Document:

Exhibit 10.1

 

	
  ANDREWS
  KURTH LLP

  	
   

  	
  STINSON
  MORRISON HECKER LLP

  
	
  600
  Travis, Suite 4200

  	
   

  	
  1850 North
  Central Avenue, Suite 2100

  
	
  Houston,
  Texas 77002

  	
   

  	
  Phoenix,
  Arizona 85004

  
	
  Telephone:
  713-220-4175

  	
   

  	
  Telephone:
  602-212-8628

  
	
  John
  Sparacino (TX 18873700)

  	
   

  	
  Alisa C.
  Lacey (010571)

  
	
  jsparacino@andrewskurth.com

  	
   

  	
  alacey@stinsonmoheck.com

  
	
  John
  Melissinos (CA 149224)

  	
   

  	
   

  
	
  jmelissinos@andrewskurth.com

  	
   

  	
   

  
	
  Attorneys
  for Debtors

  	
   

  	
  Attorneys
  for Debtors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LEWIS AND
  ROCA LLP

  	
   

  	
  MESCH
  CLARK & ROTHSCHILD PC

  
	
  40 North
  Central Avenue

  	
   

  	
  259 North
  Meyer

  
	
  Phoenix,
  Arizona 85004-4429

  	
   

  	
  Tucson,
  Arizona 85701-1000

  
	
  Telephone:
  602-262-5756

  	
   

  	
  Telephone:
  520-624-8886

  
	
  Facsimile:
  602-734-3824

  	
   

  	
  Facsimile:
  520-798-1037

  
	
  Susan M.
  Freeman (004199)

  	
   

  	
  Brenda
  Moody Whinery (10677)

  
	
  sfreeman@lrlaw.com

  	
   

  	
  bwhinery@mcrazlaw.com

  
	
  Henk
  Taylor (016321)

  	
   

  	
  Frederick
  J. Petersen (19944)

  
	
  htaylor@lrlaw.com

  	
   

  	
  fpetersen@mcrazlaw.com

  
	
  Attorneys
  for Noteholder Proponents

  	
   

  	
  Attorneys
  for Creditors’ Committee

  

 

 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF ARIZONA

 

	
  In re:

  	
   

  	
  Chapter 11

  
	
   

  	
   

  	
   

  
	
  CP
  ACQUISITION CO., et. al.

  	
   

  	
  Case No.
  2-03-11258-PHX-RJH

  
	
   

  	
   

  	
   

  
	
  Debtors.        

  	
   

  	
  (Jointly
  Administered with Cases

  
	
   

  	
   

  	
  No.
  03-11259-PHX-RJH through

  
	
   

  	
   

  	
  03-11263-PHX-RJH)

  
	
  EID No.
  93-1231906

  	
   

  	
   

  
	
   

  	
   

  	
  SECOND AMENDED JOINT

  CONSOLIDATING CHAPTER 11 PLAN

  PROPOSED BY THE DEBTORS,

  CREDITORS’ COMMITTEE,

  NOTEHOLDER PROPONENTS AND

  BANK TERM LENDER PROPONENTS,

  AS MODIFIED

  
	
   

  	
   

  	
   

  
	
  THIS FILING
  APPLIES TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ý      ALL
  DEBTORS

  	
   

  	
   

  
	
  o      SPECIFIED
  DEBTORS

  	
   

  	
   

  

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  	
  DEFINITIONS
  AND RULES OF INTERPRETATION

  
	
   

  	
   

  
	
  ARTICLE
  II SUBSTANTIVE CONSOLIDATION OF DEBTORS’ ESTATES

  
	
   

  
	
  2.1

  	
  Substantive Consolidation

  
	
  2.2

  	
  Effect of Substantive Consolidation

  
	
  2.3

  	
  No Impact on Secured
  Claims

  
	
   

  	
   

  
	
  ARTICLE
  III

  	
  CLASSIFICATION
  OF CLAIMS AND INTERESTS

  
	
   

  	
   

  
	
  3.1

  	
  Classification.

  
	
  3.2

  	
  Unclassified Claims (not entitled
  to vote on this Plan)

  
	
  3.3

  	
  Classes of Claims

  
	
   

  	
   

  
	
  ARTICLE IV TREATMENT OF CLAIMS AND
  INTERESTS RIGHT TO VOTE

  
	
   

  	
   

  
	
  4.1

  	
  Unclassified Claims

  
	
  4.1.1

  	
  Administrative Expense
  Claims

  
	
  4.1.1.1

  	
  General Provisions

  
	
  4.1.1.2

  	
  Requests for Payment

  
	
  4.1.1.3

  	
  Fee Claims

  
	
  4.1.1.4

  	
  Postpetition Tax Claims

  
	
  4.1.2

  	
  Priority Tax Claims

  
	
  4.2

  	
  Classified Claims and Interests

  
	
  4.2.1

  	
  Class 1. Other
  Priority Claims

  
	
  4.2.2

  	
  Class 2. Secured Term Lender
  Claims

  
	
  4.2.2.1

  	
  Claim Allowance

  
	
  4.2.2.2

  	
  Claim Treatment

  
	
  4.2.2.3

  	
  Impairment; Voting

  
	
  4.2.3

  	
  Class 3. Other Secured
  Claims

  
	
  4.2.3.1

  	
  General Treatment

  
	
  4.2.3.2

  	
  Impairment; Voting

  
	
  4.2.4

  	
  Class 4. General Unsecured
  Claims

  
	
  4.2.4.1

  	
  General Treatment

  
	
  4.2.4.2

  	
  Impairment; Voting

  
	
  4.2.5

  	
  Class 5. Term Lender Deficiency Claims

  
	
  4.2.5.1

  	
  Claim Allowance

  
	
  4.2.5.2

  	
  General Treatment

  
	
  4.2.5.3

  	
  Impairment; Voting

  
	
  4.2.6

  	
  Class 6. Foxglove Option Claim

  
	
  4.2.6.1

  	
  General Treatment

  
	
  4.2.6.2

  	
  Impairment; Voting

  
	
  4.2.7

  	
  Class
  7. Bonners Ferry Claims

  

 

 

	
  4.2.7.1

  	
  General Treatment

  
	
  4.2.7.2

  	
  Impairment; Voting

  
	
  4.2.8

  	
  Class 8. Subordinated Claims

  
	
  4.2.8.1

  	
  General Treatment

  
	
  4.2.8.2

  	
  Impairment; Voting

  
	
  4.2.9

  	
  Class 9. Interests

  
	
  4.2.9.1

  	
  General Treatment

  
	
  4.2.9.2

  	
  Impairment; Voting

  
	
  4.3

  	
  Retention of Defenses Regarding Claims

  
	
   

  	
   

  
	
  ARTICLE V PLAN IMPLEMENTATION, LIQUIDATING
  TRUST ISSUES AND FUNDING

  
	
   

  	
   

  
	
  5.1

  	
  Plan Implementation

  
	
  5.2

  	
  Excluded Collateral; Abandonment

  
	
  5.2.1

  	
  Identification of Excluded
  Collateral

  
	
  5.2.2

  	
  Debtor Abandonment

  
	
  5.3

  	
  NewCo Entities

  
	
  5.3.1

  	
  Formation of NewCo Entities

  
	
  5.3.2

  	
  Effective Date Transfers of Equity Interests
  in NewCo Entities

  
	
  5.3.3

  	
  NewCo Entities’ Governance

  
	
  5.3.3.1

  	
  Authority Prior to
  Effective Date

  
	
  5.3.3.2

  	
  Effective
  Date Replacement of Officers and Directors

  
	
  5.3.3.3

  	
  Retention of Tree Farm
  Manager

  
	
  5.4

  	
  Transfer of Assets

  
	
  5.4.1

  	
  Transfer to NewCo Entities

  
	
  5.4.2

  	
  Transfer of Net Worth
  Assets

  
	
  5.4.3

  	
  Transfers
  to the Liquidating Trust for the Trust Beneficiaries

  
	
  5.4.4

  	
  Transfer of Bonners
  Ferry Assets

  
	
  5.4.5

  	
  Documentation of Transfers

  
	
  5.4.6

  	
  Free and Clear

  
	
  5.4.7

  	
  Transfers
  of Privileges and Bankruptcy Rights

  
	
  5.4.8

  	
  Exemption from Transfer Taxes

  
	
  5.5

  	
  Preservation and Waiver

  
	
  5.6

  	
  Dissolution of Debtors

  
	
  5.7

  	
  Cancellation of Interests

  
	
  5.8

  	
  Continuance of Committee

  
	
  5.9

  	
  Nondischarge and Injunction

  
	
  5.9.1

  	
  Nondischarge of Debtors

  
	
  5.9.2

  	
  Injunction

  
	
  5.9.2.1

  	
  Generally Applicable
  Injunction

  
	
  5.9.2.2

  	
  Insured Claims

  
	
  5.10

  	
  Closing of
  Chapter 11 Cases and Final Decree

  

 

ii

 

	
  ARTICLE VI OTHER PROVISIONS CONCERNING THE
  LIQUIDATING TRUST

  
	
   

  	
   

  
	
  6.1

  	
  Establishment
  of Liquidating Trust; Liquidating Trust Agreement

  
	
  6.2

  	
  Purpose
  of Liquidating Trust and Exemption from Securities Laws

  
	
  6.3

  	
  Term; Extension

  
	
  6.4

  	
  Liquidating Trust
  Beneficiaries

  
	
  6.5

  	
  Status of Liquidating
  Trustee

  
	
  6.5.1

  	
  Representative of
  Consolidated Estate

  
	
  6.5.2

  	
  Liquidating
  Trustee’s Authority and Responsibilities

  
	
  6.6

  	
  Reserves

  
	
  6.6.1

  	
  Administrative Reserve

  
	
  6.6.2

  	
  Disputed Claims Reserve

  
	
  6.7

  	
  Distributions to
  Trust Beneficiaries

  
	
  6.7.1

  	
  Initial
  Funding of Certain Reserves; Initial Distribution to Holders  of
  Allowed Class 5 Claims

  
	
  6.7.2

  	
  Initial
  Distribution to Holders of Allowed Class 4 and 6 Claims

  
	
  6.7.3

  	
  Subsequent Distributions

  
	
  6.8

  	
  Liquidating Trustee

  
	
  6.8.1

  	
  Appointment, Removal, Resignation and Succession

  
	
  6.8.2

  	
  Liquidating
  Trustee’s Fees and Expenses

  
	
  6.8.3

  	
  Trustee’s Bond and
  Limited Liability

  
	
  6.8.4

  	
  Limited Recourse, and Final Discharge as to the
  Liquidating Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VII PROVISIONS CONCERNING DISTRIBUTIONS BY THE LIQUIDATING TRUSTEE

  
	
   

  	
   

  
	
  7.1

  	
  Manner of Distributions

  
	
  7.2

  	
  Distribution Dates

  
	
  7.3

  	
  Whole Dollars

  
	
  7.4

  	
  Claims Subject to
  Partial Disputes

  
	
  7.5

  	
  Escheat

  
	
  7.6

  	
  Returned Distributions

  
	
  7.7

  	
  Inter-Holder
  Disputes as to Distribution Rights

  
	
  7.8

  	
  Setoffs

  
	
  7.9

  	
  Distributions of Less than
  $100

  
	
  7.10

  	
  Withholding Taxes

  
	
   

  	
   

  
	
  ARTICLE VIII CERTAIN TERMINATIONS,
  INDEMNIFICATION AND RELEASES

  
	
   

  	
   

  
	
  8.1

  	
  Certain Terminations

  
	
  8.2

  	
  Rights if
  Plan Not Confirmed or Effective

  
	
  8.3

  	
  Term of
  Bankruptcy Injunction or Stays

  
	
  8.4

  	
  Indemnification

  

 

iii

 

	
  8.4.1

  	
  Indemnification
  of Liquidating Trust Parties Defendant

  
	
  8.4.2

  	
  Indemnification
  of Plan-Related Parties

  
	
  8.4.3

  	
  Indemnification Priority

  
	
  8.4.4

  	
  Insurance

  
	
  8.5

  	
  Exculpation

  
	
  8.6

  	
  Release of Term Lenders

  
	
  8.6.1

  	
  Consensual and Contractual Release

  
	
  8.6.2

  	
  Deemed Release

  
	
  8.7

  	
  Release of CP Admin Group

  
	
  8.7.1

  	
  Consensual and Contractual Release

  
	
  8.7.2

  	
  Deemed Release

  
	
  8.8.

  	
  Release of Committee

  
	
  8.8.1

  	
  Consensual and Contractual Release

  
	
  8.8.2

  	
  Deemed Release

  
	
  8.9

  	
  Release of Released Debtor
  Persons and Released Debtor Affiliates

  
	
  8.9.1

  	
  Consensual and Contractual Release

  
	
  8.9.2

  	
  Deemed Release

  
	
   

  	
  Subordination.

  
	
   

  	
   

  
	
  ARTICLE IX EXECUTORY CONTRACTS AND
  UNEXPIRED LEASES

  
	
   

  	
   

  
	
  9.1

  	
  Executory Contracts and
  Unexpired Leases; Deemed Rejection

  
	
  9.2

  	
  Assumption and Assignment;
  Payments Related to Assumption of Contracts and Leases

  
	
  9.3

  	
  Related Rights

  
	
  9.4

  	
  Rejection Claims

  
	
  9.5

  	
  Filing of Rejection Claims

  
	
   

  	
   

  
	
  ARTICLE X PROCEDURES FOR RESOLVING DISPUTED
  CLAIMS

  
	
   

  	
   

  
	
  10.1

  	
  Prosecution of Objections

  
	
  10.2

  	
  Time Limit for Objections to
  Claims

  
	
   

  	
   

  
	
  ARTICLE XI RETENTION OF JURISDICTION

  
	
   

  	
   

  
	
  11.1

  	
  Retention of Jurisdiction

  
	
  11.2

  	
  Jurisdiction Unaffected

  
	
   

  	
   

  
	
  ARTICLE
  XII CERTAIN OBLIGATIONS OF THE DEBTORS

  
	
   

  	
   

  
	
  12.1

  	
  Obligations for the Period
  Between the Confirmation Date and the Effective Date

  
	
  12.2

  	
  Obligations as of the
  Effective Date

  

 

iv

 

	
  ARTICLE XIII CONDITIONS TO EFFECTIVE DATE

  
	
   

  	
   

  
	
  13.1

  	
  Conditions to Occurrence of Effective
  Date

  
	
   

  	
   

  
	
  ARTICLE XIV

  	
  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  
	
  14.1

  	
  Nonconsensual Confirmation

  
	
  14.2

  	
  Notices

  
	
  14.3

  	
  Notice of Entry of Confirmation
  Order and Effective Date

  
	
  14.4

  	
  Further Notices; Post-Effective
  Date Service List

  
	
  14.5

  	
  Notice for Term Lender
  Consent and Committee Consent

  
	
  14.6

  	
  Headings

  
	
  14.7

  	
  Severability

  
	
  14.8

  	
  Computation of Time

  
	
  14.9

  	
  Governing Law

  
	
  14.10

  	
  Successors and Assigns

  
	
  14.11

  	
  Collateral Agent and Administrative
  Agent Post-Effective Date Role

  
	
  14.12

  	
  Supersession

  
	
  14.13

  	
  Incorporation of Exhibits
  and Schedules; Plan Supplement and Supplement to Schedules and Exhibits

  

 

Exhibits
and Schedules 

 

	
  Exhibit
  A:

  	
  Form of
  Liquidating Trust Agreement

  
	
   

  	
   

  
	
  Schedule
  1.13:

  	
  Bank Term
  Lender Proponents

  
	
   

  	
   

  
	
  Schedule
  1.102:

  	
  Net Worth
  Assets

  
	
   

  	
   

  
	
  Schedule
  1.105:

  	
  NewCo
  Ancillary Assets

  
	
   

  	
   

  
	
  Schedule
  1.116:

  	
  List of
  Noteholder Proponents

  
	
   

  	
   

  
	
  Schedule
  1.120:

  	
  Other
  Preserved Real Property Rights

  

 

 

Exhibits and Schedules to be
filed on or prior to the Exhibit Filing Date 

 

	
  Schedule 5.2.1:

  	
  Excluded Collateral

  
	
   

  	
   

  
	
  Schedule 5.2.2:

  	
  Abandoned Assets

  

 

v

 

	
  Schedule
  5.4.1:

  	
  Transfer
  of Term Lender Collateral and NewCo Ancillary Assets

  
	
   

  	
   

  
	
  Schedule
  9.2.1:

  	
  Assumed
  Executory Contracts and Unexpired Leases Assigned to a NewCo Entity

  
	
   

  	
   

  
	
  Schedule
  9.2.2:

  	
  Assumed
  Executory Contracts and Unexpired Leases Assigned to the Liquidating Trust

  
	
   

  	
   

  
	
  Exhibit
  B:

  	
  Form of
  NewCo Corp Certificate of Incorporation

  
	
   

  	
   

  
	
  Exhibit
  C:

  	
  Form of
  NewCo Corp By Laws

  
	
   

  	
   

  
	
  Exhibit
  D:

  	
  Form of
  NewCo Certificate of Formation

  
	
   

  	
   

  
	
  Exhibit
  E:

  	
  Form of
  NewCo Limited Liability Company Agreement

  
	
   

  	
   

  
	
  Exhibit
  F:

  	
  Form of
  NewCo Subsidiary Certificate of Formation

  
	
   

  	
   

  
	
  Exhibit
  G:

  	
  Form of
  NewCo Subsidiary Limited Liability Company Agreement

  
	
   

  	
   

  
	
  Exhibit
  H:

  	
  Form of
  NewCo Amended and Restated Limited Liability Company Agreement

  
	
   

  	
   

  
	
  Exhibit
  I:

  	
  Form of
  NewCo Subsidiary Amended and Restated Limited Liability Company Agreement

  
	
   

  	
   

  
	
  Exhibit
  J:

  	
  NewCo -
  ORM Agreement

  

 

vi

 

CP Acquisition Company, an Oregon corporation, Crown Pacific Limited
Partnership, a Delaware limited partnership (“CPLP”), Crown Pacific
Partners, L.P., a Delaware limited partnership (“CPP”), CP Air, Inc., an
Oregon corporation, CP Acquisition II Co., an Oregon corporation, and CP
Acquisition III Co., an Oregon corporation, each a debtor and
debtor-in-possession in the above-captioned Chapter 11 cases (collectively, the
“Debtors”), together with the Noteholder Proponents (as defined herein),
the Bank Term Lender Proponents (as defined herein), and the Creditors’
Committee (as defined herein) propose the following Second Amended Joint
Consolidating Chapter 11 Plan, dated as of December 20, 2004, pursuant to
section 1121(c) of the Bankruptcy Code.

 

DISCLAIMER 

 

The Disclosure Statement accompanying this Plan, including the exhibits
appended thereto, provides information about the Debtors’ business, results of
operations and properties, and includes a summary and detailed analysis of this
Plan. All Creditors are encouraged to consult the Disclosure Statement and to
read this Plan carefully and completely before voting to accept or reject this
Plan.

 

NO
SOLICITATION MATERIALS, OTHER THAN THIS PLAN, THE ACCOMPANYING DISCLOSURE STATEMENT
AND EXHIBITS APPENDED THERETO AS APPROVED BY THE BANKRUPTCY COURT HAVE BEEN
AUTHORIZED BY THE COURT FOR USE IN SOLICITING ACCEPTANCES OR REJECTIONS OF THIS
PLAN.

 

ARTICLE I

DEFINITIONS AND RULES OF INTERPRETATION

 

For the purposes of this Plan, the following terms (which appear herein
as capitalized terms) have the respective meanings as hereinafter set forth;
such meanings are equally applicable to the singular and the plural forms of
the terms defined, unless the context otherwise

 

1

 

requires.
Capitalized terms used in this Plan at all times refer to terms defined in this
Article I. Unless otherwise provided in this Plan, all terms used herein have
the meaning assigned to them under title 11 of the United States Code (as
amended from time to time, the “Bankruptcy Code”) or the Federal Rules
of Bankruptcy Procedure (as amended from time to time, the “Bankruptcy Rules”).
The rules of construction applicable to the Bankruptcy Code and the Bankruptcy
Rules are applicable to this Plan.

 

1.1          “Abandoned
Assets” means the Assets to be abandoned by the Debtors which shall be
listed on Schedule 5.2.2, and for which abandonment is approved by Final Order.

 

1.2          “Administrative
Expense Claim” means a Claim to the extent that it is of the kind described
in section 503(b) of the Bankruptcy Code and is entitled to priority under
section 507(a)(1) of the Bankruptcy Code, together with any Fee Claim.

 

1.3          “Administrative
Reserve” means the reserve established and maintained pursuant to section
6.6.1 of this Plan.

 

1.4          “Affiliate”
has the meaning set forth in section 101 of the Bankruptcy Code.

 

1.5          “Aggregate
Allowed Class 4 Claims” means the aggregate amount of Allowed Class 4
Claims after all Disputed Class 4 Claims have been resolved.

 

1.6          “Allowed”
means, with reference to any Claim (or portion thereof) or Interest and with
respect to each Debtor: (a) any Claim against or Interest in such Debtor that
has been listed by the Debtor in its Bankruptcy Schedules, as liquidated in
amount and not Disputed or contingent and for which no contrary proof of claim
or interest has been filed; or (b) as to which a proof of claim or application
has been timely filed in a liquidated amount with the Court pursuant to the
Bankruptcy Code or any order of the Court, or late filed with leave of the
Court after notice and a hearing, provided that
(i) no objection to the allowance of a Claim under clause (a) or (b) above, or
motion to expunge such Claim, has been interposed before any final date for the
filing of such

 

2

 

objections or motions set forth
in this Plan, the Confirmation Order or other order of the Court, or (ii) such
Claim or Interest is held allowed by Final Order; provided, further,
that any Claims or Interests allowed solely for the purpose of voting to accept
or reject this Plan pursuant to an order of the Court shall not be considered
“Allowed Claims” or “Allowed Interests” for the purpose of Distributions
hereunder.

 

1.7          “Assets”
means, as to each of the Debtors, all of such Debtor’s right, title and
interest as of the Effective Date in and to any and all assets, property,
interests (including equity interests) and effects, real and personal, tangible
and intangible, wherever situated.

 

1.8          “Bank
Loans” means the loans outstanding pursuant to the Bank Loan Documents.

 

1.9          “Bank
Loan Documents” means that (i) certain Amended and Restated Credit
Agreement dated as of December 1, 1999, among CPLP, each of Bank Term Lenders
and Bank of America, N.A., as the Bank Term Lender Agent, as amended by that
certain First Amendment to Amended and Restated Credit Agreement dated as of
April 20, 2001, by that certain Temporary Waiver to Amended and Restated Credit
Agreement dated as of September 28, 2001, by that certain Temporary Waiver to
Amended and Restated Credit Agreement dated as of November 1, 2001, by that
certain Second Amendment to Amended and Restated Credit Agreement dated as of
November 7, 2001 and by that certain Third Amendment to Amended and Restated
Credit Agreement dated as of April 19, 2002, (ii) certain Notes executed by
CPLP in favor of each of the Bank Term Loan Lenders evidencing CPLP’s
obligation under the Amended and Restated Credit Agreement, and (iii) any other
documents delivered to the Bank Term Lender Agent or any Bank Term Lenders in
connection therewith.

 

1.10        “Bank
Term Lenders” means those Entities that are Creditors of CPLP pursuant to
the Bank Loan Documents.

 

3

 

1.11        “Bank
Term Lender Agent” means Bank of America N.A., as agent for the Bank Term
Lenders under and pursuant to the Bank Loan Documents, and any successors or
assigns thereto.

 

1.12        “Bank
Term Lender Proponents” means singularly and/or collectively the Bank Term
Lenders identified on Schedule 1.12 hereto and each other Bank Term Lender that
delivers to counsel for the Debtors on or before the date that is three (3)
Business Days before the Confirmation Hearing a written request to be a Bank
Term Lender Proponent.  The Bank Term
Lender Proponents as of the filing date of this Plan are identified as Plan
Proponents on Schedule 1.12 to this Plan (which Schedule 1.12 may be amended to
include Bank Term Lenders who timely submit requests to become Bank Term Lender
Proponents).

 

1.13        “Bankruptcy
Code” has the meaning set forth in this Article I.

 

1.14        “Bankruptcy
Rules” has the meaning set forth in this Article I.

 

1.15        “Bankruptcy
Schedules” means the schedules of assets and liabilities, the list of
holders of Interests and the statements of financial affairs filed by the
Debtors under section 521 of the Bankruptcy Code and Bankruptcy Rule 1007, and
all amendments and modifications thereto through the Confirmation Date.

 

1.16        “Bonners
Ferry Acceptance” means the affirmative vote of the Bonners Ferry Parties
of their Allowed Bonners Ferry Claims as may be required under the Bankruptcy
Code for Class 7 acceptance of the treatment of such Allowed Bonners Ferry
Claims set forth in section 4.2.7.1(a).

 

1.17        “Bonners
Ferry Assets” means CPLP’s rights and interests in the Bonners Ferry
Facility Lease, the Bonners Ferry Site Lease, the L-P Sublease and the L-P
Purchase Agreement.

 

4

 

1.18        “Bonners
Ferry Claims” means any Unsecured Claim of a Bonners Ferry Party and/or LPC
under any of the Bonners Ferry Documents.

 

1.19        “Bonners
Ferry Consensual Transaction Acceptance” means the affirmative vote of (i)
LPC of its Allowed Claims and (ii) the Bonners Ferry Parties of their Allowed
Bonners Ferry Claims as may be required under the Bankruptcy Code for (x)
acceptance by LPC of the treatment of its Allowed Claims set forth in section
4.2.7.1(b) of this Plan and (y) acceptance by the Bonners Ferry Parties of
their Allowed Bonners Ferry Claims set forth in Section 4.2.7.1(b).

 

1.20        “Bonners
Ferry Documents” means the Participation Agreement, Tax Indemnity
Agreement, the Bonners Ferry Site Lease, Bonners Ferry Facility Lease, LPC
Purchase Agreement, LPC Sublease, Bonners Ferry Sublease Assignment, Bonners
Ferry Security Interest, and all other documents and agreements delivered in
connection therewith.

 

1.21        “Bonners
Ferry Facility Lease” means the Facility Lease (Idaho) dated November 18,
1988, between the Owner-Trustee, as lessor, and CPLP, as lessee.

 

1.22        “Bonners
Ferry Party” means any Person that is a party to a Bonners Ferry Document
or any other Person that asserts a Claim against the Debtors pursuant to a
Bonners Ferry Document, but specifically excluding LPC and the Debtors.

 

1.23        “Bonners
Ferry Realty” means the real property in the State of Idaho on which the
Bonners Ferry sawmill is located, a legal description of which is attached to
the Bonners Ferry Site Lease.

 

1.24        “Bonners
Ferry Security Interest” means the Deed of Trust, dated as of October 15,
1998, from the Owner Trustee to the Chicago Title Insurance Company for the
benefit of the Indenture Trustee, and any other documentation perfecting any
security interest granted by ICX Corporation to or for the benefit of the Indenture
Trustee in the Bonners Ferry Realty and certain personal property at the
Bonners Ferry sawmill site.

 

5

 

1.25        “Bonners
Ferry Site Lease” means the Site Lease (Idaho), dated November 18, 1998,
between CPLP, as lessor, and the Owner-Trustee, as lessee.

 

1.26        “Bonners
Ferry Sublease Assignment” means the Assignment of Sub-Lease and Consent,
dated as of September 28, 2001, between CPLP, ICX Corporation, the Mill Note
Purchasers, the Owner-Trustee, the Indenture Trustee and LPC, and relating to
the LPC Sublease.

 

1.27        “Business
Day” means any day other than a day on which banks are authorized to be
closed under the laws applicable in the State of Arizona.

 

1.28        “Cash”
means legal tender of the United States of America and equivalents thereof.

 

1.29        “Cause
of Action” means any claim or cause of action, legal or equitable, now
owned or hereafter acquired by the Debtors, whether arising under any contract
or federal or state law, including but not limited to fraudulent conveyance
actions and any causes of action arising under section 506, 510, 542, 543, 544,
545, 546, 547, 548, 549, 550, 551 or 553(b) of the Bankruptcy Code, whether
commenced prior or subsequent to the Petition Date.

 

1.30        “Chapter
11” means Chapter 11 of the Bankruptcy Code.

 

1.31        “Chapter
11 Cases” means the cases under Chapter 11 of the Bankruptcy Code commenced
by the Debtors, jointly administered under Case No. 2-03-11258-PHX-RJH,
currently pending in the Court.

 

1.32        “Claim”
has the meaning set forth in section 101(5) of the Bankruptcy Code.

 

1.33        “Claims
Objection Bar Date” has the meaning set forth in section 10.2 of this Plan.

 

1.34        “Class”
means a class of Holders of Claims or Interests as described in Article II of
this Plan.

 

1.35        “Class
4 Aggregate Distribution” means an amount of Cash equal to the sum of:

 

6

 

(i) the Class 4 Sharing Percentage
of Distributable Cash; plus

 

(ii) the Class 5 Funded Amount;
plus

 

(iii) the
Class 4 Sharing Percentage of the Value of NewCo Ancillary Assets; plus

 

(iv) the Class 4 Sharing Percentage
of the NewCo Corp Funding Amount. provided,
however, that in no event shall
the Class 4 Aggregate Distribution be greater than the Aggregate Allowed Class
4 Claims.

 

1.36        “Class
4 Received Percentage” means the quotient, expressed as a percentage, of (a)
aggregate amount of Distributions received by the holders of Allowed Class 4
Claims to (b) Aggregate Allowed Class 4 Claims.

 

1.37        “Class
4 Sharing Percentage” means the quotient, expressed as a percentage, of (a)
Aggregate Allowed Class 4 Claims to (b) the sum of (i) Aggregate Allowed Class
4 Claims and (ii) Aggregate Allowed Class 5 Claims.

 

1.38        “Class
5 Funded Amount” means $1,000,000.

 

1.39        “Class
5 Sharing Percentage” means the quotient, expressed as a percentage, of (a)
Aggregate Allowed Class 5 Claims to (b) the sum of (i) Aggregate Allowed Class
4 Claims and (ii) Aggregate Allowed Class 5 Claims.

 

1.40        “Collateral”
means any property or interest in property of the Estates subject to a Lien or
Security Interest to secure the payment or performance of a Claim, which Lien
or Security Interest is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable non-bankruptcy law.

 

1.41        “Collateral
Agent” means the Bank of America, N.A., as collateral agent to the Term
Lenders pursuant to the Intercreditor Agreement.

 

7

 

1.42        “Committee
Consent” means, as to any action or issue requiring consent of the
Creditors’ Committee under this Plan, the consent or acceptance of a simple
majority of the then-existing members of the Creditors’ Committee, as
determined and announced by the Creditors’ Committee contact or successors
thereto pursuant to section 14.5 of this Plan.

 

1.43        “Confirmation
Date” means the date upon which the clerk of the Court enters the
Confirmation Order.

 

1.44        “Confirmation
Hearing” means the hearing held by the Court to consider confirmation of
this Plan pursuant to section 1129 of the Bankruptcy Code, as such hearing may
be adjourned or continued from time to time.

 

1.45        “Confirmation
Order” means the order entered by the Court confirming this Plan in
accordance with the Bankruptcy Code.

 

1.46        “Consolidated
Estate” means the Estates of the Debtors as substantively consolidated
pursuant to Article II of this Plan.

 

1.47        “Court”
means the United States Bankruptcy Court for the District of Arizona, or such
other Court as may from time to time have jurisdiction over the Chapter 11
Cases.

 

1.48        “CP
Admin Group” means, individually and/or collectively, CPALP, SVE II, LLC
(f/k/a SVE II, Inc.), Deborah L. Duncan, James A. Bondoux, Robert Jaunich II,
Peter W. Stott, Roger L. Krage, Crown Pacific, Ltd., SK Partners, HS Corp. of
Oregon, SK Timber Company, LLC, StoKra LLC, Fremont Investors, Inc. (f/k/a
Fremont Group, Inc.), Fremont Sequoia Holdings, L.P., Sequoia Ventures Inc.,
Sequoia Ventures Holdings, L.P., Fremont Euro-Summit Limited, Fremont Timber,
Inc., FTI Holdings, L.P., Fremont Group, L.L.C., SVE, Inc., Columbia
Investments II LLC and the Jaunich Living Trust U/A6/22/71 dated June 22, 1971.

 

8

 

1.49        “CPALP”
means Crown Pacific Administrative Limited Partnership, a Delaware limited
partnership.

 

1.50        “CPLP”
means Crown Pacific Limited Partnership, a Delaware limited partnership.

 

1.51        “CPM”
means Crown Pacific Management Limited Partnership, a Delaware limited
partnership.

 

1.52        “CPP”
means Crown Pacific Partners, L.P., a Delaware limited partnership. 

 

1.53        “Creditor”
has the meaning set forth in section 101 of the Bankruptcy Code. 

 

1.54        “Creditors’
Committee” means the Official Joint Committee of Unsecured Creditors that
was appointed by the U.S. Trustee in these Chapter 11 Cases and each of its
members and their successors, and which will continue to exist after the
Effective Date in accordance with section 5.8 of this Plan.

 

1.55        “Cure”
means the distribution of Cash, or such other property, relief or arrangement
as may be agreed upon by the parties or ordered by the Court, with respect to
the assumption of an executory contract or unexpired lease, pursuant to section
365(b) of the Bankruptcy Code.

 

1.56        “Debtors”
means CP Acquisition Co., CPLP, CPP, CP Air, Inc., CP Acquisition II Co. and CP
Acquisition III Co..

 

1.57        “Deficit”
has the meaning set forth in section 5.3.2 of this Plan.

 

1.58        “Disallowed
Claim” means any Claim or portion thereof that has been disallowed by a
Final Order of the Court.

 

1.59        “Disclosure
Statement” means the First Amended Disclosure Statement for Joint
Consolidating Chapter 11 Plan Proposed by the Creditors’ Committee, Noteholder
Proponents and

 

9

 

Bank Term Lender Proponents
dated November 10, 2004, as the same may be amended or supplemented.

 

1.60        “Disputed”
means the portion (including, when appropriate, the whole) of any Claim as to
which: (a) a proof of claim or application has been or been deemed timely and
properly filed under applicable law or by a Final Order; (b) an objection,
motion to estimate, or complaint to determine the validity, priority or extent
of any Lien asserted by the claimant with respect to the Claim has been timely
filed; and (c) such objection, motion or complaint has not been withdrawn or
granted, denied or otherwise determined by Final Order.  Before the time that such an objection,
motion or complaint has been filed, a Claim shall be considered Disputed (w) to
the extent, if any, that the amount of the Claim specified in a proof of claim
exceeds the amount of any corresponding Claim scheduled by the Debtors in their
Bankruptcy Schedules; (x) in its entirety, if any corresponding Claim scheduled
by the Debtors has been scheduled as disputed, contingent or unliquidated in the
Bankruptcy Schedules; (y) in its entirety, if any corresponding Claim scheduled
by the Debtors in their Bankruptcy Schedules places the Claim in a separate
classification from that asserted in a proof of claim; or (z) in its entirety,
if no corresponding Claim has been scheduled by the Debtors in their Bankruptcy
Schedules.  In addition, “Disputed”
means, with respect to any Claim scheduled by the Debtors but not scheduled as
disputed, contingent or unliquidated, and as to which no corresponding proof of
claim was filed, the portion (including, when appropriate, the whole) of the
Claim as to which the Liquidating Trustee has made (or has assumed the pursuit
of) an objection in accordance with this Plan.

 

1.61        “Disputed
Claims Reserve” means the reserve established and maintained by the
Liquidating Trustee pursuant to section 6.6.2 of this Plan.

 

1.62        “Distributable
Cash” means the amount of Cash and Cash equivalents held by the Liquidating
Trust at any given time after payment in full of or adequate reservation for:
(i) all

 

10

 

Allowed
Administrative Expense Claims; (ii) all Allowed Priority Tax Claims; (iii) all
Allowed Postpetition Tax Claims; (iv) all Allowed Class 1 Claims; (v) all
Allowed Class 3 Claims (to the extent any such Claims are to be satisfied with
Cash rather than a return of the Collateral securing such Claims); and (vi) all
expenses or other obligations of the Liquidating Trust and Liquidating Trustee.

 

1.63        “Distribution”
means any distribution made by the Liquidating Trustee on account of Allowed
Claims pursuant to the terms of this Plan.

 

1.64        “Distribution
Date” means each date on which a Distribution is made by the Liquidating
Trustee to Holders of Allowed Claims pursuant to the terms of this Plan.

 

1.65        “Distribution
Record Date” means the date as of which Holders of Claims under the Bank
Loan Documents and Senior Notes must be listed in CPLP’s records for purposes
of transfers to be made under this Plan on the Effective Date, which shall be
the third Business Day immediately following the Confirmation Date at 5:00 p.m.
prevailing Pacific time.

 

1.66        “Effective
Date” means the first Business Day following the day on which the
conditions specified in section 13.1 of this Plan have been satisfied in full,
and which shall be identified in a notice filed and served pursuant to section
14.3 of this Plan.

 

1.67        “Entity”
has the meaning as set forth in section 101(15) of the Bankruptcy Code.

 

1.68        “Estates”
means, collectively, the estate for each of the Debtors that was created by the
commencement of the Chapter 11 Cases pursuant to section 541 of the Bankruptcy
Code, and shall be deemed to include, without limitation, any and all
privileges of the Debtors and any and all interests in property, whether real,
personal or mixed, rights, causes of action, avoidance powers or extensions of
time that the Debtors or the estate shall have had effective as of the Petition
Date or thereafter, whether by virtue of section 544, 545, 546, 547, 548, 549
or 550 of the Bankruptcy Code or otherwise.

 

11

 

1.69        “Estate
Representative” has the meaning set forth in section 1123(b)(3)(B) of the
Bankruptcy Code.

