. If the Company has
paid Liquidated Damages directly to the Persons entitled to it, the Company
shall deliver to the Trustee a certificate setting forth the particulars of
such payment.

 

ARTICLE 7

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION
7.1         COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

 

The Company shall not
consolidate with or merge into any other Person (in a transaction in which the
Company is not the surviving corporation) or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, unless:

 

(1)           in case the Company shall consolidate with or merge into
another Person (in a transaction in which the Company is not the surviving
corporation) or convey, transfer or lease its 
properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety shall be a
corporation, limited liability company, partnership, trust or other entity,
shall be organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and 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 and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part of
the Company to be performed or observed and the conversion rights shall be
provided for in accordance with Article 4, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Person (if other than the Company) formed by such consolidation or into
which the Company shall have been merged or by the Person which shall have
acquired the Company’s assets; and

 

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

 

(3)           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 and that all conditions precedent herein provided for
relating to such transaction have been complied with.

 

SECTION
7.2         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 the properties and assets of the Company
substantially as an entirety in accordance with Section 7.1, 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.

 

43

 

ARTICLE 8

DEFAULT AND
REMEDIES

 

SECTION
8.1         EVENTS OF DEFAULT.

 

An “Event of Default” shall
occur if:

 

(1)           the Company defaults in the payment of any interest or
Liquidated Damages, if any, payable to all holders of Registrable Securities
(as defined in the Registration Rights Agreement) on any Security when the same
becomes due and payable and the default continues for a period of 30 days,
whether or not such payment shall be prohibited by the provisions of Article 5
hereof, provided that a failure
to make any of the first six scheduled interest payments on the Securities on
the applicable interest payment date shall constitute an Event of Default with
no grace or cure period;

 

(2)           the Company defaults in the payment of any principal of
(including, without limitation, any premium, if any, on) any Security when the
same becomes due and payable (whether at maturity, upon redemption, on a Change
of Control Purchase Date or otherwise), whether or not such payment shall be
prohibited by the provisions of Article 5 hereof;

 

(3)           the Company fails to comply with any of its other
agreements contained in this Indenture and the default continues for the period
and after the notice specified below;

 

(4)           the Company pursuant to or within the meaning of any
Bankruptcy Law:

 

(i)            commences a voluntary case or
proceeding;

 

(ii)           consents to the entry of an order for
relief against it in an involuntary case or proceeding;

 

(iii)          consents to the appointment of a
Custodian of it or for all or substantially all of its property; or

 

(iv)          makes a general assignment for the
benefit of its creditors; or

 

(5)           a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

 

(i)            is for relief against the Company in
an involuntary case or proceeding;

 

(ii)           appoints a Custodian of the Company
or for all or substantially all of the property of the Company; or

 

(iii)          orders the liquidation of the Company;

 

and in each case the order or
decree remains unstayed and in effect for 60 days; or

 

(6)           the Collateral Pledge and Security Agreement ceases to be
in full force and effect or enforceable prior to its expiration in accordance
with its terms.

 

The term “Bankruptcy Law” means
Title 11 of the United States Code (or any successor thereto) or any similar
federal or state law for the relief of debtors. The term “Custodian” means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.

 

44

 

A default under clause (3) above
is not an Event of Default until the Trustee notifies the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding notify the Company and the Trustee, of the default, and the Company
does not cure the default within 60 days after receipt of such notice. The
notice given pursuant to this Section 8.1 must specify the default, demand that
it be remedied and state that the notice is a “Notice of Default.” When any
default under this Section 8.1 is cured, it ceases.

 

The Trustee shall not be charged
with knowledge of any Event of Default unless written notice thereof shall have
been given to a Trust Officer at the Corporate Trust Office of the Trustee by
the Company, a Paying Agent, any Holder or any agent of any Holder.

 

SECTION 8.2         ACCELERATION.

 

If an Event of Default (other
than an Event of Default specified in clause (4) or (5) of Section 8.1) occurs
and is continuing, the Trustee may, by notice to the Company, or the Holders of
at least 25% in aggregate principal amount of the Securities then outstanding
may, by written notice to the Company and the Trustee, declare all unpaid
principal on the Securities then outstanding (if not then due and payable) to
be due and payable upon any such declaration, and the same shall become and be immediately
due and payable. If an Event of Default specified in clause (4) or (5) of
Section 8.1 occurs, all unpaid principal of the Securities then outstanding
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder, subject to
the provisions of Article 5 hereof. The Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee
may rescind an acceleration and its consequences if (a) all existing Events of
Default, other than the nonpayment of the principal of the Securities which has
become due solely by such declaration of acceleration, have been cured or
waived; (b) to the extent the payment of such interest is lawful, interest
(calculated at the rate per annum borne by the Securities) on overdue
installments of interest and overdue principal,  which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction; and (d) all payments due to the
Trustee and any predecessor Trustee under Section 9.7 have been made. No such
rescission shall affect any subsequent default or impair any right consequent
thereto.

 

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

 

SECTION
8.3         OTHER REMEDIES.

 

If an Event of Default occurs
and is continuing, the Trustee may, but shall not be obligated to, pursue any
available remedy by proceeding at law or in equity to collect the payment of
the principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

 

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

 

45

 

SECTION
8.4         WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.

 

Subject to Sections 8.7 and
11.2, the Holders of a majority in aggregate principal amount of the Securities
then outstanding by notice to the Trustee may waive an existing default or
Event of Default and its consequence, except a default or Event of Default in
the payment of the principal of or interest on any Security, a failure by the
Company to convert any Securities into Common Stock or any default or Event of
Default in respect of any provision of this Indenture or the Securities which,
under Section 11.2, cannot be modified or amended without the consent of the Holder
of each Security affected. When a default or Event of Default is waived, it is
cured and ceases.

 

SECTION
8.5         CONTROL BY MAJORITY.

 

The Holders of a majority in
aggregate principal amount of the Securities then outstanding may 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 it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of another Holder or the Trustee, or that may involve the Trustee in personal
liability unless the Trustee is offered indemnity satisfactory to it; provided, however, that the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.

 

SECTION
8.6         LIMITATIONS ON SUITS.

 

A Holder may not pursue any
remedy with respect to this Indenture or the Securities (except actions for
payment of overdue principal or interest or for the conversion of the
Securities pursuant to Article 4) unless:

 

(1)           the Holder gives to the Trustee written notice of a
continuing Event of Default;

 

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

 

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

 

(4)           the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and

 

(5)           no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Securities then outstanding.