 

1.70        “Excluded
Collateral” means those Assets identified on Schedule 5.2.1 of this Plan,
as such Schedule may be amended at any time on or prior to the Exhibit Filing
Date by the Required Proponent Term Lenders.

 

1.71        “Exhibit
Filing Date” means 5:00 p.m. prevailing Pacific time on the Business Day
ten (10) Business Days immediately prior to the deadline set by the Court for
receipt of completed ballots from Holders of Claims entitled to vote on this
Plan.

 

1.72        “Extension
Period” has the meaning set forth in section 6.3.

 

1.73        “Fee
Claims” means any Claim of any Professional for compensation for services
rendered or reimbursement of expenses incurred through and including the
Effective Date under section 326, 328, 330 or 331 of the Bankruptcy Code.

 

1.74        “Final
Decree” means, as to any Chapter 11 Case, an order of the Court closing
such Chapter 11 Case pursuant to section 350 of the Bankruptcy Code.

 

1.75        “Final
Distribution” means the last Distribution that is made from the Liquidating
Trust to Holders of Allowed Claims in accordance with the terms of this Plan.

 

1.76        “Final
Distribution Date” means the day on which the Final Distribution is made.

 

1.77        “Final
Order” means an order of the Court as to which the time to appeal, petition
for certiorari, or move for re-argument or rehearing has expired and as to
which no appeal, petition for certiorari, or other proceedings for re-argument
or rehearing shall then be pending or as to which any right to appeal, petition
for certiorari, reargue, or rehear shall have been waived in writing in form
and substance satisfactory to the Proponents or, in the event that an appeal,
writ of certiorari, or re-argument or rehearing thereof has been sought, such
order of the Court on the last

 

12

 

such
appeal shall have been determined by the highest court to which such order was
appealed with no further remand or other proceedings contemplated, or
certiorari, re-argument or rehearing shall have been denied and the time to
take any further appeal, petition for certiorari, or move for re-argument or
rehearing shall have expired; provided,
however, that the possibility
that a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure,
or Rule 9023 or Rule 9024 of the Bankruptcy Rules, may be filed with respect to
such order shall not cause such order not to be a Final Order.

 

1.78        “401(k)
Plan” means the Crown Pacific Profit Sharing and Employee Savings Benefit
Plan sponsored by CPLP.

 

1.79        “Foxglove
Option” means the option granted pursuant to the Foxglove Option Agreement.

 

1.80        “Foxglove
Option Agreement” means the Option to Purchase Real Property, made as of
October 15, 1997, by and between CPLP and Foxglove L.L.C., a Washington limited
liability company.

 

1.81        “Foxglove
Option Property” means the real property subject to the Foxglove Option.

 

1.82        “General
Unsecured Claim” means any Unsecured Claim other than a Term Lender
Deficiency Claim and, unless Bonners Ferry Acceptance is received, Bonners
Ferry Claim.

 

1.83        “Glen
Echo Acreage” means the Glen Echo Mine acreage abandoned pursuant to
Section 5.2.2 and described in item A.3. of Schedule 5.2.1 hereof, as the same
shall be more particularly described by reference to a partition plat to be
recorded in connection with a partition application pending in Whatcom County,
Washington.

 

13

 

1.84        “Holder”
means any Entity that is the owner of a Claim or Interest in the Chapter 11
Cases.

 

1.85        “Indenture
Trustee” means Wells Fargo Bank Northwest, National Association (f/k/a
First Security Bank, National Association), as indenture trustee under the
Trust Indenture and Security Agreement dated as of October 15, 1998, and any
successors and assigns.

 

1.86        “Insider”
has the meaning set forth in section 101(31) of the Bankruptcy Code.

 

1.87        “Insured
Claim” means any Unsecured Claim arising from an incident or occurrence to
the extent that liability thereunder, if any, is covered by an insurance policy
of the Debtors.

 

1.88        “Intercompany
Claim” means a Claim of any Debtor against any other Debtor.

 

1.89        “Intercreditor
Agreement” means that certain Intercreditor Agreement dated as of April 19,
2002 among CPLP, Crown Pacific Partners, L.P., the Bank Term Lenders party
thereto, the Bank Term Lender Agent, the Noteholders party thereto and the
Collateral Agent, and their successors and assigns.

 

1.90        “Interest”
means as to each Debtor: (a) any share of common stock, partnership interest
(including without limitation the units issued by CPP) or other instrument
evidencing an ownership interest in such Debtor, whether or not transferable;
or (b) any option, warrant or right, contractual or otherwise, to acquire an
ownership interest in such Debtor.

 

1.91        “Lien”
has the meaning set forth in section 101(37) of the Bankruptcy Code.

 

1.92        “Liquidating
Trust” means the grantor trust established pursuant to the laws of the
State of Arizona in accordance with section 6.1 of this Plan.

 

14

 

1.93        “Liquidating
Trust Agreement” means the agreement generally described in section 6.1 of
this Plan, as approved by the Bankruptcy Court, which shall be in substantially
the form attached as Exhibit A hereto.

 

1.94        “Liquidating
Trustee” means Michael W. Carmel or such other party named as Liquidating
Trustee in accordance with the terms of the Plan and the Liquidating Trust
Agreement, or any Person who becomes a successor in accordance with the terms
of this Plan and the Liquidating Trust Agreement.

 

1.95        “LPC” means Louisiana Pacific
Corporation, a Delaware corporation.

 

1.96        “LPC Escrow” means the $2 million
escrow deposit currently held by Chicago Title Insurance Company in connection
with the LPC Purchase Agreement.

 

1.97        “LPC Purchase Agreement” means the
Purchase Agreement (Bonners Ferry Mill), dated as of August 20, 2001, between
CPLP and LPC, as amended by First Amendment to Agreement, dated as of August
30, 2001, and by Second Amendment to Purchase and Sale Agreement, dated as of
September 28, 2001.

 

1.98        “LPC Sublease” the Facility
Sublease (Idaho), dated September 28, 2001, between CPLP, as sublessor, and
LPC, as sublessee.

 

1.99        “Mill Notes” means the 7.20%
Secured Notes Series A, due July 2, 2010, and the 7.25% Secured Notes Series B,
due July 2, 2010, issued by the Owner-Trustee.

 

1.100      “Mill
Note Purchasers” means Minnesota Life Insurance Company, The Great-West
Life Assurance Company, and Nationwide Life Insurance Company, as initial
purchasers of the Mill Notes, and any subsequent Holders of the Mill Notes.

 

1.101      “MSP/KERP
Claims” means any Claims arising under the Severance Program or Retention
Plan.

 

15

 

1.102      “Net
Proceeds” means the Cash or other proceeds from the sale, collection or
other monetization of any property or assets remaining after payment of any
taxes, liens, fees, commissions or similar charges, or other transaction costs
necessary to such sale, collection or other disposition.

 

1.103      “Net
Worth Assets” means the real property described in Schedule 1.103 to this
Plan.

 

1.104      “Net
Worth Assets Transaction” means the transactions with respect to the
transfer to CPLP from CPALP of the Net Worth Assets in exchange for $1.5
million and mutual releases provided for in this Plan, which transactions will
be set forth in an agreement between CPALP and CPLP in form and substance
satisfactory to the Creditors Committee, the Proponent Term Lenders, CPLP and
CPALP.

 

1.105      “NewCo”
means a limited liability company formed under the laws of the State of
Delaware that will be established prior to the Effective Date in accordance
with this Plan, and the equity ownership of which will be assigned to the Term
Lenders in consideration of the satisfaction of their Secured Claims.

 

1.106      “NewCo
Ancillary Assets” means (i) those Assets directly related to the operation
of the Term Lender Collateral (generally consisting of certain of the Debtors’
furniture, fixtures, equipment, and certain parcels of real property and
easements) as specifically identified on Schedule 1.106 to this Plan (but
excluding the Assets listed on Schedule 5.2.2 whether or not abandoned under
this Plan), (ii) if and to the extent transferred prior to the Effective Date
to CPLP, the Net Worth Assets, and (iii) any and all of the Debtors’ rights
under the executory contracts and unexpired leases identified on Schedule 1.106
to this Plan and assumed and assigned to a NewCo Entity.

 

16

 

1.107      “NewCo
Corp” means a corporation or corporations formed under the laws of the
State of Delaware that will be organized prior to the Effective Date in
accordance with this Plan and the entire equity ownership of which shall be
assigned to the respective Term Lender that requested that it receive NewCo
Corp Shares in accordance with this Plan.

 

1.108      “NewCo
Corp Funding Amount” means an amount of Cash equal to one percent of the
aggregate value of the Assets transferred to NewCo and the NewCo Subsidiaries
pursuant to this Plan, without duplication, on the Effective Date, i.e. $3,091,638.

 

1.109      “NewCo
Corp Shares” means the uncertificated equity ownership shares of common
stock issued by each NewCo Corp.

 

1.110      “NewCo
Entities” means, collectively, NewCo, each NewCo Corp and each NewCo
Subsidiary.

 

1.111      “NewCo
Membership Interests” means the uncertificated membership interests issued
by NewCo.

 

1.112      “NewCo
Subsidiary” means each single member limited liability company formed under
the laws of the State of Delaware that will be established prior to the
Effective Date in accordance with this Plan and the equity ownership of which
shall be held by NewCo in accordance with this Plan.

 

1.113      “NewCo
Unit” has the meaning set forth in Section 4.2.2.2 of this Plan.

 

1.114      “Non-Insider”
means an Entity that is not an Insider.

 

1.115      “Non-Insider
Preference Claim” shall mean a Preference Claim against any Non-Insider,
which are released under this Plan.

 

1.116      “Noteholder”
means any Holder of a Senior Note.

 

17

 

1.117      “Noteholder
Proponents” means singularly and/or collectively the Noteholders identified
as Plan Proponents on Schedule 1.117 to this Plan.

 

1.118      “Operative
Document” means any contract, instrument, release, settlement agreement or
other agreement or document, if any, that is reasonably necessary to effectuate
and implement the terms of this Plan.

 

1.119      “Organizational
Documents” means, with respect to each of NewCo and each NewCo Subsidiary,
any original and/or amended and restated certificate of formation and limited
liability company agreement, and with respect to each NewCo Corp, its certificate
of incorporation and bylaws.

 

1.120      “Other
Bonners Ferry Documents” means the Bonners Ferry Documents other than the
Bonners Ferry Facility Lease, the Bonners Ferry Site Lease and the LPC
Sublease.

 

1.121      “Other
Preserved Real Property Rights” means any easements, licenses, permits,
rights, privileges, powers, uses, reciprocal easement agreements, vaults,
tunnel or bridge agreements, and any other interest in real estate or rights in rem, relating to any real property
comprising the Term Lender Collateral, that are (i) of record and enforceable
in the respective jurisdiction where such real property Collateral is located,
(ii) are subordinate or junior to the lien of the Collateral Agent, and (iii)
specified in Schedule 1.121 by the Required Proponent Term Lenders filed by the
Exhibit Filing Date.

 

1.122      “Other
Priority Claim” means any Claim other than an Administrative Expense Claim
or a Priority Tax Claim entitled to priority under section 507(a) of the
Bankruptcy Code.

 

1.123      “Other
Secured Claim” means any Secured Claim (including a Secured Tax Claim)
other than a Term Lender Secured Claim, regardless of the form of the
Collateral or Lien or Security Interest securing payment of such Other Secured
Claim.

 

18

 

1.124      “Owner-Trustee”
means Wilmington Trust Company, as Owner-Trustee pursuant to, inter alia, the Participation Agreement.

 

1.125      “Participation
Agreement” means the Participation Agreement among CPLP, ICX Corporation,
the Owner-Trustee, the Indenture Trustee, and the Mill Note Purchasers, dated
October 15, 1998.

 

1.126      “Person”
has the meaning set forth in section 101(41) of the Bankruptcy Code.

 

1.127      “Petition
Date” means June 29, 2003, when the Chapter 11 Cases were commenced by the
Debtors.

 

1.128      “Plan”
means this Chapter 11 plan, including, without limitation, all exhibits,
supplements, appendices and schedules hereto, either in its present form or as
the same may be altered, amended or modified from time to time pursuant to the
Bankruptcy Code or Final Order of the Court.

 

1.129      “Post-Effective
Date Service List” has the meaning set forth in section 14.4.

 

1.130      “Postpetition
Tax Claim” means any Administrative Expense Claim by a governmental unit
for taxes (and for interest and/or penalties related to such taxes) for any tax
year or period, all or any portion of which occurs or falls within the period
from and including the Petition Date through and including the Effective Date.

 

1.131      “Preference
Claim” means a Cause of Action arising under section 547 of the Bankruptcy
Code.

 

1.132      “Preserved
Real Property Rights” means any easements, licenses, permits, rights,
privileges, powers, uses, reciprocal easement agreements, vaults, tunnel or
bridge agreements, and any other interest in real estate or rights in rem, relating to any real property
comprising the Term Lender Collateral, that are (i) of record and enforceable
in the respective jurisdiction where such

 

19

 

real
property Collateral is located and (ii) not subordinate or junior to the lien
of the Collateral Agent.

 

1.133                 “Priority
Tax Claim” means any Claim of a governmental unit of the kind specified in
section 502(i) or section 507(a)(8) of the Bankruptcy Code. Priority Tax Claims
do not include ad valorem tax
claims if such Claims under applicable state law are secured by a Lien on any
of the Debtors’ Assets.

 

1.134                 “Pro Rata” means a proportionate
sharing, so that the ratio of the consideration distributed on account of an
Allowed Claim in a Class to the amount that such Allowed Claim is the same as
the ratio of the amount of the consideration distributed on account of all
Allowed Claims in such Class to the amount of all Allowed Claims in such Class.

 

1.135                 “Professional”
means a professional Entity retained (i) prior to the Effective Date by the
Debtors or the Creditors’ Committee with Court approval, or (ii) subsequent to
the Effective Date, by the Liquidating Trustee or Creditors’ Committee or the
Required Proponent Term Lenders in accordance with the terms of this Plan.

 

1.136                 “Proponents”
means, singularly and/or collectively, each of the Debtors, Proponent Term
Lenders and the Creditors’ Committee, as co-proponents of this Plan.

 

1.137                 “Proponent
Term Lenders” means (i) on or prior to the Effective Date, each of the Bank
Term Lender Proponents and the Noteholder Proponents; and (ii) after the
Effective Date, Holders of Allowed Class 5 Claims, as of any date of
determination.

 

1.138                 “Released
Committee Claims” has the meaning set forth in section 8.8.1.

 

1.139                 “Released Committee
Parties” has the meaning set forth in section 8.8.1.

 

1.140                 “Released CP
Admin Group Claims” has the meaning set forth in section 8.7.1.

 

20

 

1.141                 “Released Debtor Affiliates”
means individually and/or collectively, (i) CPM and (ii) any Entity that holds
an equity interest in CPM (but excluding any Entity that is within the CP Admin
Group).

 

1.142                 “Released
Debtor Persons” means Deborah L. Duncan, Richard B. Keller, Lee C. Simpson,
Mark V. Allred, Gary N. Cremer, Steven E. Dietrich, John S. Ernst, P. A.
(“Tony”) Leineweber, Susan R. Steers, Brandon L. Works, L. James Weeks, Richard
D. Snyder, Christopher Mumford, William L. Smith, Charles E. Carlbom, John W.
Larson, and James A. Bondoux, except to the extent any such Person receives a
release pursuant to this Plan as a member of the CP Admin Group.

 

1.143                 “Released
Debtor Persons’ Claims” has the meaning set forth in section 8.9.1.

 

1.144                 “Released
Lender Parties” means, collectively, the Collateral Agent, the Bank Term
Lender Agent, the Term Lenders, and each of their respective past, current and
future members, shareholders, directors, officers, employees, agents,
accountants, financial advisors, attorneys, trustees, representatives, other
affiliates and their successors and assigns.

 

1.145                 “Released
Term Lender Claims” has the meaning set forth in section 8.6.1.

 

1.146                 “Required
Class 5 Holders” means, after the Effective Date, any composition of
Holders holding in excess of fifty percent (50%) of the aggregate amount of
Allowed Class 5 Claims.

 

1.147                 “Required
Proponent Term Lenders” means (i) on or prior to the Effective Date, as of
any date of determination, any composition of the Proponent Term Lenders that
held at least two-thirds (2/3s) of the aggregate Proponent Term Lender Claims;
and (ii) after the Effective Date, as of any date of determination, the
Required Class 5 Holders.

 

21

 

1.148                 “Retention
Plan” means the Key Employee Retention Plan approved by the Court in the
Chapter 11 Cases by its Order Approving Debtors’ Key Employee Retention Plan
and Post-Petition Modified Severance Program and Authorizing Payments to Be
Made Pursuant to the Terms Thereunder Without Further Order of the Court
entered on May 19, 2004.

 

1.149                 “SEC Filings”
means public filings by CPP with the Securities and Exchange Commission
pursuant to the Securities Act of 1934, as amended, prior to October 31, 2004.

 

1.150                 “Secured
Claim” means any Claim, to the extent reflected in the Bankruptcy Schedules
or a proof of claim as a Secured Claim, to the extent it is secured by a valid,
unavoidable Lien or Security Interest in Collateral (whether consensual or otherwise),
to the extent of the value of the Estates’ interest in such Collateral, as
determined in accordance with section 506(a) of the Bankruptcy Code and taking
into account any other Secured Claims with respect to such Collateral not
inferior in priority to such Secured Claim, or, in the event that such Claim is
subject to setoff under section 553 of the Bankruptcy Code, to the extent of
such setoff.

 

1.151                 “Secured Tax
Claim” means any Claim of a governmental unit that under applicable state
law is secured by a Lien on any of the Debtors’ Assets.

 

1.152                 “Security
Interest” has the meaning set forth in section 101(50) of the Bankruptcy
Code.

 

1.153                 “Senior
Notes” means:

 

(i)    the 9.78% Senior Notes due December 1, 2009
(as amended and outstanding from time to time) in the original aggregate
principal amount of $275,000,000, issued by CPLP pursuant to the Note Purchase
Agreement, dated as of December 1, 1994, 
between CPLP and the purchasers named therein;

 

22

 

(ii)    the 9.60% Senior Notes due December 1, 2009
(as amended and outstanding from time to time) in the original aggregate
principal amount of $25,000,000, issued by CPLP pursuant to the Note Purchase
Agreement, dated as of March 15, 1995, between CPLP and the purchasers named
therein;

 

(iii)    the Senior Notes issued by CPLP in the
original aggregate principal amount of $91,000,000, comprised of (a) 8.01%
Senior Notes, Series A, due August 1, 2006, in the original aggregate principal
amount of $6,490,000, (b) 8.16% Senior Notes, Series B, due August 1, 2011, in
the original aggregate principal amount of $50,000,000, (c) 8.21% Senior Notes,
Series C, due August 1, 2011, in the original aggregate principal amount of
$19,510,000 and (d) 8.25% Senior Notes, Series D, due August 1, 2013, in the
original aggregate principal amount of $15,000,000, (as amended and outstanding
from time to time), issued pursuant to the Note Purchase Agreement, dated as of
August 1, 1996, between CPLP and the purchasers named therein; and

 

(iv)    the Senior Notes issued by CPLP in the
original aggregate principal amount of $95,000,000, comprised of (a) 7.76%
Senior Notes, Series A, due February 1, 2012, in the original aggregate
principal amount of $15,000,000, (b) 7.76% Senior Notes, Series B, due February
1, 2013, in the original aggregate principal amount of $55,000,000, and (c)
7.93% Senior Notes, Series C, due February 1, 2018, in the original aggregate
principal amount of $25,000,000 (as amended and outstanding from time to time),
issued pursuant to the Note Purchase Agreement, dated as of December 15, 1997,
between CPLP and the purchasers named therein.

 

1.154                 “Severance
Program” means the Post-Petition Modified Severance Program approved by the
Court in the Chapter 11 Cases by its Order Approving Debtors’ Key Employee
Retention Plan and Post-Petition Modified Severance Program and Authorizing
Payments to Be

 

23

 

Made
Pursuant to the Terms Thereunder Without Further Order of the Court entered on
May 19, 2004.

 

1.155                 “Subordinated
Claim” means any Claim that is subordinated by Final Order pursuant to
section 510 of the Bankruptcy Code or otherwise.

 

1.156                 “Tax Indemnity Agreement” means the Tax Indemnity
Agreement, dated as of October 30, 1998, between CPLP and ICX Corporation.

 

1.157                 “Term Lender
Claim” means a Claim against the Debtors arising under or pursuant to a
Senior Note and/or the Bank Loan Documents.

 

1.158                 “Term Lender
Collateral” means the Collateral securing the Term Lender Claims.

 

1.159                 “Term Lender
Consent” means, as to
any action or issue requiring consent of the Term Lenders under this Plan, the
consent or acceptance (in accordance with section 14.5 of this Plan) of the
Required Proponent Term Lenders.

 

1.160                 “Term Lender
Deficiency Claim” means the Unsecured portion of a Term Lender Claim in
accordance with section 506(a) of the Bankruptcy Code.

 

1.161                 “Term Lender
Secured Claim” means that portion of a Term Lender Claim that is secured by
the Term Lender Collateral.

 

1.162                 “Term
Lenders” means, singularly and/or collectively, each of the Bank Term
Lenders, the Bank Term Lender Agent, the Collateral Agent and the Noteholders.

 

1.163                 “Trust
Assets” means all Assets except (i) the Term Lender Collateral (provided that
the Excluded Collateral listed on Schedule 5.2.1 as transferred to the Trust
shall constitute Trust Assets), (ii) the Abandoned Assets, (iii) the Bonners
Ferry Assets (other than the LPC Escrow) and Bonners Ferry Realty if Bonners
Ferry Acceptance or Bonners Ferry Consensual Transaction Acceptance is
received, (vi) the NewCo Ancillary Assets, (v) the NewCo Corp

 

24

 

Funding
Amount, and (vi) equity interests in the NewCo Entities and the Assets
transferred to the NewCo Entities in accordance with this Plan.

 

1.164                 “Trust
Beneficiaries” means Holders of Allowed Class 4, 5 and 6 Claims as of and
after the Effective Date.

 

1.165                 “Unclassified
Claims” means Administrative Expense Claims and Priority Tax Claims.

 

1.166                 “Unsecured
Claim” means any Claim that is not a Secured Claim, Administrative Expense
Claim, Priority Tax Claim or Other Priority Claim.

 

1.167                 “U.S.
Trustee” means the Office of the United States Trustee for Region 14.

 

1.168                 “Value of
NewCo Ancillary Assets” means $17,140,787, less $9,200,000 if the Net Worth
Assets are not transferred by CPLP to NewCo.

 

For
purposes of this Plan: (a) whenever from the context it is appropriate, each
term, whether stated in the singular or the plural, shall include both the
singular and the plural; (b) to the extent a reference or description in this
Plan to an Operative Document is inconsistent with the terms or conditions of
that Operative Document, the terms and conditions of the Operative Document
shall govern over the reference or description contained in this Plan; (c) any
reference in this Plan to an existing document, schedule, Operative Document,
or exhibit filed or to be filed means such document, schedule, Operative
Document, or exhibit, as it may have been or may be amended, modified, or
supplemented in accordance with section 14.13; (d) unless otherwise specified
in a particular reference, all references in this Plan to sections, Articles,
and exhibits are references to sections, Articles, and exhibits of or to this
Plan; (e) the words “herein,” “hereof,” “hereto,” “hereunder,” and others of
similar import refer to this Plan in its entirety rather than to only a
particular portion of this Plan; (f) the word “all” shall mean “any and all”;
(g) captions and headings to Articles and sections are inserted for convenience
of reference only and are not

 

25

 

intended to be a part of or to
affect the interpretations of this Plan; (h) the rules of construction set forth
in section 102 of the Bankruptcy Code shall apply, including that the terms
“includes,” “shall include,” and “including” are not limiting; (i) reference to
a pleading, request, or document being “filed” means duly and properly filed
with the Court as reflected on the docket of the Court; (j) all exhibits and
schedules to this Plan are incorporated into this Plan, and shall be deemed to
be included in this Plan, regardless of when they are filed; (k) any service or
notice provided for in this Plan shall be provided at the addresses specified
in section 14.2.1 of this Plan; (1) except to the extent that the Bankruptcy
Code or other federal law is applicable, or to the extent the exhibits or
Operative Documents provide otherwise, the rights, duties and obligations under
this Plan shall be governed, construed and enforced in accordance with the laws
of the State of Arizona; and (m) to the extent a reference or description in
the Disclosure Statement to this Plan or an Operative Document is inconsistent
with the terms or conditions of this Plan or Operative Document, the terms and
conditions of this Plan or Operative Documents shall govern over the reference
contained in the Disclosure Statement.

 

ARTICLE II

SUBSTANTIVE CONSOLIDATION OF DEBTORS’ ESTATES

 

2.1                               Substantive Consolidation. This Plan
will serve to substantively consolidate the Chapter 11 Cases. The Confirmation
Order must contain findings supporting, and conclusions providing for,
substantive consolidation of the Debtors’ Estates for purposes of Distributions
on the terms set forth in this Article II of this Plan.

 

2.2                               Effect of Substantive Consolidation. As a result of the substantive consolidation of the Assets
and liabilities of the Debtors: (a) the Chapter 11 Cases shall be consolidated
into the case of CPLP as a single consolidated case; (b) all property of the
Estate of each of the Debtors shall be deemed to be property of the
Consolidated Estate; (c) all Allowed Claims against each Estate of the Debtors
shall be deemed to be Allowed Claims against the

 

26

 

Consolidated
Estate, any proof of claim filed against one or more of the Debtors shall be
deemed to be a single Claim filed against the Consolidated Estate, and all
duplicate proofs of Claim for the same Claim filed against more than one Debtor
shall be expunged; (d) all Intercompany Claims by and against any of the
Debtors shall be eliminated, and no Distributions under this Plan shall be made
on account of Claims based upon such Intercompany Claims; (e) except as
specifically provided herein, all guarantees by one Debtor of claims against
any other Debtor shall be extinguished and eliminated, and no Distributions
under this Plan shall be made on account of Claims based upon such guarantees;
and (f) for purposes of determining the availability of the right of setoff
under section 553 of the Bankruptcy Code, the Debtors shall be treated as one
consolidated entity so that, subject to the other provisions of section 553 of
the Bankruptcy Code, debts due to one Debtor and claims against one Debtor may
be set off against the debts of and claims against the other; provided, however, the consolidation shall
not affect or expand in any manner the liability of non-Debtors on any Claim.

 

2.3                               No Impact on
Secured Claims. Substantive
consolidation shall have no effect upon valid, enforceable and unavoidable
Liens, and shall not expand or contract those liens in any way. Substantive
consolidation shall not have the effect of creating a Claim in a Class
different from the Class in which a Claim would have been placed under this
Plan in the absence of substantive consolidation. The substantive consolidation
contemplated herein shall not affect any applicable date(s) for purposes of
pursuing any Bankruptcy Causes of Action.

 

ARTICLE III

CLASSIFICATION OF CLAIMS AND INTERESTS

 

3.1                               Classification. All Claims and Interests,
except Administrative Expense Claims (which term includes, without limitation,
Fee Claims) and except Priority Tax Claims, are placed in the Classes set forth
below. In accordance with section 1123(a)(1) of the Bankruptcy

 

27

 

Code,
Administrative Expense Claims and Priority Tax Claims are not classified.  A Claim or Interest is placed in a particular
Class only to the extent that the Claim or Interest falls within the
description of that Class and is classified in other Classes to the extent that
any portion of the Claim or Interest falls within the description of such other
Classes.

 

A Claim or Interest is also placed in a particular Class for all
purposes, including voting on this Plan, confirmation and receiving
Distributions pursuant to this Plan only to the extent that such Claim or
Interest is an Allowed Claim in that Class and such Claim has not been paid,
released or otherwise settled prior to the Effective Date.

 

3.2                          Unclassified
Claims (not
entitled to vote on this Plan).

 

(a)                                  Administrative Expense Claims.

 

(b)                                 Priority Tax Claims.

 

3.3                           Classes of Claims.

 

(a)                                  Class 1. Other Priority Claims.

 

(b)                                 Class 2. Term Lender Secured Claims.

 

(c)                                  Class 3.  Other Secured
Claims.  Each Holder of an Other Secured
Claim shall be deemed to be in a separate class for purposes of voting on and
confirming this Plan.

 

(d)                                 Class 4. General Unsecured Claims.

 

(e)                                  Class 5. Term Lender Deficiency Claims.

 

(f)                                    Class 6. Foxglove Option Claim.

 

(g)                                 Class 7. Bonners Ferry Claims.

 

(h)                                 Class 8.  Subordinated
Claims.

 

28

 

(i)                                     Class 9.  Interests.

 

ARTICLE IV

TREATMENT OF CLAIMS AND INTERESTS RIGHT TO VOTE 

 

4.1                               Unclassified Claims.

 

4.1.1                          Administrative
Expense Claims.

 

4.1.1.1           General Provisions.  Subject
to the provisions of sections 330(a), 331 and 503(b) of the Bankruptcy Code,
each Allowed Administrative Expense Claim shall be paid in full, in Cash, by
the Liquidating Trustee from the Liquidating Trust on, or as soon as reasonably
practicable after, the latest of: (a) the Effective Date; (b) such date as may
be fixed by the Court; and (c) the tenth Business Day after such Claim is
Allowed, unless otherwise agreed by the Holder of such Claim and the
Liquidating Trustee.

 

4.1.1.2           Requests for Payment. All requests for payment of Administrative Expense Claims
must be filed within forty-five (45) days after the Effective Date or the
holders thereof shall be forever barred from asserting such Administrative
Expense Claims against the Debtors, the Assets or the Liquidating Trust. All
final applications for allowance and disbursement of Fee Claims must be filed
in accordance with section 4.1.1.3 of this Plan.

 

4.1.1.3           Fee
Claims. Each Entity
seeking an award by the Court of a Fee Claim: (a) must file its final
application for allowance of such Fee Claim within forty-five (45) days after
the Effective Date; and (b) if the Court grants such an award, each such Entity
shall be paid in full in Cash by the Liquidating Trustee from the
Administrative Reserve in such previously unpaid Allowed amounts as soon
thereafter as practicable. All such applications must be in compliance with all
of the terms and provisions of any applicable order of the Court, including the
Confirmation Order, and all other orders governing payment of Fee Claims.

 

29

 

4.1.1.4           Postpetition Tax Claims. All Postpetition Tax Claims must be filed with a motion for
payment and served on the Liquidating Trustee, the Creditors’ Committee, the
Proponent Term Lenders, and any other party specifically requesting a copy in
writing on or before the later of (i) fifteen (15) days following the date of
mailing of the notice of the Effective Date; and (ii) one hundred and twenty
(120) days following the filing of the tax return for such taxes for such tax
year or period with the applicable governmental unit for any amounts in excess
of the amount shown as due on such return; unless an application is filed under
section 505(b) of the Bankruptcy Code, and if such application is filed, the
sixty-first (61st) day after the filing of such application. Any Holder of any
Postpetition Tax Claim that is required to file a motion for payment of such
taxes and which does not file and properly serve such a Claim by the applicable
bar date shall be forever barred from asserting any Postpetition Tax Claim in
excess of the amount shown due on the applicable return against the Debtors, or
their Assets, regardless of whether any such Postpetition Tax Claim is deemed
to arise prior to, on, or subsequent to the Effective Date. Any interested
party may object to any Postpetition Tax Claim by filing a written objection
with the Court and serving its objection on the Liquidating Trustee, the
Creditors’ Committee, the Proponent Term Lenders and the relevant governmental
unit. Postpetition Tax Claims shall be Allowed upon entry of a Court order
pursuant to the Claim motion, and shall be deemed Allowed in the amount shown
on any return specified in clause (ii) above in the absence of a timely motion
for payment of a Claim for additional amounts due by the applicable
governmental unit.

 

4.1.2                                             Priority Tax Claims. On, or as
soon as reasonably practicable after, the later of (i) the Effective Date or
(ii) the date on which a Priority Tax Claim becomes an Allowed Priority Tax
Claim, each Holder of an Allowed Priority Tax Claim shall receive in full
satisfaction, settlement and release of and in exchange for such Allowed
Priority Tax Claim: (a) Cash equal to the amount of such Allowed Priority Tax
Claim; or (b) such other treatment as to

 

30

 

which
the Liquidating Trustee and the Holder of such Allowed Priority Tax Claim shall
have agreed upon in writing.

 

4.2                               Classified Claims
and Interests.

 

4.2.1                                             Class 1.
Other Priority Claims. The legal and equitable rights of the Holders of
Allowed Other Priority Claims are unaltered by this Plan. On, or as soon as
reasonably practicable after, the later of (i) the Effective Date or (ii) the
date on which such Other Priority Claim becomes an Allowed Other Priority
Claim, each Holder of an Allowed Other Priority Claim shall receive in full satisfaction,
settlement and release of and in exchange for such Allowed Other Priority Claim
to the extent necessary to render each such Allowed Priority Claim unimpaired
within the meaning of section 1129 of the Bankruptcy Code: (a) Cash equal to
the amount of such Allowed Other Priority Claim (including any interest on such
claim to which such Holder may be entitled, if any); or (b) such other
treatment as to which the Debtors, the Committee, the Required Proponent Term
Lenders and/or Liquidating Trustee and the Holder of such Allowed Other
Priority Claim shall have agreed upon in writing.

 

Holders of Class 1 Claims
are not impaired and are deemed to have accepted this Plan.

 

4.2.2                                             Class 2. Secured
Term Lender Claims.

 

4.2.2.1                                   Claim Allowance.  Class 2 consists
of Secured Term Lender Claims.  Class 2
Claims remaining after distribution of proceeds of Term Lender Collateral
during the Chapter 11 Cases are Allowed in the aggregate amount of $292,023,025
(unless there is a material adverse change in the Collateral securing the Term
Lender Claims, in which event, the Proponent Term Lenders may petition the
Court to determine the aggregate Allowed amount of the Secured Term Lender
Claims), which amount is allocated among the Holders of Term Lender Claims
based on the outstanding principal amount of the respective Term Lender’s
Allowed

 

31

 

Claim
to the aggregate outstanding principal amount of Allowed Term Lender Claims,
consistent with the provisions of the Intercreditor Agreement.

 

4.2.2.2           Claim Treatment. In full and final satisfaction of any and all Allowed
Class 2 Claims, the Holders of Class 2 Claims will receive all of the
outstanding equity ownership interests in NewCo and each NewCo Corp, after all
of the Debtors’ right, title and interest in the Term Lender Collateral as of
the Effective Date (less the Excluded Collateral) has been assigned to the
NewCo Entities in accordance with Section 5.4.1 of this Plan. Each Term Lender
may elect to receive either NewCo Membership Interests or NewCo Corp Shares by
checking the appropriate box on the ballot (the NewCo Membership Interests and
NewCo Corp Shares are collectively referred to in this Plan as the “NewCo
Units”). A separate NewCo Corp shall be formed for each Term Lender that
elects to receive NewCo Corp Shares. Any Term Lender that does not elect to
receive NewCo Corp Shares will receive its distribution in the form of NewCo
Membership Interests. Each Term Lender shall receive NewCo Units in an amount
such that its percentage ownership of NewCo (either directly or indirectly
through a NewCo Corp), will equal the percentage of the outstanding principal
amount of Senior Notes and Bank Loans such Term Lender owned to the aggregate
outstanding principal amount of Senior Notes and Bank Loans as of the
Distribution Record Date. The NewCo Entities are successors of the Debtors
within the meaning of section 1145 of the Bankruptcy Code, and under that
section, the issuance, distribution and transfer of NewCo Units pursuant to
this Plan shall be exempt from registration under the Securities Act of 1933,
as amended, and applicable state laws requiring registration of securities.

 

If a Term Lender wishes to receive a portion of its NewCo Units in the
form of NewCo Membership Interests and the remaining portion in NewCo Corp.
Shares, it may so indicate on its ballot. Ambiguity concerning whether a Term
Lender has elected to receive NewCo Membership Interests or NewCo Corp Shares
or how many NewCo Corps should be

 

32

 

formed
will not affect the validity of the vote to accept or reject the Plan. The
Required Proponent Term Lenders shall resolve any ambiguities with such
election, if any, prior to the Effective Date.

 

A Term Lender
may designate an Entity or Entities other than itself to receive its NewCo
Units and/or its beneficial interests in the Liquidating Trust on the Effective
Date if such Term Lender (i) delivers written notice not later than 5:00 pm
(prevailing Pacific time) on the Distribution Record Date in accordance with
Section 14.2, which notice explicitly states such Term Lender’s intention to
designate one or more Entities to receive its NewCo Units or its beneficial
interests in the Liquidating Trust and clearly identifies such other Entity or
Entities and (ii) concurrently with such notice, the designee receiving the
NewCo Units or the beneficial interests in the Liquidating Trust delivers a
letter, in form and substance satisfactory to the counsel to Proponent
Noteholders, in which it makes for the benefit of NewCo the representations set
forth in Section 11.1 of the NewCo Amended and Restated Limited Liability
Company Operating Agreement and agrees to be bound by the terms thereof,
provided that, a Term Lender may not designate more than one Entity to receive
its interests if (i) in the case of NewCo Units, either Entity will receive
NewCo units representing less than 0.5% of the aggregate equity of NewCo and,
(ii) in the case beneficial interests in the Liquidating Trust, the aggregate
number of Holders of Class 5 beneficial interests would exceed 450.

 

4.2.2.3           Impairment; Voting. The Holders of Class 2 Claims are impaired and
entitled to vote to accept or reject this Plan.

 

4.2.3             Class 3.
Other Secured Claims.

 

4.2.3.1           General Treatment. On, or as soon as reasonably
practicable after, the later of (i) the Effective Date, (ii) the date on which
such Other Secured Claim becomes an Allowed Other Secured Claim, or (iii)
solely with respect to a Secured Claim that is a Secured

 

33

 

Tax
Claim, the last day on which the Secured Tax Claim is due and payable without
interest or penalty, each Holder of an Allowed Other Secured Claim shall
receive in full satisfaction, settlement and release of and in exchange for
such Allowed Other Secured Claim at the election of (i) if before the Effective
Date, the Debtors, Creditors’ Committee and the Required Proponent Term Lenders
or (ii) if after the Effective Date, the Liquidating Trustee, (a) Cash in the
full amount of such Allowed Other Secured Claim; (b) the return of any and all
Collateral securing such Allowed Other Secured Claim (except as to a Secured
Tax Claim); (c) such other treatment as to which the Debtors, the Creditors’
Committee and the Required Proponent Term Lenders and/or Liquidating Trustee,
as applicable, and the Holder of such Allowed Other Secured Claim shall have
agreed upon in writing (including an agreement by LPC to Bonners Ferry
Consensual Transaction Acceptance); or (d) such other treatment as may be
ordered by the Court.

 

4.2.3.2           Impairment; Voting. Holders of Class 3 Claims
are impaired and are entitled to vote to accept or reject this Plan.

 

4.2.4             Class 4. General
Unsecured Claims.

 

4.2.4.1           General
Treatment. Holders
of Allowed Class 4 Claims shall be Trust Beneficiaries, and in full and final
satisfaction of their Claims, shall receive their pro rata share of the Class 4 Aggregate Distribution from
the Liquidating Trust, provided
that (i) in no event shall any Allowed Class 4 Claim be paid more than 100% of
the Allowed Amount of such Claim and (ii) the Holder of any Insured Claim must
first pursue such Claim against any applicable insurance policy and exhaust all
such recovery rights on the Claim before being entitled to receive
Distributions under this Plan. Distributions to Allowed Class 4 Claims shall be
made as provided in Article VII and sections 6.7.2 and 6.7.3 of this Plan.  No postpetition interest will be allowed or
paid on any Class 4 Claim.

 

34

 

4.2.4.2           Impairment; Voting. Holders of Class 4 Claims are impaired and are entitled to
vote to accept or reject this Plan.

 

4.2.5             Class 5. Term Lender Deficiency Claims.

 

4.2.5.1           Claim
Allowance. Class
5 Claims are Allowed in an aggregate amount equal to $505,438,510 less the
aggregate amount of the Allowed Class 2 Claims, i.e. $213,415,486 (unless there is a material adverse change
in collateral value, resulting in a change in the Allowed Class 2 Claims).  This aggregate Allowed Claim amount is
allocated among the Holders of Allowed Term Lender Claims based on the ratio of
each such Holder’s Allowed Claim (less such Holder’s Allowed Class 2 Claim) to
the aggregate Allowed Class 5 Claims.

 

4.2.5.2           General Treatment. Holders
of Allowed Class 5 Claims shall, and in full and final satisfaction of their
Claims, receive (i) an enhancement in the value of the NewCo Entities through
the transfer by CPLP of the NewCo Ancillary Assets to the NewCo Entities; (ii)
an enhancement in the value of the NewCo Entities through the transfer by CPLP
of the NewCo Corp Funding Amount to the NewCo Corps, and the subsequent
contribution of such amount to NewCo by the NewCo Corps; and (iii) beneficial
interests in the Liquidating Trust in an aggregate percentage equal to the
Class 5 Sharing Percentage (subject to adjustment as set forth in the next two
immediately following sentences). Distributions from the Liquidating Trust from
Distributable Cash allocated to Allowed Class 5 Claims shall be reduced (unless
or until the Aggregate Allowed Class 4 Claims have received 100% of such
Allowed Class 4 Claims) in an amount equal to (i) the Class 5 Funded Amount,
plus (ii) the Class 4 Sharing Percentage of the Value of NewCo Ancillary
Assets, plus (iii) the Class 4 Sharing Percentage of the NewCo Corp Funding
Amount. No postpetition interest will be allowed or paid on any Class 5 Claim.
Distributions by the Liquidating Trustee on behalf of Holders of Class 5
beneficial interests in the Liquidating Trust shall be distributed pursuant to
the terms of the Intercreditor Agreement.

 

35

 

A Term Lender may designate an Entity or Entities other than itself to
receive its beneficial interests in the Liquidating Trust on the Effective Date
as set forth in section 4.2.2.2.

 

4.2.5.3           Impairment; Voting. Holders of Class 5 Claims are impaired and
are entitled to vote to accept or reject this Plan.

 

4.2.6             Class 6. Foxglove Option Claim.

 

4.2.6.1           General Treatment.

 

(a)(1) The Foxglove Option Property will be assigned to the NewCo
Subsidiary named Cascade Timberlands (Hamilton) LLC (the “Hamilton
Subsidiary”) subject to the Foxglove Option Agreement which will be
unimpaired.  The Foxglove Option
Agreement and each of the terms and conditions thereof will remain in full
force and effect except as modified herein.

 

(2) As soon as practicable after assignment of the Foxglove
Option Property to the Hamilton Subsidiary, and in no event more than 60 days
following the Effective Date, the Hamilton Subsidiary will grant a lien on the
Foxglove Option Property to secure its obligations under the Foxglove Option
Agreement pursuant to a deed of trust (a) in form and substance reasonably
satisfactory to Foxglove LLC (“Foxglove”) and the Hamilton Subsidiary
and (b) in the event of any disagreement between such parties, in a form
approved by the Bankruptcy Court after notice and hearing.

 

(3) The per acre Purchase Price (as defined in Section 7.1 of
the Foxglove Option Agreement) shall be amended to the sum of (a) $215 plus (b)
an amount equal to (i) the product of (A) the Value of the Foxglove Option (as
determined pursuant to subparagraph (b) below) multiplied by (B) 14.8%, divided
by (ii) the total number of acres subject to the Foxglove Option.

 

36

 

(4) For all purposes of the Foxglove Option Agreement and
this Section 4.2.6.1 of the Plan, the Glen Echo Acreage shall be deemed to have
been deleted from, and not included within, the Foxglove Option Agreement and
the Foxglove Option Property.

 

(5)
Notwithstanding Section 5.2.2 of this Plan, in the event that Foxglove on or
prior to December 22, 2004 notifies CPLP in writing pursuant to this Section
4.2.6.1 of its election to acquire the Glen Echo Acreage at no cost, then CPLP
will transfer by quitclaim deed (i.e. on
a completely nonrecourse basis) to Foxglove the Glen Echo Acreage, subject to a
declaration of easements to permit use of existing roads.

 

(b) By the 30th day immediately following the Effective Date (the “Appointment
Date”), each of Foxglove and the Hamilton Subsidiary shall engage a
qualified licensed real estate appraiser or appraisal firm with significant
experience appraising timberlands and residential property in Whatcom County,
Washington (an “Appraiser”) to determine the fair market value of the
Foxglove Option as of the Effective Date (the “Value of the Foxglove Option”),
which appraisals shall be completed by the 90th day immediately following the
Effective Date (the “Report Date”).

 

The first two appointed Appraisers shall submit to each other
simultaneously on or prior to the Report Date copies of their respective
written determinations of the fair market value of the Foxglove Option as of
the Effective Date (each, a “Determination”). If the fair market value
of the Foxglove Option set forth in the two Appraisals are within 10% of each
other, then the Value of the Foxglove Option shall be the arithmetic average of
such two Determinations. If the two Determinations are not within 10%, then
Foxglove and the Hamilton Subsidiary shall engage a third Appraiser (which
third Appraiser shall be reasonably acceptable to Foxglove and the Hamilton
Subsidiary, the “Third Appraiser”), provided, that in the event
of any disagreement between such parties, the Third Appraiser shall be selected
by the Bankruptcy Court after notice

 

37

 

and
hearing. The Third Appraiser shall, by the 60th day immediately following its
engagement, submit to Foxglove and the Hamilton Subsidiary its
Determination.  Upon receipt by Foxglove
and the Hamilton Subsidiary of the Determination by the Third Appraiser, the
Determination with the highest fair market value of the Foxglove Option and the
Determination with the lowest fair market value of the Foxglove Option will be
disregarded and the Value of the Foxglove Option will be deemed to be as set
forth in the remaining Determination.

 

The Determinations shall be prepared (i) in good faith using reasonable
assumptions, (ii) without reference to the proof of claim filed by Foxglove
against the Debtors, and (iii) assuming a per acre purchase price for the
Foxglove Option of $215.

 

Each of Foxglove and the Hamilton Subsidiary shall pay the fees and
expenses of its Appraiser and each shall pay 50% of the fees and expenses of
the Third Appraiser (if applicable).

 

The Bankruptcy Court shall have jurisdiction to adjudicate any dispute
that may arise with respect to the subject matter, including any procedures,
set forth in this Section 4.2.6.1.

 

4.2.6.2           Impairment; Voting. Holders of Class 6 Claims are impaired and are
entitled to vote to accept or reject this Plan.

 

4.2.7             Class 7. Bonners Ferry Claims.

 

4.2.7.1           General Treatment.

 

(a) If the Bonners Ferry Consensual Transaction Acceptance is not
received, but the Bonners Ferry Acceptance is received, the Bonners Ferry
Claims will be satisfied by (i) the transfer to the Owner-Trustee (or a
designee thereof to the extent designated by the Owner-Trustee in writing to
the Proponents prior to the Effective Date) of CPLP’s right, title and interest
in and to the Bonners Ferry Realty, subject to any rights and obligations of
any Entity (except the Debtors) under the Bonners Ferry Documents, and (ii) the
assumption by CPLP and assignment to

 

38

 

the
Owner-Trustee, pursuant to Bankruptcy Code Section 365, of any remaining
interest of CPLP in (a) the Bonners Ferry Site Lease, (b) the LPC Sublease, and
(c) the Bonners Ferry Facility Lease to the extent not previously transferred
to LPC under the LPC Purchase Agreement or the LPC Sublease, provided, however that the LPC Escrow
shall not be transferred to the Owner Trustee and will be transferred to the
Liquidating Trust as Trust Assets.

 

The Other Bonners Ferry Documents shall be rejected, to the extent they
are executory.  The Bonners Ferry Parties
shall be deemed to have released the Debtors, their Estates, the Consolidated
Estate, the Liquidating Trust and Liquidating Trustee, the NewCo Entities, and
each of the Term Lenders of any and all claims directly or indirectly relating
to the Bonners Ferry Documents, including all liability of CPLP and its
successors in interest under the Bonners Ferry Sublease Assignment in
accordance with the assignment of all of CPLP’s remaining rights and interest
in the LPC Sublease under Bankruptcy Code § 365(f).

 

(b) If (and only if) the Bonners Ferry Consensual Transaction
Acceptance is received, then all Claims of each Bonners Ferry Party and of LPC
shall be deemed Allowed in the amounts of the value each respectively receives,
and satisfied by (all to occur substantially contemporaneously):

 

(i) the transfer to BFM LLP (or other entity
acceptable to all parties) of CPLP’s right, title and interest in Bonners Ferry
Realty (subject to any rights and obligations of any Entity (except the
Debtors) under the Bonners Ferry Documents);

 

(ii) the assumption by CPLP, assignment to BFM LLP
(pursuant to Bankruptcy Code section 365) and acceptance by BFM LLP (by the
Bonners Ferry Parties’ favorable vote on the Plan) of any remaining interest of
CPLP in (x) the Bonners Ferry Site Lease, (y) the LPC sublease, and (z) the
Bonners Ferry Facility Lease to the extent not previously transferred to LPC
under the LPC Purchase Agreement or the LPC Sublease, provided, however, that on or prior to the
Effective Date, the entire LPC Escrow of $2 million (together with all interest
and gain from any investment of such funds) less $500,000 will be transferred
to CPLP, which funds will be transferred by CPLP to the Liquidating Trust as
Trust Assets on the Effective Date, and the remaining $500,000 of the LPC
Escrow shall be transferred to an escrow agent on behalf of the Bonners Ferry
Parties and LPC,

 

39

 

and provided, further that BFM LLP shall commit to comply in
full with the terms of the assigned Bonners Ferry Documents;

 

(iii) the Other Bonners Ferry Documents will be
assumed and assigned to BFM LLC, or terminated at its direction; and

 

(iv) each of the Bonners Ferry Parties and LPC will release
(and in connection therewith) execute releases of any and all claims (including
any and all collateral securing any such claims) directly or indirectly
relating to the Bonners Ferry Documents, against the Debtors (individually and
on behalf of their Estates) and their successors and assigns, including all
liability of CPLP and its successors in interest under the Bonners Ferry
Sublease Assignment in accordance with the assignment of all of CPLP’s
remaining rights and interest in the LPC Sublease under Bankruptcy Code Section
365(f). Contemporaneously with the foregoing release,  the Debtors will release (and in connection
therewith) execute releases of any and all claims directly or indirectly
relating to the Bonners Ferry Documents (other than with respect to the payment
of the LPC Escrow funds set forth in clause (ii) above) against the Bonners
Ferry Parties and LPC.

 

(c) If neither Bonners Ferry Acceptance nor Bonners Ferry
Consensual Transaction Acceptance is received, the Bonners Ferry Documents
(except for the LPC Escrow, to the extent it may be deemed executory) and Other
Bonners Ferry Documents will be rejected, and any Allowed Bonners Ferry Claims
will be treated with other unsecured Class 4 Claims. The Debtors’ interests in
the LPC Escrow and Bonners Ferry Realty will become Trust Assets.

 

4.2.7.2           Impairment; Voting. Holders of Class 7 Claims
are impaired and are entitled to vote to accept or reject this Plan.

 

4.2.8             Class 8. Subordinated Claims.

 

4.2.8.1           General
Treatment. Holders
of Subordinated Claims shall not receive any Distributions under this Plan.

 

4.2.8.2           Impairment; Voting. Holders
of Class 8 Subordinated Claims are impaired and are deemed to have rejected
this Plan.

 

40

 

4.2.9             Class 9. Interests.

 

4.2.9.1           General Treatment. Holders of Interests shall not receive any Distributions
under this Plan. Upon the Effective Date, all Interests shall be extinguished
and canceled without further action by the Debtors or notice to Holders of
Interests being necessary.

 

4.2.9.2           Impairment; Voting.  Holders
of Class 9 Interests are impaired and are deemed to have rejected this Plan.

 

4.3                               Retention of Defenses Regarding
Claims. Except as otherwise provided
in this Plan including, without limitation, Article VIII hereof, nothing shall
affect the Debtors’ rights and defenses, both legal and equitable, with respect
to any Claims, including, but not limited to, all rights with respect to legal
and equitable defenses of setoff or recoupment or subordination against Claims,
and such rights and defenses shall be deemed assigned to the Liquidating Trust
on the Effective Date.

 

ARTICLE V

PLAN IMPLEMENTATION, LIQUIDATING TRUST ISSUES AND
FUNDING

 

5.1                               Plan
Implementation. This Plan shall be implemented in all respects in a
manner that is consistent with the requirements of section 1123(a) and other
applicable provisions of the Bankruptcy Code.

 

5.2                               Excluded Collateral; Abandonment.

 

5.2.1                                             Identification of Excluded Collateral. On or before the Exhibit Filing Date, the Required Proponent
Term Lenders shall file with the Court Schedule 5.2.1 to this Plan, which
Schedule shall identify any specific items or parcels of Term Lender Collateral
that shall not be transferred to the NewCo Entities (the “Excluded
Collateral”) pursuant to section 5.4.1 below. Schedule 5.2.1 shall
designate whether each identified Asset shall be transferred by the Debtors to
the Liquidating Trust on or as of the Effective Date, or will be abandoned by
the Debtors as of the Effective Date. The Collateral Agent shall release,
and/or be deemed to have

 

41

 

released,
any and all Liens in favor of the Collateral Agent upon the Excluded Collateral
as of the Effective Date. To the extent that any private roads on any parcel of
Excluded Collateral provide access to any parcel of Term Lender Collateral that
will be transferred to NewCo, access easements over such roads will be granted
or established by CPLP to benefit the Term Lender Collateral.

 

5.2.2                                             Debtor Abandonment. This Plan shall constitute a
motion pursuant to Bankruptcy Code Section 554 to abandon, as of the Effective
Date, those Assets set forth on Schedule 5.2.2 of this Plan.  To the extent that the motion to abandon is
denied as to any such Assets by Final Order, such non-abandoned Assets shall
constitute Trust Assets.

 

5.3                               NewCo Entities.

 

5.3.1                                             Formation of NewCo Entities. Prior to the Effective Date,
if one or more Term Lenders has elected to receive NewCo Corp Shares, CPLP
shall cause the formation of the NewCo Corps by filing a certificate of
incorporation in the form attached as Exhibit B to this Plan with the Delaware
office of Secretary of State and adopting the by-laws attached as Exhibit C to
this Plan for each NewCo Corp being formed. 
One NewCo Corp shall be formed for each Term Lender that elects to
receive its NewCo Units in the form of NewCo Corp Shares.  CPLP shall be the sole shareholder of each
NewCo Corp.  Also prior to the Effective
Date, CPLP and the NewCo Corps shall cause the formation of NewCo by filing a
certificate of formation in the form attached as Exhibit D to this Plan in the
Delaware office of Secretary of State and adopting a limited liability company
agreement in the form attached as Exhibit E to this Plan. If no Term Lender
elects to receive NewCo Corp Shares, CPLP shall form NewCo as the sole member.

 

Prior to the Effective Date and following the formation of NewCo, CPLP
shall make a capital contribution to NewCo of $99 and the NewCo Corps shall
make a capital

 

42

 

contribution
to NewCo of $1, paid by the NewCo Corps pro
rata in proportion to the outstanding principal amount of Senior
Notes and Bank Loans owned by the Term Lenders who elected to receive NewCo
Corp Shares. Nine hundred ninety (990) uncertificated NewCo Membership
Interests shall be allocated to CPLP and ten (10) uncertificated NewCo
Membership Interests shall be allocated among the NewCo Corps in proportion to
their capital contributions to NewCo (rounded to the nearest whole number so
that there are no fractional NewCo Membership Interests).  If no NewCo Corp has been formed, CPLP shall
make a capital contribution of $100 to NewCo and in return shall receive 1000
uncertificated NewCo Membership Interests.

 

After the formation of NewCo and prior to the Effective Date, at the
direction of the Required Proponent Term Lenders, NewCo shall cause the
formation of each NewCo Subsidiary by filing a certificate of formation in the
form attached as Exhibit F to this Plan in the Delaware office of Secretary of
State and adopting a limited liability company agreement in the form attached
as Exhibit G to this Plan.  Each NewCo
Subsidiary shall be a single member limited liability company.  NewCo shall be the sole member of each NewCo
Subsidiary and shall hold its membership interests in each NewCo Subsidiary
free and clear of all liens, claims and interests of any kind.

 

In
accordance with applicable law, CPLP shall have appointed initial directors and
officers of the NewCo Corps.  Any
existing directors and officers of the NewCo Corps shall be terminated on the
Effective Date and be replaced pursuant to section 5.3.3.2 of this Plan.  At no time shall the directors and officers
of the NewCo Corps appointed by CPLP be deemed to be employees of the NewCo
Corps, and any compensation of such directors or officers and related
obligations, including any employment taxes, shall be obligations of CPLP.  None of NewCo or any NewCo Subsidiary shall
have any officers, directors or employees prior to the Effective Date.

 

43

 

CPLP shall designate the Liquidating Trustee as an “authorized person”
within the meaning of the Delaware Limited Liability Company Act, as
“incorporator” within the meaning of the Delaware General Corporation Law, and
as an officer and director of each NewCo Corp. for the limited purpose of
forming all the NewCo Entities and executing on behalf of each NewCo Entity all
organizational documents, filings, receipts, deeds and other documents that a
NewCo Entity may reasonably be expected to sign in connection with the actions
to be taken by each NewCo Entity pursuant to this Plan prior to the Effective
Date. The Liquidating Trustee may be indemnified for any liability incurred as
a consequence of such activities to the extent provided in the Liquidating
Trust Agreement and the organizational documents of the NewCo Entities.

 

5.3.2                                             Effective Date Transfers of Equity Interests in NewCo Entities.  On, or prior to, the Effective Date, NewCo
shall issue to CPLP 98,010 NewCo Membership Interests and to the NewCo Corps,
if formed, 990 NewCo Membership Interests, which NewCo Membership Interests
shall be allocated to each NewCo Corp in proportion to their respective capital
contributions to NewCo (rounded to the nearest whole number so that there are
no fractional NewCo Membership Interests), so that NewCo shall have issued in
the aggregate, 100,000 NewCo Membership Interests. If no NewCo Corp has been
formed, NewCo shall issue 99,000 NewCo Membership Interests to CPLP.
Immediately after the issuance of NewCo Membership Interests as provided in the
immediately preceding sentence, each NewCo Corp shall issue to CPLP additional
uncertificated shares so that the number of NewCo Membership Interests held by
it is the same as the number of its shares held by CPLP.

 

If
any NewCo Corp holds fewer NewCo Membership Interests than the number of NewCo
Membership Interests that the Term Lender for whom such NewCo Corp was formed
would otherwise receive under this Plan (a “Deficit”), CPLP shall contribute to
such NewCo Corp that number of NewCo Membership Interests equal to such Deficit
(rounded to the nearest whole number so that there are no fractional NewCo Membership
Interests).

 

44

 

On the Effective Date and after the transfer
of Assets to the NewCo Entities in accordance with this Plan, including section
5.4, CPLP shall distribute all NewCo Membership Interests and NewCo Corp Shares
held by CPLP to the Holders of Allowed Term Lender Claims as of the
Distribution Record Date (rounded to the nearest whole number so that there are
no fractional NewCo Membership Interests), provided
that the shares of each NewCo Corp shall be distributed only to the Term Lender
for whom such NewCo Corp was formed. 
Following such distribution, each Term Lender that elected to receive
NewCo Corp Shares shall own indirectly through a NewCo Corp that number of
NewCo Membership Interests to which such Term Lender is entitled under this
Plan. Each Term Lender shall receive NewCo Units in an amount such that its
percentage ownership of NewCo Membership Interests (directly or indirectly
through a NewCo Corp) will equal its percentage of the outstanding principal
amount of Senior Notes and Banks Loans it owns out of the aggregate outstanding
principal amount of Senior Note and Bank Loans.

 

Each Term Lender (or in the case of a Term
Lender that receives a NewCo Corp, such NewCo Corp) shall be deemed to have
complied with the conditions for becoming a Member of NewCo by its actions,
including receipt of NewCo Membership Interests (or shares of a NewCo Corp) in
exchange for its Class 2 Claims, and accordingly, each Term Lender (or NewCo
Corp that it holds) will be admitted as a Member of NewCo on the Effective Date
and shall be bound by the NewCo Amended and Restated Limited Liability Company
Agreement without execution thereof, as contemplated by Sections
18-101(7)(a)(2) and 18-101(7)(b) of the Delaware Limited Liability Company Act.

 

5.3.3            NewCo Entities’
Governance.

 

5.3.3.1         Authority Prior to Effective Date. Prior to the Effective
Date, employees, officers or members of the boards of directors, shareholders,
members, managers or agents of each NewCo Entity shall not be authorized to,
and none shall cause any such NewCo

 

45

 

Entity to, enter into any agreement on behalf of such NewCo Entity,
incur any obligations, conduct any business of any type or take any other
action (or cause any other action to be taken) by or on behalf of such NewCo
Entity, unless such action is expressly required by this Plan or by Term Lender
Consent. Any action in violation of the preceding sentence shall be deemed
void, unauthorized and without effect.

 

5.3.3.2         Effective Date Replacement of Officers and Directors. On the Effective Date and
immediately prior to the distribution to the Term Lenders of the NewCo Units:  (i) the terms of the officers and members of
the board of directors of each NewCo Corp elected or appointed prior to the
Effective Date shall be or shall be deemed to have terminated, (ii) the
post-Effective Date officers and members of the board of directors of NewCo and
the NewCo Subsidiaries, as specified in Schedule IX.D.6(e) to the Disclosure
Statement submitted with the consent of Required Proponent Term Lenders, shall
be appointed and shall be deemed to have been appointed, and (iii) the
Organizational Documents of NewCo and the NewCo Subsidiaries shall be deemed to
be amended and restated in Delaware, in the forms attached as Exhibits H and I
to this Plan. Each Term Lender for whom a NewCo Corp was formed shall be solely
responsible for: (i) electing post-Effective Date officers and members of the
board of directors and (ii) making any amendments to the NewCo Corp Organizational
Documents.

 

5.3.3.3         Retention of Tree Farm Manager. On the Effective Date, NewCo
will enter into an agreement in the form attached as Exhibit J to this Plan
with a tree farm specialist pursuant to which such specialist acts as tree farm
manager and manager (within the meaning of Delaware Limited Liability Company
Act) of NewCo.

 

5.4    Transfer of Assets.

 

5.4.1               Transfers to NewCo Entities. On the Effective Date and
prior to the Distribution described in section 4.2.2.2, the Debtors shall
transfer, assign and convey, and shall

 

46

 

be deemed to have transferred, assigned and conveyed all of their
then-held right, title and interest in the Term Lender Collateral (except the
Excluded Collateral) and the NewCo Ancillary Assets, directly to the NewCo
Entities as specified on Schedule 5.4.1 to this Plan.  On the Effective Date, the Debtors shall
contribute Cash in the amount of the NewCo Corp Funding Amount to the NewCo
Corps pro rata in proportion to
the outstanding principal amount of the Senior Notes and Bank Loans owned by
the Term Lenders who elected to receive NewCo Corp Shares. Each NewCo Corp will
immediately thereafter contribute such Cash to NewCo. If no NewCo Corp has been
formed pursuant to Section 5.3.1 of this Plan, on the Effective Date, the
Debtors shall contribute Cash in the amount of the NewCo Corp Funding Amount
directly to NewCo.

 

On the Effective Date, NewCo and the NewCo
Subsidiaries will hold title to the Term Lender Collateral (except the Excluded
Collateral) and the NewCo Ancillary Assets as specified on Schedule 5.4.1 free
and clear of all liens, claims and interest of any kind except (i) outstanding ad valorem Secured Tax Claims, (ii)
Preserved Real Property Rights and Other Preserved Real Property Rights
applicable to the transferred Assets, and (iii) that the Foxglove Option
Property shall remain subject to the Foxglove Option as set forth in Section
4.2.6.1 above.  The Collateral Agent
shall release and/or be deemed to have released, any and all liens in favor of
the Collateral Agent upon the Term Lender Collateral. Immediately after receipt
of the Assets, NewCo and each NewCo Corp and NewCo Subsidiary shall have no
other liabilities of any nature except as provided in this Plan.

 

5.4.2       Transfer of Net Worth Assets. CPALP and the CP Admin Group
have generally agreed to, among other things, transfer all of CPALP’s right,
title and interest in and to the Net Worth Assets to CPLP as of the Effective
Date in exchange for Cash in the amount of $1.5 million on the Effective Date
and the mutual releases provided in Sections 8.7 and 8.9 of this Plan, all on
terms reasonably satisfactory to the Proponent Term Lenders, CPLP and
CPALP.  To the extent so transferred, the
Net Worth Assets shall constitute NewCo Ancillary Assets, and

 

47

 

on the Effective Date, CPLP shall transfer the Net Worth Assets to
NewCo or a NewCo Subsidiary in accordance with section 5.4.1 of this Plan.

 

5.4.3       Transfers to the Liquidating
Trust for the Trust Beneficiaries.  Except as specifically set forth in this
Plan, on the Effective Date, all of the Debtors’ right, title and interest in
and to the Trust Assets shall be, and shall be deemed to be, irrevocably
transferred, absolutely assigned, conveyed, set over and delivered to the
Liquidating Trust, in trust to and for the benefit of the Trust Beneficiaries
for the uses and purposes stated herein and in the Liquidating Trust
Agreement.  For United States federal and
applicable state income tax purposes, the transfers of the Trust Assets to the
Liquidating Trust shall be reported as a disposition of the Trust Assets
directly to and for the benefit of the Trust Beneficiaries immediately followed
by a contribution of the Trust Assets by the Trust Beneficiaries to the
Liquidating Trust for the benefit of the Trust Beneficiaries. The Trust
Beneficiaries shall be treated as the grantors and deemed owners of the
Liquidating Trust.

 

5.4.4       Transfer of Bonners Ferry Assets. The Bonners Ferry Parties
and LPC have offered to (a) release to CPLP, the LPC Escrow, and (b) release
the Debtors, their Estates, the Consolidated Estate and their successors and
assigns of any and all claims directly or indirectly relating to the Bonners
Ferry Documents, in exchange for:

 

(i) the transfer to BFM LLP of
CPLP’s right, title and interest in Bonners Ferry Realty (subject to any rights
and obligations of any Entity (except the Debtors) under the Bonners Ferry
Documents);

 

(ii) the assumption by CPLP and
assignment to BFM LLP, pursuant to Bankruptcy Code section 365, of any
remaining interest of CPLP in (x) the Bonners Ferry Site Lease, (y) the LPC
sublease, and (z) the Bonners Ferry Facility Lease to the extent not previously
transferred to LPC under the LPC Purchase Agreement or the LPC Sublease, with
BFM LLP committing to comply in full with the terms of the assigned Bonners
Ferry Documents, and

 

48

 

(iii) an escrow agent on behalf of the Bonners Ferry Parties and LPC
receiving $500,000 of the LPC Escrow when the remainder is transferred to CPLP
(for transfer to the Liquidating Trust), and a release by the Debtors.

 

If Bonners Ferry Consensual Transaction
Acceptance is received, these transfers will be documented before the Effective
Date and be implemented as of the Effective Date.

 

5.4.5       Documentation of Transfers. This Plan and the Confirmation Order shall constitute
sufficient documentation to evidence any of the transfers called for by this
Plan (except with respect to the Bonners Ferry Consensual Transaction
Acceptance transfers).  No further
documentation shall be necessary to give effect to any such transfers. To the
extent required or as reasonably requested by the Required Proponent Term
Lenders, the Debtors and the Liquidating Trustee shall cooperate with the Term
Lenders and their professionals to prepare and execute any Operative Documents
necessary to effectuate transfers and otherwise insure that title to the Assets
is validly transferred in accordance with this Plan.  The Debtors shall execute and deliver
promptly to the Collateral Agent and/or NewCo, as applicable, by the Effective
Date, any and all Operative Documents reasonably requested to evidence this
transfer of title and removal of obstacles to title as of the Effective Date.

 

5.4.6       Free
and Clear.  Except as otherwise provided by this Plan,
the Liquidating Trust Agreement or the Confirmation Order, any transfer,
assignment or conveyance of the Debtors’ right, title and interest in any
Assets under this Plan shall be free and clear of all Liens, claims and
interests, including any transfer taxes, pursuant to sections 363(f), 1123,
1141 and 1146(c) of the Bankruptcy Code. 
The Foxglove Option Property shall be transferred subject to the
Foxglove Option as set forth in Section 4.2.6.1 above. The Liquidating Trustee
shall have no obligation regarding payment of any Allowed Class 6 Claim, or
interest thereon.

 

5.4.7       Transfers of Privileges and Bankruptcy Rights. To the full extent permitted by law, all rights under
section 363(h) of the Bankruptcy Code are preserved for the

 

49

 

benefit of the Consolidated Estate and its Creditors, and may be
exercised by the Liquidating Trustee with Court approval. To the full extent
permitted by law, all rights under section 365 including section 365(f) of the
Bankruptcy Code are preserved for the benefit of the Consolidated Estate and
its Creditors, and may be exercised by the Liquidating Trustee with Court
approval, including prosecution and amendment of any motions to assume or
reject executory contracts and leases that are pending on the Effective Date.
To the full extent permitted by law, and subject to the express provisions of
this Plan, on the Effective Date the Debtors shall be deemed to irrevocably
transfer to the Liquidating Trustee, as their legal successor, all rights of
the Debtors and Estates (including the Consolidated Estate) to exercise or
waive any attorney-client privilege, accountant-client privilege, work-product
privilege or other privilege or immunity attaching to any documents or
communications (whether written or oral), and the Debtors and the Liquidating
Trustee are authorized to take any and all necessary actions to effectuate the
transfer of such privileges and available defenses.

 

5.4.8       Exemption from Transfer Taxes. Pursuant to section 1146(c) of the Bankruptcy Code, the
issuance or exchange of any security, or the making or delivery of any
instrument of transfer under, in furtherance, or in connection with this Plan,
including, but not limited to, any deeds, bills of sale, assignments or other
instruments of transfer, shall not be subject to any stamp tax, real estate
transfer tax or similar tax. To the extent permitted by law, this is intended to
include but is not limited to the transfers contemplated in sections 4.2.2,
5.3, 5.4, and 6.7 of this Plan, and is intended to encompass (i) any transfer
of Assets to the Liquidating Trust, (ii) any transfer by the Liquidating Trust
in connection with liquidating and otherwise disposing of Assets and making
Distributions to Holders of Allowed Claims, (iii) any transfer to NewCo
Entities and (iv) any transfer required to implement this Plan.

 

5.5    Preservation and Waiver. Except as to any Cause of Action released under this Plan,
all Causes of Action are reserved for later adjudication in accordance with
this Plan, and

 

50

 

therefore no preclusion doctrine, including, without limitation, the
doctrines of res judicata,
collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial,
equitable or otherwise) or laches shall apply to such Causes of Action upon or
after the confirmation or consummation of this Plan. The failure to
specifically list or otherwise identify a Cause of Action in this Plan or the
Disclosure Statement (i) is not intended to effect, and to the extent permitted
by law shall not be deemed to effect, a release or waiver of such Cause of
Action, and (ii) is not intended to impair, and to the extent permitted by law
shall not impair, the Liquidating Trust’s right to pursue such a Cause of
Action.

 

Notwithstanding the foregoing, as of the
Effective Date, any and all Non-Insider Preference Claims belonging to the
Estates shall be waived and released, and no action may be brought on any such
Cause of Action.

 

5.6    Dissolution of
Debtors. Following
the transfers of Assets contemplated in section5.4 of this Plan and the NewCo
Units contemplated in Section 5.3 of this Plan, each Debtor except CPLP shall
be deemed to be dissolved as of the Effective Date, and CPLP will be dissolved
in conjunction with the entry of a Final Decree.  The Liquidating Trustee shall have full
authority, and shall take any action necessary, to wind up the affairs, and dissolve
and terminate the existence, of each Debtor under applicable state laws and in
accordance with the rights, powers and responsibilities conferred by the
Bankruptcy Code, this Plan and the Final Orders of the Court.  To the extent necessary, any partnership
agreement or other controlling organization or formation document or agreement
for each Debtor shall be deemed amended to authorize the Liquidating Trustee to
take such actions.

 

5.7    Cancellation of Interests. On the Effective Date, all Interests in any of the Debtors
shall be canceled and be of no further force or effect, without any further
action being required to effect such cancellation. From and after the
cancellation of the Interests pursuant to

 

51

 

this Plan, Holders of Interests shall have no rights arising from or
relating to such Interests or the cancellation thereof, provided, however, that, pursuant to the
Liquidating Trust Agreement, they shall be entitled to receive federal Schedule
K-1 (Form 1065) reports with respect to their Interests from the Liquidating
Trustee.

 

5.8    Continuance of Committee. The Creditors’ Committee
shall continue in existence after the Effective Date for the purpose of
advising and consulting with the Liquidating Trustee with respect to its
administration of the Trust Assets, the Administrative Reserve and the Disputed
Claims Reserve. From and after the Effective Date, except as set forth in
Section 8.5 below, neither the Creditors’ Committee, nor any of its members,
agents or attorneys shall have any fiduciary or other duty to the Debtors, any
Holder of a Claim or Interest, or any other party in interest. The Creditors’
Committee will disband if and when all Class 4 Claims are paid in full. The
Liquidating Trustee shall engage the Creditors’ Committee counsel as special
counsel to represent the Liquidating Trustee with respect to the analysis and
resolution of Class 4 Disputed Claims, including the prosecution of objections
to Class 4 Disputed Claims, and Creditors’ Committee counsel shall be deemed to
have no conflict of interest because of that engagement.

 

5.9    Nondischarge and Injunction.

 

5.9.1            Nondischarge of Debtors. Pursuant to section
1141(d)(3) of the Bankruptcy Code, the Confirmation Order shall not discharge
Claims against the Debtors. However, following the Effective Date, no Holder of
a Claim or Interest may receive any payment from or seek recourse against any
Assets, except as expressly provided for in this Plan.  As of the Effective Date, all Entities are
precluded from asserting against any Assets any debt, Claim, cause of action,
other liabilities, rights or Interests based upon any act or omission,
transaction or other activity of any kind or nature that occurred prior to the
Effective Date, other than as expressly provided in this Plan, the Confirmation
Order or the Operative Documents, regardless of the

 

52

 

filing, lack of filing, allowance or disallowance of such a Claim or
Interest and regardless of whether such an Entity has voted to accept this
Plan.

 

5.9.2            Injunction.

 

5.9.2.1         Generally Applicable Injunction. Except as otherwise provided in this
Plan or the Confirmation Order, on and after the Effective Date all Entities
that have held, currently hold or may hold a debt, Claim, cause of action,
other liabilities, rights or Interests against or in the Debtors that would be
discharged upon Confirmation of this Plan on the Effective Date but for the
provisions of section 1141(d)(3) of the Bankruptcy Code and Section 5.9.1
hereof are permanently enjoined from taking any of the following actions on
account of such debt, Claim, cause of action, other liabilities, rights or
Interests: (i) commencing or continuing in any manner any action or other
proceeding on account of such debt, Claim, cause of action, other liabilities,
rights or Interests against Assets or proceeds thereof, other than to enforce
any right to a Distribution with respect to such Assets or the proceeds thereof
as provided under this Plan; (ii) enforcing, attaching, collecting or
recovering in any manner any judgment, award, decree, or order against any
Assets, other than as permitted under subparagraph (i) above; and (iii)
creating, perfecting or enforcing any Lien or encumbrance against any Assets,
other than as permitted by this Plan.