 

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

 

SECTION
8.7         RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on the Security, on or after the
respective due dates expressed in the Security and this Indenture, to convert
such Security in accordance with Article 4 and to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to

 

46

 

convert, is absolute and unconditional and shall
not be impaired or affected without the consent of the Holder.

 

SECTION
8.8         COLLECTION SUIT BY TRUSTEE.

 

If an Event of Default in the
payment of principal or interest specified in clause (1) or (2) of Section 8.1
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company or another obligor on the
Securities for the whole amount of principal and accrued interest remaining
unpaid, together with, to the extent that payment of such interest is lawful,
interest on overdue principal and on overdue installments of interest, in each
case at the rate per annum borne by the Securities and such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

 

SECTION
8.9         TRUSTEE MAY FILE PROOFS OF CLAIM.

 

The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor on the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any money
or other property payable or deliverable on any such claims and to distribute
the same, and any Custodian in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 9.7, and to the extent that
such payment of the reasonable compensation, expenses, disbursements and
advances in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other property which the
Holders may be entitled to receive in such proceedings, whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to,
or, on behalf of any Holder, to authorize, accept or adopt any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

 

SECTION 8.10       PRIORITIES.

 

If the Trustee collects any
money pursuant to this Article 8, it shall pay out the money in the following
order:

 

First, to the Trustee for
amounts due under Section 9.7;

 

Second, to the holders of Senior
Indebtedness to the extent required by Article 5;

 

Third, to Holders for amounts
due and unpaid on the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal and interest, respectively; and

 

Fourth, to the Company.

 

47

 

The Trustee may fix a record
date and payment date for any payment to Holders pursuant to this Section 8.10.

 

SECTION
8.11       UNDERTAKING FOR COSTS.

 

In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 8.11 does not apply
to a suit made by the Trustee, a suit by a Holder pursuant to Section 8.7, or a
suit by Holders of more than 10% in aggregate principal amount of the
Securities then outstanding.

 

ARTICLE 9

TRUSTEE

 

SECTION
9.1         DUTIES OF TRUSTEE.

 

(a)           If 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 its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

 

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

 

(1)           the Trustee need perform only those
duties as are specifically set forth in this Indenture and no others; and

 

(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. The Trustee, however, shall examine any certificates and opinions
which by any provision hereof are specifically required to be delivered to the
Trustee to determine whether or not they conform to the requirements of this
Indenture.

 

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

 

(1)           this paragraph does not limit the
effect of subsection (b) of this Section 9.1;

 

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

 

(3)           the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 8.5.

 

(d)           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

 

48

 

exercise of any of its rights or powers unless
the Trustee shall have received indemnity satisfactory to it, in its sole
opinion, against potential costs and liabilities incurred by it relating
thereto.

 

(e)           Every provision of this Indenture that in any way relates
to the Trustee is subject to subsections (a), (b), (c) and (d) of this Section
9.1.

 

(f)            The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

 

SECTION
9.2         RIGHTS OF TRUSTEE.

 

Subject to Section 9.1:

 

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

 

(b)           Before the Trustee acts or refrains from acting, it may
require an Officers’ Certificate or an Opinion of Counsel, which shall conform
to Section 13.4(b). The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Certificate or Opinion.

 

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

 

(d)           The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.

 

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

 

(f)            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 pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.

 

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

 

(h)           The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice from the Company or the Holders of
at least 25% of the aggregate principal amount of the then outstanding

 

49

 

Securities of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office, and such
notice references the Securities and this Indenture.

 

(i)            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 to each agent, custodian and
other Person employed to act hereunder.

 

SECTION
9.3         INDIVIDUAL RIGHTS OF TRUSTEE.

 

The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 9.10 and 9.11.

 

SECTION
9.4         TRUSTEE’S DISCLAIMER.

 

The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds
from the Securities, and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.

 

SECTION
9.5         NOTICE OF DEFAULT OR EVENTS OF DEFAULT.

 

If a default or an Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Securityholder notice of the default or Event of Default
within 90 days after it occurs. However, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of Securityholders, except in the case
of a default or an Event of Default in payment of the principal of or interest
on any Security.

 

SECTION
9.6         REPORTS BY TRUSTEE TO HOLDERS.

 

If such report is required by
TIA Section 313, within 60 days after each May 15, beginning with the May 15
following the date of this Indenture, the Trustee shall mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2) and
(c).

 

A copy of each report at the
time of its mailing to Securityholders shall be mailed to the Company and filed
with the SEC and each stock exchange, if any, on which the Securities are
listed. The Company shall notify the Trustee whenever the Securities become
listed on any stock exchange or listed or admitted to trading on any quotation
system and any changes in the stock exchanges or quotation systems on which the
Securities are listed or admitted to trading and of any delisting thereof.

 

SECTION
9.7         COMPENSATION AND INDEMNITY.

 

The Company  shall pay to the Trustee from time to time
such compensation (as agreed to from time to time by the Company and the
Trustee in writing) for its services (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust). The Company shall reimburse the Trustee upon request for all
reasonable, actual disbursements, expenses and advances incurred or made by it.
Such expenses may include the reasonable, actual compensation, disbursements
and expenses of the Trustee’s agents and counsel.

 

50

 

The Company shall indemnify the
Trustee or any predecessor Trustee (which for purposes of this Section 9.7
shall include its officers, directors, employees and agents) for, and hold it
harmless against, any and all loss, liability or expense including taxes (other
than taxes based upon, measured by or determined by the income of the Trustee),
(including reasonable legal fees and expenses) incurred by it in connection
with the acceptance or administration of its duties under this Indenture or any
action or failure to act as authorized or within the discretion or rights or
powers conferred upon the Trustee hereunder including the reasonable costs and
expenses of the Trustee and its counsel in defending itself against any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity. The
Company need not pay for any settlement without its written consent, which
shall not be unreasonably withheld.

 

The Company need not reimburse
the Trustee for any expense or indemnify it against any loss or liability
incurred by it resulting from its gross negligence or bad faith.

 

To secure the Company’s payment
obligations in this Section 9.7, the Trustee shall have a senior claim to which
the Securities are hereby made subordinate on all money or property held or
collected by the Trustee, except money, securities or property held in the
Collateral Account and any other such money or property held in trust to pay
the principal of and interest on the Securities. The obligations of the Company
under this Section 9.7 shall survive the satisfaction and discharge of this
Indenture or the resignation or removal of the Trustee.

 

When the Trustee incurs expenses
or renders services after an Event of Default specified in clause (4) or (5) of
Section 8.1 occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law. The
provisions of this Section shall survive the termination of this Indenture.

 

SECTION
9.8         REPLACEMENT OF TRUSTEE.