 

On and after the Effective Date, each Holder
of an Interest in the Debtors is permanently enjoined from taking or
participating in any action that would interfere or otherwise hinder the
Proponents or Liquidating Trustee from implementing this Plan, the Confirmation
Order or any Operative Documents.

 

5.9.2.2         Insured Claims. Notwithstanding section 5.9.2.1, Holders of Insured
Claims shall not be enjoined from pursuing (and are required to so pursue such
Claims in accordance with Section 4.2.4.1, hereof) any applicable insurance
policy or coverage of the

 

53

 

Debtors with respect to such Insured Claim. In accordance with Section
4.2.4.1 of this Plan, any Holder of an Insured Claim shall not be entitled to
Class 4 treatment or Distributions from the Liquidating Trust until such Holder
has exhausted all other avenues of recovery on the Insured Claim.

 

5.10  Closing of Chapter 11 Cases and Final Decree. The Liquidating Trustee
shall take all action necessary to close each of the Chapter 11 Cases except
the CPLP Chapter 11 Case as soon as practicable after the Effective Date. The
Liquidating Trustee shall request entry of the Final Decree in the CPLP Chapter
11 Case only at such time as:

 

5.10.1.     all
adversary proceedings and contested matters have been finally resolved or
adjudicated by the entry of a Final Order;

 

5.10.2     all
Claims have either: (i) become Allowed Claims and have been paid in accordance
with the treatment to be given such Allowed Claim pursuant to this Plan; or
(ii) been disallowed by a Final Order or been deemed to be a Disallowed Claim
in accordance with the terms of this Plan;

 

5.10.3.     all Trust
Assets (including Causes of Action) have been either: (i) reduced to Cash; or
(ii) abandoned by the Liquidating Trustee;

 

5.10.4     all
expenses of the Liquidating Trust shall have been paid and all payments and
Final Distributions to be made to Holders of Allowed Claims and Administrative
Expense Claims shall have been made by the Liquidating Trustee in accordance
with the requirements of this Plan; and

 

5.10.5     the Final Report pursuant to section 6.8.4 of this
Plan has been filed.

 

Prior
to the entry of the Final Decree, the Liquidating Trustee shall have been discharged
pursuant to section 6.8.4.

 

54

 

ARTICLE VI

 

OTHER PROVISIONS CONCERNING THE LIQUIDATING
TRUST

 

6.1                Establishment of Liquidating Trust; Liquidating Trust
Agreement. On the
Effective Date, the Liquidating Trust shall be established. The Liquidating
Trust will be governed by the Liquidating Trust Agreement, a copy of which is
attached to this Plan as Exhibit A, which shall be effective as of the
Effective Date.

 

6.2                Purpose of Liquidating Trust and Exemption from
Securities Laws. The
Liquidating Trust shall be established for the primary purpose of liquidating
and distributing its assets, in accordance with the Liquidating Trust
Agreement, this Plan and Treasury Regulation section 301.7701-4(d), with no objective
to continue or engage in the conduct of a trade or business, except to the
extent reasonably necessary to preserve the liquidation value of the Trust
Assets, and consistent with the liquidating purpose of the Liquidating Trust.  The Liquidating Trust shall be deemed a
successor-in-interest to the Debtors for the purposes of Bankruptcy Code
section 1145. Under section 1145 of the Bankruptcy Code, the issuance of
beneficial interests in the Liquidating Trust pursuant to this Plan shall be
exempt from registration under the Securities Act of 1933, as amended, and
applicable state and local laws requiring registration of securities.

 

6.3                Term;
Extension. The
Liquidating Trust shall terminate by entry of a Final Decree upon the closing
of the last Chapter 11 Case, but in any event no later than three years after
the Effective Date. Notwithstanding the foregoing, the Liquidating Trustee may,
with joint Term Lender Consent and Committee Consent, if it is in the best
interests of Trust Beneficiaries, and subject to the approval of the Court
based on a finding that an extension is necessary to the purpose of the
Liquidating Trust, extend the term of the Liquidating Trust for one or more
finite periods based upon the particular facts and circumstances at that time
(each, an “Extension

 

55

 

Period”), provided that each Extension Period is requested
by the Liquidating Trustee before expiration of the Liquidating Trust term (as
it may then have been extended).

 

6.4                Liquidating
Trust Beneficiaries. As of the Effective Date, the Liquidating Trust
shall hold all of the Debtors’ right, title and interests in the Trust Assets.
The Trust Assets shall be held, administered and liquidated for the benefit of,
with corresponding Distributions to, the Trust Beneficiaries: the Holders of
Allowed Class 4 and 5 Claims. The Liquidating Trustee shall maintain a register
of the names and addresses of the Trust Beneficiaries as provided in the
Liquidating Trust Agreement. The Trust Beneficiaries’ interests shall be
transferable only in accordance with the Liquidating Trust Agreement.

 

6.5                Status of Liquidating Trustee.

 

6.5.1          Representative of Consolidated Estate. On the Effective Date, the
Liquidating Trustee shall be the representative of the Consolidated Estate
within the meaning of section 1123(b)(3)(B) of the Bankruptcy Code and shall
have the rights and powers provided for in the Bankruptcy Code in addition to
any rights and powers granted in the Liquidating Trust Agreement and herein.  The Liquidating Trustee shall be a party in
interest as to all matters over which the Court has jurisdiction.

 

In his capacity as the Estate Representative
of the Consolidated Estate, and except as to any Cause of Action released under
this Plan, the Liquidating Trustee shall be the successor-in-interest to the
Debtors with respect to any claim, right or Cause of Action that was or could
have been commenced by the Debtors prior to the Effective Date, or thereafter
arising in conjunction with any Trust Assets until the Liquidating Trustee
disposes of them. All such Causes of Action and any and all other rights,
claims or interests constituting Trust Assets, including the right to seek to
subordinate Claims under section 510 of the Bankruptcy Code, but excluding
Causes of Action released under this Plan, shall be retained and may be pursued
and enforced by

 

56

 

the Liquidating Trustee as the representative of the Consolidated
Estate pursuant to section 1123(b)(3)(B) of the Bankruptcy Code and the terms
of this Plan.  Notwithstanding anything
to the contrary in this Plan or the Liquidating Trust Agreement, the
Liquidating Trust shall not be permitted to transfer, assign or convey any
right, title or interest of the Liquidating Trust in any Cause of Action.

 

6.5.1.1    Disbursing Agent.  The Liquidating
Trustee shall be responsible for making Distributions from the Liquidating
Trust as required by and set forth in this Plan and the Liquidating Trust
Agreement.  The Liquidating Trustee, or
its designee, shall act as the disbursing agent under this Plan and shall
establish such account or accounts as may be required to effectuate payments
and Distributions as provided for in this Plan.

 

6.5.2       Liquidating Trustee’s Authority and Responsibilities. The Liquidating Trustee shall be authorized to and shall
take all actions required of the Liquidating Trustee under this Plan and the
Liquidating Trust Agreement, and any additional actions that are necessary and
appropriate to implement the Liquidating Trust. Subject to the terms set forth
in Article V of this Plan (including, without limitation, the authority granted
to the Creditors’ Committee and to the Proponent Term Lenders), the Liquidating
Trustee shall have the authority, powers, duties and responsibilities set forth
in the Liquidating Trust Agreement. The Liquidating Trustee shall engage Lewis
and Roca LLP to represent the Liquidating Trustee as special counsel with
respect to the analysis and resolution of any disputes that may arise over the
Foxglove Option, including any litigation concerning the Foxglove Option, and
Lewis and Roca LLP shall be deemed to have no conflict of interest because of
that engagement, including with respect to previous or continuing representation
of the Proponent Term Lenders.

 

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6.6    Reserves.

 

6.6.1      Administrative
Reserve.

 

6.6.1.1    Establishment;
Maintenance; Purpose. On or as
soon as practicable after the Effective Date, the Liquidating Trustee, in its
capacity as Estate Representative, shall establish, and shall thereafter
maintain, one or more reserve accounts (the “Administrative Reserve”)
that will fund the Cash satisfaction of Allowed Administrative Expense Claims,
Allowed Priority Tax Claims, Allowed Postpetition Tax Claims, Allowed Class 1
Claims, Allowed Class 3 Claims (to the extent such Claims are being satisfied
in Cash rather than a return of the Collateral securing such claim), and all
reasonably anticipated costs and expenses of administering the Liquidating
Trust; provided, however, that nothing herein shall be deemed to prohibit the
payment of such claims and expenses from any Trust Assets.

 

6.6.1.2    Amount and Source of
Funding; Necessary Transfers. The
Liquidating Trustee shall initially fund the Administrative Reserve, and shall
periodically re-assess and may modify the funding level, in its reasonable
discretion (and as and to the extent required by the terms of this Plan, acting
in consultation with, or at the direction of, the Required Proponent Term
Lenders and the Creditors’ Committee) in an amount necessary to pay in full in
Cash: (i) all Allowed and estimated-to-be Allowed (a) Administrative Expense
Claims, (b) Priority Tax Claims, (c) Postpetition Tax Claims, (d) Class 1 Claims,
and (e) Class 3 Claims (to the extent any such Other Secured Claims are being
satisfied in Cash rather than a return of the Collateral securing such Claims),
taking into consideration any such Claims that are anticipated, asserted or
Disputed; and (ii) all reasonably anticipated costs and expenses of
administering the Liquidating Trust, including fees and expenses payable from
Trust Assets. The Administrative Reserve shall be funded with, inter alia, Cash transferred to the
Liquidating Trust on the Effective Date. When Claims to be funded from the
Administrative Reserve are Allowed, the Liquidating Trustee shall pay them as
soon as practicable.

 

6.6.1.3    Post-Effective Date
Professional Fees. Pursuant to
this Plan and the Liquidating Trust Agreement, all fees for services rendered
by Professionals in connection

 

58

 

with the Chapter 11 Cases and this Plan after the Effective Date,
including those relating to the prosecution of Causes of Action preserved under
this Plan and the resolution of Disputed Claims and including fees incurred by
the Proponent Term Lenders (whose counsel shall be presumed to be Lewis and
Roca LLP unless changed by a majority of the Proponent Term Lenders at any
time) relating to the Liquidating Trust, are to be paid by the Liquidating
Trustee upon receipt of an invoice for such services, or on such other terms to
which Liquidating Trustee may agree, without the need for further Court
authorization or entry of a Final Order, provided that all payments of fees for
services rendered and expenses incurred by parties other than Professionals
shall be paid from Distributions made to the respective claimants on whose
behalf such fees were incurred. The Liquidating Trustee shall have fifteen (15)
days after the receipt of any Professional’s invoice to object to any item
contained in such invoice. If the Liquidating Trustee and any Professional
cannot agree on the amount of post-Effective Date fees and expenses to be paid
to such Professional, such amount is to be determined by the Court.

 

6.6.1.4    Post-Effective Date U.S.
Trustee Fees. The
Liquidating Trustee, following the Effective Date, shall be responsible for
timely payment of the quarterly fees of the U.S. Trustee that are payable
pursuant to 28 U.S.C. § 1930(a)(6) until such time as the orders or Final
Decree closing these Chapter 11 Cases is entered. Any quarterly fees due as of
the Effective Date will be paid in full by the Liquidating Trustee from Trust
Assets. The Liquidating Trustee shall file with the Court and serve on the U.S.
Trustee, a quarterly financial report for each quarter (or portion thereof)
that any of the Chapter 11 Cases remain open in such format as reasonably may
be required by the U.S. Trustee.

 

6.6.2     Disputed Claims Reserve. Notwithstanding any other provision of this Plan, on any
Distribution Date, the Liquidating Trustee shall create and maintain a reserve
that shall withhold from the amount to be distributed under this Plan the
amount attributable to any Claim that is a Disputed Claim and shall place in
the Disputed Claims Reserve the amount of

 

59

 

Cash
in an aggregate amount sufficient to pay each Holder of a Disputed Claim: (i)
the amount of Cash such Holder would have been entitled to receive under this
Plan if such Claim had been an Allowed Claim on that Distribution Date in the
“face amount” of such Disputed Claim; or (ii) such other amount as the Court
may order as set forth below. For purposes of this provision, the “face amount”
of a Claim is the liquidated amount set forth on the proof of the claim or
application; and if no proof of the claim or application has been filed, the
amount of the Claim as may be set forth in the Bankruptcy Schedules as not
being disputed, contingent, or unliquidated.

 

In the case of any Disputed Claim that is
filed in an unliquidated or undetermined amount, the Court, upon motion by the
Liquidating Trustee or the Holder of such a Disputed Claim, shall determine an
amount sufficient to withhold and reserve with respect to such Disputed Claim
and may estimate the likely maximum amount of the Claim in order to make such
determination. Any Creditor whose Claim is so estimated shall not have recourse
to the Debtors, any Distributions made on account of Allowed Claims, the
Administrative Reserve, or any other Entity or property if the finally Allowed
Claim of such Creditor exceeds that maximum. Instead, such Creditor shall have
recourse only to the extent there are Trust Assets in the Disputed Claims
Reserve that were allocated for payment of the Claim of that Creditor, or to
the extent there are remaining Trust Assets in the Disputed Claims Reserve
after satisfaction of all other Disputed Claims.

 

6.7    Distributions to Trust Beneficiaries.

 

6.7.1    Initial Funding of Certain Reserves; Initial
Distribution to Holdersof
Allowed Class 5 Claims.  Within one hundred fifty (150) days after the
Effective Date or such other date as the Liquidating Trustee determines is
appropriate, the Liquidating Trustee shall adjust as appropriate the funding of
the Administrative Reserve.  On or as
soon as reasonably practicable after meeting the requirements in the preceding
sentence, the Liquidating Trustee shall

 

60

 

distribute to Holders of Allowed Class 5 Claims the Distributable Cash
on hand less the amount necessary to fund the Class 4 Aggregate Distribution.

 

6.7.2       Initial Distribution to Holders of Allowed Class 4
Claims. So long as
Allowed and estimated-to-be Allowed (a) Administrative Expense Claims, (b)
Priority Tax Claims, (c) Postpetition Tax Claims, (d) Class 1 Claims and (e)
Class 3 Claims have been satisfied or adequately reserved for in accordance
with this Plan, then within 30 days after the Claims Objection Bar Date in
section 10.2 of this Plan, the Liquidating Trustee shall (i) make an initial
Distribution to Holders of Allowed Class 4 Claims, and (ii) establish and fund
the Disputed Claims Reserve as required by Section 6.6.2 for any Disputed Class
4 Claims.  The funds reserved for
Disputed Class 4 Claims shall be charged to and paid from the Distributable
Cash allocated for the Class 4 Aggregate Distribution.

 

6.7.3       Subsequent Distributions. The Liquidating Trustee shall make subsequent Distributions
to Holders of Allowed Class 4 and Class 5 Claims in accordance with this Plan
until all Trust Assets are liquidated, all Liquidating Trust expenses are paid,
and all Distributions are made. If Holders of Allowed Class 4 Claims are paid
in full (excluding any claimed post-petition interest), (a) any beneficial
interests in the Liquidating Trust on account of Allowed Class 4 Claims shall
be deemed to be satisfied and extinguished, and (b) all Distributable Cash
remaining in the Liquidating Trust and thereafter received by the Liquidating
Trust shall be distributed to Holders of Allowed Class 5 Claims.

 

Prior to making any subsequent Distributions
under this Section, the Liquidating Trustee shall adjust the Administrative
Reserve and the Disputed Claim Reserve as set forth above, as necessary to
assure sufficient funding levels are maintained in accordance with this Plan.

 

61

 

6.8    Liquidating
Trustee.

 

6.8.1       Appointment, Removal, Resignation and Succession. On the Effective
Date, the Liquidating Trustee shall be appointed for all purposes with respect
to implementation of this Plan. The Court shall have approved the appointment
of Michael W. Carmel (or such other party as the Creditors’ Committee and the
Required Proponent Term Lenders may mutually agree, provided that if the Creditors’ Committee and the Required
Proponent Term Lenders cannot agree upon a replacement Liquidating Trustee,
then such replacement Liquidating Trustee shall be appointed upon (x) motion to
the Court by any party in interest with either Committee Consent or Term Lender
Consent, and (y) the confirmation of such appointment by the Court), as
Liquidating Trustee in the Confirmation Order. The Liquidating Trustee may be
removed, may resign and may be replaced in accordance with the Liquidating
Trust Agreement.

 

6.8.2       Liquidating Trustee’s Fees and Expenses.

 

6.8.2.1        Compensation and
Reimbursement of Liquidating Trustee and Professionals. The Liquidating Trustee shall be compensated for services in
the administration of the Liquidating Trust and, in its capacity as Estate
Representative, the administration of the Debtors’ Consolidated Estate,
pursuant to the Liquidating Trust Agreement. 
Any professionals or any Entity retained by the Liquidating Trustee
pursuant to the Plan will be entitled to reasonable compensation for services
rendered at a rate reflecting actual time billed by such professional or Entity
on an hourly basis, at the standard billing rates in effect at the time of
service, or such other rate or basis of compensation that is reasonable. All
reasonable out-of-pocket expenses incurred by the Liquidating Trustee or any
other professional or other Entity retained by the Liquidating Trustee pursuant
to the Plan will be reimbursable as an expense of the Liquidating Trust. The
fees and expenses of any such professional or other Entity, including the
Professionals retained by the Proponent Term Lenders and by the Creditors’
Committee, will be reimbursed in accordance with the Plan.

 

62

 

6.8.2.2        Costs and Expenses Related
to the Liquidating Trust. Any
reasonable and necessary costs and expenses incurred by the Liquidating Trustee
in the performance of its duties that are recoverable pursuant to the Liquidating
Trust Agreement shall be paid from the Administrative Reserve. The Liquidating
Trustee shall be authorized to pay obligations or expenses of, or relating to,
the Trust Assets (other than Class 4 and 5 Claims against the Estates, which
are paid pursuant to Distributions under this Plan) when the Liquidating
Trustee, considering the purposes, terms, distributional requirements and other
circumstances of this Plan, deems it prudent to do so in order to effectuate
this Plan.

 

6.8.3       Trustee’s Bond and Limited Liability. The Liquidating Trustee shall obtain a trustee’s bond from
an Entity reasonably satisfactory to the Required Proponent Term Lenders and
the Creditors’ Committee to protect the Trust Beneficiaries with respect to his
obligations as Liquidating Trustee, and pay the premiums for such bond with
Trust Assets as an expense of administering the Liquidating Trust. The bond
amount shall be determined based upon the amount of Cash under the control of
the Liquidating Trustee at any time. The amount of the bond shall be adjusted
from time to time in accordance with Cash receipts and disbursements by the
Liquidating Trust.

 

The Liquidating Trustee shall not be liable
for any act he may do or omit to do as the Liquidating Trustee while acting in
good faith and in the exercise of his reasonable judgment. The fact that such
act or omission was based upon advice of counsel for the Liquidating Trustee
shall be evidence of such good faith and reasonable judgment. This limitation
on liability does not extend to acts and omissions that constitute gross
negligence, fraud or willful misconduct. The Liquidating Trustee may rely, and
shall be protected in acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, or other paper or
document believed by him to be genuine and to have been signed or presented by
the proper party or parties, and shall not, absent fraud, gross negligence or
willful misconduct in seeking or

 

63

 

carrying out such order, be liable for any action set forth in any
order of the Court.  The limitations in
liability set forth herein and in the Liquidating Trust Agreement will apply
equally to the agents and/or employees of the Liquidating Trustee acting on
behalf of the Liquidating Trustee in the fulfillment of the Liquidating
Trustee’s duties under this Plan and the Liquidating Trust Agreement. Neither
the Liquidating Trustee nor any of the Trust Beneficiaries under the
Liquidating Trust Agreement shall be personally liable with respect to any
liabilities or obligations of the Liquidating Trust or any liabilities or
obligations relating to the Trust Assets, including, without limitation, those
arising under this Plan or the Liquidating Trust Agreement or with respect to
the Liquidating Trust or the Trust Assets, and all Entities dealing with the
Liquidating Trust must look solely to the Trust Assets for the enforcement of
any claims against the Liquidating Trust or the Trust Assets, provided that the Liquidating Trustee may
be held personally liable for acts or omissions constituting gross negligence,
fraud or willful misconduct to the extent not covered by the trustee bond.

 

6.8.4       Limited Recourse, and Final
Discharge as to the Liquidating Trustee.  Except as provided in section 6.8.3 and the
Liquidating Trust Agreement, no recourse shall ever be had, directly or
indirectly, against the Liquidating Trustee personally, or against any
employee, contractor, agent, attorney, accountant or other professional
retained by the Liquidating Trustee in accordance with the terms of this Plan
or the Liquidating Trust Agreement, by legal or equitable proceedings or by
virtue of any statute or otherwise, nor upon any promise, contract, instrument,
undertaking, obligation, covenant or agreement whatsoever executed by the
Liquidating Trustee in implementation of this Plan or the Liquidating Trust
Agreement, or by reason of the creation of any indebtedness by the Liquidating
Trustee under this Plan for any purpose authorized by this Plan or the
Liquidating Trust Agreement, it being expressly understood and agreed that all
such liabilities, covenants, and agreements of the Liquidating Trust, whether
in writing or otherwise, shall be enforceable only against and be satisfied
only out of the Trust

 

64

 

Assets or such part thereof as shall under the terms of any such
agreement be liable therefore or shall be evidence only of a right of payment
out of the Trust Assets. Notwithstanding the foregoing, the Liquidating Trustee
may be held liable for its gross negligence, fraud or willful misconduct; and
if liability on such grounds is established, recourse may be had against the
Liquidating Trustee’s bond and, to the extent not covered by such bond, against
the Liquidating Trustee.

 

The Liquidating Trustee shall prepare a final
report in accordance with the Liquidating Trust Agreement upon completion of
the Liquidating Trust or upon early removal or resignation of the Liquidating Trustee.
Such report shall be filed with the Bankruptcy Court and served on the
Proponent Term Lenders, the Creditors’ Committee, the U.S. Trustee and any
Entity listed on the Post-Effective Date Service List pursuant to section 14.4
hereof, along with a motion for approval of the such final report and discharge
of the Liquidating Trustee, and notice that any objections are due thirty (30)
days later. If approved by the Bankruptcy Court, the withdrawing Liquidating
Trustee shall be discharged from all liability to the Liquidating Trust or any
Entity who has had or may then or thereafter have an interest in the
Liquidating Trust for acts or omissions in the Liquidating Trustee’s capacity
as the Liquidating Trustee or in any other capacity contemplated by the Liquidating
Trust Agreement or this Plan.

 

ARTICLE VII

 

PROVISIONS
CONCERNING DISTRIBUTIONS BY THE LIQUIDATING TRUSTEE 

 

7.1    Manner of Distributions. Distributions to be made by the Liquidating Trustee from the
Liquidating Trust pursuant to this Plan shall be made, at the discretion of the
Liquidating Trustee, in Cash, by (a) check drawn on a Liquidating Trust bank
account, (b) by wire transfer from a domestic bank, or (c) by such other method
as the Liquidating Trustee deems appropriate under the circumstances.

 

65

 

7.2    Distribution Dates. Distributions
required to be made under this Plan to Holders of Allowed Claims shall take
place at least annually, as long as there is sufficient Distributable Cash.

 

7.3    Whole
Dollars. Any other
provision of this Plan to the contrary notwithstanding, no Distributions of
cents will be made. Whenever any Distribution of cents would be made, the
actual Distribution may reflect a rounding of such fraction to the nearest
whole dollar (up or down).

 

7.4    Claims Subject to Partial Disputes. If only a portion of a Claim is the subject of an objection,
the Liquidating Trustee shall make Distributions to the Holder of such Claim on
account of the Allowed portion of the Claim which is not subject to an
objection and shall only treat the portion of Claim which is subject to an
objection as a Disputed Claim.

 

7.5    Escheat. Subject to section 7.6 below, Holders of Allowed Claims shall
have ninety (90) days from the check date to negotiate Distribution checks
issued by the Liquidating Trust under the terms of this Plan, otherwise payment
on such checks may at the Liquidating Trustee’s sole discretion be stopped and
the funds shall escheat to the Liquidating Trust and shall become available (in
accordance with section 347(b) of the Bankruptcy Code) for Distribution to the
Trust Beneficiaries in accordance with the Plan and Liquidating Trust
Agreement. In the event the Liquidating Trustee makes a Distribution and a
Holder’s payment from an earlier Distribution has escheated hereunder, the
Liquidating Trustee is authorized to treat the Holder’s Claim thereafter as a
Disallowed Claim, and make no further payments to such Holder.

 

7.6    Returned Distributions. Notwithstanding the foregoing, in the case of Distributions
to the Holders of Allowed Claims that are returned to the Liquidating Trustee
due to an incorrect or incomplete address, the Liquidating Trustee shall retain
any such returned Distribution in a segregated account established by the Liquidating
Trustee to keep track of any

 

66

 

returned Distributions. Unless the Holder of the Allowed Claim relating
to any such returned Distribution contacts the Liquidating Trustee (or its
designee) within six (6) months from the Distribution Date for which such
Distribution was returned and provides the Liquidating Trustee (or its
designee) with acceptable proof of identity and an accurate address, such
Holder shall forfeit all rights thereto, and to any and all future
Distributions or rights under this Plan. In such event, the Liquidating Trustee
is authorized to treat the Claim for which such Distributions were issued
thereafter as a Disallowed Claim, and the Distribution on account of such
Disallowed Claim shall become Available Cash (in accordance with section 347(b)
of the Bankruptcy Code).

 

7.7    Inter-Holder Disputes as to Distribution Rights. In the event of any dispute between or among Holders of
Claims as to which Entity is the Holder of a Claim entitled to receive or
retain any Distribution to be made to such Holder under this Plan, the
Liquidating Trustee, in lieu of making such Distribution to such Holder, may
make it instead into an escrow account for payment as ordered by the Court or
as the interested parties to such dispute may otherwise agree among themselves.
Any such Holder who fails to raise such dispute by filing an appropriate
request for relief with the Court prior to the issuance of such disputed
Distribution by the Liquidating Trustee shall be deemed to have forever waived
any right to dispute such Distribution or to enjoin, impair or otherwise
restrict the use of any such Distribution.

 

7.8    Setoffs. The
Liquidating Trustee may, but shall not be required to, set-off against any
Distributions to be made pursuant to this Plan to a Holder of an Allowed Claim,
claims of any nature whatsoever that the Debtors may have, or may have had,
against such Holder, but neither the failure to do so, nor the allowance of any
Claim held by such Holder shall constitute a waiver or release by the
Liquidating Trustee of any such Claim the Debtors may have, or may have had,
against such Holder.

 

67

 

7.9    Distributions of Less than $100. Except as to Distributions to Holders of Allowed Class 4
Claims, any Distribution required to be made under the provisions of this Plan
shall be made only to those Holders of Allowed Claims entitled to receive at
least $100 in Cash at the time of such Distribution pursuant to this Plan.  Any Holder of an Allowed Claim entitled to
receive less than $100 in Cash at the time of any Distribution shall receive
such Distribution of Cash as part of the next Distribution as to which such
Holder is entitled to receive an aggregate Distribution of Cash equal to or
greater than $100, unless the next Distribution is the Final Distribution under
this Plan, in which event such Holder shall receive a Distribution of all Cash
due such Holder of an Allowed Claim under this Plan.

 

7.10  Withholding Taxes. The Liquidating Trustee shall be entitled to deduct
any applicable federal or state withholding taxes from any Distribution, as
appropriate, and shall otherwise comply with section 346 of the Bankruptcy
Code.

 

ARTICLE VIII

 

CERTAIN
TERMINATIONS, INDEMNIFICATION AND RELEASES 

 

8.1    Certain Terminations. Except
only to the extent necessary to implement this Plan, on the Effective Date, all
instruments evidencing indebtedness of the Debtors that are impaired by this
Plan shall be deemed canceled as against the Debtors.

 

8.2    Rights if Plan Not Confirmed or Effective. The Proponents reserve the right to withdraw this Plan prior
to the Confirmation Date. 
Notwithstanding anything to the contrary in this Plan, if this Plan is
not confirmed or the Effective Date does not occur within sixty (60) days of
the Confirmation Date (unless such period is extended by Term Lender Consent
and Committee Consent), this Plan will be null and void, and nothing contained
in this Plan or the Disclosure Statement will: (a) be deemed to be an admission
by any of the Proponents with respect to any matter set forth in this Plan,
including liability on any Claim or the propriety of any

 

68

 

Claim’s classification; (b) constitute a waiver, acknowledgment, or
release of any Claims against, or any Interests in, the Debtors, or of any
claims of the Debtors; or (c) prejudice in any manner the rights of the
Debtors, the other Proponents or any Creditors in any further proceedings.

 

8.3    Term of Bankruptcy Injunction or Stays. Any injunction or stay in
the Chapter 11 Cases (pursuant to Bankruptcy Code section 105 or 362 or
otherwise) that are in existence on the Confirmation Date shall remain in full
force and effect until the Effective Date.

 

8.4    Indemnification.

 

8.4.1       Indemnification of Liquidating Trust Parties Defendant. The Liquidating Trust shall indemnify and hold harmless any
Entity who was, or is, a party, or is threatened to be made a party, to any
pending or contemplated action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such Entity is or
was the Liquidating Trustee or an employee of the Liquidating Trust, or an
employee, contractor, agent, attorney, accountant or other professional for the
Liquidating Trustee, against all costs, expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by such Entity in
connection with such action, suit or proceeding, or the defense or settlement
of any claim, issue or matter therein, to the fullest extent, except to the
extent such liability is determined to be the result of such Entity’s willful
misconduct, fraud or gross negligence. Costs or expenses incurred by any such
Entity in defending any such action, suit or proceeding may be paid by the
Liquidating Trust in advance of the institution or final disposition of such
action, suit or proceeding, if authorized by the Liquidating Trustee.

8.4.2       Indemnification of Plan-Related Parties. The Liquidating Trust shall indemnify the Creditors’
Committee, the Released Lender Parties, each Person identified as a Released
Debtor Person (regardless of whether such Person qualifies as a member of the
CP Admin Group), each Entity identified as a Released Debtor Affiliate
(regardless of whether such

 

69

 

Person qualifies as a member of
the CP Admin Group), Robert Jaunich II, Peter W. Stott and, with respect to any
action or inaction taken as general partner of CPP, CPALP, and their respective
agents, employees, representatives, financial advisors, attorneys, successors
or assigns against all costs and expenses (including attorneys’ fees) incurred
by any of them in defending against post-Confirmation Date claims that are
based on actions allegedly taken (or not taken) by them in their respective
capacities arising from implementation of this Plan; provided, however, that no Entity shall be entitled to
indemnification under this Plan or the Liquidating Trust Agreement for the
costs and expenses of defending a cause of action in which it is ultimately
judicially determined that such Entity was grossly negligent or acted
fraudulently or with willful misconduct in performing such Entity’s duties
hereunder or under any Final Order of the Court or applicable law.

 

8.4.3       Indemnification
Priority. Any Entity
entitled to indemnification under this section 8.4 or the Liquidating Trust
Agreement shall have a priority distribution right on the corpus of the
Liquidating Trust ranking pari passu
with other parties entitled to indemnification hereunder or under the Liquidating
Trust Agreement, provided, however, that
such right to payment shall be (i) subordinate in all respects to the right to
payment associated with any unpaid Allowed Administrative Expense Claim,
Allowed Priority Tax Claim or Allowed Other Priority Claim, and (ii) prior to
any right of payment of any Trust Beneficiary Distribution.

 

8.4.4       Insurance.
The Liquidating Trustee may use Trust Assets (as an expense
of consummating this Plan) to purchase indemnification insurance to satisfy any
potential indemnification claims that may arise under this section 8.4 or the
Liquidating Trust Agreement.

 

8.5          Exculpation.
None of the Creditors’ Committee, the Released Lender
Parties, the Released Debtor Persons (regardless of whether such Person
qualifies as a member of the CP Admin Group), the Released Debtor Affiliates
(regardless of whether such Person qualifies as a

 

70

 

member
of the CP Admin Group), Robert Jaunich II, Peter W. Stott, with respect to any
action or inaction taken as an officer of CPLP or CPP, Roger Krage, or, with
respect to any action or inaction taken as general partner of CPP, CPALP, or
any of their respective agents, employees, representatives, financial advisors
or attorneys, or any of their successors or assigns, will have or incur any
liability to any Holder of a Claim or Interest for any act or omission in
connection with, relating to, or arising out of the Chapter 11 Cases, the
pursuit of confirmation of this Plan, or the consummation of this Plan, except
only to the extent such liability is based on gross negligence, fraud or
willful misconduct, and in all respects such Entities will be entitled to
reasonably rely upon the advice of counsel with respect to their duties and
responsibilities under this Plan or in the context of the Chapter 11 Cases. No
Holder of a Claim or Interest, or any other party in interest, including their
respective agents, employees, representatives, financial advisors, or
attorneys, will have any right of action against the Creditors’ Committee, the
Released Lender Parties, the Released Debtor Persons (regardless of whether
such Person qualifies as a member of the CP Admin Group), the Released Debtor
Affiliates (regardless of whether such Person qualifies as a member of the CP
Admin Group), Robert Jaunich II, Peter W. Stott, with respect to any action or
inaction taken as an officer of CPP or CPLP, Roger Krage, or, with respect to
any action or inaction taken as general partner of CPP, CPALP, for any act or
omission in connection with, relating to, or arising out of, the Chapter 11
Cases, the pursuit of confirmation of the Plan, the consummation of the Plan or
the administration of the Plan, except to the extent arising from fraud, gross
negligence or willful misconduct.

 

8.6          Release of Term Lenders. In consideration of the Term Lenders’ acceptance of
the treatment of the Allowed Term Lenders’ Claims pursuant to this Plan, except
as to any Claims and rights provided for and established in this Plan, this
Plan shall constitute a full settlement and compromise of all claims and causes
of action including, without limitation, Causes of Action, subordination,
recoupment, setoff and other legal or equitable defenses by, between, and
through,

 

71

 

on
the one hand, each of the Term Lenders, and on the other hand, each of the
Debtors, their Estates, the Creditors’ Committee, (if the Net Worth Assets are
transferred by CPALP to CPLP and CPLP transfers to CPALP $1.5 million, all in
accordance with Section 5.4.2 of this Plan) the CP Admin Group, the Released
Debtor Parties and the Released Debtor Affiliates, the Liquidating Trust, as
successor to the Debtors, and all representatives, successors and assigns
thereof, including any subsequently appointed Chapter 7 trustee, effective upon
the Effective Date, in accordance with 8.6.1 and 8.6.2.

 

8.6.1       Consensual and Contractual Release. As of the
Effective Date, each of the Debtors, in their individual capacities and as
debtors-in-possession on behalf of the Estates, the Creditors’ Committee, the
Liquidating Trust, as successor in interest to the Debtors, (if the Net Worth
Assets are transferred by CPALP to CPLP and CPLP transfers to CPALP $1.5
million, all in accordance with Section 5.4.2 of this Plan) the CP Admin Group,
the Released Debtor Parties and the Released Debtor Affiliates shall, and shall
be deemed to, release, waive and forever discharge all claims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action and liabilities,
whether known or unknown, foreseen or unforeseen, then existing or thereafter
arising, in law, equity or otherwise that are based in whole or part on any
act, omission, transaction, event or other occurrence taking place on or prior
to the Effective Date in any way relating to the Debtors, their assets, the
Chapter 11 Cases or this Plan, and that could have been asserted by or on
behalf of the Debtors or their Estates, or any other Entity, including, but not
limited to, all Causes of Action, against the Term Lenders and each and every
one of their respective members, directors, officers, trustees, affiliates,
employees, attorneys, accountants, financial advisors, other professionals,
agents, representatives, successors and assigns; provided, however,
that the foregoing shall not apply to any action or omission that constitutes,
fraud, willful misconduct or gross negligence (collectively, “Released Term
Lender Claims”).

 

72

 

8.6.2       Deemed Release. The acceptance of
any Distribution under this Plan by any Holder of a Claim, or the release of
any Entity under this Plan, shall constitute a waiver and release of any and
all Released Term Lender Claims that such Holder or Entity had or could have
commenced against any of the Released Lender Parties based in whole or in part
on any act, omission, transaction, event or other occurrence taking place on or
prior to the Effective Date, in any way relating to the Debtors, their assets,
the Chapter 11 Cases or this Plan.

 

8.7          Release of CP Admin Group. If the Net Worth
Assets are transferred pursuant to section 5.4.2 hereof, the n in consideration
of (i) the transfer by CPALP of fee title to the Net Worth Assets to CPLP
pursuant to section 5.4.2 hereof, and (ii) the releases by the CP Admin Group
of the Released Lender Parties, the Creditors’ Committee, the Debtors and the
Estates provided under this Plan, (except as to any rights provided for and
established in this Plan, the Net Worth Assets Transaction or with respect to
applicable directors’ and officers’ liability insurance), this Plan shall
constitute a full settlement and compromise of all claims and causes of action
including, without limitation, Causes of Action, and subordination, recoupment,
setoff and other legal or equitable defenses (other than with respect to the
Net Worth Assets Transaction) by, between, and through, on the one hand, the CP
Admin Group, and on the other hand, each of the Debtors, their Estates, the
Creditors’ Committee, each of the Term Lenders, the Liquidating Trust and all
representatives, successors and assigns, including any subsequently appointed
Chapter 7 trustee, effective upon the Effective Date, in accordance with
sections 8.7.1 and 8.7.2; provided,
however, the releases of the respective
constituents of the CP Admin Group are only given to those Entities of the CP
Admin Group that have agreed in writing to waive and release all Claims and
acknowledge extinguishment of all Interests against or in the Debtors
individually and as debtors-in-possession of the Estates (except any rights
provided for and established in the Plan, the Net Worth Assets Transaction or
with respect to applicable directors’ and officers’ liability

 

73

 

insurance),
the Creditors’ Committee and the Released Lender Parties, all as reasonably
satisfactory to such parties.

 

8.7.1       Consensual and Contractual Release. If fee title to the Net Worth Assets is
transferred by CPALP to CPLP and CPLP transfers to CPALP $1.5 million, all
pursuant to section 5.4.2 hereof, then as of the Effective Date, each of the
Debtors, in their individual capacities and as debtors-in-possession on behalf
of the Estates, the Creditors’ Committee, each of the Term Lenders and the
Liquidating Trust, as successor in interest to the Debtors, shall, and shall be
deemed to, release, waive and forever discharge all claims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action and liabilities,
whether known or unknown, foreseen or unforeseen, then existing or thereafter
arising, in law, equity or otherwise that are based in whole or part on any
act, omission, transaction, event or other occurrence taking place on or prior
to the Effective Date (other than with respect to the Net Worth Assets
Transaction) in any way relating to the Debtors, their assets, the Chapter 11
Cases or this Plan, and that could have been asserted by or on behalf of the
Debtors or the Estates, or any other Entity, including, but not limited to, all
Causes of Action, against the CP Admin Group and each and every one of its
respective members, directors, officers, employees, attorneys, accountants,
financial advisors, other professionals, agents, representatives, successors
and assigns; provided, however, that
the foregoing shall not apply to any action or omission that constitutes fraud,
willful misconduct or gross negligence, and further
provided that the foregoing release shall include any claims
(whether based on gross negligence, willful misconduct or fraud) with respect
to

 

(i) distributions with respect to Interests of any of the
Debtors but only to the extent disclosed in the SEC Filings or the Bankruptcy
Schedules,

 

(ii) payments of salaries and bonuses by any of the Debtors
but only to the extent disclosed in the SEC Filings or the Bankruptcy
Schedules,

 

(iii) distributions or transfers by any of the Debtors of
distribution equivalent rights (as such term is defined in the SEC Filings) but
only to the extent disclosed in the SEC Filings,

 

74

 

(iv) the transfer of the Net Worth Assets by CPLP but only to
the extent disclosed in documents recorded in the applicable county recorder’s
office prior to the Petition Date,

 

(v) the amount of trees harvested at tree farms but only to
the extent disclosed in the SEC Filings, and

 

(vi) the restated net book value of the Timber, Timberlands
and Roads after the impairment charge as set forth in the financial statements
as of December 31, 2003 of CPP and its consolidated subsidiaries

 

(collectively, ‘Released
CP Admin Group Claims”), and further
provided, the releases of the respective constituents of the CP
Admin Group are only given to those Entities of the CP Admin Group that have
agreed in writing to waive and release all Claims and Interests against or in
the Debtors individually and as debtors-in-possession of the Estates, the
Creditors’ Committee and the Released Lenders Parties, all as reasonably
satisfactory to such parties.

 

8.7.2       Deemed Release. If fee title to the
Net Worth Assets is transferred by CPALP to CPLP and CPLP transfers to CPALP
$1.5 million, all pursuant to section 5.4.2 hereof, then the acceptance of any
Distribution under this Plan by any Holder of a Claim, or the release of any
Entity under this Plan, shall constitute a waiver and release of any and all
Released CP Admin Group Claims that such Holder or Entity had or could have
commenced against any Person in the CP Admin Group based in whole or in part on
any act, omission, transaction, event or other occurrence taking place on or
prior to the Effective Date, in any way relating to the Debtors, their assets,
the Chapter 11 Cases or this Plan, provided,
however, the releases of the respective constituents of the CP Admin
Group are only given to those Entities of the CP Admin Group that have agreed
in writing to waive and release all Claims and Interests against or in the
Debtors individually and as debtors-in-possession of the Estates, the
Creditors’ Committee and the Released Lender Parties, all as reasonably
satisfactory to such parties.

 

75

 

8.8.         Release of Committee.

 

8.8.1       Consensual and Contractual Release. As of the
Effective Date, for services rendered in the Chapter 11 Cases and other good
and valuable consideration, the adequacy of which is hereby confirmed, each of
the Debtors, in their individual capacities and as debtors-in-possession on
behalf of the Estates, each of the Term Lenders, the Liquidating Trust, as
successor in interest to the Debtors, and (if the Net Worth Assets are
transferred by CPALP to CPLP and CPLP transfers to CPALP $1.5 million, all in
accordance with Section 5.4.2 of this Plan) the CP Admin Group, the Released
Debtor Parties and the Released Debtor Affiliates shall, and shall be deemed
to, release, waive and forever discharge all claims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action and liabilities,
whether known or unknown, foreseen or unforeseen, then existing or thereafter
arising, in law, equity or otherwise against the members of the Creditors’
Committee and each and every one of their respective directors, officers,
affiliates, employees, attorneys, accountants, financial advisors, other
professionals, agents, representatives, but excluding any attorneys or other
Professionals retained by the Creditors’ Committee in the Chapter 11 Cases (the
“Released Committee Parties”), that are based in whole or part on any
act, omission, transaction, event or other occurrence taking place on or prior
to the Effective Date relating to the Released Committee Parties’ service on or
service to the Creditors’ Committee in the Chapter 11 Cases; provided, however, that the foregoing
shall not apply to any action or omission that constitutes fraud, willful
misconduct or gross negligence (collectively, “Released Committee Claims”).

 

8.8.2       Deemed Release. The acceptance of
any Distribution under this Plan by any Holder of a Claim, or the release of
any Entity under this Plan, shall constitute a waiver and release of any and
all Released Committee Claims that such Holder or Entity had or could have
commenced against any of the Released Committee Parties based in whole or in
part on any act, omission, transaction, event or other occurrence taking place
on or prior to the Effective Date, in any way relating to the Debtors, their
assets, the Chapter 11 Cases or this Plan.

 

76

 

8.9          Release of Released Debtor Persons and Released Debtor Affiliates.

 

8.9.1       Consensual and Contractual Release. As of the Effective Date, each of the
Debtors, in their individual capacities and as debtors-in-possession on behalf
of the Estates, the Creditors’ Committee, and each of the Term Lenders shall,
and shall be deemed to, unconditionally release, waive and forever discharge
each of the Released Debtor Persons and Released Debtor Affiliates, and each
and every one of their respective directors, officers, affiliates, employees,
attorneys, accountants, financial advisors, other professionals, agents, and
representatives (but excluding (i) any attorneys or other Professionals retained by
the Debtors in the Chapter 11 Cases, and (ii) any Entity that is a member of
the CP Admin Group), from any and all claims, obligations, suits, judgments, damages,
demands, debts, rights, causes of action and liabilities whatsoever (including,
without limitation, those arising under the Bankruptcy Code), whether known or
unknown, foreseen or unforeseen, then existing or thereafter arising, in law,
equity or otherwise, based in whole or in part on any act, omission,
transaction, event or other occurrence that arose on or prior to the Effective
Date and in any way relating to the Debtors, their assets, the Chapter 11 Cases
or this Plan; provided, however,
that the foregoing shall not apply to any action or omission that constitutes
fraud, willful misconduct, or gross negligence (collectively, “Released
Debtor Persons’ Claims”); provided,
however, that the releases set forth in this Section 8.9.1 are only
to be provided to those Released Debtor Persons and Released Debtor Affiliates
that, to the extent applicable, (i) have agreed in writing to waive and release
any Claim held by such Entity (except that no such Person shall be required to
waive or release, and there shall be no waiver or release of, (a) an MSP/KERP
Claim or (b) any claims or rights with respect to directors’ and officers’
insurance policies and coverages), and (ii) agreed to provide continued
availability, assistance and cooperation pursuant to sections 12.1 and 12.2 of
this Plan, and provided further
that the releases set forth in this section 8.9.1 are only provided to CPM if
CPM transfers on or before the Effective Date to CPLP any of the NewCo
Ancillary Assets that

 

77

 

are owned by CPM, and
agrees to transfer to the Liquidating Trust any other real property owned by
CPM.  In order for a Released Debtor
Person or Released Debtor Affiliate to obtain the releases set forth in this
section 8.9.1, such Released Debtor Person or Released Debtor Affiliate must on
or prior to the Effective Date execute a release, waiver and discharge of each
Debtor, in their individual capacities and as debtors-in-possession on behalf
of the Estates, the Creditors’ Committee, each Released Lender Party and the CP
Admin Group, giving effect to releases of such parties as set forth in this
Article VIII, all on terms reasonably satisfactory to such parties. The Debtors
(in their individual capacities and as debtors-in-possession on behalf of the
Estates), the Creditors’ Committee, and each of the Term Lenders shall be
deemed to admit to the existence and sufficiency of consideration in support of
the releases set forth in this section 8.9.1.

 

8.9.2       Deemed Release. The acceptance of any Distribution under this Plan by
any Holder of a Claim, or the release of any Entity under this Plan, shall
constitute a waiver and release of any Released Debtor Persons’ Claims against
any Released Debtor Person or Released Debtor Affiliate that executed a release
pursuant to the immediately foregoing paragraph that such Holder or Entity had
or could have commenced against any Released Debtor Person or Released Debtor
Affiliate based in whole or in part on any act, omission, transaction, event or
other occurrence taking place on or prior to the Effective Date, in any way
relating to the Debtors, their assets, the Chapter 11 Cases or this Plan, provided however that the releases set
forth in this section 8.9.1 are only provided to CPM if CPM transfers on or
before the Effective Date to CPLP any of the NewCo Ancillary Assets that are
owned by CPM, and agrees to transfer to the Liquidating Trust any other real
property owned by CPM.

 

8.10        Subordination. Except to the extent any such right or claim has been
released in this Plan, nothing in this Plan shall in any way be deemed to have
impaired, altered or otherwise affected the right of any party-in-interest, or
the Liquidating Trustee on behalf of the Liquidating Trust and in consultation
with the Proponent Term Lenders and the Creditors’ Committee, to seek

 

78

 

to enforce any
right of subordination that may exist by agreement or otherwise, including,
without limitation, section 510 of the Bankruptcy Code.

 

ARTICLE IX

 

EXECUTORY
CONTRACTS AND UNEXPIRED LEASES

 

9.1          Executory Contracts and Unexpired Leases; Deemed Rejection. Except as
otherwise provided for in this Plan or by prior Court order, any and all
executory contracts and unexpired leases of the Debtors that have not been
assumed or rejected prior to the Confirmation Date, shall on the Effective Date
be deemed rejected as of the Confirmation Date. In the event a motion to
assume, assign or reject an executory contract is pending and unresolved on the
Confirmation Date, the automatic rejection provision of this Section 9.1 shall
not apply and the determination of the status of the executory contract or
lease shall be determined when a Final Order is entered on the respective
motion. To the full extent permitted by law, the Liquidating Trustee is
empowered on behalf of the Estate to exercise all rights under Bankruptcy Code
section 365 including section 365(f), and specifically with respect to
proceedings concerning pending motions to assume or reject, or motions to
extend the deadline to assume or reject, executory contracts and/or unexpired
leases, including through modification or amendment of such motions, and
continuation of such motions.

 

9.2          Assumption and Assignment; Payments Related to Assumption of Contracts and
Leases.

 

9.2.1       Assumption
and Assignment to NewCo. As of the Effective Date, the Debtors’ executory
contracts and unexpired leases that are identified on Schedule 9.2.1 to this
Plan shall be assumed and assigned to a NewCo Entity (as identified on attached
Schedule 9.2.1) pursuant to section 365(f) of the Bankruptcy Code.  The Required Proponent Term Lenders shall
file with the Court any amendment to Schedule 9.2.1 and serve it upon all
parties affected thereby

 

79

 

on
or before the Exhibit Filing Date. Schedule 9.2.1 shall reflect (i) the
specific contracts and leases to be assumed and assigned, (ii) all
counter-parties to such contracts and leases, (iii) the proposed assignee of
such contracts and leases, and (iv) the Required Proponent Term Lenders’
assertion as to any Cure obligations that may exist with respect to such
contracts and leases. Schedule 9.2.1 may be modified by the Required Proponent
Term Lenders at any time prior to the conclusion of the Confirmation Hearing.

 

9.2.2       Assumption and Assignment to the Liquidating Trust. As of the
Effective Date, the Debtors’ executory contracts and unexpired leases that are
identified on Schedule 9.2.2 to this Plan shall be assumed and assigned to the
Liquidating Trust pursuant to section 365(f) of the Bankruptcy Code. The
Required Proponent Term Lenders and the Creditors’ Committee shall file with
the Court any amendment to Schedule 9.2.2 and serve it upon all parties
affected thereby on or before the Exhibit Filing Date. Schedule 9.2.2 shall
reflect (i) the specific contracts and leases to be assumed and assigned, (ii)
all counter-parties to such contracts and leases, and (iii) the Proponents’
assertion as to any Cure obligations that may exist with respect to such
contracts and leases. Schedule 9.2.2 may be modified by the Required Proponent
Term Lenders and the Creditors’ Committee at any time prior to the conclusion
of the Confirmation Hearing.

 

9.2.3       Assumption and Assignment Relating to Bonners Ferry. The Bonners
Ferry Documents are assumed and assigned and cured as set forth in section
4.2.7.1 if Bonners Ferry Acceptance is received. If the Holders of Class 7
Claims reject the Plan, the Bonners Ferry Documents and the Bonners Ferry Other
Documents are rejected as set forth in that section, and may have or assert
unsecured rejection Claim rights as set forth in section 9.4, to the extent
filed in accordance with section 9.5 and Allowed.

 

80

 

9.2.4       Cure. The Cure obligations set forth on
Schedules 9.2.1 and 9.2.2 shall be deemed to be accurate unless an objection to
confirmation of this Plan is timely filed with the Court.  The Court shall determine any dispute regarding
(i) the nature or amount of any Cure, (ii) the ability of the assignee to
provide “adequate assurance of future performance” (within the meaning of
section 365 of the Bankruptcy Code) under the contract or lease to be assumed
and assigned, or (iii) any other matter pertaining to the proposed assumption
and assignment. Cure shall occur following the entry of a Final Order resolving
the dispute and approving the assumption and assignment, or the executory
contract or lease will be deemed rejected. 
Any determined monetary Cure amounts shall be satisfied, under section
365(b)(1) of the Bankruptcy Code, by the applicable NewCo Entity, if the
assignment is pursuant to section 9.2.1, or by the Liquidating Trustee, if the
assignment is pursuant to section 9.2.2.

 

9.3          Related Rights. Each executory contract or unexpired lease
that is to be assumed and assigned and relates to the use, ability to acquire
or occupancy of real property shall include (a) all modifications, amendments,
supplements, restatements, or other agreements made directly or indirectly by
any agreement, instrument, or other document that in any manner affect such
executory contract or unexpired lease and (b) all executory contracts and
unexpired leases appurtenant to the premises, including all Preserved Real
Property Rights and all Other Preserved Real Property Rights, unless any of the
foregoing agreements has been rejected pursuant to any order of the Court that
may be entered prior to, at or after the Confirmation Date, including the
Confirmation Order.

 

9.4          Rejection Claims. Subject to the terms of section 9.5 below, any Holder
of a Claim arising from the rejection of an executory contract or unexpired
lease with the Debtors shall have the rights of a Holder of a General Unsecured
Claim (except, subject to the receipt of the Bonners Ferry Acceptance) and, to
the extent such Claim becomes an Allowed Claim, shall

 

81

 

receive
the treatment provided to Holders of Class 4 Allowed General Unsecured Claims
as set forth in section 4.2.4 above.

 

9.5          Filing of Rejection Claims. Any Entity that has a Claim against the Debtors by
virtue of the rejection of an executory contract or unexpired lease pursuant to
this Article IX or a Final Order entered after the Confirmation Date shall file
a Claim with the Clerk of the Court within the earlier of thirty (30) days
following notice of the Effective Date or the time set forth for the filing of
such Claim in said Final Order, and shall serve that Claim on the Liquidating
Trustee, the Creditors’ Committee and the Proponent Term Lenders. If such Claim
is not so filed, it shall be forever barred from assertion against the Debtors,
the Liquidating Trust or any of the Assets provided for in this Plan.

 

ARTICLE X

 

PROCEDURES
FOR RESOLVING DISPUTED CLAIMS

 

10.1        Prosecution of Objections. After the Effective
Date, the Liquidating Trustee shall have the authority to prosecute and/or
resolve any Claim objection, including any objection pending at the Effective
Date, subject to the limitations and requirements set forth in this Plan and
the Liquidating Trust Agreement.

 

10.2        Time Limit for Objections to Claims. Objections to
Claims shall be filed by the Liquidating Trustee with the Court and served upon
the affected Holder not later than one hundred twenty (120) days following the
later of (i) the Effective Date; and (ii) the date such Claim is filed (the “Claims
Objection Bar Date”), except as such deadline may be extended by order of
the Court upon a motion filed before the expiration of the existing deadline.

 

82

 

ARTICLE XI

 

RETENTION
OF JURISDICTION

 

11.1        Retention of Jurisdiction. Except to the
extent otherwise expressly set forth herein, the Court shall have and retain
jurisdiction of all matters arising out of, and related to, the Chapter 11
Cases and this Plan following the Confirmation Date, including for the
following purposes:

 

11.1.1     to determine
the allowance and amount of any Claim;

 

11.1.2     to determine
any application by a Professional for compensation for any Professional Entity
or Person and similar fees to the extent such application is subject to a
hearing under this Plan and /or the Bankruptcy Code;

 

11.1.3     to determine (i) any application or motions
for the rejection, assumption or assumption and assignment (as the case may be)
of an executory contract and/or unexpired lease, (ii) any motion to extend the
deadline to seek to assume or reject executory contracts and/or unexpired
leases, and (iii) any Claim arising therefrom;

 

11.1.4     to determine any application, motion,
adversary proceeding, and contested matter;

 

11.1.5     to modify this Plan or to remedy any defect
or omission or reconcile any inconsistency in the Confirmation Order to the
extent permitted by the Bankruptcy Code;

 

11.1.6     to determine any controversy, suit or dispute
in connection with the interpretation or enforcement of (i) this Plan, (ii) any
agreements or instruments issued under or relating to this Plan, or (iii) any
other documentation evidencing the terms of this Plan;

 

11.1.7     to determine any controversy, suit or dispute
with regard to orders of this Court entered in these Chapter 11 Cases;

 

83

 

11.1.8     to determine any controversy concerning the
classification or treatment of any Claim;

 

11.1.9     to determine any claim to a security or
ownership interest in any of the Debtors’ Assets, or in any proceeds thereof;

 

11.1.10  to determine any claim or controversy
relating to a purchase, sale or contract made or undertaken by the Debtors or
the Liquidating Trustee;

 

11.1.11  to determine any dispute regarding recovery
of and entitlement to any Assets;

 

11.1.12  to determine any dispute between or among the
Debtors, the Creditors’ Committee, the Term Lenders, the Liquidating Trustee
and any other Entity, whether or not subject to an action pending as of the
Confirmation Date;

 

11.1.13  to adjudicate any Cause of Action
irrespective of when asserted;

 

11.1.14  to determine any dispute concerning
entitlement to Distributions to be made under and pursuant to this Plan;

 

11.1.15  to determine any dispute, and enter any
appropriate order or judgment (including injunctive relief) regarding, or
necessary to enforce, (i) the title, rights, powers and duties of the
Liquidating Trustee, (ii) the rights of any Entity hereunder, or (iii) any
limitation, restriction, term and /or condition relating to the Liquidating
Trustee’s title, rights, powers and duties;

 

11.1.16  to determine such other matters as may be
provided for in the Confirmation Order and this Plan, or as may from time to
time be authorized under the provisions of the Bankruptcy Code or any other
applicable law;

 

84

 

11.1.17  to enter a Final Decree and any other order
necessary to, or in furtherance of, the closure of the Chapter 11 Cases; and

 

11.1.18  to enter any order necessary or appropriate
to effect, interpret, clarify or enforce the provisions of this Plan.

 

11.2        Jurisdiction Unaffected. The occurrence of
the Effective Date and/or the entry of a Final Decree shall not divest the
Court of any jurisdiction otherwise retained under this Article 11 or the
Confirmation Order.

 

ARTICLE XII

 

CERTAIN
OBLIGATIONS OF THE DEBTORS

 

12.1        Obligations for
the Period Between the
Confirmation Date and the Effective Date. Between the Confirmation Date and the
Effective Date, the Debtors, in addition to performance of their other
obligations as may be required hereunder or under the Bankruptcy Code and prior
orders of the Court, shall:

 

12.1.1 take such legal and authorized actions and execute such documents as
may be reasonably requested in writing by the Creditors’ Committee and/or the
Proponent Term Lenders to consummate this Plan;

 

12.1.2 continue to maintain insurance on all assets of the Estates in
accordance with ordinary course practices, except as expressly permitted by
Term Lender Consent and Committee Consent;

 

12.1.3 maintain all of their books, records and accounting systems in
accordance wit h their past practices, or altered only with Proponent Term
Lender Consent;

 

12.1.4 not sell or dispose of any assets of the Estates, or any proceeds
thereof, except (i) in the ordinary course of business operations, (ii) as
contemplated by this Plan, (iii)

 

85

 

with
Committee Consent and/or Term Lender Consent (in each instance as the case may
be pursuant to the terms of this Plan), or (iv) otherwise as may be authorized
by order of the Court; and

 

12.1.5 commence actions to terminate the 401(k) Plan, including requesting
that the 401(k) Plan administrator take any actions necessary to effectuate
such termination and to cause a complete distribution of the 401(k) Plan assets
as soon as reasonably practicable.

 

12.2    Obligations as
of the Effective Date. Each of the
Debtors’ remaining officers, directors and general partners shall be deemed to
have resigned and/or withdrawn as of the Effective Date, and such Persons
(together with the members of the Board of Control of CPM, the officers of CPM,
and any general partners of the Debtors’ general partners) shall as of that
date have no further duties, responsibilities or obligations as officers,
directors, general partners or otherwise to the Debtors, the Estates, any
Creditors or Interest holders, and all such parties shall be deemed to have
consented to such resignations and/or withdrawals, provided, however, that if specifically authorized and
requested by the Liquidating Trustee (acting in its capacity as Estate
Representative), one or more officers of the Debtors may execute documents as
necessary or required to report on actions taken by or at the direction of the
Debtors, including with respect to termination of the 401(k) Plan. Each of the
Debtors’ Professionals, including lawyers and financial advisors, shall
conclude their engagements by and on behalf of the Debtors on the Effective
Date, and shall as of that date have no further duties, responsibilities or
obligations to the Debtors, the Estates, any Creditors or any Interest holders,
provided, however, that the
Debtors’ Professionals and Debtor Released Persons, for agreed compensation,
shall assist the Liquidating Trustee or any NewCo Entity if such assistance is
reasonably requested, including assistance in connection with litigation in
which their knowledge of the Debtors’ operations and Assets may be relevant.
The deemed resignations and withdrawals provided for in this Section concern
solely the affected Persons’ duties, responsibilities and obligations as
officers, directors

 

86

 

or general
partners of any of the Debtors. Nothing in this Section shall be deemed to
determine the affected Persons ‘ employment status within the meaning of the
Retention Plan and Severance Program or their rights (if any) under the
Retention Plan and Severance Program.

 

ARTICLE XIII

 

CONDITIONS
TO EFFECTIVE DATE

 

13.1        Conditions to Occurrence of Effective Date. Each of the following are conditions
precedent to the Effective Date, which conditions must be satisfied to the
reasonable satisfaction of the Proponents or waived, as applicable:

 

13.1.1     the Liquidating Trustee is willing to serve
in such capacity and the terms of its service and compensation as set forth in
the Liquidating Trust Agreement shall have been approved by the Court at the
Confirmation Hearing;

 

13.1.2     the Liquidating Trust Agreement shall have
been executed and delivered by the Liquidating Trustee and any other parties
thereto;

 

13.1.3     any outstanding fees of the U.S. Trustee
under 28 U.S.C. § 1930 shall have been paid in full;

 

13.1.4     the Confirmation Order shall have become a
Final Order, unless such condition shall have been waived by the Proponents;

 

13.1.5     the Proponents shall have received all
authorizations, consents, regulatory approvals, rulings, letters, no-action
letters, opinions or documents that are reasonably determined by the Proponents
to be necessary to implement this Plan;

 

13.1.6     any real property included in the Abandoned
Assets, the Trust Assets and the Excluded Collateral shall have been
partitioned to establish such real property as separate

 

87

 

legal
lots to the extent required by local law, to the satisfaction of the Required
Proponent Term Lenders, unless waived by the Required Proponent Term Lenders;

 

13.1.7     the NewCo Entities shall have been formed and
be duly existing, and shall be legally authorized (as applicable) to hold title
to the Assets that shall be transferred to the NewCo Entities under this Plan;
and

 

13.1.8     action shall have been taken to terminate the
401(k) Plan, including the 401(k) Plan administrator having been requested to
take any actions necessary to effectuate such termination and to cause a
complete distribution of the 401(k) Plan assets as soon as reasonably
practicable.

 

ARTICLE XIV

 

MISCELLANEOUS PROVISIONS

 

14.1        Nonconsensual Confirmation. As to any Class
that votes or is deemed to reject this Plan, the Proponents are seeking
confirmation of this Plan in accordance with section 1129(b) of the Bankruptcy
Code either under the terms provided herein or upon such terms as may exist if
this Plan is modified in accordance with section 1127(d) of the Bankruptcy
Code.

 

14.2        Notices. Except as
otherwise set forth in section 14.4 below, all notices, requests, elections or
demands in connection with this Plan, including any change of address of any
Holder of a Claim for the purposes of receiving any Distributions under this
Plan, shall be in writing and shall be delivered personally or by telecopy,
e-mail or overnight delivery service, or mailed by stamped first class mail to
the Persons identified in this section. Such notice shall be deemed to have
been given the next Business Day after receipt or, if mailed by first class
mail, seven (7) days after the date of mailing:

 

88

 

	
  14.2.1
  If prior to the Effective Date:

  	
   

  
	
   

  	
   

  
			

 

To the Creditors’ Committee:

 

Columbia River Log Scaling & Grading Bureau

Attn: Dana L. Denney

260 Oakway Center

Eugene, OR 97401

Phone: (541) 342-6007

Fax:  (541) 342-2631

E-mail: accounting@crls.com

 

with a copy to:

 

Mesch, Clark & Rothschild, P.C.

Attn: Brenda Moody Whinery, Esq.

and Frederick J. Petersen, Esq.

259 N. Meyer Avenue

Tucson, AZ 85701

Phone: (520) 624-8886

Fax: (520) 798-1037

E-mail:
bwhinery@mcrazlaw.com

E-mail: fpetersen@mcrazlaw.com

 

To the Bank Term Lender Proponents:

 

Bank of America, N.A., as Administrative Agent

Attn: Anthea Del Bianco, Vice President

1455 Market Street, 5th Floor

Mail Code CA5-701-05-19

San Francisco, CA 94103-1399

Phone: (415) 436-7226

Fax: (415) 503-5101

E-mail:
anthea.del_bianco@bankofamerica.com

 

with a copy to:

 

Moore & Van Allen
PLLP

Attn: David L. Eades

and Alan W. Pope

Bank of America Corporate
Tower

Suite 4700

100 North Tryon Street

Charlotte, North Carolina
28202-4003

Phone: (704) 331-1044 (Eades)

Fax: (704) 378-2044 (Eades)

Phone: (704) 331-1014 (Pope)

Fax: (704) 378-2014 (Pope)

E-mail: davideades@mvalaw.com

 

89

 

E-mail:
alanpope@mvalaw.com

 

To the Noteholder Proponents:

 

Debevoise & Plimpton LLP

Attn: Peter L. Borowitz

and Sarah A.W. Fitts

919 Third Avenue

New York, NY 10022

Phone: (212) 909-6525 (Borowitz)

Fax: (212) 521-7525 (Borowitz)

Phone: (212) 909-6251 (Fitts)

Fax: (212) 521-7051 (Fitts)

E-mail:
plborowitz@debevoise.com

E-mail: sawfitts@debevoise.com

 

with a copy to:

 

Lewis and Roca LLP

Attn: Susan M. Freeman

and Henk Taylor

40 N. Central Ave.

Suite 1900

Phoenix, Arizona 85004

Phone: (602) 262-5756 (Freeman)

Fax: (602) 734-3824 (Freeman)

Phone: (602) 262-0254 (Taylor)

Fax: (602) 734-3831 (Taylor)

E-mail: sfreeman@lrlaw.com

E-mail: htaylor@lrlaw.com

 

and

 

To the Debtors:

 

Crown Pacific Limited Partnership

Attn: Steven Dietrich

805 S.W. Broadway, Suite 1500

Portland, Oregon 97205

Phone: (503) 973-1144

Fax: (503) 294-1247

E-mail: steve.dietrich@crown-pacific.com

 

90

 

with a
copy to:

 

Andrews Kurth LLP

Attn: John
Sparacino

and John
Melissinos

600 Travis, Suite
4200

Houston, Texas
77002

Phone: (713)
220-4175 (Sparacino)

Fax: (713)
238-7172

Phone: (213)
896-3181 (Melissinos)

Fax: (213)
896-3137

E-mail:
jsparacino@andrewskurth.com

E-mail:
jmelissinos@andrewskurth.com

 

with
a copy to:

 

Stinson Morrison
Hecker LLP

Attn: Alisa C. Lacey

1850 N. Central Avenue, Suite 2100

Phoenix, Arizona
85004

Phone: (602)
212-8628

Fax: (602)
240-6925

E-mail:
alacey@stinsonmoheck.com

 

14.2.2    If after the Effective Date, then to the Creditors’ Committee (as set
forth in section 14.2.1), and Proponent Term Lenders and Liquidating Trustee:

 

To Proponent Term Lenders:

 

The Entities set forth in Schedule 1.117

 

as amended by notices provided to the Liquidating
Trustee and filed with the Court

 

with
a copy to:

 

Lewis and Roca LLP

Attn: Susan M. Freeman

and Henk Taylor

40 N. Central Ave.

Suite 1900

Phoenix, Arizona 85004

Phone: (602) 262-5756 (Freeman)

Fax: (602) 734-3824 (Freeman)

Phone: (602) 262-0254 (Taylor)

 

91

 

Fax: (602) 734-3831 (Taylor)

E-mail:
sfreeman@lrlaw.com

E-mail: htaylor@lrlaw.com

 

To the Liquidating Trustee:

 

Law Offices of Michael W. Carmel, Ltd.

80 East Columbus Avenue

Phoenix, Arizona 85012-2334

Phone: (602) 264-4965

Fax: (602) 277-0144

E-mail:
Michael@mcarmellaw.com

 

or such other address as shall be filed with the
Court.

 

14.3        Notice of Entry of Confirmation Order and Effective Date. The Liquidating Trustee shall provide notice
by U.S. first class mail of the (i) entry of the Confirmation Order and (ii)
Effective Date, which may be contained in a single notice, to all parties
entitled to notice under Bankruptcy Rule 2002(f)(7) as soon as practicable
following the Effective Date. Such notice shall be deemed to be good and
sufficient notice of such matters, with no requirement for any additional or
further notice.

 

14.4        Further Notices; Post-Effective Date Service List.  From and after the
Effective Date, notices of appearance and demands for service of process filed
with the Court prior to such date shall no longer be effective. From and after
the Effective Date, no further notices, other than the Notice of Entry of the
Confirmation Order and the Notice of Effective Date of the Plan required by
section 14.3 of this Plan, shall be required to be sent to any Entity, except
each Entity that files with the Court a new notice of appearance and demand for
service dated subsequent to the Effective Date, which subsequent notice and
demand must be filed with the Court and served upon the Entities listed in
section 14.2.2.  A list setting forth the
name, address, e-mail address (if any) and telephone number of each such Entity
shall be maintained by the Liquidating Trustee and shall be provided upon
request (the “Post-Effective Date Service List”).

 

92

 

14.5        Notice for Term Lender Consent and Committee Consent. To the
extent any provision of this Plan or the Liquidating Trust Agreement requires
Term Lender Consent, the Entity seeking such consent shall direct the request
for consent to each Trust Beneficiary that holds Liquidating Trust interests in
respect of Allowed Class 5 Claims, and the Entity seeking such consent shall be
responsible for determining whether such consent has or has not been obtained,
and for notifying the Liquidating Trustee, the Proponent Term Lenders and the
Creditors’ Committee upon receipt of such consent, including acceptances and
rejections actually obtained. To the extent any provision of this Plan or the
Liquidating Trust Agreement requires Committee Consent, the Entity seeking such
consent shall be entitled to direct the request for approval to the Persons
designated in section 14.2 as Creditors’ Committee contacts, or such successors
thereto as shall be designated in filings with the Court and the Liquidating
Trustee, and those notified Committee contacts shall then be responsible for
determining whether such consent has or has not been obtained, and shall notify
the Liquidating Trustee, the Proponent Term Lenders and the Creditors’
Committee upon receipt of such consent. 
Any statement by the designated Person to any other Entity concerning
consent shall be dispositive.

 

14.6        Headings.  The headings used in this Plan are inserted
for convenience only and neither constitute a portion of this Plan nor in any
manner affect the provisions of this Plan.

 

14.7        Severability. Should any provision in this Plan be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Plan.

 

14.8        Computation of Time. In computing any period of time
prescribed or allowed by this Plan, the provisions of Bankruptcy Rule 9006(a)
shall apply.

 

93

 

14.9        Governing Law. Except to the extent that the
Bankruptcy Code or any other Federal law is applicable, the rights and
obligations arising under this Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of Arizona.

 

14.10      Successors and Assigns. The rights and
obligations of any Entity named or referred to in this Plan shall be binding
upon, and shall inure to the benefit of, the successors and assigns of such
Entity.

 

14.11      Collateral Agent and Administrative Agent Post-Effective Date
Role.  As a result
of the distributions, transfers and other treatments accorded to the Term
Lenders in connection with the Plan, the obligations and duties of Bank of
America, N.A., in its capacities as the Collateral Agent and the Bank Term
Lender Agent, shall terminate as of the Effective Date and, from and after such
date, Bank of America, N.A., shall have no further obligations or duties
arising in its capacities as the Bank Term Lender Agent or the Collateral Agent
to the Term Lenders or the Bank Term Lenders.

 

14.12      Supersession. Except as otherwise specifically
provided for herein, in the event of any inconsistency between the terms of any
document and instrument prepared pursuant to this Plan or the Disclosure
Statement and the terms of this Plan (including without limitation, the
Liquidating Trust Agreement), the terms of this Plan shall govern and shall supersede
the terms of any such documents, instruments or Disclosure Statement. In the
event of any inconsistency between the terms of this Plan and the Confirmation
Order, the terms of the Confirmation Order shall govern and supersede the terms
of this Plan.

 

14.13      Incorporation of Exhibits and Schedules; Plan Supplement and Supplement to
Schedules and Exhibits.  All exhibits
and schedules referenced in this Plan are incorporated into this Plan in
full.  Any supplement to this Plan filed
with the Court shall be incorporated into this Plan in full. From time to time
prior to the Confirmation Date, the Proponents with the approval of

 

94

 

the
Required Proponent Tem Lenders may amend or supplement any of the Schedules or
Exhibits that are attached to this Plan.

 

RESPECTFULLY SUBMITTED this 20th day of
December, 2004.

 

 

	
   

  	
  LEWIS AND ROCA LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
     

  	
  By

  	
  /s/S. Freeman #004199

  	
   

  
	
   

  	
   

  	
  Susan M. Freeman

  
	
   

  	
   

  	
  Henk Taylor 

  
	
   

  	
   

  	
  Attorneys for
  Noteholder Proponents

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MESCH, CLARK &
  ROTHSCHILD PC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ B.M. Whinery
  (#10677)

  	
   

  
	
   

  	
   

  	
  Brenda Moody Whinery

  
	
   

  	
   

  	
  Frederick J. Petersen

  
	
   

  	
   

  	
  Attorneys for
  Creditors’ Committee

  

 

95

 

	
   

  	
  ANDREWS KURTH LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/J.
  Sparacino (TX18873700)

  	
   

  
	
   

  	
   

  	
  John Sparacino

  
	
   

  	
   

  	
  John Melissinos

  
	
   

  	
   

  	
  Attorneys for Debtors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP ACQUISITION CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
    Senior Vice
  President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E. Dietrich

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROWN PACIFIC LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By CROWN PACIFIC
  MANAGEMENT LIMITED

  
	
   

  	
  PARTNERSHIP, Its
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
    Senior Vice
  President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E. Dietrich

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROWN PACIFIC PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By CROWN PACIFIC
  MANAGEMENT LIMITED

  
	
   

  	
  PARTNERSHIP, Its
  Managing General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
    Senior Vice President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E.
  Dietrich

  
											

 

96

 

	
   

  	
  CP AIR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its: 

  	
    Senior Vice
  President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E. Dietrich

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP ACQUISITION II CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
    Senior Vice
  President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E. Dietrich

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP ACQUISITION III CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
    Senior Vice
  President, CFO and Treasurer

  	
   

  
	
   

  	
  Steven E.
  Dietrich

  
										

 

97Exhibit 4.1

 

 

CEPHALON,
INC.

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033

FIRST PUTABLE JUNE 15, 2008

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033

FIRST PUTABLE JUNE 15, 2010

 

 

INDENTURE

DATED AS OF DECEMBER 20, 2004

 

 

U.S.
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.

  	
  Legend;
  Additional Transfer and Exchange Requirements

  	
   

  
	
  Section 2.13.

  	
  CUSIP
  Numbers

  	
   

  
	
  Section 2.14.

  	
  Separate
  Series

  	
   

  
	
   

  	
   

  	
   

  
	
  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 Fundamental Change

  	
   

  
	
  Section 3.9.

  	
  Effect
  of Fundamental Change Purchase Notice

  	
   

  
	
  Section 3.10.

  	
  Deposit
  of Fundamental Change Purchase Price

  	
   

  
	
  Section 3.11.