 

The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities then outstanding may remove the Trustee by so notifying the Trustee
and may, with the Company’s written consent, appoint a successor Trustee. The
Company may remove the Trustee if:

 

(1)           the Trustee fails to comply with Section 9.10;

 

(2)           the Trustee is adjudged a bankrupt or an insolvent;

 

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

 

(4)           the Trustee becomes incapable of acting.

 

If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee. The resignation or removal
of a Trustee shall not be effective until a successor Trustee shall have
delivered the written acceptance of its appointment as described below.

 

If a successor Trustee does not
take office within 45 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of 10% in principal amount of
the Securities then outstanding may petition any court of competent jurisdiction
for the appointment of a successor Trustee at the expense of the Company.

 

51

 

If the Trustee fails to comply
with Section 9.10, any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall
deliver a written  acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as
Trustee) hereunder, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.

 

A retiring Trustee shall not be
liable for the acts or omissions of any successor Trustee after its succession.

 

Notwithstanding replacement of
the Trustee pursuant to this Section 9.8, the Company’s obligations under
Section 9.7 shall continue for the benefit of the retiring Trustee.

 

SECTION
9.9         SUCCESSOR TRUSTEE BY MERGER, ETC.

 

If the Trustee consolidates
with, merges or converts into, or transfers all or substantially  all of its corporate trust assets (including
the administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 9.10. Such successor Trustee shall promptly mail notice
of its succession to the Company and each Holder.

 

SECTION
9.10       ELIGIBILITY; DISQUALIFICATION.

 

The Trustee shall always satisfy
the requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000. If at any time the Trustee shall cease to
satisfy any such requirements, it shall resign immediately in the manner and
with the effect specified in this Article 9. The Trustee shall be subject to
the provisions of TIA Section 310(b). Nothing herein shall prevent the Trustee
from filing with the SEC the application referred to in the penultimate
paragraph of TIA Section 310(b).

 

SECTION
9.11       PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

 

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

 

ARTICLE 10

SATISFACTION AND DISCHARGE OF INDENTURE

 

SECTION
10.1       SATISFACTION AND DISCHARGE OF INDENTURE.

 

This Indenture shall cease to be
of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided
for and except as further provided below), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

 

(1)           either

 

52

 

 

(i)            all Securities theretofore authenticated
and delivered (other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.7 and (ii)
Securities for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or

 

(ii)           all such Securities
not theretofore delivered to the Trustee for cancellation

 

(i)            have become due and payable, or

 

(ii)           will become due and payable at the
Final Maturity Date within one year, or

 

(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 irrevocably
deposited or caused to be irrevocably deposited with the Trustee or a Paying
Agent (other than the Company or any of its Affiliates) as trust funds in trust
for the purpose cash in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Final Maturity
Date or Redemption Date, as the case may be;

 

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

 

(3)           the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each 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 9.7 shall survive and, if money shall have been deposited with
the Trustee pursuant to clause (1) of this Section, the provisions of Sections
2.3, 2.4, 2.5, 2.6, 2.7, 2.12, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 9.1, 9.2, 9.3,
9.4 and 13.5, Article 4, the last paragraph of Section 6.2 and this Article 10,
shall survive until the Securities have been paid in full.

 

SECTION
10.2       APPLICATION OF TRUST MONEY.

 

Subject to the provisions of
Section 10.3, the Trustee or a Paying Agent shall hold in trust, for the
benefit of the Holders, all money deposited with it pursuant to Section 10.1
and shall apply the deposited money in accordance with this Indenture and the
Securities to the payment of the principal of and interest on the Securities.
Money so held in trust shall not be subject to the subordination provisions of
Article 5.

 

SECTION
10.3       REPAYMENT TO COMPANY.

 

The Trustee and each Paying
Agent shall promptly pay to the Company upon request any excess money (i)
deposited with them pursuant to Section 10.1 and (ii) held by them at any time.

 

53

 

The Trustee and each Paying
Agent shall pay to the Company upon request any money held by them for the
payment of any amount with respect to the Securities that remains unclaimed for
two years after a right to such money has matured; provided, however, that the Trustee or such Paying Agent,
before being required to make any such payment, may at the expense of the
Company cause to be mailed to each Holder entitled to such money notice that
such money remains unclaimed and that after a date specified therein, which
shall be at least 30 days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to
the Company, Holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

 

SECTION
10.4       REINSTATEMENT.

 

If the Trustee or any Paying
Agent is unable to apply any money in accordance with Section 10.2 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 10.1 until such time as the Trustee or such Paying Agent is
permitted to apply all such money in accordance with Section 10.2; provided, however, that if the Company has
made any payment of the principal of or interest on any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the
money held by the Trustee or such Paying Agent.

 

ARTICLE 11

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION
11.1       WITHOUT CONSENT OF HOLDERS.

 

The Company and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:

 

(a)           to comply with Sections 4.11 and 7.1;

 

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

 

(c)           to make any other change that does not adversely effect
the rights of any Securityholder;

 

(d)           to comply with the provisions of the TIA; or

 

(e)           to appoint a successor Trustee.

 

SECTION
11.2       WITH CONSENT OF HOLDERS.

 

The Company and the Trustee may
amend or supplement this Indenture or the Securities with the written consent
of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding. The Holders of at least a majority in aggregate
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. However, notwithstanding the
foregoing but subject to Section 11.4, without the written consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.4, may not:

 

54

 

(a)           extend the stated maturity of the principal of, or
interest on, any Security;

 

(b)           reduce the principal amount of, or any premium or interest
on, any Security;

 

(c)           reduce the amount of principal payable upon acceleration
of the maturity of any Security;

 

(d)           change the place or currency of payment of principal of,
or any premium or interest on, any Security;

 

(e)           impair the right to institute suit for the enforcement of
any payment on, or with respect to, any Security;

 

(f)            adversely affect the right of Holders to convert
Securities other than as provided in or under Article 4 of this Indenture;

 

(g)           reduce the percentage of the aggregate principal amount of
the outstanding  Securities whose
Holders must consent to a modification or amendment of this Indenture;

 

(h)           reduce the percentage of the aggregate principal amount of
the outstanding Securities necessary for the waiver of compliance with certain
provisions of this Indenture or the waiver of certain defaults under this
Indenture; and

 

(i)            modify any of the provisions of this Section 11.2 or
Section 8.4, except to increase any such percentage or to provide that certain
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each outstanding Security affected thereby.

 

It shall not be necessary for
the consent of the Holders under this Section 11.2 to approve the particular
form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.