  	
  Purchase
  of Securities at Option of the Holder on Specified Dates

  	
   

  
	
  Section 3.12.

  	
  Securities
  Purchased in Part

  	
   

  
	
  Section 3.13.

  	
  Compliance
  with Securities Laws Upon Purchase of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4
  MAKE WHOLE PREMIUM

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Make
  Whole Premium

  	
   

  
	
  Section 4.2.

  	
  Adjustments
  Relating to Make Whole Premium

  	
   

  

 

 

	
  ARTICLE 5
  CONVERSION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Conversion
  Privilege

  	
   

  
	
  Section 5.2.

  	
  Conversion
  Procedure

  	
   

  
	
  Section 5.3.

  	
  Fractional
  Shares

  	
   

  
	
  Section 5.4.

  	
  Taxes
  on Conversion

  	
   

  
	
  Section 5.5.

  	
  Payment
  Upon Conversion

  	
   

  
	
  Section 5.6.

  	
  Adjustment
  of Conversion Price

  	
   

  
	
  Section 5.7.

  	
  No
  Adjustment

  	
   

  
	
  Section 5.8.

  	
  Adjustment
  for Tax Purposes

  	
   

  
	
  Section 5.9.

  	
  Notice
  of Adjustment

  	
   

  
	
  Section 5.10.

  	
  Notice
  of Certain Transactions

  	
   

  
	
  Section 5.11.

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

  	
   

  
	
  Section 5.12.

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 5.13.

  	
  Voluntary Reduction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6 SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Agreement
  of Subordination

  	
   

  
	
  Section 6.2.

  	
  Payments
  to Holders

  	
   

  
	
  Section 6.3.

  	
  Subrogation
  of Securities

  	
   

  
	
  Section 6.4.

  	
  Authorization
  to Effect Subordination

  	
   

  
	
  Section 6.5.

  	
  Notice
  to Trustee

  	
   

  
	
  Section 6.6.

  	
  Trustee’s
  Relation to Senior Indebtedness

  	
   

  
	
  Section 6.7.

  	
  No
  Impairment of Subordination

  	
   

  
	
  Section 6.8.

  	
  Certain
  Conversions Deemed Payment

  	
   

  
	
  Section 6.9.

  	
  Article
  Applicable to Paying Agents

  	
   

  
	
  Section 6.10.

  	
  Senior
  Indebtedness Entitled to Rely

  	
   

  
	
  Section 6.11.

  	
  Ranking
  of Securities in Relation to Existing Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7 COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Payment
  of Securities

  	
   

  
	
  Section 7.2.

  	
  SEC
  Reports

  	
   

  
	
  Section 7.3.

  	
  Compliance
  Certificates

  	
   

  
	
  Section 7.4.

  	
  Further
  Instruments and Acts

  	
   

  
	
  Section 7.5.

  	
  Maintenance
  of Corporate Existence

  	
   

  
	
  Section 7.6.

  	
  Rule
  144A Information Requirement

  	
   

  
	
  Section 7.7.

  	
  Stay,
  Extension and Usury Laws

  	
   

  
	
  Section 7.8.

  	
  Payment
  of Interest Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Company
  May Consolidate, Etc, Only on Certain Terms

  	
   

  
	
  Section 8.2.

  	
  Successor
  Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9 DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Events
  of Default

  	
   

  
	
  Section 9.2.

  	
  Acceleration

  	
   

  

 

 

	
  Section 9.3.

  	
  Other
  Remedies

  	
   

  
	
  Section 9.4.

  	
  Waiver
  of Defaults and Events of Default

  	
   

  
	
  Section 9.5.

  	
  Control
  by Majority

  	
   

  
	
  Section 9.6.

  	
  Limitations
  on Suits

  	
   

  
	
  Section 9.7.

  	
  Rights
  of Holders to Receive Payment and to Convert

  	
   

  
	
  Section 9.8.

  	
  Collection Suit
  by Trustee

  	
   

  
	
  Section 9.9.

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  Section 9.10.

  	
  Priorities

  	
   

  
	
  Section 9.11.

  	
  Undertaking
  for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10 TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Duties
  of Trustee

  	
   

  
	
  Section 10.2.

  	
  Rights
  of Trustee

  	
   

  
	
  Section 10.3.

  	
  Individual
  Rights of Trustee

  	
   

  
	
  Section 10.4.

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  Section 10.5.

  	
  Notice
  of Default or Events of Default

  	
   

  
	
  Section 10.6.

  	
  Reports
  by Trustee to Holders

  	
   

  
	
  Section 10.7.

  	
  Compensation
  and Indemnity

  	
   

  
	
  Section 10.8.

  	
  Replacement
  of Trustee

  	
   

  
	
  Section 10.9.

  	
  Successor
  Trustee by Merger, Etc

  	
   

  
	
  Section 10.10.

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 10.11.

  	
  Preferential Collection of Claims against Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11 SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
  Satisfaction
  and Discharge

  	
   

  
	
  Section 11.2.

  	
  Application of Trust Money

  	
   

  
	
  Section 11.3.

  	
  Repayment
  to Company

  	
   

  
	
  Section 11.4.

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  12 AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Without
  Consent of Holders

  	
   

  
	
  Section 12.2.

  	
  With
  Consent of Holders

  	
   

  
	
  Section 12.3.

  	
  Compliance
  with Trust Indenture Act

  	
   

  
	
  Section 12.4.

  	
  Revocation
  and Effect of Consents

  	
   

  
	
  Section 12.5.

  	
  Notation
  on or Exchange of Securities

  	
   

  
	
  Section 12.6.

  	
  Trustee
  to Sign Amendments, Etc

  	
   

  
	
  Section 12.7.

  	
  Effect
  of Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  13 MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  Section 13.2.

  	
  Notices

  	
   

  
	
  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

  	
   

  

 

 

CROSS-REFERENCE TABLE*

 

	
  TIA SECTION

  	
   

  	
   

  	
   

  	
  INDENTURE SECTION

  
	
  Section

  	
   

  	
  310(a)(1)

  	
   

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
   

  	
  N.A.**

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  10.8;
  10.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  311(a)

  	
   

  	
   

  	
  10.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  10.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  312(a)

  	
   

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  13.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  13.3

  
	
  Section

  	
   

  	
  313(a)

  	
   

  	
   

  	
  10.6

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
   

  	
  10.6

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  10.6;
  13.2

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  10.6

  
	
  Section

  	
   

  	
  314(a)

  	
   

  	
   

  	
  7.2;
  7.4; 13.2

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
   

  	
  13.4(a)

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
   

  	
  13.4(a)

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  13.4(b)

  
	
   

  	
   

  	
  (f)

  	
   

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  315(a)

  	
   

  	
   

  	
  10.1(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  10.5;
  13.2

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  10.1(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  10.1(c)

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  9.11

  
	
  Section

  	
   

  	
  316(a)(last sentence)

  	
   

  	
   

  	
  2.9

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
   

  	
  9.5

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
   

  	
  9.4

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  9.7

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  13.5

  
	
  Section

  	
   

  	
  317(a)(1)

  	
   

  	
   

  	
  9.8

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  9.9

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  2.4

  

 

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

**                        N.A.
means Not Applicable.

 

 

THIS
INDENTURE dated as of December 20, 2004 is between Cephalon, Inc., a
corporation duly organized under the laws of the State of Delaware (the “Company”),
and U.S. Bank National Association, a national banking association organized
and existing under the laws of the United States, as Trustee (the “Trustee”).

 

In
consideration of the premises and the acquisition 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 Securities.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.                                Definitions.

 

“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, in each case to the extent
applicable to such transfer or exchange.

 

“Board of Directors” means either the board of
directors of the Company or any committee of the Board of Directors
specifically authorized to act for it with respect to this Indenture.

 

“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 either a 2008 Security that
is in substantially the form attached hereto as Exhibit A or a 2010
Security that is in substantially the form attached hereto as Exhibit B,
and in either case that does not include the information or the schedule called
for by footnotes 1, 3 and 4 thereof.

 

“Common Stock” means the common stock of the Company,
$0.01 par value, 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

 

1

 

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 the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture, and thereafter “Company” shall mean
such successor Company.

 

“Conversion Rate” means, as of any date of
determination with respect to Securities of a series, an amount equal to $1,000
divided by the then applicable Conversion Price of the Securities of such
series.  As of the date hereof and
subject to adjustment pursuant to Section 5.6, the Conversion Rate with
respect to the 2008 Securities is 16.8067 shares of Common Stock, and the
Conversion Rate with respect to the 2010 Securities is 17.6991 shares of
Common Stock.

 

“Conversion Value” of a Security of a series means, as
of any date of determination, the product of the last reported bid price of the
Common Stock on that date multiplied by the Conversion Rate of that Security on
that date.

 

“Corporate Trust Office” means the office of the
Trustee at which at any time the trust created by this Indenture shall be
administered, which office at the date of the execution of this Indenture is
located at 225 Asylum Street, 23rd Floor, Hartford,
CT  06103, Attention:  Corporate Trust Services (Cephalon, Inc. Zero
Coupon Convertible Subordinated Notes due June 15, 2033), 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 of the Company in which the instrument creating or
evidencing the same or the assumption or guarantee thereof (or any related
agreements or documents to which the Company is a party) expressly provides
that such Senior 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.

 

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

 

“Final
Maturity Date” means June 15, 2033.

 

“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

 

2

 

accounting bulletins and other official written statements from the
accounting staff of the SEC expressing the views of the SEC therein.

 

“Global
Security” means a permanent Global Security that is in substantially the form
attached hereto as Exhibit A, in the case of a 2008 Security, or Exhibit B,
in the case of a 2010 Security, 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, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person (i) 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 banks,
whether or not evidenced by notes or similar instruments) or
(ii) evidenced by credit or loan agreements, bonds, debentures, notes or
similar instruments (whether or not the recourse of the lender is to the whole
of the assets of such Person or to only a portion thereof) (other than any
accounts payable or other accrued current liability or obligation incurred in
the ordinary course of business in connection with the obtaining of
materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers’ acceptances, (c) all obligations and
liabilities (contingent or otherwise) of such Person (i) in respect of
leases of such Person required, in conformity with GAAP, to be accounted for as
capitalized lease obligations on the balance sheet of such Person (as
determined by the Company), or (ii) under any lease or related document
(including a purchase agreement, conditional sale or other title retention
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 or pay an agreed upon residual
value of the leased property to the lessor (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with GAAP), (d) all obligations (contingent or otherwise) of
such Person with respect to any interest rate 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; (e) all direct or indirect guaranties, agreements
to be jointly liable or similar agreements by such Person in respect of, and
obligations or liabilities of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (d), and (f) any and all deferrals, renewals, extensions, refinancings
and refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (a)
through (e).

 

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

 

“Interest
Amounts” has the meaning specified in Section 5 of the Registration Rights
Agreement and shall also include for purposes of this Indenture default
interest (to the extent the payment thereof is lawful) on overdue installments
of Interest Amounts and overdue principal and premium, if any, as and to the
extent provided for in this Indenture.

 

“Nasdaq”
means The Nasdaq National Market.

 

3

 

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

 

“Officers’
Certificate” means a certificate signed by two Officers; provided, however, that, for
purposes of Sections 5.11 and 7.3, “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.

 

“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.

 

“Put
Right Purchase Date” means either the 2008 Purchase Date, the applicable
2013-2028 Purchase Date, the 2010 Purchase Date or the applicable 2015-2030
Purchase Date, as the case may be.

 

“Put
Right Purchase Price” means the 2008 Purchase Price, the 2013-2028 Purchase
Price, the 2010 Purchase Price or the 2015-2030 Purchase Price, as the case may
be.

 

“Quoted
Price” of the Common Stock means, as of any date of determination, the last
sale price regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way or, if more than one in
either case, the average of the average bid and the average asked prices, in
either case, at 4:00 p.m. (or such earlier time as the last sale prior to 4:00
p.m.), New York time, as reported in composite transactions for the principal
U.S. securities exchange on which the Common Stock is traded or, if the Common
Stock is not listed on a U.S. national or regional securities exchange, as
reported on the Nasdaq System or by the National Quotation Bureau Incorporated.

 

“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,” 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 or Exhibit B hereto.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of
December 20, 2004, between the Company and the Trustee.

 

“Representative”
means the (a) 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.

 

4

 

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

 

“Restricted
Security” means a Security required to bear the restricted legend set forth in
the form of Security set forth in Exhibit A or Exhibit B,
as the case may be, of this Indenture.

 

“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 2008 Securities and the 2010 Securities, or any of them (each a “Security”)

 

“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, and 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
allowed as a claim in any such proceeding) and rent payable on 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 secured or unsecured, absolute or
contingent, due or to become due, 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), excluding the
Existing Securities or 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 “pari
passu” or “junior” to the Securities. 
Notwithstanding the foregoing, the term Senior Indebtedness shall not
include (i) any Indebtedness of the Company to any Subsidiary of the
Company (other than Indebtedness of the Company to such Subsidiary arising by
reason of guarantees by the Company of Indebtedness of such Subsidiary to a
Person that is not a Subsidiary of the Company) or (ii) Indebtedness for
trade payables or the deferred purchase price of assets or services incurred in
the ordinary course of business.  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.

 

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

 

“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 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

 

5

 

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, and the rules and
regulations thereunder as in effect on the date of this Indenture, 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 any day that is a “trading day” (i.e., a day during which trading in
securities generally occurs) on Nasdaq or, if the Common Stock (or relevant
securities of a successor obligor) is not listed on Nasdaq, on the principal
other national or regional securities exchange on which the Common Stock (or
relevant securities of a successor obligor) is then listed or, if the Common
Stock (or relevant securities of a successor obligor) is not listed on a
national or regional securities exchange, on Nasdaq or, if the Common Stock (or
relevant securities of a successor obligor) is not quoted on Nasdaq, on the
principal other market on which the Common Stock (or relevant securities of a
successor obligor) is then traded, other than (i) a day on which trading on
Nasdaq or such other principal other market on which the Common Stock (or relevant
securities of a successor obligor) is listed, as applicable, is scheduled to
close prior to its regular weekday closing time or (ii) a day on which, during
the one-half hour period prior to the close of trading on such day, there is a
suspension or limitation imposed on trading in the Common Stock on Nasdaq or
such other principal other market on which the Common Stock (or relevant
securities of a successor obligor) is listed, as applicable (by reason of
movements in price exceeding limits permitted by that exchange or otherwise).

 

“Trading
Price” means, on any date of determination with respect to Securities of a
series, the average of the secondary bid quotations per Security of that series
obtained by the Conversion Agent for $5,000,000 principal amount of Securities
of that series at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers selected by the Company; provided that,
if at least three such bids cannot reasonably be obtained, but two such bids
can reasonably be obtained, then the average of these two bids shall be used; provided, further, that,
if at least two such bids cannot reasonably be obtained, but one such bid can
reasonably be obtained, this one bid shall be used.  If the Conversion Agent cannot reasonably
obtain at least one bid for $5,000,000 principal amount of the Securities of
that series from an independent nationally recognized securities dealer or, in
the reasonable judgment of the Company, the bid quotations are not indicative
of the secondary market value of the Securities of that series, then the
Trading Price of such Securities will equal (a) the applicable Conversion Rate
of such Securities multiplied by (b) the Quoted Price of the Common Stock.

 

“Trustee”
means the party named as such in the first paragraph of 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 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 Restricted
Security.

 

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

 

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

 

6

 

“Voting
Stock” of a Person means all classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.

 

“2008
Securities” means the Zero Coupon Convertible Subordinated Notes due
June 15, 2033, First Putable June 15, 2008, or any of them (each, a “2008 Security”),
as amended or supplemented from time to time, that are issued under this
Indenture.

 

“2010 Securities”
means the Zero Coupon Convertible Subordinated Notes due June 15, 2033,
First Putable June 15, 2010, or any of them (each, a “2010 Security”),
as amended or supplemented from time to time, that are issued under this
Indenture.

 

Section 1.2.                                Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Additional
  Premium”

  	
   

  	
   

  	
  4.1(a)

  
	
  “Additional
  Premium Table”

  	
   

  	
   

  	
  4.1(b)

  
	
  “Agent Members”

  	
   

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
   

  	
  9.1

  
	
  “Change in Control”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Closing Price”

  	
   

  	
   

  	
  5.6(d)

  
	
  “Company Order”

  	
   

  	
   

  	
  2.2

  
	
  “Company Put Right
  Notice”

  	
   

  	
   

  	
  3.11(c)

  
	
  “Conversion Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Conversion Date”

  	
   

  	
   

  	
  5.2

  
	
  “Conversion Notice”

  	
   

  	
   

  	
  5.2

  
	
  “Conversion Obligation”

  	
   

  	
   

  	
  5.5(a)

  
	
  “Conversion Period”

  	
   

  	
   

  	
  5.5(a)

  
	
  “Conversion Price”

  	
   

  	
   

  	
  5.6

  
	
  “Current Market Price”

  	
   

  	
   

  	
  5.6(d)

  
	
  “Custodian”

  	
   

  	
   

  	
  9.1

  
	
  “Daily Conversion
  Value”

  	
   

  	
   

  	
  5.5(a)

  
	
  “Daily Net Share
  Settlement Value”

  	
   

  	
   

  	
  5.5(a)

  
	
  “DTC”

  	
   

  	
   

  	
  2.1

  
	
  “Depositary”

  	
   

  	
   

  	
  2.1

  
	
  “Effective Date”

  	
   

  	
   

  	
  4.1(b)

  
	
  “Event of Default”

  	
   

  	
   

  	
  9.1

  
	
  “Existing Securities”

  	
   

  	
   

  	
  2.1

  
	
  “Expiration Date”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Expiration Time”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Fundamental Change”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Fundamental Change
  Purchase Date”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Fundamental Change
  Purchase Notice”

  	
   

  	
   

  	
  3.8(c)

  
	
  “Fundamental Change
  Purchase Price”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Legal Holiday”

  	
   

  	
   

  	
  13.7

  
	
  “Legend”

  	
   

  	
   

  	
  2.12

  
	
  “Instrument”

  	
   

  	
   

  	
  9.1

  
	
  “Make Whole Premium”

  	
   

  	
   

  	
  4.1(b)

  

 

7

 

	
  Term

  	
   

  	
  Defined in Section

  
	
  “Paying Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Payment Blockage
  Notice”

  	
   

  	
   

  	
  6.2

  
	
  “Primary Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Purchase Agreement”

  	
   

  	
   

  	
  2.1

  
	
  “Purchased Shares”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Put Right Purchase
  Notice”

  	
   

  	
   

  	
  3.11(c)

  
	
  “Quoted Price
  Condition”

  	
   

  	
   

  	
  5.1(a)

  
	
  “Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Rights Plan”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Significant
  Subsidiary”

  	
   

  	
   

  	
  9.1

  
	
  “Stock Price”

  	
   

  	
   

  	
  4.1(b)

  
	
  “Stock Price Cap”

  	
   

  	
   

  	
  4.1(b)

  
	
  “Stock Price Threshold”

  	
   

  	
   

  	
  4.1(b)

  
	
  “Termination of
  Trading”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Triggering
  Distribution”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Trigger Event”

  	
   

  	
   

  	
  5.6(c)

  
	
  “Unissued Shares”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Volume Weighted
  Average Price”

  	
   

  	
   

  	
  5.5(a)

  
	
  “2008 Purchase Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2008 Purchase Price”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2010 Purchase Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2010 Purchase Price”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2013-2028 Purchase
  Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2013-2028 Purchase
  Price”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2015-2030 Purchase
  Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2015-2030 Purchase
  Price”

  	
   

  	
   

  	
  3.11(a)

  

 

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.

 

8

 

Section 1.4.                                Rules
of Construction.

 

Unless
the context otherwise requires:

 

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

 

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

 

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

 

(D)       provisions
apply to successive events and transactions;

 

(E)         the
term “merger” includes a statutory share exchange, and the term “merged” has a
correlative meaning;

 

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

 

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

 

(H)       “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
2008 Securities and the corresponding 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 2010 Securities and the
corresponding Trustee’s certificate of authentication shall be substantially in
the respective forms set forth in Exhibit B, 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.  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 by the Company in exchange for an equal principal amount of similar
debt securities (the “Existing Securities”) tendered in exchange therefor by
the holders thereof.

 

(a)                                  Restricted
Global Securities.  Each Security
issued in exchange for an Existing Security which at the time of exchange bears
CUSIP Number 156708 AF 6 or 156708 AH 2 shall be issued initially in the
form of one or more Restricted Global Securities, which shall be deposited on
behalf of the acquirers 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 as hereinafter provided, subject in each case to
compliance with the Applicable Procedures.

 

9

 

(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 adjustment of the aggregate principal
amount 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 Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof and shall be made on the records of the
Trustee and the Depositary.

 

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 the 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
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)                                  Book
Entry Provisions.  The Company shall execute
and the Trustee shall, in accordance with this Section 2.1(c) and Section 2.2,
authenticate and deliver initially one or more Global Securities that
(i) shall be registered in the name of Cede & Co. or as otherwise
instructed by the Depositary, (ii) shall be delivered by the Trustee to
the Depositary or pursuant to the Depositary’s instructions and
(iii) shall bear legends substantially to the following effect:

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO CEPHALON, INC. (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.  TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.”

 

Section 2.2.                                Execution
and Authentication.

 

An
Officer shall sign the Securities for the Company by manual or facsimile
signature.  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.

 

10

 

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 2008 Securities
for original issue in the aggregate principal amount of up to $375,000,000 upon
receipt of a written order or orders of the Company signed by two Officers of
the Company (a “Company Order”).  The
Trustee shall authenticate and make available for delivery 2010 Securities
for original issue in the aggregate principal amount of up to $375,000,000 upon
receipt of a Company Order.  Each Company
Order shall specify the amount of Securities to be authenticated and shall
provide whether such Securities will be represented by a Restricted Global
Security or an Unrestricted Global Security and the date on which each original
issue of Securities is to be authenticated. 
The aggregate principal amount of 2008 Securities outstanding at
any time may not exceed $375,000,000, and the aggregate principal amount of
2010 Securities outstanding at any time may not exceed $375,000,000, in
each 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 principal amount 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 will at all times maintain a
Paying Agent, Conversion Agent, 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 7.1 and Article 11).

 

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 or agency of the Trustee in the Borough of Manhattan,
The City of New York (which shall initially be U.S. Bank Trust National Association,
an Affiliate of the Trustee), to be such office or agency of the Company for
each of the aforesaid purposes.

 

11

 

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 Amounts, if any, or Make Whole Premium, if any, on, any Securities,
the Company shall deposit with a Paying Agent a sum sufficient to pay such
principal, Interest Amounts, if any, and Make Whole Premium, if any, so
becoming due.  Subject to Section 6.2,
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 Amounts, if any, or Make Whole Premium, 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 Amounts, if any, or Make Whole Premium, if any, 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 pay forthwith 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
2008 Securityholders and the most recent list available to it of
2010 Securityholders.  If the
Trustee is not the Primary Registrar, the Company shall furnish to the Trustee
on or before each semiannual Interest Amount 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
2008 Securityholders and/or 2010 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 of the same series, the 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 of
the same series 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; provided that this sentence shall not apply to
any exchange pursuant to Section 2.10, 2.12(a), 3.6, 3.12, 5.2 (last
paragraph) or 12.5.

 

None
of the Company, any Registrar or the Trustee shall be required to exchange or
register a transfer of (i) any Securities for a period of 15 days
next preceding any mailing of a notice of Securities to be redeemed,
(ii) any Securities or portions thereof selected or called for redemption
(except, in the case of redemption of a Security in part, the portion thereof
not to be redeemed) or (iii) any Securities or portions thereof in respect
of which a Fundamental Change 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 thereof not to be purchased).

 

12

 

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 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 U.S.
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 Security, a new Security of like
tenor and principal amount of the same series, 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.

 

Upon
the issuance of any new Securities under this Section 2.7, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto 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 of that series 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.

 

13

 

Section 2.8.                                Outstanding
Securities.

 

Securities
outstanding at any time are all Securities authenticated by the Trustee, except
for those canceled by it, those converted pursuant to Article 5, those
delivered to it for cancellation or surrendered for transfer or exchange 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, subsequent to the new Security’s authentication,
proof satisfactory to the Company 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 in
respect of a series of Securities on a Redemption Date, a Fundamental Change
Purchase Date, a Put Right Purchase Date or the Final Maturity Date money
sufficient to pay the principal of (including premium, if any), and any accrued
Interest Amounts on, Securities of such series (or portions thereof) payable on
that date, then on and after such Redemption Date, Fundamental Change Purchase
Date, Put Right Purchase Date or the Final Maturity Date, as the case may be,
such Securities (or portions thereof, as the case may be) shall cease to be
outstanding and any Interest Amounts on them shall cease to accrue; provided
that, if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.

 

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.

 

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 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 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

 

14

 

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 5.  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.                         Legend;
Additional Transfer and Exchange Requirements.

 

(a)          If Securities are issued
upon the transfer, exchange or replacement of Securities subject to restrictions
on transfer and bearing the legends set forth on the forms of Securities
attached hereto as Exhibit A and Exhibit B
(collectively, the “Legend”), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company
and the Registrar such satisfactory evidence, which shall include an opinion of
counsel if requested by the Company or such Registrar, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144
under the Securities Act or that such Securities are not “restricted” within
the meaning of Rule 144 under the Securities Act; provided that no
such evidence need be supplied in connection with the sale of such
Security pursuant to a registration statement that is effective at the time of
such sale.  Upon (i) provision of
such satisfactory evidence, if requested, or (ii) notification by the
Company to the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. 
If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Legend shall be
reinstated.

 

(b)         A Global Security may not
be transferred, in whole or in part, to any Person other than the Depositary or
a nominee or any successor thereof, and no such transfer to any such other
Person may be registered; provided that the foregoing shall not prohibit
any transfer of a Security that is issued in exchange for a Global Security but
is not itself a Global Security.  No
transfer of a Security to any Person shall be effective under this Indenture or
the Securities unless and until such Security has been registered in the name
of such Person.  Notwithstanding any
other provisions of this Indenture or the Securities, transfers of a Global
Security, in whole or in part, shall be made only in accordance with this Section 2.12.

 

(c)          Subject to the
succeeding paragraph, every Security issued in exchange for an Existing
Security bearing CUSIP Number 156708 AF 6 or 156708 AH 2 shall initially
be subject to the restrictions on transfer provided in the Legend.  Whenever any Restricted Security other than a
Restricted Global Security is presented or surrendered for registration of
transfer or for exchange for a Security registered in a name other than that of
the Holder, such Security must be accompanied by a certificate in substantially
the form set forth in Exhibit C, in the case of
2008 Securities, and Exhibit D, in the case of
2010 Securities, dated the date of such surrender and signed by the Holder
of such Security, as to compliance with such restrictions on transfer.  The Registrar shall not be required to accept
for such registration of transfer or exchange any Security not so accompanied
by a properly completed certificate.

 

(d)         The restrictions imposed
by the Legend upon the transferability of any Security shall cease and
terminate when such Security has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision).  Any Security as to
which such

 

15

 

restrictions on transfer shall have expired in accordance with their
terms or shall have terminated may, upon a surrender of such Security for
exchange to the Registrar in accordance with the provisions of this Section 2.12
(accompanied, in the event that such restrictions on transfer have terminated
by reason of a transfer in compliance with Rule 144 or any successor
provision, by, if requested, an opinion of counsel reasonably acceptable to the
Company, addressed to the Company and in form acceptable to the Company, to the
effect that the transfer of such Security has been made in compliance with
Rule 144 or such successor provision), be exchanged for a new Security, of
like tenor and aggregate principal amount of the same series, which shall not
bear the restrictive Legend.  The Company
shall inform the Trustee of the effective date of any registration statement
registering the Securities under the Securities Act.  The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.

 

(e)          As used in the preceding
two paragraphs of this Section 2.12, the term “transfer” encompasses any
sale, pledge, transfer, hypothecation or other disposition of any Security.

 

(f)            The provisions of
clauses (i), (ii), (iii) and (iv) below shall apply only to Global
Securities:

 

(i)                                     Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security
shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees thereof; provided
that a Global Security may be exchanged for Securities registered in the names
of any person designated by the Depositary in the event that (A) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or such Depositary has ceased to be a “clearing
agency” registered under the Exchange Act, and a successor Depositary is not
appointed by the Company within 90 days, (B) the Company has provided
the Depositary with written notice that it has decided to discontinue use of
the system of book-entry transfer through the Depositary or any successor
Depositary or (C) an Event of Default has occurred and is continuing with
respect to the Securities.  Any Global
Security exchanged pursuant to clause (A) or (B) above shall be so
exchanged in whole and not in part, and any Global Security exchanged pursuant
to clause (C) above may be exchanged in whole or from time to time in part
as directed by the Depositary.  Any
Security issued in exchange for a Global Security or any portion thereof shall
be a Global Security; provided that any such Security so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.

 

(ii)                                  Securities
issued in exchange for a Global Security or any portion thereof shall be issued
in definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Security or portion
thereof to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. 
Any Global Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. 
With regard to any Global Security to be exchanged in part, either such
Global Security shall be so surrendered for exchange or, if the Trustee is acting
as custodian for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced by an amount equal to
the portion thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee.  Upon
any such surrender or adjustment, the Trustee shall authenticate and deliver
the Security issuable on such exchange to or upon the order of the Depositary
or an authorized representative thereof.

 

16

 

(iii)                               The
registered Holder may grant proxies and otherwise authorize any Person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

 

(iv)                              In
the event of the occurrence of any of the events specified in clause (i)
above, the Company will promptly make available to the Trustee a reasonable
supply of Certificated Securities in definitive, fully registered form, without
interest coupons.

 

Section 2.13.                         CUSIP
Numbers.

 

The
Company in issuing the Securities may use one or more “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 will promptly
notify the Trustee of any change in the “CUSIP” numbers.

 

Section 2.14.                         Separate
Series.

 

The
2008 Securities and the 2010 Securities shall each constitute a
separate and distinct series of Securities under this Indenture.

 

ARTICLE 3

REDEMPTION AND PURCHASES

 

Section 3.1.                                Right
to Redeem; Notice to Trustee.

 

The
2008 Securities may be redeemed at the election of the Company, as a whole
or from time to time in part, at the times and at the Redemption Prices
specified in paragraph 5 of the form of Security attached hereto as Exhibit A,
together with any accrued Interest Amount up to, but not including, the Redemption
Date; provided that, if the Redemption Date falls after an Interest
Amount payment record date and on or before an Interest Amount payment date,
then the Interest Amounts will be payable to the Holders in whose name the
Securities are registered at the close of business on the Interest Amount
payment record date.

 

The
2010 Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at the times and at the Redemption Prices
specified in paragraph 5 of the form of Security attached hereto as Exhibit B,
together with any accrued Interest Amount up to, but not including, the
Redemption Date; provided that, if the Redemption Date falls after an
Interest Amount payment record date and on or before an Interest Amount payment
date, then the Interest Amounts will be payable to the Holders in whose name
the Securities are registered at the close of business on the Interest Amount
payment record date.

 

If the
Company elects to redeem Securities pursuant to this Section 3.1 and
paragraph 5 of the Securities, it shall notify the Trustee at least
25 days prior to the Redemption Date as fixed by the Company (unless a
shorter notice period 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 of a
series are to be

 

17

 

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 of a series are to be redeemed, unless the
procedures of the Depositary provide otherwise, the Trustee shall, at least 15
days but 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 of that series 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.

 

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 part
of the portion selected for redemption. 
Securities which have been converted subsequent to the Trustee
commencing selection of Securities to be redeemed but prior to redemption
of such Securities shall be treated by the Trustee as outstanding for the
purpose of such selection.

 

Section 3.3.                                Notice
of Redemption.

 

At
least 15 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 Trading Day
immediately preceding the Redemption Date and must satisfy the other
requirements set forth in paragraph 9 of the Securities and Article 5
hereof;

 

(7)          that,
unless the Company defaults in making the payment of the Redemption Price,
Interest Amounts 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 Interest Amounts, if
any, upon presentation and surrender to a Paying Agent of the Securities; and

 

18

 

(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 to each Holder 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 Interest Amounts, if any, except for Securities
that are converted in accordance with the provisions of Article 5.  On or after the Redemption Date and upon
presentation and surrender to a Paying Agent, Securities called for redemption
shall be paid at the Redemption Price, plus any accrued Interest Amounts up to
but not including the Redemption Date; provided that, if the Redemption
Date is an Interest Amount payment date, Interest Amounts will be payable to
the Holders in whose names the Securities are registered on the Redemption
Date.

 

Section 3.5.                                Deposit
of Redemption Price.

 

Prior
to 11:00 a.m., New York City time, on the Redemption Date, the Company shall
deposit with a Paying Agent (or, if the Company acts as Paying Agent, shall
segregate and hold in trust) an amount of money (in immediately available funds
if deposited on such Redemption Date) sufficient to pay the Redemption Price
of, and any accrued Interest Amounts 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 5, 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 any Interest
Amounts accrued 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

 

19

 

pay the Redemption Price of such Securities, including all accrued
Interest Amounts, if any, shall be deemed to 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 any accrued Interest Amounts 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 5) 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 Fundamental Change.

 

(a)          If
at any time that Securities remain outstanding there shall occur a Fundamental
Change, Securities shall be purchased by the Company at the option of the
Holders, as of the date that is 30 Business Days after the occurrence of
the Fundamental Change (the “Fundamental Change Purchase Date”) at a purchase
price equal to 100% of the principal amount of the Securities, together with
any accrued and unpaid Interest Amounts to, but excluding, the Fundamental
Change Purchase Date (the “Fundamental Change Purchase Price”), payable in
cash, subject to satisfaction by or on behalf of any Holder of the requirements
set forth in subsection (c) of this Section 3.8.  Notwithstanding the foregoing, the Company
may not repurchase the Securities upon the occurrence of a Fundamental Change
if the principal amount of the Securities has been accelerated and such
acceleration has not been rescinded on or prior to the Fundamental Change
Purchase Date.

 

A “Fundamental Change” shall mean the occurrence of a Change in Control
or a Termination of Trading.

 

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

 

20

 

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

 

(3)                                  the
holders of capital stock of the Company approve any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the terms hereof).

 

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
provision 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 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 will not be deemed to have occurred if, in the case of a merger or
consolidation, all of the consideration (excluding cash payments for fractional
shares and cash payments pursuant to dissenters’ appraisal rights) in the
merger or consolidation constituting the Change in Control consists of common
stock traded on a U.S. national securities exchange or quoted on Nasdaq (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
Daily Net Share Settlement Value (if any) of any Securities surrendered for
conversion would be in the form of such common stock.

 

A “Termination
of Trading” means that the Common Stock or other securities into which the
Securities are convertible are neither listed for trading on a U.S. national
securities exchange nor approved for listing on Nasdaq or any similar U.S.
system of automated dissemination of quotations of securities prices.

 

(b)         Within 10 Business Days
after the occurrence of a Fundamental Change, the Company shall mail a written
notice of the Fundamental Change to the Trustee and to each Holder (and to
beneficial owners as required by applicable law).  The notice shall include the form of a
Fundamental Change Purchase Notice to be completed by the Holder and shall
state:

 

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

 

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

 

(3)          the
Fundamental Change Purchase Date;

 

(4)          the
Fundamental Change Purchase Price;

 

21

 

(5)          the
Holder’s right to require the Company to purchase the Securities;

 

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

 

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

 

(8)          the
Conversion Price and any adjustments thereto;

 

(9)          that
Securities as to which a Fundamental Change Purchase Notice has been given may
be converted into Cash and Common Stock (if any) pursuant to Article 5 of
this Indenture only to the extent that the Fundamental Change Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;

 

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

 

(11)    the
procedures for withdrawing a Fundamental Change Purchase Notice, including a
form of notice of withdrawal; and

 

(12)    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, in the case of
2008 Securities, and Exhibit B hereto, in the case of
2010 Securities, 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 “Fundamental Change Purchase Notice”) to any Paying Agent at any time
prior to the close of business on the second Trading Day next preceding the
Fundamental Change 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 Fundamental Change 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.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to a Paying Agent the
Fundamental Change Purchase Notice contemplated by this subsection (c)
shall have the right to withdraw such Fundamental Change 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 5:00 p.m., New York City time,
on the second Trading Day next preceding the Fundamental Change Purchase Date
by delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.9.

 

22

 

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

 

Anything
herein to the contrary notwithstanding, in the case of Global Securities, any
Fundamental Change 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 Fundamental Change Purchase Notice.

 

Upon
receipt by any Paying Agent of the Fundamental Change Purchase Notice specified
in Section 3.8(c), the Holder of the Security in respect of which such
Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified below) thereafter be entitled
to receive the Fundamental Change Purchase Price with respect to such
Security.  Such Fundamental Change
Purchase Price shall be paid to such Holder promptly following the later of
(a) the Fundamental Change 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 Fundamental Change Purchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock pursuant to Article 5 on or after the date of the delivery of such
Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn.

 

A
Fundamental Change Purchase Notice may be withdrawn by means of a written
notice (which may be delivered by mail, 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 5:00 p.m., New York City time, on
the second Trading Day immediately preceding the Fundamental Change 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 Fundamental Change Purchase Price.

 

On or
before 11:00 a.m., New York City time, on the Fundamental Change 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 Fundamental Change Purchase
Date) sufficient to pay the aggregate Fundamental Change Purchase Price of all
the Securities or portions thereof that are to be purchased as of such
Fundamental Change 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 Fundamental Change Purchase Date.

 

If a
Paying Agent holds, in accordance with the terms hereof, money sufficient to
pay the Fundamental Change Purchase Price of any Security for which a
Fundamental Change Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture, then, on the Fundamental Change Purchase Date,
such Security will cease to be outstanding and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the
Fundamental Change Purchase Price as aforesaid).  The Company shall publicly announce the
principal amount of Securities purchased as a result of such Fundamental Change
on or as soon as practicable after the Fundamental Change Purchase Date.

 

23

 

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

 

Section 3.11.                         Purchase
of Securities at Option of the Holder on Specified Dates.

 

(a)          2008 Securities
shall be purchased by the Company in accordance with the provisions of
paragraph 8 of the 2008 Securities on June 15, 2008 (the “2008 Purchase
Date”) at a purchase price per Security equal to 100.25% of the aggregate
principal amount of the Security (the “2008 Purchase Price”), together
with any accrued Interest Amounts up to but not including such Put Right
Purchase Date, and on June 15, 2013, June 15, 2018, June 15,
2023 and June 15, 2028 (the “2013-2028 Purchase Dates”), at a
purchase price per Security equal to 100% of the aggregate principal amount of
the Security (the “2013-2028 Purchase Price”), together with any accrued
Interest Amounts up to but not including such Put Right Purchase Date; provided
that, if the Put Right Purchase Date is on or after an Interest Amount record
date but on or prior to the related Interest Amount payment date, any Interest
Amounts on the 2008 Securities will be payable to the Holders in whose
names the 2008 Securities are registered at the close of business on the
relevant date.  Notwithstanding the
foregoing, the Company may not repurchase the Securities, at the option of the
Holder thereof, if the principal amount of the Securities has been accelerated,
and such acceleration has not been rescinded, on or prior to the relevant Put
Right Purchase Date.

 

2010 Securities
shall be purchased by the Company in accordance with the provisions of
paragraph 8 of the 2010 Securities on June 15, 2010 (the “2010 Purchase
Date”) at a purchase price per Security equal to 100.25% of the aggregate
principal amount of the Security (the “2010 Purchase Price”), together
with any accrued Interest Amounts up to but not including such Put Right
Purchase Date, and on June 15, 2015, June 15, 2020, June 15,
2025 and June 15, 2030 (the “2015-2030 Purchase Dates”), at a
purchase price per Security equal to 100% of the aggregate principal amount of
the Security (the “2015-2030 Purchase Price”), together with any accrued
Interest Amounts up to but not including such Put Right Purchase Date; provided
that, if the Put Right Purchase Date is on or after an Interest Amount record
date but on or prior to the related Interest Amount payment date, any Interest
Amounts on the 2010 Securities will be payable to the Holders in whose
names the 2010 Securities are registered at the close of business on the
relevant record date.  Notwithstanding
the foregoing, the Company may not repurchase the Securities, at the option of
the Holder thereof, if the principal amount of the Securities has been
accelerated, and such acceleration has not been rescinded, on or prior to the
relevant Put Right Purchase Date.

 

Purchases
of Securities by the Company pursuant to this Section 3.11 shall be made,
at the option of the Holder thereof, upon:

 

(1)          delivery
to the Paying Agent by the Holder of a written notice of purchase (a “Put Right
Purchase Notice”) at any time from the opening of business on the date that is
20 Business Days prior to the applicable Put Right Purchase Date until the
close of business on the fifth Business Day prior to such Put Right Purchase
Date stating:

 

(i)             the certificate
number of the Security which the Holder will deliver to be purchased,

 

(ii)          the portion of the
principal amount of the Security which the Holder will deliver to be purchased,
which portion must be in principal amounts at maturity of $1,000 or an integral
multiple thereof, and

 

24

 

(iii)       that such Security shall be
purchased as of the applicable Put Right Purchase Date pursuant to the terms
and conditions specified in paragraph 8 of the Securities and in this
Indenture, and

 

(2)          delivery
of such Security to the Paying Agent prior to, on or after the Put Right
Purchase Date (together with all necessary endorsements) at the offices of the
Paying Agent, such delivery being a condition to receipt by the Holder of the
Put Right Purchase Price therefor, together with any accrued Interest Amounts,
which shall be so paid pursuant to this Section 3.11 only if the Security
so delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Put Right Purchase Notice, as determined by
the Company.

 

The
Company shall purchase from the Holder thereof, pursuant to this
Section 3.11, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the purchase of all of a Security also apply to the purchase of such portion of
such Security.

 

Any purchase
by the Company contemplated pursuant to the provisions of this
Section 3.11 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Put Right
Purchase Date and the time of delivery of the Security.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Put Right Purchase Notice contemplated by this Section 3.11 shall have the
right to withdraw such Put Right Purchase Notice at any time prior to the close
of business at 5:00 p.m., New York City time, on the second Business Day next
preceding the Put Right Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.11(e).

 

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

 

(b)         The
Put Right Purchase Price of Securities in respect of which a Put Right Purchase
Notice pursuant to Section 3.11 has been given shall be paid in U.S. legal
tender (cash).

 

(c)          In
connection with any purchase of Securities pursuant to this Section 3.11,
the Company shall give written notice of the Put Right Purchase Date to the
Holders (the “Company Put Right Notice”).

 

The
Company Put Right Notice shall be sent by first-class mail to the Trustee and
to each Holder (and to each beneficial owner as required by applicable law) not
less than 20 Business Days prior to any Put Right Purchase Date (the “Company
Put Right Notice Date”).  Each Company
Put Right Notice shall include a form of Put Right Purchase Notice to be
completed by a Securityholder and shall state:

 

(i)                                     the
Put Right Purchase Price and the Conversion Price;

 

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

 

(iii)                               that
Securities as to which a Put Right Purchase Notice has been given may be
converted if they are otherwise convertible only in accordance with
Article 5 hereof and paragraph 9 of the Securities if the applicable
Put Right Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;

 

25

 

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

 

(v)                                 that
the Put Right Purchase Price for, and any accrued Interest Amounts on, any
Security as to which a Put Right Purchase Notice has been given and not
withdrawn will be paid promptly following the later of the Put Right Purchase
Date and the time of surrender of such Security as described in subclause (iv)
above;

 

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

 

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

 

(viii)                        the
procedures for withdrawing a Put Right Purchase Notice (including pursuant to
the terms of Section 3.11(e);

 

(ix)                                that,
unless the Company defaults in making payment on Securities for which a Put
Right Purchase Notice has been submitted, Interest Amounts, if any, on such
Securities will cease to accrue on the Put Right Purchase Date; and

 

(x)                                   the
CUSIP number of the Securities.

 

If any
of the Securities are to be redeemed in the form of a Global Security, 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 request, the Trustee shall give such Company Put Right Notice in the
Company’s name and at the Company’s expense; provided, however,
that, in all cases, the text of such Company Put Right Notice shall be prepared
by the Company.

 

(d)                                 The
Company shall deposit cash, in respect of purchases under this
Section 3.11, at the time and in the manner as provided in
Section 3.11(f), sufficient to pay the aggregate Put Right Purchase Price
of all Securities, together with any accrued Interest Amounts to, but not
including, the Put Right Purchase Date, to be purchased pursuant to this
Section 3.11.

 

(e)                                  Upon
receipt by the Paying Agent of the Put Right Purchase Notice specified in
Section 3.11(a), the Holder of the Security in respect of which such Put
Right Purchase Notice was given shall (unless such Put Right Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Put Right Purchase Price, together with any accrued
Interest Amounts to, but not including, the Put Right Purchase Date thereon,
with respect to such Security.  Such Put
Right Purchase Price, together with any accrued Interest Amounts to, but not
including, the Put Right Purchase Date thereon, shall be paid to such Holder,
subject to receipt of funds by the Paying Agent, promptly following the later
of (x) the Put Right Purchase Date with respect to such Security (provided
the conditions in Section 3.11(a) have been satisfied) and (y) the
time of delivery of such Security to the Paying Agent by the Holder thereof in
the manner required by Section 3.11(a). 
Securities in respect of which a Put Right Purchase Notice has been
given by the Holder thereof may not be converted pursuant to Article 5
hereof on or after the date of the delivery of such Put Right Purchase Notice,
unless such Put Right Purchase Notice has first been validly withdrawn as
specified in the following two paragraphs.

 

A Put
Right Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Put Right Purchase Notice at any time

 

26

 

prior to 5:00 p.m., New York City time, on the second Business Day
prior to the Put Right Purchase Date specifying:

 

(1)                                  the
certificate number, if any, of the Security in respect of which such notice of
withdrawal is being submitted,

 

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

 

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

 

A
written notice of withdrawal of a Put Right Purchase Notice shall be in the
form set forth in the preceding paragraph.

 

There
shall be no purchase of any Securities pursuant to this Section 3.11 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Put Right Purchase Notice) and
is continuing an Event of Default with respect to Securities of such series
(other than a default in the payment of the Put Right Purchase Price with
respect to such Securities).  The Paying
Agent will promptly return to the respective Holders thereof any Securities
(x) with respect to which a Put Right Purchase Notice has been withdrawn
in compliance with this Indenture or (y) held by it during the continuance
of an Event of Default with respect to Securities of such series (other than a
default in the payment of the Put Right Purchase Price with respect to such
Securities), in which case, upon such return, the Put Right Purchase Notice
with respect thereto shall be deemed to have been withdrawn.

 

(f)            Prior
to 11:00 a.m. (local time in the City of New York) on the Put Right Purchase
Date, the Company shall deposit with the Trustee or with the Paying Agent (or,
if the Company or a Subsidiary or an Affiliate of either of them is acting as
the Paying Agent, shall segregate and hold in trust as provided in
Section 2.4) an amount (in immediately available funds if deposited on
such Business Day) sufficient to pay the aggregate Put Right Purchase Price of,
together with all accrued Interest Amounts, if any, to, but not including, the
Put Right Purchase Date on, all the Securities or portions thereof which are to
be purchased as of the Put Right Purchase Date. 
The manner in which the deposit required by this Section 3.11(f) 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 Put Right Purchase Date.

 

If a
Paying Agent holds, in accordance with the terms hereof, money sufficient to
pay the Put Right Purchase Price of any Security, then, on the Put Right
Purchase Date, such Security will cease to be outstanding and the rights of the
Holder in respect thereof shall terminate (other than the right to receive the
Put Right Purchase Price as aforesaid). 
The Company shall publicly announce the principal amount of Securities
purchased on such Put Right Purchase Date as soon as practicable after the Put
Right Purchase Date.

 

To the
extent that the aggregate amount of cash deposited by the Company pursuant to
this Section 3.11(f) exceeds the aggregate Put Right Purchase Price,
together with Interest Amounts, if any, thereon, of the Securities or portions
thereof that the Company is obligated to purchase, then promptly after the Put
Right Purchase Date the Trustee or a Paying Agent, as the case may be, shall
return any such excess cash to the Company.

 

27

 

Section 3.12.                         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 Fundamental Change Purchase
Date or the Put Right Purchase Date, as the case may be, 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 3.13.                         Compliance
with Securities Laws Upon Purchase of Securities.

 

In
connection with any offer to purchase or repurchase of Securities under
Section 3.8 or 3.11, the Company shall (a) comply with
Rule 13e-4, Rule 14e-1 and any other tender offer rules 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 repurchase of Securities, all so as
to permit the rights of the Holders and obligations of the Company under
Sections 3.8 through 3.12 to be exercised in the time and in the manner
specified therein.

 

ARTICLE 4

MAKE WHOLE PREMIUM

 

Section 4.1.                                Make
Whole Premium.

 

(a)          If
a Fundamental Change occurs prior to June 15, 2008, in the case of the
2008 Securities, or June 15, 2010, in the case of the
2010 Securities, the Company shall pay the Make Whole Premium to Holders
of the Securities who convert their Securities in connection with a Fundamental
Change pursuant to Section 5.1(b). 
The Make Whole Premium shall be paid on the Fundamental Change Purchase
Date and shall be paid solely in shares of the Common Stock (other than Cash
paid in lieu of fractional shares) or in the same form of consideration into
which all or substantially all of the shares of Common Stock have been
converted or exchanged in connection with the Fundamental Change, as described
below.  The Make Whole Premium shall be
equal to a percentage (the “Additional Premium”) of the principal amount of the
Securities.  The Additional Premium will
be in addition to, and not in substitution for, any Cash, securities or other
assets otherwise due to Holders of Securities upon conversion as described in
this Indenture.

 

(b)         The
Make Whole Premium shall be determined as follows:

 

(i)                                     “Effective
Date” means the date that a Fundamental Change becomes effective.

 

(ii)                                  “Stock
Price” means the price paid (or deemed to be paid) per share of Common Stock in
the transaction constituting the Fundamental Change, determined as follows:

 

(A)      If holders of the Common
Stock receive only Cash in the Fundamental Change, the Stock Price shall be the
Cash amount paid per share of Common Stock; or

 

28

 

(B)        Otherwise, the Stock Price
shall be the average Quoted Price of the Common Stock for the 10 consecutive
Trading Days immediately prior to but not including the Effective Date.

 

(iii)                               Additional
Premium means, with respect to each of the 2008 Securities and the 2010
Securities, the percentage set forth on the relevant table below (each, an “Additional
Premium Table”) for the Stock Price and the Effective Date:

 

29

 

Additional
Premium Applicable to the 2008 Securities Upon Fundamental Change

(% of Face Value)

 

	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
  November 15,

  2004

  	
   

  	
  June 15,

  2005

  	
   

  	
  June 15,

  2006

  	
   

  	
  June 15,

  2007

  	
   

  	
  June 15,

  2008

  	
   

  
	
  $

  	
  48.05

  	
   

  	
  19.2

  	
   

  	
  19.2

  	
   

  	
  19.2

  	
   

  	
  19.2

  	
   

  	
  19.2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  50.00

  	
   

  	
  16.5

  	
   

  	
  16.9

  	
   

  	
  17.2

  	
   

  	
  16.8

  	
   

  	
  16.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  55.00

  	
   

  	
  13.8

  	
   

  	
  13.9

  	
   

  	
  13.7

  	
   

  	
  12.3

  	
   

  	
  7.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  60.00

  	
   

  	
  11.5

  	
   

  	
  11.4

  	
   

  	
  10.8

  	
   

  	
  8.8

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  65.00

  	
   

  	
  9.6

  	
   

  	
  9.4

  	
   

  	
  8.4

  	
   

  	
  6.2

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  70.00

  	
   

  	
  8.1

  	
   

  	
  7.7

  	
   

  	
  6.6

  	
   

  	
  4.3

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  75.00

  	
   

  	
  6.8

  	
   

  	
  6.4

  	
   

  	
  5.2

  	
   

  	
  3.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  80.00

  	
   

  	
  5.7

  	
   

  	
  5.2

  	
   

  	
  4.0

  	
   

  	
  2.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  85.00

  	
   

  	
  4.8

  	
   

  	
  4.3

  	
   

  	
  3.2

  	
   

  	
  1.4

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  90.00

  	
   

  	
  4.0

  	
   

  	
  3.6

  	
   

  	
  2.5

  	
   

  	
  0.9

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  95.00

  	
   

  	
  3.4

  	
   

  	
  3.0

  	
   

  	
  1.9

  	
   

  	
  0.6

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  100.00

  	
   

  	
  2.9

  	
   

  	
  2.5

  	
   

  	
  1.5

  	
   

  	
  0.4

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  105.00

  	
   

  	
  2.5

  	
   

  	
  2.1

  	
   

  	
  1.2

  	
   

  	
  0.3

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  110.00

  	
   

  	
  2.1

  	
   

  	
  1.7

  	
   

  	
  0.9

  	
   

  	
  0.2

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  115.00

  	
   

  	
  1.8

  	
   

  	
  1.4

  	
   

  	
  0.7

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  120.00

  	
   

  	
  1.5

  	
   

  	
  1.2

  	
   

  	
  0.6

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  125.00

  	
   

  	
  1.3

  	
   

  	
  1.0

  	
   

  	
  0.5

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  130.00

  	
   

  	
  1.1

  	
   

  	
  0.9

  	
   

  	
  0.4

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  135.00

  	
   

  	
  1.0

  	
   

  	
  0.7

  	
   

  	
  0.3

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  

 

30

 

Additional
Premium Applicable to the 2010 Securities Upon Fundamental Change

(% of Face Value)

 

	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
  November,

  15, 2004

  	
   

  	
  June 15,

  2005

  	
   

  	
  June 15,

  2006

  	
   

  	
  June 15,

  2007

  	
   

  	
  June 15,

  2008

  	
   

  	
  June 15,

  2009

  	
   

  	
  June 15

  2010

  	
   

  
	
  $

  	
  48.05

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  50.00

  	
   

  	
  13.6

  	
   

  	
  14.1

  	
   

  	
  14.8

  	
   

  	
  14.7

  	
   

  	
  14.5

  	
   

  	
  14.3

  	
   

  	
  11.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  55.00

  	
   

  	
  11.6

  	
   

  	
  11.9

  	
   

  	
  12.3

  	
   

  	
  12.4

  	
   

  	
  11.9

  	
   

  	
  10.2

  	
   

  	
  2.7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  60.00

  	
   

  	
  10.0

  	
   

  	
  10.1

  	
   

  	
  10.3

  	
   

  	
  10.1

  	
   

  	
  9.2

  	
   

  	
  7.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  65.00

  	
   

  	
  8.6

  	
   

  	
  8.7

  	
   

  	
  8.6

  	
   

  	
  8.2

  	
   

  	
  7.1

  	
   

  	
  4.8

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  70.00

  	
   

  	
  7.4

  	
   

  	
  7.4

  	
   

  	
  7.2

  	
   

  	
  6.7

  	
   

  	
  5.5

  	
   

  	
  3.3

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  75.00

  	
   

  	
  6.4

  	
   

  	
  6.4

  	
   

  	
  6.1

  	
   

  	
  5.5

  	
   

  	
  4.2

  	
   

  	
  2.2

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  80.00

  	
   

  	
  5.6

  	
   

  	
  5.5

  	
   

  	
  5.2

  	
   

  	
  4.5

  	
   

  	
  3.3

  	
   

  	
  1.4

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  85.00

  	
   

  	
  4.9

  	
   

  	
  4.7

  	
   

  	
  4.4

  	
   

  	
  3.7

  	
   

  	
  2.5

  	
   

  	
  0.9

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  90.00

  	
   

  	
  4.3

  	
   

  	
  4.1

  	
   

  	
  3.7

  	
   

  	
  3.0

  	
   

  	
  1.9

  	
   

  	
  0.6

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  95.00

  	
   

  	
  3.7

  	
   

  	
  3.6

  	
   

  	
  3.1

  	
   

  	
  2.5

  	
   

  	
  1.5

  	
   

  	
  0.4

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  100.00

  	
   

  	
  3.3

  	
   

  	
  3.1

  	
   

  	
  2.7

  	
   

  	
  2.0

  	
   

  	
  1.2

  	
   

  	
  0.3

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  105.00

  	
   

  	
  2.9

  	
   

  	
  2.7

  	
   

  	
  2.3

  	
   

  	
  1.7

  	
   

  	
  0.9

  	
   

  	
  0.2

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  110.00

  	
   

  	
  2.6

  	
   

  	
  2.4

  	
   

  	
  2.0

  	
   

  	
  1.4

  	
   

  	
  0.7

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  115.00

  	
   

  	
  2.3

  	
   

  	
  2.1

  	
   

  	
  1.7

  	
   

  	
  1.2

  	
   

  	
  0.5

  	
   

  	
  0.1

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  120.00

  	
   

  	
  2.0

  	
   

  	
  1.8

  	
   

  	
  1.5

  	
   

  	
  1.0

  	
   

  	
  0.4

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  125.00

  	
   

  	
  1.8

  	
   

  	
  1.6

  	
   

  	
  1.3

  	
   

  	
  0.8

  	
   

  	
  0.3

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  130.00

  	
   

  	
  1.6

  	
   

  	
  1.4

  	
   

  	
  1.1

  	
   

  	
  0.7

  	
   

  	
  0.3

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  135.00

  	
   

  	
  1.4

  	
   

  	
  1.3

  	
   

  	
  1.0

  	
   

  	
  0.6

  	
   

  	
  0.2

  	
   

  	
  0.0

  	
   

  	
  0.0

  	
   

  

 

The
exact Stock Price and Effective Date may not be set forth on the relevant
Additional Premium Table, in which case, if the Stock Price is between two
Stock Prices on such Additional Premium Table or the Effective Date is between
two Effective Dates on such Additional Premium Table, the Additional Premium
shall be determined by straight-line interpolation between Additional Premium
amounts set forth for the higher and lower Stock Prices and the two Effective
Dates, as applicable, based on a 365-day year. 
The Stock Prices set forth in the column headers are subject to
adjustment pursuant to Section 5.6.

 

(iv)                              “Make
Whole Premium” means the amount per $1,000 principal amount of Securities equal
to:

 

31

 

(A)      if the Effective Date is on
or after June 15, 2008, in the case of the 2008 Securities, or
June 15, 2010, in the case of the 2010 Securities, $0;

 

(B)        if the Stock Price is less
than or equal to $48.05 (subject to adjustment pursuant to Section 5.6)
(the “Stock Price Threshold”), $0;

 

(C)        if the Stock Price is more
than $135.00 (subject to adjustment pursuant to Section 5.6) (the “Stock
Price Cap”), $0; and

 

(D)       otherwise, the dollar
amount equal to the Additional Premium times $1,000 divided by 100.

 

(c)          The
Company shall pay the Make Whole Premium solely in shares of Common Stock
(other than Cash paid in lieu of fractional shares) or in the same form of
consideration into which all or substantially all of the shares of Common Stock
have been converted or exchanged in connection with the Fundamental
Change.  If holders of the Common Stock
receive or have the right to receive more than one form of consideration in
connection with such Fundamental Change, then, for purposes of the foregoing,
the forms of consideration in which the Make Whole Premium shall be paid shall
be in proportion to the different forms of consideration paid to holders of
Common Stock in connection with such Fundamental Change.

 

(d)         The
value of the shares of Common Stock or other consideration for purposes of
determining the number of shares of Common Stock or other consideration to be
issued or delivered, as the case may be, in respect of the Make Whole Premium
shall be calculated as follows:

 

(i)                                     in
the case of a Fundamental Change in which all or substantially all of the
shares of Common Stock have been, as of the Effective Date, converted into or
exchanged for the right to receive securities or other assets or property
(including Cash), then the consideration shall be valued as follows:

 

(A)      securities that are traded
on a U.S. national securities exchange or approved for quotation on Nasdaq or
any similar system of automated dissemination of quotations of securities
prices shall be valued at 98% of the average Quoted Price for the
10 consecutive Trading Days immediately prior to but excluding the
Fundamental Change Purchase Date,

 

(B)        other securities, assets
or property (other than Cash) that holders will have the right to receive shall
be valued based on 98% of the average of the fair market value of such
securities, assets or property (other than Cash) as determined on the Business
Day immediately prior to the Fundamental Change Purchase Date by two
independent nationally recognized investment banks selected by the Trustee, and

 

(C)        100% of any Cash.

 

(ii)                                  in
all other cases, the value of each share of Common Stock shall equal 98% of the
average Quoted Price of the Common Stock for the 10 consecutive Trading
Days prior to but excluding the Fundamental Change Purchase Date.

 

32

 

Notwithstanding
the foregoing, in no event shall the value of each share of Common Stock be
less than 50% of the Stock Price used to determine the amount of the Make Whole
Premium.

 

(e)                                  A
Calculation Agent appointed from time to time by the Company shall, on behalf
of and on request by the Company, calculate (A) the Stock Price and
(B) the Additional Premium and Make Whole Premium with respect to such
Stock Price, based on the Effective Date specified by the Company, and shall
deliver its calculation of the Stock Price, Additional Premium and Make Whole
Premium to the Company and the Trustee within three Business Days of the
request by the Company or the Trustee. 
In addition, the Calculation Agent shall, on behalf of and upon request
by the Company or the Trustee, make the determinations described in
Section 4.1(d) above and deliver its calculations to the Company or the
Trustee by 9:00 p.m., New York City time, on the day prior to the
Fundamental Change Purchase Date.  The
Company or, at the Company’s request, the Trustee, in the name and at the
expense of the Company, (X) shall notify the Holders of the Stock Price
and Make Whole Premium per $1,000 principal amount of Securities with respect
to a Fundamental Change as part of the Fundamental Change Purchase Notice and
(Y) shall notify the Holders, by registered first-class mail, promptly
upon the opening of business on the Fundamental Change Purchase Date of the
number of shares of Common Stock (or such other securities, assets or property
(including Cash) into which all or substantially all of the shares of Common
Stock have been converted as of the Effective Date as described above) to be
paid in respect of the Make Whole Premium in connection with such Fundamental
Change, in the manner provided in this Indenture.  Any notice so given shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice.  The Company shall verify, in
writing, all calculations made by the Calculation Agent pursuant to this
Section 4.1(e).

 

(f)                                    On
or prior to the Fundamental Change Purchase Date, the Company shall deposit
with the Trustee or with one or more Paying Agents (or, if the Company or an
Affiliate or Subsidiary of the Company is acting as the Paying Agent, set
aside, segregate and hold in trust) an amount of shares of Common Stock (or, in
the case of a Fundamental Change in which all or substantially all of the
shares of Common Stock have been, as of the Effective Date, converted into or
exchanged for the right to receive securities or other assets or property
(including Cash), an amount of such other securities or other assets or property
(including Cash)) sufficient to pay the Make Whole Premium with respect to all
the Securities converted in connection with such Fundamental Change; provided that, if such payment is made on the Fundamental
Change Purchase Date, it must be received by the Trustee or Paying Agent, as
the case may be, by 10:00 a.m., New York City time, on such date.  Payment of the Make Whole Premium for
Securities surrendered for conversion within the period described in Section 5.1
shall be made promptly on the Fundamental Change Purchase Date by mailing
checks in respect of Cash and otherwise delivering entitlements to securities,
other assets or property for the amount payable to the Holders of such
Securities entitled thereto as they shall appear in the register kept by the
Registrar.

 

33

 

Section 4.2.                                Adjustments
Relating to Make Whole Premium.  Whenever the Conversion Rate shall
be adjusted from time to time by the Company pursuant to Section 5.6, the
Stock Price Threshold and the Stock Price Cap shall be adjusted and each of the
Stock Prices set forth in each Additional Premium Table shall be adjusted.  The adjusted Stock Price Threshold, Stock
Price Cap and Stock Prices set forth in each Additional Premium Table shall equal
the Stock Price Threshold, Stock Price Cap and such Stock Prices, as the case
may be, immediately prior to such adjustment multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the adjustment
giving rise to such adjustment and the denominator of which is the Conversion
Rate so adjusted.

 

ARTICLE 5

CONVERSION

 

Section 5.1.                                Conversion
Privilege.

 

(a)                                  Subject
to the further provisions of this Article 5 and paragraph 9 of the
Securities, 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 Cash and Common Stock at any time prior to the
close of business on the Final Maturity Date, at the Conversion Price then in
effect, if, as of such Conversion Date, the Quoted Price of the Common Stock on
the first Trading Day immediately prior to the date of surrender is more than
120% of the Conversion Price of Common Stock on the first Trading Day
immediately prior to such date of surrender (the “Quoted Price Condition”),
subject to the exceptions provided in Section 5.1(b); 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 Trading Day immediately preceding the Redemption Date
or Fundamental Change 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
Fundamental Change 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).

 

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 Fundamental Change
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 Fundamental Change Purchase Notice is withdrawn by a written notice of
withdrawal delivered to a Paying Agent prior to 5:00 p.m., New York City time,
on the second Trading Day immediately preceding the Fundamental Change Purchase
Date in accordance with Section 3.9. 
A Security in respect of which a Holder has delivered a Put Right Purchase
Notice pursuant to Section 3.11(a) exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such Put
Right Purchase Notice is withdrawn by a written notice of withdrawal delivered
to a Paying Agent prior to 5:00 p.m., New York City time, on the second
Business Day immediately preceding the Put Right Purchase Date in accordance
with Section 3.11(e).

 

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 5.

 

(b)                                 Even
if the Quoted Price Condition is not satisfied,

 

34

 

(1)                                  a
Holder may surrender for conversion a Security which has been called for
redemption pursuant to Section 3.1 at any time prior to the close of
business on the day that is two Trading Days prior to the redemption date;

 

(2)                                  if,
after any five consecutive Trading Day period, the average of the Trading
Prices for the Securities of a series for that five-Trading Day period was less
than 100% of the average of the Conversion Values for the Securities of that
series during that period, a holder may surrender Securities of that series for
conversion at any time during the following 10 Trading Days; provided, however,
that no Securities of a series may be converted based on the satisfaction of
this condition during the six-month period immediately preceding each specified
date on which the Holders may require the Company to repurchase Securities of
such series set forth in Section 3.11;

 

(3)                                  in
the event that the Company declares

 

(i)                                     a
dividend or distribution of any rights or warrants to all holders of Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share (as defined in
Section 5.6(d)) on the record date for such dividend or distribution (other
than a distribution of rights by the Company to its stockholders pursuant to
the Company’s Amended and Restated Rights Agreement, dated as of
January 1, 1999, between the Company and StockTrans, Inc., as Rights
Agent, and any successor or similar stockholders rights plan until the
occurrence of a triggering event under such plan), or

 

(ii)                                  a
dividend or distribution of cash, debt securities (or other evidences of
indebtedness) or other assets (excluding dividends or distributions for which
Conversion Price adjustment is required to be made under Section 5.6(a) or
5.6(b) of this Indenture) where the fair market value of such dividend or
distribution per share of Common Stock, as determined in this Indenture,
together with all other such dividends and distributions within the preceding
twelve months, exceeds 10% of the Current Market Price of the Common Stock as
of the Trading Day immediately prior to the date of declaration for such
dividend or distribution,

 

then the Securities may be surrendered for conversion
beginning on the date the Company gives notice to the Holders of such right,
which shall not be less than 20 days prior to the ex-dividend time for
such dividend or distribution, until the earlier of the close of business on
the Business Day prior to the ex-dividend time or until the Company announces
that such distribution will not take place; and

 

(4)                                  upon
the occurrence of a Fundamental Change with respect to the Company, the
Securities may be surrendered for conversion at any time from or after the date
which is 15 days prior to the anticipated effective time of the
Fundamental Change as announced by the Company, which announcement must occur,
to the extent practicable, not earlier than 30 Business Days nor later than 15
Business Days prior to such anticipated effective time, until the close of
business on the second Trading Day immediately preceding the Fundamental Change
Purchase Date.

 

(c)          If
a Holder converts Securities at any time beginning 15 days before the
scheduled Effective Date of any Fundamental Change and ending at the close of
business on the second Trading Day immediately preceding the Fundamental Change
Purchase Date, such Holder shall receive:

 

(i)                         (1)                                  if such
Securities are surrendered for conversion at any time beginning ten Trading
Days before the date of payment of consideration in connection with a Change of

 

35

 

Control, Cash and, with respect to the portion of
the Conversion Obligation for any Trading Day during the Conversion Period in
excess of $100.00 (if any), the kind of securities and other assets or property
(including Cash) received by holders of the Common Stock in such Change in
Control; or

 

(2)          in all other events, Cash or
a combination of Cash and Common Stock, in the same manner as described  in
Section 5.5; plus

 

(ii)                      the Make Whole
Premium, if any, which shall be in an amount and form determined as set forth
in Article 4, and shall be paid on the relevant Fundamental Change
Purchase Date.

 

(d)         If
holders of the Common Stock receive or have the right to receive more than one
form of consideration in connection with a Fundamental Change, then, for
purposes of the foregoing, the forms of consideration in which the Daily Net
Share Settlement Value shall be paid shall be in proportion to the different
forms of consideration paid to holders of Common Stock in connection with such
Fundamental Change.

 

Section 5.2.                                Conversion
Procedure.

 

The
right to convert any Security may be exercised, if such Security is represented
by a Global Security, by book-entry transfer to the Conversion Agent (which
initially shall be the Trustee) through the facilities of the Depositary in
accordance with the Applicable Procedures or, if such Security is represented
by a Certificated Security, by delivery of such Security at the specified
office of the Conversion Agent, accompanied, in either case, by (a) a
completed and duly signed conversion notice, in the form as set forth on the
reverse of Security attached hereto as Exhibit A or Exhibit B
(a “Conversion Notice”); (b) if the Security is represented by a
Certificated Security and such Certificated Security has been lost, stolen,
destroyed or mutilated, a notice to the Conversion Agent in accordance with
Section 2.7 regarding the loss, theft, destruction or mutilation of the
Security; (c) appropriate endorsements and transfer documents if required
by the Conversion Agent; and (d) payment of any tax or duty, in accordance
with Section 5.4, which may be payable in respect of any transfer
involving the issue or delivery of the Common Stock in the name of a Person
other than the Holder of the Security. 
The “Conversion Date” shall be the Business Day on which the Holder
satisfies all of the requirements set forth in the immediately preceding
sentence, if all such requirements shall have been satisfied by
11:00 a.m., New York City time, on such day, and in all other cases, the
Conversion Date shall be the next succeeding Business Day; however (1) if
a Holder surrenders for conversion a Security called for redemption at any time
after 15 Trading Days prior to such Redemption Date but on or prior to the
close of business on the day that is two Trading Days prior to such Redemption
Date, the Conversion Date shall be deemed to be the date two Trading Days prior
to such Redemption Date and (2) if a Holder surrenders for conversion a
Security at any time after 11 Trading Days prior to the Final Maturity Date,
the Conversion Date shall  be deemed to
be the date 11 Trading Days prior to such Security’s Final Maturity 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 (including cash in lieu of any fractional shares pursuant
to Section 5.3).

 

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

 

36

 

holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided, further,
that such conversion shall be at the Conversion Price in effect for the 10
Trading Days immediately following 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.

 

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 5.3.                                Fractional
Shares.

 

The
Company will not issue fractional shares of Common Stock upon conversion of
Securities.  In lieu thereof, the Company
will deliver a number of shares of Common Stock equal to the aggregate of the
fractional shares otherwise deliverable for each Trading Day during the
Conversion Period (rounding down to the nearest whole number) and pay an amount
in cash for the current market value of the remaining fractional shares.  The current market value of a fractional share
shall be determined (calculated to the nearest 1/1000th of a share)
by multiplying the Volume Weighted Average Price of the Common Stock on the
tenth Trading Day immediately following the Conversion Date by such fractional
share and rounding the product to the nearest whole cent.

 

Section 5.4.                                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 5.5.                                Payment
Upon Conversion.

 

(a)          In
the event that the Company receives a Holder’s Conversion Notice:

 

(i)             For each $1,000
aggregate principal amount of Securities surrendered for conversion, the
Company shall be required to pay to such Holder the aggregate of the following
(the “Conversion Obligation”) for each of the ten Trading Days following the
Conversion Date (the “Conversion Period”):

 

(A)      if the Daily Conversion
Value (as defined below) for such Trading Day for each $1,000 aggregate
principal amount of Securities exceeds $100.00, (1) a Cash payment of
$100.00 and (2) the remaining Daily Conversion Value (the “Daily Net Share
Settlement Value”) in shares of Common Stock; or

 

(B)        if the Daily Conversion
Value for such Trading Day for each $1,000 aggregate principal amount of
Securities is less than or equal to $100.00, a Cash payment equal to the Daily
Conversion Value.

 

37

 

Notwithstanding the foregoing, if a holder
surrenders for conversion a Security at any time after 11 trading days prior to
the Final Maturity Date and the Daily Conversion Value of such Security on any
day during the ten Trading Days prior to the Final Maturity Date is less than
$100.00, the Daily Conversion Value of such Security on such Trading Day will be
deemed to be $100.00

 

(ii)          The amount to be paid to
a converting Holder shall be computed in accordance with the following:

 

(A)      The “Daily Conversion Value”
for each Trading Day during the Conversion Period for each $1,000 aggregate
principal amount of Securities is equal to one-tenth of the product of the then
applicable Conversion Rate multiplied by the Volume Weighted Average Price of
the Common Stock (or such other form of consideration into which the Common
Stock has been converted in connection with a Fundamental Change) on such
Trading Day.

 

(B)        The number of shares of
Common Stock to be delivered under Section 5.5(a)(i)(A)(2) shall be
determined by dividing the Daily Net Share Settlement Value by the Volume
Weighted Average Price of the Common Stock (or such other form of consideration
into which the Common Stock has been converted in connection with a Fundamental
Change) for such Trading Day.

 

(C)        For purposes of this
Section 5.5, “Volume Weighted Average Price” per share of Common Stock (or
any security into which the Common Stock has been converted in connection with
a Fundamental Change) on any Trading Day means the volume weighted average
price on the principal exchange or over-the-counter market on which the Common
Stock (or such other security) is then listed or traded, from 9:30 a.m. to 4:00
p.m. (New York City time) on that Trading Day as displayed under the heading “Bloomberg
VWAP” on Bloomberg Page CEPH Equity AQR (or the Bloomberg Page for any security
into which the Common Stock has been converted in connection with a Fundamental
Change), or if such Volume Weighted Average Price is not available, the Board
of Director’s reasonable, good faith estimate of the volume weighted average
price of the shares of Common Stock (or other security) on such Trading Day.

 

(D)       Solely for purposes of
valuing any non-cash consideration received by holders of Common Stock in any
Change in Control, to the extent any component of such non-cash consideration
is not listed on a U.S. national or regional securities exchange or reported on
Nasdaq, the value of such non-cash consideration will be determined by two
nationally recognized investment banks selected by the Trustee and, to the
extent any component of such non-cash consideration is listed on a U.S. national
or regional securities exchange or reported on Nasdaq, the value of such
non-cash consideration will be determined by reference to its Volume Weighted
Average Price.

 

(b)         The
Company shall, prior to the issuance of any Securities hereunder, and from time
to time as may be necessary, reserve at all times and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, a
sufficient number of shares of Common Stock deliverable upon conversion of all
of the Securities.

 

38

 

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

 

(d)         The
Company shall endeavor to comply with all applicable securities laws regulating
the offer and delivery of any Common Stock upon conversion of Securities and
shall list or cause to have quoted such shares of Common Stock on each national
securities exchange or on Nasdaq or other over-the-counter market or such other
market on which the Common Stock is then listed or quoted; provided,  however, that, if the 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 Securities into Common Stock in
accordance with the provisions of this Indenture, the Company covenants to list
such Common Stock issuable upon conversion of the Securities 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 was a
Restricted Security shall also be a Restricted Security.