 

After an amendment, supplement
or waiver under this Section 11.2 becomes effective, the Company shall mail to
the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amendment, supplement or waiver. An amendment or supplement under this
Section 11.2 or under Section 11.1 may not make any change that adversely
affects the rights under Article 5 of any holder of an issue of Senior
Indebtedness unless the holders of that issue, pursuant to its terms, consent
to the change.

 

SECTION
11.3       COMPLIANCE WITH TRUST INDENTURE ACT.

 

Every amendment to or supplement
of this Indenture or the Securities shall comply with the TIA as in effect at
the date of such amendment or supplement.

 

SECTION
11.4       REVOCATION AND EFFECT OF CONSENTS.

 

Until an amendment, supplement
or waiver becomes effective, a consent to it by a Holder is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to its

 

55

 

Security or portion of a Security if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective.

 

After an amendment, supplement
or waiver becomes effective, it shall bind every Securityholder, unless it
makes a change described in any of clauses (a) through (i) of Section 11.2. In
that case the amendment, supplement or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security.

 

SECTION
11.5       NOTATION ON OR EXCHANGE OF SECURITIES.

 

If an amendment, supplement or
waiver changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.

 

SECTION
11.6       TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The Trustee shall sign any
amendment or supplemental indenture authorized pursuant to this Article 11 if
the amendment or supplemental indenture does not adversely affect the rights,
duties,  liabilities or immunities of the
Trustee. If it does, the Trustee may, in its sole discretion, but need not sign
it. In signing or refusing to sign such amendment or supplemental indenture,
the Trustee shall be entitled to receive and, subject to Section 9.1, shall be
fully protected in relying upon, an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture. The Company may not sign an amendment or supplemental indenture
until the Board of Directors approves it.

 

ARTICLE 12

SECURITY

 

SECTION 12.1       SECURITY.

 

(a)           On or prior to the First Closing Date, the Company shall
(i) enter into the Collateral Pledge and Security Agreement and comply with the
terms and provisions thereof and (ii) purchase the Initial Pledged Securities
to be pledged to the Collateral Agent for the benefit of the Trustee and the
ratable benefit of the Holders in such amount as will be sufficient upon
receipt of scheduled interest and principal payments of such Initial Pledged
Securities, as computed by the Company, to provide for payment in full of the
first six scheduled interest payments (but not additional interest) due on the
Securities.  PricewaterhouseCoopers LLP,
independent public accountants (“PwC”), or another nationally recognized firm
of independent public accountants selected by the Company, will, using agreed
upon procedures, assist the Company in evaluating its compliance with such
computation on or before the First Closing Date.  The Initial Pledged Securities shall be pledged by the Company to
the Collateral Agent for the benefit of the Trustee and the ratable benefit of
the Holders and shall be held by the Collateral Agent in the Collateral Account
pending disposition pursuant to the Collateral Pledge and Security Agreement.

 

(b)           On
each relevant Closing Date (if such Closing Date is different from the First
Closing Date), the Company shall (i) enter into a supplement to the Collateral
Pledge and Security Agreement and comply with the terms and provisions thereof
and (ii) purchase the Additional Pledged Securities to be pledged to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders in such amount as will be sufficient upon receipt of scheduled interest
and principal payments of

 

56

 

such Additional Pledged Securities, as computed by the Company, to
provide for payment in full of the first six scheduled interest payments (but
not additional interest) due on the Additional Pledged Securities issued in
connection therewith.  PwC, or another
nationally recognized firm of independent public accountants selected by the
Company, will, using agreed upon procedures, assist the Company in evaluating
its compliance with such computation.  The
Additional Pledged Securities shall be pledged by the Company to the Collateral
Agent for the benefit of the Trustee and the ratable benefit of the Holders and
shall be held by the Collateral Agent in the Collateral Account pending
disposition pursuant to the Collateral Pledge and Security Agreement.

 

(c)           Each
Holder, by its acceptance of a Security, consents and agrees to the terms of
the Collateral Pledge and Security Agreement (including, without limitation,
the provisions providing for foreclosure and release of the Pledged Securities)
as the same may be in effect or may be amended from time to time in writing by
the parties thereto (provided that no amendment may be effected to the
Collateral Pledge and Security Agreement without the consent of the Holders of
a majority of the aggregate principal amount of Securities affected thereby if
the amendment (i) would amend, in any manner that would adversely affect the
rights of any Holder, any provision of the Collateral Pledge and Security
Agreement providing for (A) the rights and remedies of the Holders thereunder;
(B) the perfection or priority of the security interest in the Collateral; or
(C) the termination of the security interest in the Collateral or termination
of the Collateral Pledge and Security Agreement; (ii) would release Collateral
from the Liens established in the Collateral Pledge and Security Agreement,
other than as set forth in the Collateral Pledge and Security Agreement prior
to such amendment or (iii) would allow the Pledged Securities to consist of any
obligation other than U.S. Government Obligations or the reinvestment or
application of the proceeds of the Collateral, other than as set forth in the
Collateral Pledge and Security Agreement prior to such amendment), and
authorizes and directs the Trustee and the Collateral Agent to enter into the
Collateral Pledge and Security Agreement and to perform its respective
obligations and exercise its respective rights thereunder in accordance
therewith.  Except as set forth in the preceding
sentence, the Company, the Collateral Agent and the Trustee may amend the
Collateral Pledge and Security Agreement without notice to or the consent of
any Holder.  The Company will do or
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Collateral Pledge and Security
Agreement, to assure and confirm to the Trustee and the Collateral Agent the
security interest in the Pledged Securities contemplated hereby, by the
Collateral Pledge and Security Agreement or any part thereof, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Securities secured hereby, according to
the intent and purpose herein expressed. 
The Company shall take, or shall cause to be taken, upon request of  the Trustee or the Collateral Agent, any and
all actions reasonably required to cause the Collateral Pledge and Security
Agreement to create and maintain, as security for the obligations of the
Company under this Indenture and the Securities as provided in the Collateral
Pledge and Security Agreement, valid and enforceable first priority perfected
Liens in and on all the Pledged Securities, in favor of the Collateral Agent
for the benefit of the Trustee and the ratable benefit of the Holders, superior
to and prior to the rights of third Persons and subject to no other Liens.

 

(d)           The
release of any Pledged Securities pursuant to the Collateral Pledge and
Security Agreement will not be deemed to impair the security under this Indenture
in contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to this Indenture and the Collateral Pledge
and Security Agreement.  To the extent
applicable, the Company shall cause Section 314(d) of the TIA relating to the
release of property or securities from the Lien and security interest of the
Collateral Pledge and Security Agreement and relating to the substitution
therefor of any property or securities to be subjected to the Lien and security
interest of the Collateral Pledge and Security Agreement to be complied
with.  Any certificate or opinion
required by Section 314(d) of the TIA may be made by an Officer of the Company,
except in cases where Section 314(d) of the TIA requires that such 

 

57

 

certificate or opinion be made by an independent Person, which Person
shall be an independent engineer, appraiser or other expert selected by the
Company.

 

(e)           The
Company shall cause Section 314(b) of the TIA, relating to Opinions of Counsel
regarding the Lien under the Collateral Pledge and Security Agreement, to be
complied with.  The Trustee may, to the
extent permitted by Sections 9.1 and 9.2 hereof, accept as conclusive evidence
of compliance of the foregoing provisions the appropriate statements contained
in such Opinions of Counsel.

 

(f)            The
Trustee and the Collateral Agent may, in their sole discretion and without the
consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (i) enforce any of the terms of the
Collateral Pledge and Security Agreement and (ii) collect and receive any and
all amounts payable in respect of the obligations of the Company
thereunder.  The Trustee and the
Collateral Agent shall have the authority necessary in order to institute and
maintain such suits and proceedings as the Trustee and the Collateral Agent may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Pledged Securities (including the authority to institute and
maintain suits or proceedings to restrain the enforcement of, or compliance
with, any legislative or other governmental enactment, rule or order that may
be unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the Holders, the Collateral
Agent or the Trustee).

 

(g)           Beyond
the exercise of reasonable care in the custody and preservation thereof, the
Trustee and the Collateral Agent shall have no duty as to any Pledged
Securities in their possession or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto, and the
Trustee and the Collateral Agent shall not be responsible for filing any
financing or continuation statements or recording any documents or instruments
in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Pledged
Securities.  The Trustee and the
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Securities in its possession if the
Pledged Securities are accorded treatment substantially equal to that which it
accords its own property or property held in similar accounts and shall not be
liable or responsible for any loss or diminution in the value of any of the
Pledged Securities, by reason of the act or omission of the Collateral Agent, any
carrier, forwarding agency or other agent or bailee selected by the Trustee in
good faith.

 

(h)           The
Trustee shall not be responsible for the existence, genuineness or value of any
of the Pledged Securities or for the validity, perfection, priority or enforceability
of the Liens in any of the Pledged Securities, whether impaired by operation of
law or otherwise, for the validity or sufficiency of the Pledged Securities or
any agreement or assignment contained therein, for the validity of the title of
the Company to the Pledged Securities, for insuring the Pledged Securities or
for the payment of taxes, charges, assessments or Liens upon the Pledged
Securities or otherwise as to the maintenance of the Pledged Securities.  The Trustee shall have no duty to ascertain
or inquire as to the performance or observance of any of the terms of this
Indenture or the Collateral Pledge and Security Agreement by the Company or the
Collateral Agent.

 

ARTICLE 13

MISCELLANEOUS

 

SECTION
13.1       TRUST INDENTURE ACT CONTROLS.

 

If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the TIA through operation of Section 318(c)
thereof, such imposed duties shall control.

 

58

 

SECTION 13.2       NOTICES.

 

Any notice, request or
communication shall be given in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows, or transmitted by
confirmed facsimile transmission to the following facsimile numbers:

 

If to the Company:

 

Adaptec, Inc.

691 South Milpitas Boulevard

Milpitas, California 95035

Attention:  Chief Financial Officer

Facsimile No.:  (408) 957-7989

 

with a copy to:

 

Fenwick & West LLP

275 Battery Street

San Francisco, California 94111

Attention:  David K. Michaels, Esq.

Facsimile No.:  (415) 281-1350

 

If to the Trustee:

 

Wells Fargo Bank, National
Association

707 Wilshire Boulevard, 17th
Floor

Los Angeles, California 90017

Attention:  Corporate Trust Department

Facsimile No.:  (213) 614-3355

 

Such notices or communications
shall be effective when received.

 

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

 

Any notice or communication
mailed to a Securityholder shall be mailed by first-class mail or delivered by
an overnight courier service to it at its address shown on the register kept by
the Primary Registrar.

 

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

 

SECTION
13.3       COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.

 

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

 

59

 

SECTION
13.4       CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

 

(a)           Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee at the request of the Trustee:

 

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

 

(2)           an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent (including any
covenants, compliance with which constitutes a condition precedent) have been
complied with.

 

(b)           Each Officers’ Certificate and Opinion of Counsel with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:

 

(1)           a statement that the person making
such certificate or opinion has read such covenant or condition;

 

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

 

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

 

(4)           a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers’ Certificate or certificates of public officials.

 

SECTION
13.5       RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS.

 

The Company (or, in the event
deposits have been made pursuant to Section 10.1, the Trustee) may set a record
date for purposes of determining the identity of Holders entitled to vote or
consent to any action by vote or consent authorized or permitted under this
Indenture, which record date shall not be more than thirty (30) days prior to
the date of the commencement of solicitation of such action. Notwithstanding
the provisions of Section 11.4, if a record date is fixed, those persons who
were Holders of Securities at the close of business on such record date (or
their duly designated proxies), and only those persons, shall be entitled to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date.

 

SECTION
13.6       RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT.

 

The Trustee may make reasonable
rules (not inconsistent with the terms of this Indenture) for action by or at a
meeting of Holders. Any Registrar, Paying Agent or Conversion Agent may make
reasonable rules for its functions.

 

60

 

SECTION
13.7       LEGAL HOLIDAYS.

 

A “Legal Holiday” is a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York, New York and the state in which the Corporate Trust Office is located
are not required to be open. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.

 

SECTION
13.8       GOVERNING LAW.

 

This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to principles of conflicts of laws.

 

SECTION
13.9       NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

 

This Indenture may not be used
to interpret another indenture, loan or debt agreement of the Company or a
Subsidiary of the Company. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.

 

SECTION
13.10     NO
RECOURSE AGAINST OTHERS.

 

All liability described in
paragraph 19 of the Securities of any director, officer, employee or
stockholder, as such, of the Company is waived and released.

 

SECTION 13.11     SUCCESSORS.

 

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

 

SECTION
13.12     MULTIPLE
COUNTERPARTS.

 

The parties may sign multiple
counterparts of this Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent the same agreement.

 

SECTION
13.13     SEPARABILITY.

 

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

 

SECTION
13.14     TABLE
OF CONTENTS, HEADINGS, ETC.

 

The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.

 

61

 

IN WITNESS WHEREOF, the parties
hereto have hereunto set their hands as of the date and year first above
written.

 

	
   

  	
  ADAPTEC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  

  	
  David A. Young

  
	
   

  	
  Name:

  	
  David A. Young

  
	
   

  	
  Title:

  	
  Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  

  	
  Jeanie Mar

  
	
   

  	
  Name:

  	
  Jeanie Mar

  
	
   

  	
  Title:

  	
  Vice PresidentExhibit 4.05

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

THIS NOTE (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS
NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT BE OFFERED,
SOLD OR 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.

 

THE HOLDER OF THIS NOTE
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (iii) PURSUANT TO THE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (ii) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE OR COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE
HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH
THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

 

 

ADAPTEC, INC.

 

	
  CUSIP:  006-51F-AD0

  	
   

  	
  No.1

  

 

3% CONVERTIBLE SUBORDINATED NOTES DUE 2007

 

Adaptec,
Inc., a Delaware corporation (the “Company”, which term shall include any
successor corporation under the Indenture referred to on the reverse hereof),
promises to pay to Cede & Co., or registered assigns, the principal sum of
Two Hundred Fifty Million Dollars ($250,000,000) on March 5, 2007 or such
greater or lesser amount as is indicated on the Schedule of Exchanges of Notes
on the other side of this Note.

 

Interest
Payment Dates:  March 5 and September 5

 

Record
Dates:  February 20 and August 20

 

This
Note is convertible as specified on the other side of this Note. Additional
provisions of this Note are set forth on the other side of this Note.

 

2

 

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

 

	
   

  	
  ADAPTEC,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert L. Schultz Jr.

  	
   

  
	
   

  	
  Name:

  	
  ROBERT L. SCHULTZ, JR.

  
	
   

  	
  Title:

  	
  CHIEF OPERATING OFFICER

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Dana E. Miles

  	
   

  	
   

  
	
  Name:

  	
  DANA E. MILES 

  	
   

  
	
  Title:

  	
  VICE PRESIDENT &
  GENERAL COUNSEL

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
								

 

Trustee’s Certificate
of Authentication: This is one of the Securities referred to in the
within-mentioned Indenture.

 

	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
  as
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeanie Mar

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  By:

  	
  JEANIE MAR

  	
   

  	
   

  
					

 

3

 

ADAPTEC, INC.

3%
CONVERTIBLE SUBORDINATED NOTES DUE 2007

 

1.             INTEREST

 

Adaptec,
Inc. a Delaware corporation (the “Company”, which term shall include any
successor corporation under the Indenture hereinafter referred to), promises to
pay interest on the principal amount of this Note at the rate of 3% per
annum.  The Company shall pay interest
semiannually on March 5 and September 5 of each year, commencing September 5,
2002.  Interest on the Notes shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from March 5, 2002; provided,
however, that if there is not an existing default in the payment of
interest and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding interest payment date, interest shall
accrue from such interest payment date. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.  Any reference herein to
interest accrued or payable as of any date shall include any Liquidated Damages
accrued or payable on such date as provided in the Registration Rights
Agreement.

 

2.             METHOD OF PAYMENT

 

The
Company shall pay interest on this Note (except defaulted interest) to the
person who is the Holder of this Note at the close of business on February 20
or August 20, as the case may be, next preceding the related interest payment
date. The Holder must surrender this Note to a Paying Agent to collect payment
of principal.  The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  The Company may, however, pay principal and
interest in respect of any Certificated Security by check or wire payable in
such money; provided, however,
that a Holder with an aggregate principal amount in excess of $2,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company at
least 10 Business Days prior to the payment date. The Company may mail an
interest check to the Holder’s registered address. Notwithstanding the
foregoing, so long as this Note is registered in the name of a Depositary or
its nominee, all payments hereon shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

 

3.             PAYING AGENT, REGISTRAR AND
CONVERSION AGENT

 

Initially,
Wells Fargo Bank, National Association, (the “Trustee,” which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its Subsidiaries may, subject to certain limitations set
forth in the Indenture, act as Paying Agent or Registrar.

 

4.             INDENTURE, LIMITATIONS

 

This
Note is one of a duly authorized issue of Securities of the Company designated
as its 3% Convertible Subordinated Notes due March 5, 2007 (the “Notes”),
issued under an Indenture dated as of March 5, 2002 (together with any
supplemental indentures thereto, the “Indenture”), between the Company and the
Trustee. The terms of this Note include those stated in the Indenture and those
required by or made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended, as in effect on the date of the Indenture. This Note
is subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Act for a statement of them.

 

4

 

The
Notes are subordinated unsecured obligations of the Company limited to
$250,000,000 aggregate principal amount, subject to Section 2.7 of the
Indenture. The Indenture does not limit other debt of the Company, secured or
unsecured, including Senior Indebtedness.

 

5.             OPTIONAL REDEMPTION

 

The
Notes are subject to redemption, at any time on or after March 20, 2004, on at
least 30 days’ and no more than 60 days’ notice, in whole or in part, at the
election of the Company. The Redemption Prices (expressed as percentages of the
principal amount) are as follows for Notes redeemed during the periods set
forth below:

 

	
  Period

  	
   

  	
  Redemption Price

  
	
  March
  9, 2005 through March 4, 2006

  	
   

  	
  101.200%

  
	
  March
  5, 2006 and thereafter

  	
   

  	
  100.600%

  

 

in each case together
with accrued and unpaid interest up to but not including the Redemption Date; provided that if the redemption date is an
interest payment date, interest will be payable to the Holders in whose names
the Notes are registered at the close of business on the relevant record dates.

 

6.             NOTICE OF REDEMPTION

 

Notice
of redemption will be mailed by first-class mail at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part, but only in whole multiples of $1,000. On and after the
Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price plus accrued and unpaid interest, if
any, accrued to, but excluding, the Redemption Date, interest shall cease to
accrue on Notes or portions of them called for redemption.

 

7.             PURCHASE OF NOTES AT OPTION OF
HOLDER UPON A CHANGE IN CONTROL

 

At the
option of the Holder and subject to the terms and conditions of the Indenture,
the Company shall become obligated to purchase all or any part specified by the
Holder (so long as the principal amount of such part is $1,000 or an integral
multiple of $1,000 in excess thereof) of the Notes held by such Holder on the
date that is a Business Day designated by the Company no earlier than 30 days
nor more than 60 days from the date that the Change in Control notice referred
to in Section 3.8(b) of the Indenture is mailed, at a purchase price equal to
100% of the principal amount thereof together with accrued and unpaid interest
up to, but excluding, the Change in Control Purchase Date. The Holder shall
have the right to withdraw any Change in Control Purchase Notice (in whole or
in a portion thereof that is $1,000 or an integral multiple of $1,000 in excess
thereof) at any time prior to the close of business on the Business Day next
preceding the Change in Control Purchase Date by delivering a written notice of
withdrawal to the Paying Agent in accordance with the terms of the Indenture.

 

8.             CONVERSION

 

A
Holder of a Note may convert the principal amount of such Note (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into shares of Common Stock at any time prior to the close of business on March
5, 2007; provided, however, that
if the Note is called for redemption or subject to purchase upon a Change in
Control, the conversion right will terminate at the close of business on the
Business Day immediately preceding the redemption date or the Change in Control
Purchase Date, as the case may be, for such Note or such earlier date as the
Holder presents such Note for redemption or purchase (unless the Company shall
default in making the redemption payment or Change in Control Purchase Price,
as the case may be, when due, in which case the conversion right shall

 

5

 

terminate at the close
of business on the date such default is cured and such Note is redeemed or
purchased).

 

The
initial Conversion Price is approximately $15.31 per share, subject to
adjustment under certain circumstances. The number of shares of Common Stock
issuable upon conversion of a Note is determined by dividing the principal
amount of the Note or portion thereof converted by the Conversion Price in
effect on the Conversion Date. No fractional shares will be issued upon conversion;
in lieu thereof, an amount will be paid in cash based upon the closing price
(as defined in the Indenture) of the Common Stock on the Trading Day
immediately prior to the Conversion Date.

 

To
convert a Note, a Holder must (a) complete and manually sign the conversion
notice set forth below and deliver such notice to a Conversion Agent, (b)
surrender the Note to a Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by a Registrar or a Conversion Agent, and
(d) pay any transfer or similar tax, if required. Notes so surrendered for
conversion (in whole or in part) during the period from the close of business
on any regular record date to the opening of business on the next succeeding
interest payment date (excluding Notes or portions thereof called for
redemption or subject to purchase upon a Change in Control on a Redemption Date
or Change in Control Purchase Date, as the case may be, during the period
beginning at the close of business on a regular record date and ending at the
opening of business on the first Business Day after the next succeeding
interest payment date, or if such interest payment date is not a Business Day,
the second such Business Day) shall also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
interest payment date on the principal amount of such Note then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Note, subject to the provisions of this
Indenture relating to the payment of defaulted interest by the Company. If the
Company defaults in the payment of interest payable on such interest payment
date, the Company shall promptly repay such funds to such Holder. A Holder may
convert a portion of a Note equal to $1,000 or any integral multiple thereof.

 

A Note
in respect of which a Holder had delivered a Change in Control Purchase Notice
exercising the option of such Holder to require the Company to purchase such
Note may be converted only if the Change in Control Purchase Notice is
withdrawn in accordance with the terms of the Indenture.

 

9.             CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION

 

Any
Notes called for redemption, unless surrendered for conversion before the close
of business on the Business Day immediately preceding the Redemption Date, may
be deemed to be purchased from the Holders of such Notes at an amount not less
than the Redemption Price, together with accrued and unpaid interest, if any,
to, but not including, the Redemption Date, by one or more investment bankers
or other purchasers who may agree with the Company to purchase such Notes from
the Holders, to convert them into Common Stock of the Company and to make
payment for such Notes to the Paying Agent in trust for such Holders.

 

10.           SUBORDINATION

 

The
indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full in cash of all Senior Indebtedness. Any Holder by
accepting this Note agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect. In addition to all
other rights of Senior Indebtedness described in the Indenture, the Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination 
provisions irrespective of any amendment, modification

 

6

 

or waiver of any terms
of any instrument relating to the Senior Indebtedness or any extension or
renewal of the Senior Indebtedness.

 

11.           DENOMINATIONS, TRANSFER, EXCHANGE

 

The
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. A Holder may register the transfer of or exchange
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes or other governmental charges that may be imposed in
relation thereto by law or permitted by the Indenture.

 

12.           PERSONS DEEMED OWNERS

 

The
Holder of a Note may be treated as the owner of it for all purposes.

 

13.           UNCLAIMED MONEY

 

If
money for the payment of principal or interest remains unclaimed for two years,
the Trustee or Paying Agent will pay the money back to the Company at its
written request. After that, Holders entitled to money must look to the Company
for payment unless an applicable abandoned property law designates another
person.

 

14.           AMENDMENT, SUPPLEMENT AND WAIVER

 

Subject
to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and an existing
default or Event of Default and its consequence or compliance with any
provision of the Indenture or the Notes may be waived in a particular instance
with the consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding. Without the consent of or notice to any Holder, the
Company and the Trustee may amend or supplement the Indenture or the Notes to,
among other things, cure any ambiguity, defect or inconsistency or make any
other change that does not adversely affect the rights of any Holder.

 

15.           SUCCESSOR CORPORATION

 

When a
successor corporation assumes all the obligations of its predecessor under the
Notes and the Indenture in accordance with the terms and conditions of the
Indenture, the predecessor corporation will (except in certain circumstances
specified in the Indenture) be released from those obligations.

 

16.           DEFAULTS AND REMEDIES

 

Under
the Indenture, an Event of Default includes: (i) default for 30 days in payment
of any interest on any Notes, except for a failure to make any of the first six
scheduled interest payments on any Notes on the applicable interest payment
date, which will constitute an event of default with no grace or cure period;
(ii) default in payment of any principal (including, without limitation, any
premium, if any) on the Notes when due; (iii) failure by the Company for 60
days after notice to it to comply with any of its other agreements contained in
the Indenture or the Notes; (iv) certain events of bankruptcy, insolvency or
reorganization of the Company and (v) the Collateral Pledge and Security
Agreement ceasing to be in full force and effect or enforceable prior to the
expiration in accordance with its terms. If an Event of Default (other than as
a result of certain events of bankruptcy, insolvency or reorganization of the
Company) occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal

 

7

 

amount of the Notes
then outstanding may declare all unpaid principal to the date of acceleration
on the Notes then outstanding to be due and payable immediately, all as and to
the extent provided in the Indenture. If an Event of Default occurs as a result
of certain events of bankruptcy, insolvency or reorganization of the Company,
unpaid principal of the Notes then outstanding shall become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder, all as and to the extent provided in the Indenture. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority
in aggregate principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee as
to the absence of default.

 

17.           SECURITY

 

The Company has entered into
the Collateral Pledge and Security Agreement and purchased and pledged to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders Pledged Securities in an amount sufficient upon receipt of scheduled
interest and principal payments on such securities to provide for the payment
in full of the first six scheduled interest payments due on the Securities.  The Pledged Securities will be pledged by
the Company to the Collateral Agent for the benefit of the Trustee and the
ratable benefit of the Holders and will be held by the Collateral Agent in the
Collateral Account pending disbursement pursuant to the Collateral Pledge and
Security Agreement.

 

18.           TRUSTEE DEALINGS WITH THE COMPANY

 

Wells
Fargo Bank, National Association, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.

 

19.           NO RECOURSE AGAINST OTHERS

 

A
director, officer, employee, agent or stockholder, as such, past, present or
future, of the Company shall not have any liability whatsoever for any
obligations of the Company under the Notes or the Indenture or any supplemental
indenture nor for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Note.

 

20.           AUTHENTICATION

 

This
Note shall not be valid until the Trustee or an authenticating agent manually
signs the certificate of authentication on the other side of this Note.

 

21.           ABBREVIATIONS AND DEFINITIONS

 

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

 

All
terms defined in the Indenture and used in this Note but not specifically
defined herein are defined in the Indenture and are used herein as so defined.

 

8

 

22.           INDENTURE TO CONTROL; GOVERNING LAW

 

In the
case of any conflict between the provisions of this Note and the Indenture, the
provisions of the Indenture shall control. This Note shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of law.

 

The
Company will furnish to any Holder, upon written request and without charge, a
copy of the Indenture. Requests may be made to: Adaptec, Inc., 691 South
Milpitas Boulevard, Milpitas, California 95035, Attention:  General Counsel.

 

9

 

ASSIGNMENT FORM

 

To assign this Note,
fill in the form below:

 

I or we assign and
transfer this Note to

 

	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  

 

	
  

  
	
  

  
	
  

  
	
  

  
	
  (Print or type assignee’s name, address and zip code)

  

 

and irrevocably appoint

	
  

  

 

agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him or her.

 

	
   

  	
  Your
  Signature:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name
  appears on the other side of this Note)

  
	
   

  	
   

  
	
  *Signature
  guaranteed by:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
							

 

*              The signature must be guaranteed
by an institution which is a  member of
one of the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.

 

10

 

CONVERSION NOTICE

 

To convert this Note
into Common Stock of the Company, check the box: ^

 

To convert only part of
this Note, state the principal amount to be converted (must be $1,000 or an
integral multiple of $1,000): $                   .

 

If you want the stock
certificate made out in another person’s name, fill in the form below:

 

	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  

 

	
   

  
	
  

  
	
  

  
	
  

  
	
  (Print or type assignee’s name, address and zip code)

  

 

	
   

  	
  Your
  Signature:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name
  appears on the other side of this Note)

  
	
   

  	
   

  
	
  *Signature
  guaranteed by:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
						

 

*              The signature must be guaranteed
by an institution which is a  member of
one of the following recognized signature guaranty  programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the
Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.

 

11

 

OPTION TO ELECT REPURCHASE UPON A CHANGE OF CONTROL

 

To:          Adaptec, Inc.

 

The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from Adaptec, Inc. (the “Company”) as to the occurrence of
a Change in Control with respect to the Company and requests and instructs the
Company to redeem the entire principal amount of this Security, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Security at the
Change in Control Purchase Price, together with accrued and unpaid interest to,
but excluding, such date, to the registered Holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  Signature(s)
  must be guaranteed by a qualified guarantor institution with membership in an
  approved signature guarantee program pursuant to Rule 17Ad-15 under the
  Securities Exchange Act of 1934.

  
	
   

  	
  

  
	
   

  	
  Signature
  Guaranty

  
	
   

  	
   

  
	
  Principal
  amount to be redeemed

  	
   

  
	
  (in
  an integral multiple of $1,000, if less than all):

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

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.

 

12

 

SCHEDULE OF EXCHANGES OF NOTES

 

The
following exchanges, redemptions, repurchases or conversions of a part of this
global Note have been made:

 

	
  Principal Amount of

  this Global Note

  Following Such

  Decrease Date of

  Exchange (or Increase)

  	
   

  	
  Authorized Signatory

  of Securities Custodian

  	
   

  	
  Amount of Decrease in

  Principal Amount of

  this Global Note

  	
   

  	
  Amount of Increase in

  Principal Amount of

  this Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

13

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION

OF TRANSFER OF TRANSFER RESTRICTED
SECURITIES

 

Re:          3% Convertible Subordinated Notes due
2007 (the “Notes”) of Adaptec, Inc.

 

This
certificate relates to $              
principal amount of Notes owned in (check applicable box)

 

^
book-entry or ^ definitive form by                                      (the “Transferor”).

 

The
Transferor has requested a Registrar or the Trustee to exchange or register the
transfer of such Notes.

 

In
connection with such request and in respect of each such Note, the Transferor
does hereby certify that the Transferor is familiar with transfer restrictions
relating to the Notes as provided in Section 2.12 of the Indenture dated as of
March 5, 2002 between Adaptec, Inc. and Wells Fargo Bank, National Association
(the “Indenture”), and the transfer of such Note is being made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) (check applicable box) or the transfer or exchange, as
the case may be, of such Note does not require registration under the
Securities Act because (check applicable box):

 

^              Such Note is being transferred
pursuant to an effective registration statement under the Securities Act.

 

^              Such Note is being acquired for
the Transferor’s own account, without transfer.

 

^              Such Note is being transferred to
the Company or a Subsidiary (as defined in the Indenture) of the Company.

 

^              Such
Note is being transferred to a person the Transferor reasonably believes is a
“qualified institutional buyer” (as defined in Rule 144A or any successor
provision thereto (“Rule 144A”) under the Securities Act) that is purchasing
for its own account or for the account of a “qualified institutional buyer”, in
each case to whom notice has been given that the transfer is being made in
reliance on such Rule 144A, and in each case in reliance on Rule 144A.

 

^              Such
Note is being transferred pursuant to and in compliance with an exemption from
the registration requirements under the Securities Act in accordance with Rule
144 (or any successor thereto) (“Rule 144”) under the Securities Act.

 

^              Such
Note is being transferred pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act (other than an exemption
referred to above) and as a result of which such Note will, upon such transfer,
cease to be a “restricted security” within the meaning of Rule 144 under the
Securities Act.

 

The
Transferor acknowledges and agrees that, if the transferee will hold any such
Notes in the form of beneficial interests in a global Note which is a
“restricted security” within the meaning of Rule 144 under the Securities Act,
then such transfer can only be made pursuant to Rule 144A under the Securities
Act and such transferee must be a “qualified institutional buyer” (as defined
in Rule 144A).

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of Transferor)

  

 

14

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