 

(e)          Notwithstanding
anything herein to the contrary, nothing herein shall give to any Holder any
rights as a creditor in respect of its right to conversion.

 

Section 5.6.                                Adjustment
of Conversion Price.

 

The
conversion price as stated in paragraph 9 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 record date of such event or the happening of such
event (assuming such Security were convertible solely into shares of Common
Stock, based on the relevant Conversion Price, rather than Cash or Cash and
Common Stock as set forth in Section 5.5). 
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 Current Market Price per share of
Common Stock (as determined in accordance with subsection (d) of this
Section 5.6) 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 Current Market
Price per share (as defined in subsection (d) of this Section 5.6) of
Common Stock on

 

39

 

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).

 

(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 (including
securities of any person other than the Company but excluding
(1) dividends or distributions paid exclusively in cash or
(2) dividends or distributions referred to in subsection (a) of this
Section 5.6), 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 5.6 and also excluding the
distribution of rights to all holders of Common Stock pursuant to the adoption
of a stockholders rights plan or the detachment of such rights under the terms
of such stockholder rights plan), 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 5.6) 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 5.6) 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
shareholders entitled to receive such distribution.

 

In the
event the then fair market value (as so determined) 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 is equal to or greater than the Current Market Price per share of the
Common Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of capital stock, evidences of
indebtedness or other non-cash assets so distributed or of such rights or warrants
such holder would have received had such holder converted each Security on such
record date.  In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.  If the Board of Directors determines the fair
market value of any distribution for purposes of this Section 5.6(c) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.

 

In the
event that the Company implements a preferred shares rights plan (“Rights Plan”),
upon conversion of the Securities into Common Stock, to the extent that the
Rights Plan has been implemented and is still in effect upon such conversion,
the holders of Securities will receive, in addition to the Common Stock, the
rights described therein (whether or not the rights have separated from the
Common Stock at the time of conversion), subject to the limitations set forth
in the Rights Plan.  Any distribution of
rights or warrants pursuant to a Rights Plan complying with the requirements
set forth in the immediately

 

40

 

preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants pursuant to this Section 5.6(c).

 

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 5.6
(and no adjustment to the Conversion Price under this Section 5.6 will be
required) until the occurrence of the earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Price shall be made under
this Section 5.6(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 5.6 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 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
dividends and distributions, the Conversion Price shall be reduced so that the
same shall equal the price determined by dividing such Conversion Price in
effect on the record date with respect to such Cash dividend or distribution 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 5.6) as of the day before the “ex” date with respect to the
dividend or distribution, 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 5.6) as of the day before the “ex”
date with respect to the dividend or distribution less the amount per share of
the Cash dividend or distribution, such decrease to become effective
immediately prior to the opening of business on the day following the date on
which the Triggering Distribution is paid; provided, however,
that, in the event the portion of the Triggering Distribution applicable to one
share of Common Stock is equal to or greater than the Current Market Price on
such record date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder shall have the right to receive upon conversion the
amount of Cash such Holder would have received had such Holder converted each
Security on such record date.  In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be
effect if such dividend or distribution had not been declared.

 

(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

 

41

 

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 exceeds an
amount equal to the Current Market Price per share of Common Stock (as
determined in accordance with subsection (d) of this Section 5.6) 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”), 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 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 Current Market Price per share of the Common Stock (as
determined in accordance with subsection (d) of this Section 5.6) 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 5.6) 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 5.6(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 5.6(c)(2).

 

(3)                                  For
purposes of this Section 5.6(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 5.6, the current market price (the “Current Market Price”) shall
mean, with respect to any date of determination, the average of the Quoted
Prices per share of Common Stock for the three consecutive Trading Days ending
on the date of determination.  For
purposes hereof, the term “ex” date, when used with respect to any dividend or
distribution, means the first date on which the Common Stock trades, regular
way, on the relevant exchange or in the relevant market from which the Quoted
Price was obtained without the right to receive such dividend or distribution.

 

(e)          In
any case in which this Section 5.6 shall require that an adjustment be
made following a record date or Expiration Date, as the case may be,
established for purposes of this Section 5.6, the Company may elect to
defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 5.9) issuing to
the Holder of any Security converted after such record 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, or Cash payable, upon such conversion only on
the basis of the

 

42

 

Conversion Price prior to adjustment; and, in lieu of the shares the
issuance of which, or Cash the payment 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 or Cash, as the case may be.  If
any distribution in respect of which an adjustment to the Conversion Price is
required to be made as of the record 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 Expiration Date
had not occurred.

 

Section 5.7.                                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 5.7 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.  All calculations under this Article 5
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.

 

Except
as otherwise provided herein, 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 5.8.                                Adjustment
for Tax Purposes.

 

The
Company shall be entitled to make such reductions in the Conversion Price, in
addition to those required by Section 5.6, as it in its discretion shall
determine to be advisable in order to avoid or diminish any tax to stockholders
in connection with 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.

 

Section 5.9.                                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 5.10.                         Notice
of Certain Transactions.

 

In the
event that:

 

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

 

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

 

43

 

(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 5.10.

 

Section 5.11.                         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 5.6); (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 cash and, with respect to the portion of
the Conversion Obligation in excess (if any) of the principal amount of
Securities being converted, 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 5.  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 5.11 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 5.11, 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.

 

44

 

Section 5.12.                         Trustee’s
Disclaimer.

 

The Trustee shall have no duty to determine when an
adjustment under this Article 5 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 5.9.  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 5.

 

The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 5.11, 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 5.11.

 

Section 5.13.                         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 our Board of
Directors determines that such reduction would be in the best interest of the
Company or to avoid or diminish income tax to holders of shares of our Common
Stock in connection with a dividend or distribution of stock or similar event,
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.

 

ARTICLE 6

SUBORDINATION

 

Section 6.1.                                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 6;
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, and premium, if any,
the cash portion of the Conversion Obligation, if any, and Interest Amounts, if
any, on, all Securities (including, but not limited to, the Redemption Price
with respect to the Securities called for redemption or the Fundamental Change
Purchase Price or Put Right Purchase Price with respect to the Securities
subject to purchase in accordance with Article 3 as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full, in cash or other 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 6 shall prevent the
occurrence of any default or Event of Default hereunder.

 

Section 6.2.                                Payments to
Holders.

 

No payment shall be made with respect to the principal
of, or premium, if any, the cash portion of the Conversion Obligation, if any,
or Interest Amounts, if any, on, the Securities (including, but not

 

45

 

limited to, the Redemption Price with respect to the
Securities to be called for redemption or the Fundamental Change Purchase Price
or Put Right 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 6.5, if:

 

(i)                                     a
default in the payment of principal, premium, interest, rent or other
obligations due on any Senior Indebtedness occurs and is continuing (or, in the
case of 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 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 payment default, on any 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
such Designated Senior Indebtedness or the Company.

 

Subject to the provisions of Section 6.5, 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 and
all scheduled payments on the Securities that have come due have been paid in
full in cash.  No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee (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 upon the earlier of:

 

(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 the date on which the applicable Payment Blockage Notice is
received, if the maturity of such Designated Senior Indebtedness has not been
accelerated, unless this Article 6 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 payment satisfactory to the holders of Senior Indebtedness, before any
payment is made on account of the principal of, and premium, if any, the cash
portion of the Conversion Obligation, if any, or Interest Amounts, if any, on,
the Securities (except payments made pursuant to Article 11 from monies
deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation or reorganization);
and upon any such dissolution or winding-up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provision of this Article 6,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or

 

46

 

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 6, the words, “cash,
property or securities” shall not be deemed to include shares of stock of the Company,
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article 6
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 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 8 shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 6.2 if such other corporation shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 8.

 

In the event of the acceleration of the Securities of
a series because of an Event of Default, no payment or distribution shall be
made to the Trustee or any Holder of Securities of that series in respect of
the principal of, and premium, if any, the cash portion of the Conversion
Obligation, if any, or Interest Amounts, if any, on, the Securities of that
series by the Company (including, but not limited to, the Redemption Price with
respect to the Securities of that series called for redemption or the
Fundamental Change Purchase Price or Put Right Purchase Price with respect to
the Securities of that series subject to purchase in accordance with Article 3
as provided in this Indenture), except payments and distributions made by the
Trustee as permitted by Section 6.5, 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
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, 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.

 

47

 

Nothing in this Section 6.2 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 10.7.  This Section 6.2 shall be subject to the
further provisions of Section 6.5.

 

Section 6.3.                                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 of a series 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 6
(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 of,
and premium, if any, the cash portion of the Conversion Obligation, if any, and
Interest Amounts, if any, on, the Securities of that series 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 of that series or the
Trustee would be entitled except for the provisions of this Article 6, and
no payment over, pursuant to the provisions of this Article 6, to or for
the benefit of the holders of Senior Indebtedness by Holders of the Securities
of that series or the Trustee shall, as between the Company, its creditors
other than holders of Senior Indebtedness and the Holders of the Securities of
that series, 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 of that
series pursuant to the subrogation provisions of this Article 6, 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 6 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 6 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, the cash portion of the Conversion Obligation, if any, and
any Interest Amounts, if any, 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 6
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 6, the Trustee, subject to the
provisions of Section 10.1, 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, 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 6.

 

48

 

Section 6.4.                                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 6 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 6.3 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 6.5.                                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 6.  Notwithstanding the provisions of this Article 6
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 6, 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 10.1, shall be entitled in
all respects to assume that no such facts exist; provided that, if on a
date not less 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
Amounts, if any, on, any Security) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 6.5, 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 6
to the contrary, nothing shall prevent any payment by the Trustee to the Holders
of monies deposited with it pursuant to Article 11, and any such payment
shall not be subject to the provisions of Article 6.

 

The Trustee, subject to the provisions of Section 10.1,
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 6, 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 6, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such payment.

 

Section 6.6.                                Trustee’s
Relation to Senior Indebtedness.

 

The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article 6 in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior

 

49

 

Indebtedness, and nothing in Section 10.11 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 6, 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 10.1, 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 6 or
otherwise.

 

Section 6.7.                                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 6.8.                                Certain Conversions
Deemed Payment.

 

For the purposes of this Article 6 only,
(1) the issuance and delivery of junior securities upon conversion of
Securities in accordance with Article 5 shall not be deemed to constitute
a payment or distribution on account of the principal of, or premium, if any,
the cash portion of the Conversion Obligation, if any, or Interest Amounts, if
any, 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 5.3), 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 6.8,
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 6 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 5.

 

Section 6.9.                                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 place of the Trustee; provided, however,
that the first paragraph of Section 6.5 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

 

Section 6.10.                         Senior
Indebtedness Entitled to Rely.

 

The holders of Senior Indebtedness (including, without
limitation, Designated Senior Indebtedness) shall have the right to rely upon
this Article 6, and no amendment or modification of the

 

50

 

provisions contained herein shall diminish the rights
of such holders unless such holders shall have agreed in writing thereto.

 

Section 6.11.                         Ranking of
Securities in Relation to Existing Securities.

 

The Securities shall rank pari passu in right of
payment with the Existing Securities.

 

ARTICLE 7

COVENANTS

 

Section 7.1.                                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.  The Make
Whole Premium, if any, and an installment of principal or Interest Amounts, 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, sufficient to pay the Make
Whole Premium, if any, or such installment. 
The Company shall (in immediately available funds), to the fullest
extent permitted by law, pay interest on overdue principal (including premium,
if any, and the value of the Make Whole Premium, if any) and overdue
installments of Interest Amounts at the rate borne by the Securities per annum.

 

Payment of the principal of (and premium, if any) and
any Interest Amounts on the Securities shall be made at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City
of New York (which shall initially be U.S. Bank Trust National Association, an
Affiliate of the Trustee), or 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 Amounts may be made by
check mailed to the address of the Person entitled thereto as such address
appears in the Register; 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 7.2.                                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 7.3.                                Compliance
Certificates.

 

The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company (beginning with the
fiscal year ending December 31, 2004), an Officers’ Certificate as to the
signer’s knowledge of the Company’s compliance with all conditions and
covenants on its part contained

 

51

 

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 7.3, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant
to the terms of this Indenture.

 

Section 7.4.                                Further
Instruments and Acts.

 

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

 

Section 7.5.                                Maintenance
of Corporate Existence.

 

Subject to Article 8, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

 

Section 7.6.                                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, upon the request of any Holder or beneficial
holder of the Securities, make available to such 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, and it will 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 will
deliver to such Holder a written statement as to whether it has complied with
such requirements.

 

Section 7.7.                                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, or premium, if any, or
Interest Amounts, if any, on, or the Make Whole Premium, 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 7.8.                                Payment of
Interest Amounts.

 

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

 

52

 

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

 

ARTICLE 8

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 8.1.                                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 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 Amounts on, and the
Make Whole Premium, if any, 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 5, 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;

 

(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 8.2.                                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 8.1, 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.

 

53

 

ARTICLE 9

DEFAULT AND REMEDIES

 

Section 9.1.                                Events of
Default.

 

An “Event of Default” with respect to a series of
Securities shall occur if:

 

(1)                                  the
Company defaults in the payment of Interest Amounts, if any, payable to all
holders of Registrable Securities (as defined in the Registration Rights
Agreement) on any Security of that series 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 6 hereof;

 

(2)                                  the
Company defaults in the payment of any principal of (including, without
limitation, any premium, if any, on), or any Make Whole Premium, if any, on,
any Security of that series when the same becomes due and payable (whether at
maturity, upon redemption, on a Fundamental Change Purchase Date or Put Right
Purchase Date or otherwise), whether or not such payment shall be prohibited by
the provisions of Article 6 hereof;

 

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

 

(4)                                  the
Company defaults in the payment of the purchase price of any Security of that
series when the same becomes due and payable, whether or not such payment shall
be prohibited by the provisions of Article 6 hereof;

 

(5)                                  the
Company fails to provide a Fundamental Change Purchase Notice when required by Section 3.8;

 

(6)                                  any
indebtedness under any bond, debenture, note or other evidence of indebtedness
for money borrowed by the Company or any Significant Subsidiary (all or
substantially all of the outstanding voting securities of which are owned,
directly or indirectly, by the Company) or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any Significant
Subsidiary (all or substantially all of the outstanding voting securities of
which are owned, directly or indirectly, by the Company) (an “Instrument”) with
a principal amount then outstanding in excess of U.S.$10,000,000, whether such
indebtedness now exists or shall hereafter be created, is not paid at final
maturity of the Instrument (either at its stated maturity or upon acceleration
thereof), and such indebtedness is not discharged, or such default in payment
or acceleration is not cured or rescinded, within a period of 30 days after
there shall have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the outstanding Securities of that series a
written notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such default to be cured or waived or
such acceleration to be rescinded or annulled and stating that such notice is a
“Notice of Default” hereunder; or

 

(7)                                  the
Company or any Significant Subsidiary of the Company, pursuant to or within the
meaning of any Bankruptcy Law:

 

(i)             commences
a voluntary case or proceeding;

 

54

 

(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

 

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

 

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

 

(ii)          appoints
a Custodian of the Company or any Significant Subsidiary of the Company for all
or substantially all of the property of the Company or any such Significant
Subsidiary; or

 

(iii)       orders the liquidation of the Company or any
Significant Subsidiary of the Company;

 

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

 

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.

 

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 of that series then
outstanding notify the Company and the Trustee, in writing 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 9.1 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 9.1
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 9.2.                                Acceleration.

 

If an Event of Default (other than an Event of Default
specified in clause (7) or (8) of Section 9.1) occurs and is
continuing with respect to a series of Securities, the Trustee may, by notice
to the Company, or the Holders of at least 25% in aggregate principal amount of
the Securities of that series then outstanding may, by notice to the Company
and the Trustee, declare all unpaid principal to the date of acceleration on
the Securities of that series 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 (7) or (8) of Section 9.1 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.  The
Holders of a majority in aggregate principal amount of the Securities of a
series then outstanding by notice to the Trustee may rescind an acceleration of
Securities of that series and its consequences if (a) all existing Events
of Default with respect to that

 

55

 

series, other than the nonpayment of the principal of
the Securities of that series 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 of 21⁄2% per annum)
on overdue installments of Interest Amounts and overdue principal of that
series, 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 10.7
have been made.  No such rescission shall
affect any subsequent default or impair any right consequent thereto.

 

Section 9.3.                                Other
Remedies.

 

If an Event of Default with respect to a series of
Securities 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 any Interest Amounts on, or any
Make Whole Premium on, the Securities of that series or to enforce the
performance of any provision of the Securities of that series or this
Indenture.

 

The Trustee may maintain a proceeding even if it does
not possess any of the Securities of that series or does not produce any of
them in the proceeding.  A delay or
omission by the Trustee or any Securityholder of that series 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.

 

Section 9.4.                                Waiver of
Defaults and Events of Default.

 

Subject to Sections 9.7 and 12.2, the Holders of
a majority in aggregate principal amount of the Securities of a series then
outstanding by notice to the Trustee may waive an existing default or Event of
Default with respect to that series and its consequence, except a default or
Event of Default in the payment of the principal of, or premium, if any, or
Interest Amounts, if any, on, or the Make Whole Premium, if any, 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 12.2, 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 9.5.                                Control by
Majority.

 

The Holders of a majority in aggregate principal
amount of the Securities of a series 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 with respect to that
series.  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 9.6.                                Limitations on Suits.

 

A Holder of a Security of a series may not pursue any
remedy with respect to this Indenture or the Securities (except actions for
payment of overdue principal, Interest Amounts or Make Whole Premium or for the
conversion of the Securities pursuant to Article 5) unless:

 

56

 

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

 

(2)                                  the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities of that series 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 of that series 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 9.7.                                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 Amounts, if any, on, and the Make Whole Premium, if any, 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 5 and
to bring suit for the enforcement of any such payment on or after such
respective dates or the right to convert, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.

 

Section 9.8.                                Collection
Suit by Trustee.

 

If an Event of Default with respect to a series of
Securities in the payment of principal, premium, Interest Amounts or the Make
Whole Premium, if any, specified in clause (1) or (2) of Section 9.1
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 of that series for the whole amount of principal, premium and
accrued Interest Amounts remaining unpaid and the Make Whole Premium, if any,
together with, to the extent that payment of such interest is lawful, interest
on overdue principal, on overdue premium, on overdue installments of Interest
Amounts and on overdue Make Whole Premium, if any, in each case at the rate of
21⁄2% per annum, 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 9.9.                                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

 

57

 

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 10.7, 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 9.10.                                                 Priorities.

 

If the Trustee collects any money pursuant to this Article 9,
it shall pay out the money in the following order:

 

First, to the
Trustee for amounts due under Section 10.7;

 

Second, to the
holders of Senior Indebtedness to the extent required by Article 6;

 

Third, to
Holders for amounts due and unpaid on the Securities for principal, premium, if
any, Interest Amounts, if any, and Make Whole Premium, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal, premium, if any, Interest Amounts, if any, and
Make Whole Premium, if any, respectively; and

 

Fourth, the
balance, if any, to the Company.

 

The Trustee may fix a record date and payment date for
any payment to Holders pursuant to this Section 9.10.

 

Section 9.11.                         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 9.11
does not apply to a suit made by the Trustee, a suit by a Holder pursuant to Section 9.7
or a suit by Holders of more than 10% in aggregate principal amount of the
Securities of a series then outstanding.

 

ARTICLE 10

TRUSTEE

 

Section 10.1.                         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.

 

58

 

(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 10.1;

 

(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 9.5.

 

(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 exercise of any of its rights or powers unless
the Trustee shall have received adequate indemnity in its 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 10.1.

 

(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.

 

(g)         At
5:00 p.m., New York City time, on each Trading Day, the Trustee shall
print and retain, for a period of 30 Business Days, the Volume Weighted Average
Price for such Trading Day, to the extent such Volume Weighted Average Price is
available on Bloomberg.

 

Section 10.2.                         Rights of
Trustee.

 

Subject to Section 10.1:

 

(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 Officers’
Certificate or Opinion of Counsel.

 

59

 

(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 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 10.3.                         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 10.10 and 10.11.

 

Section 10.4.                         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 10.5.                                                 Notice of
Default or Events of Default.

 

If a default or an Event of Default with respect to a
series of Securities occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of that series notice of
the

 

60

 

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
of that series, except in the case of a default or an Event of Default in
payment of the principal of, or interest or premium on, or the Make Whole
Premium on, any Security of that series.

 

Section 10.6.                         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 March 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 10.7.                         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 disbursements, expenses
and advances incurred or made by it. 
Such expenses may include the reasonable compensation, disbursements and
expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify the Trustee or any predecessor
Trustee (which for purposes of this Section 10.7 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 10.7,
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
such money or property held in trust to pay the principal of, and Interest
Amounts, if any, and premium, if any, on, and the Make Whole Premium, if any,
on, the Securities.  The obligations of
the Company under this Section 10.7 shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.

 

61

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in clause (7) or (8) of Section 9.1
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 10.8.                         Replacement
of Trustee.

 

The Trustee may resign by so notifying the
Company.  The Holders of a majority in
aggregate principal amount of the Securities of each series 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 10.10;

 

(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 of each
series then outstanding may petition any court of competent jurisdiction for
the appointment of a successor Trustee at the expense of the Company.

 

If the Trustee fails to comply with Section 10.10,
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 10.8, the Company’s obligations under Section 10.7 shall
continue for the benefit of the retiring Trustee.

 

Section 10.9.                         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,

 

62

 

surviving or transferee corporation, without any
further act, shall be the successor Trustee, provided such transferee
corporation shall qualify and be eligible under Section 10.10.  Such successor Trustee shall promptly mail notice
of its succession to the Company and each Holder.

 

Section 10.10.                  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 10.  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 10.11.                  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 11

SATISFACTION AND DISCHARGE

 

Section 11.1.                         Satisfaction
and Discharge.

 

(a)                                  This
Indenture shall cease to be of further effect with respect to a series of
Securities, and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to that series, when

 

(1)                                  all
Securities of that series theretofore authenticated and delivered (other than
(i) Securities of that series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.7 and
(ii) Securities of that series for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company as provided in Section 11.3)
have been delivered to the Trustee for cancellation;

 

(2)                                  the
Company has paid or caused to be paid all other sums payable hereunder with
respect to that series 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 with respect to
that series have been complied with.

 

Notwithstanding the satisfaction and discharge of this
Indenture with respect to a series of Securities, the obligations of the
Company to the Trustee under Section 10.7 shall survive.

 

(b)                                 The
Company may discharge its obligations to pay principal of, and Interest
Amounts, if any, and premium, if any, on, and the Make Whole Premium, if any,
on, the Securities of a series when all Securities of that series not
theretofore delivered to the Trustee for cancellation

 

(1)                                  have
become due and payable, or

 

63

 

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

 

(3)                                  are
scheduled 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 (1), (2)
or (3) above, has irrevocably, subject to the limitations set forth in the
following sentence, deposited or caused to be irrevocably, subject to the
limitations set forth in the following sentence, 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, premium, if any, Interest Amounts, if any, 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.  In the event that the Company exercises its
right to redeem the Securities of a series as provided for in Article 3
herein, the Company shall have the right to withdraw its funds previously
deposited with the Trustee or Paying Agent pursuant to the immediately
preceding sentence.

 

Section 11.2.                         Application
of Trust Money.

 

Subject to the provisions of Section 11.3, the
Trustee or a Paying Agent shall hold in trust, for the benefit of the Holders
of Securities of a series, all money deposited with it pursuant to Section 11.1(b)
with respect to Securities of that series and shall apply the deposited money
in accordance with this Indenture and the Securities of that series to the
payment of the principal of, and any Interest Amounts and premium on, the
Securities of that series.  Money so held
in trust shall not be subject to the subordination provisions of Article 6.

 

Section 11.3.                         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 11.1(b) and (ii) held by them at any time.

 

The Trustee and each Paying Agent shall pay to the
Company upon request any money held by them for the payment of principal,
premium or Interest Amounts 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 11.4.                         Reinstatement.

 

(a)                                  If
the Trustee or any Paying Agent is unable to apply any money in accordance with
Section 11.2 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 of the applicable series shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.1(b)
until such time as the Trustee or such Paying Agent is permitted to apply all
such money in accordance with Section 11.2; provided, however, that, if the Company has made any
payment of the principal of, or Interest Amounts

 

64

 

or premium 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.

 

(b)                                 If,
pursuant to the last sentence of Section 11.1(b), the Company withdraws
its previously deposited funds as a result of its exercise of its redemption
right, the Company’s obligations under this Indenture and the Securities of the
applicable series shall be revived and reinstated as though no deposit has
occurred pursuant to Section 11.1.

 

ARTICLE 12

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 12.1.                         Without
Consent of Holders.

 

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

 

(a)          to
comply with Sections 5.11 and 8.1;

 

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

 

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

 

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

 

(e)          to
add to the covenants of the Company for the equal and ratable benefit of the
Securityholders or to surrender any right, power or option conferred upon the
Company; or

 

(f)            to
appoint a successor Trustee.

 

Section 12.2.                         With Consent
of Holders.

 

The Company and the Trustee may amend or supplement
the Securities of a series or this Indenture with respect to that series with
the written consent of the Holders of at least a majority in aggregate
principal amount of the Securities of that series then outstanding.  The Holders of at least a majority in aggregate
principal amount of the Securities of a series then outstanding may waive
compliance in a particular instance by the Company with any provision of the
Securities of that series or this Indenture with respect to that series without
notice to any Securityholder.  However,
notwithstanding the foregoing but subject to Section 12.4, without the
written consent of each Securityholder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 9.4, may not:

 

(a)          change
the stated maturity of the principal of, or the date the Make Whole Premium or
any installment of Interest Amounts is due on, any Security;

 

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

 

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

 

(d)         reduce
the Make Whole Premium payable, if any, on any Security;

 

65

 

(e)          change
the place or currency of payment of principal of, or any premium, Make Whole
Premium (to the extent that such Make Whole Premium is payable in Cash) or
Interest Amounts on, any Security;

 

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

 

(g)         modify
the provisions with respect to the purchase right of Holders pursuant to Article 3
upon a Fundamental Change or as described in Section 3.11 in a manner
adverse to Holders;

 

(h)         modify
the subordination provisions of Article 6 in a manner materially adverse
to the Holders of Securities;

 

(i)             adversely
affect the right of Holders to convert Securities other than as provided in or
under Article 5 of this Indenture;

 

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

 

(k)          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

 

(l)             modify
any of the provisions of this Section or Section 9.4, 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 12.2 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 12.2
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 12.2
or under Section 12.1 may not make any change that adversely affects the
rights under Article 6 of any holder of an issue of Senior Indebtedness
unless the holders of that issue, pursuant to its terms, consent to the change.

 

Section 12.3.                         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 12.4.                         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

 

66

 

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 applicable Securityholder, unless it makes a
change described in any of clauses (a) through (l) of Section 12.2.  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 12.5.                         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 12.6.                         Trustee to
Sign Amendments, Etc.

 

The Trustee shall sign any amendment or supplemental
indenture authorized pursuant to this Article 12 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 10.1, 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 supplement indenture until the
Board of Directors approves it.

 

Section 12.7.                         Effect of
Supplemental Indentures.

 

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

 

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.

 

Section 13.2.                         Notices.

 

Any demand, authorization, notice, request, consent 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
facsimile transmission (confirmed by delivery in person or mail by first-class
mail, postage prepaid, or by guaranteed overnight courier) to the following
facsimile numbers:

 

67

 

If to the Company, to:

 

Cephalon, Inc.

145 Brandywine Parkway

West Chester, Pennsylvania  19380

Attention:  Chief Financial Officer

Facsimile No.:  (610) 344-7563

 

if to the Trustee, to:

 

U.S. Bank National
Association

225 Asylum Street, 23rd Floor

Hartford, Connecticut  06103

Attention:  Corporate Trust Services
(Cephalon, Inc.

Zero Coupon Convertible Subordinated Notes due

June 15, 2033)

Facsimile No.:  (860) 241-6881

 

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 delivery
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).

 

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.

 

68

 

(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 11.1, 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 30 days prior to the date of the
commencement of solicitation of such action. 
Notwithstanding the provisions of Section 12.4, 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.

 

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 Amounts 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.

 

69

 

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 18 of the
Securities of any director, officer, employee or shareholder, 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.

 

 

[SIGNATURE PAGE
FOLLOWS]

 

70

 

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

 

 

	
   

  	
  Cephalon, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Kevin Buchi

  	
   

  
	
   

  	
  Name:

  	
  J. Kevin Buchi

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. Bank National Association,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Arthur L. Blakeslee

  	
   

  
	
   

  	
  Name:

  	
  Arthur L. Blakeslee

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

 

EXHIBIT A

[FORM OF FACE OF SECURITY]

[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.](1)

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY
AND THE SHARES OF 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 SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](2)

[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) 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, (II) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN 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

(1)                                  These paragraphs should be included only
if the Security is a Global Security.

(2)                                  These paragraphs to be included only if
the Security is a Restricted Security.

 

A-1

 

 CASES (I) 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 SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
CLAUSE (A) ABOVE.  IN ANY CASE, THE
HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT.](2)

[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.](2)

 

(2)                                  These paragraphs to be included only if
the Security is a Restricted Security.

 

 

A-2

CEPHALON,
INC.

CUSIP:  ______________                                                                                                                                                      A-______

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2008

Cephalon, 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 ___________ _________________, or
registered assigns, the principal sum of ______________ ($_________) on
June 15, 2033 [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note].(3)

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.

SIGNATURE PAGE FOLLOWS

 

(3)                                  This phrase
should be included only if the Security is a Global Security.

 

A-3

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

 

	
   

  	
  CEPHALON,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trustee’s Certificate of
  Authentication: This is one of the

  	
   

  	
   

  
	
  Securities referred to in
  the within-mentioned Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
   as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

 

A-4

 

[FORM OF REVERSE SIDE OF
SECURITY]

CEPHALON, INC.

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2008

1.             INTEREST
AMOUNTS

Cephalon, Inc., a Delaware corporation (the “Company”,
which term shall include any successor corporation under the Indenture
hereinafter referred to), will not pay interest on the principal amount of this
Note other than Interest Amounts, if any, accrued or payable as provided in the
Registration Rights Agreement and the Indenture.

2.             METHOD
OF PAYMENT

The Company shall pay any Interest Amounts on this
Note to the person who is the Holder of this Note at the close of business on
June 1 or December 1, as the case may be, next preceding the related
Interest Amount payment date.  The Holder
must surrender this Note to a Paying Agent to collect payment of principal and
premium, if any.  The Company will pay
principal, premium, if any, and Interest Amounts, if any, 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, premium, if any, and Interest Amounts, if any, in
respect of any Certificated Security by check or wire transfer 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.  The Company may mail a check for Interest
Amounts 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, U.S. 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 Zero Coupon Convertible Subordinated
Notes due June 15, 2033, First Putable June 15, 2008 (the “Notes”),
issued under an Indenture, dated as of December 20, 2004 (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.

 

A-5

 

The Notes are subordinated unsecured obligations of
the Company limited to up to $375,000,000 aggregate principal amount.  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 June 15, 2008, as a whole or from time to time in part, at the
election of the Company.  The Redemption
Price is 100% (or 100.25% if the Redemption Date is June 15, 2008) of the
principal amount of the Notes to be redeemed, together with accrued and unpaid
Interest Amounts, if any, up to but not including the Redemption Date; provided that, if the Redemption Date falls
after an Interest Amount payment record date and on or before an Interest
Amount payment date, then the Interest Amounts will be payable to the Holders
in whose names the Notes are registered at the close of business on the
relevant Interest Amount payment record dates.

No sinking fund is provided for the Notes.

6.             NOTICE
OF REDEMPTION

Notice of redemption will be mailed by first-class
mail at least 15 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 Interest Amounts, if any, accrued to, but excluding, the
Redemption Date, Interest Amounts, if any, shall cease to accrue on Notes or
portions of them called for redemption.

7.             PURCHASE
OF NOTES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

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 30 Business Days after the
occurrence of a Fundamental Change, at a purchase price equal to 100% of the
principal amount thereof, together with any accrued Interest Amounts up to, but
excluding, the Fundamental Change Purchase Date, payable in cash.  The Holder shall have the right to withdraw
any Fundamental Change 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 5:00 p.m., New York City time, on the second Trading Day next
preceding the Fundamental Change Purchase Date by delivering a written notice
of withdrawal to the Paying Agent in accordance with the terms of the
Indenture.

8.             PURCHASE
OF NOTES AT OPTION OF HOLDER ON SPECIFIED DATES

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 applicable Put Right Purchase Date at a
purchase price equal to 100% (or 100.25% if the Put Right Purchase Date is
June 15, 2008) of the principal amount thereof, together with any accrued
Interest Amounts up to, but excluding, the Put Right Purchase Date.  The Holder shall have the right to withdraw any
Put Right 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 5:00
p.m., New York City time, on the

 

A-6

 

second
Business Day next preceding the Put Right Purchase Date by delivering a written
notice of withdrawal to the Paying Agent in accordance with the terms of the
Indenture.

9.             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 cash and shares of Common Stock at any time
prior to the close of business on June 15, 2033, subject to the conditions
set forth in Section 5.1 of the Indenture; provided, however, that, if the Note is called for redemption
or subject to purchase upon a Fundamental Change or upon exercise of the
purchase right described in paragraph 8 above, the conversion right will
terminate at the close of business on (1) the second Trading Day
immediately preceding the Redemption Date or the Fundamental Change Purchase
Date or (2) the second Business Day immediately preceding the Put Right
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, Fundamental Change Purchase Price or
Put Right Purchase Price, as the case may be, when due, in which case the
conversion right shall 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 $59.50 per share, and
the initial Conversion Rate is 16.8067 shares of Common Stock, in each case
subject to adjustment under certain circumstances as provided in the
Indenture.  No fractional shares will be
issued upon conversion; in lieu thereof, the Company shall deliver a number of
shares of Common Stock equal to the aggregate of the fractional shares
otherwise deliverable for each of the ten Trading Days following the Conversion
Date (rounding down to the nearest whole number) and shall pay an amount in
cash for the remainder based upon the Volume Weighted Average Price of the
Common Stock on the tenth Trading Day following 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.  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
Fundamental Change Purchase Notice or Put Right Purchase Notice exercising the
option of such Holder to require the Company to purchase such Note may be
converted only if the Fundamental Change Purchase Notice or Put Right Purchase
Notice, as the case may be, is withdrawn in accordance with the terms of the
Indenture.

10.           CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION

Any Notes called for redemption, unless surrendered
for conversion before the close of business on the second Trading Day
immediately preceding the Redemption Date, may be purchased from the Holders of
such Notes at an amount not less than the Redemption Price, together with
accrued Interest Amounts, 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, and the obligation of the Company to pay the
Redemption Price of such Securities, including all accrued Interest Amounts, if
any, shall be deemed to be satisfied and discharged to the extent such amount
is so paid by such purchasers.

 

A-7

 

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

12.           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 transfer 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.

13.           PERSONS
DEEMED OWNERS

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

14.           UNCLAIMED
MONEY

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

15.           AMENDMENT,
SUPPLEMENT AND WAIVER

Subject to certain exceptions set forth in the
Indenture, the Notes and the Indenture 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 with
respect to the Notes and its consequence or compliance with any provision of
the Notes or the Indenture 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.

16.           SUCCESSOR
ENTITY

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
(except in certain circumstances specified in the Indenture) shall be released
from those obligations.

 

A-8

 

17.           DEFAULTS
AND REMEDIES

Under the Indenture, an Event of Default with respect
to the Notes includes:  (i) default
for 30 days in payment of any Interest Amounts on any Notes; (ii) default
in payment of any principal (including, without limitation, any premium, if
any) on, or any Make Whole 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 Notes or in the Indenture
with respect to the Notes; (iv) default in the payment of certain
indebtedness of the Company or a Significant Subsidiary and (v) certain
events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary.  If an Event of
Default with respect to the Notes (other than as a result of certain events of
bankruptcy, insolvency or reorganization specified in the Indenture) occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate
principal 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 specified in the
Indenture, 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 any premium, Interest Amounts or Make Whole Premium) 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.

18.           TRUSTEE
DEALINGS WITH THE COMPANY

U.S. 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 or shareholder, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or 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).

 

 

A-9

 

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

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.

The Company will furnish to any Holder, upon written
request and without charge, a copy of the Indenture.  Requests may be made to:  Cephalon, Inc., 145 Brandywine Parkway, West Chester,
PA  19380, (610) 344-0200,
Attention:  General Counsel.

 

 

A-10

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.

 

A-11

 

 

CONVERSION NOTICE

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

To convert only part of this Note, state the principal
amount to be converted (must be $1,000 or a 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.

 

A-12

OPTION
TO ELECT REPURCHASE

UPON A FUNDAMENTAL CHANGE

To:          Cephalon, Inc.

The undersigned registered owner of this
Security hereby irrevocably acknowledges receipt of a notice from Cephalon,
Inc. (the “Company”) as to the occurrence of a Fundamental Change 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 a purchase price equal to the
Fundamental Change Purchase Price, payable in Cash.

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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.

 

A-13

 

OPTION
TO ELECT REPURCHASE

ON SPECIFIED DATES

To:          Cephalon, Inc.

The undersigned hereby 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, on
June 15, _____ in accordance with the terms of the Indenture referred to
in this Security at the Put Right Purchase Price, together with any accrued
Interest Amounts to, but excluding, such date, to the registered Holder hereof.

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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.

 

A-14

SCHEDULE OF EXCHANGES OF
NOTES(4)

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(4)           This
schedule should be included only if the Security is a Global Security.

A-15

 

 

EXHIBIT B

[FORM OF FACE OF SECURITY]

[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.](3)

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY
AND THE SHARES OF 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 SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](4)

[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) 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, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN 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 (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF 

(3)                                  These paragraphs should be included only
if the Security is a Global Security.

(4)                                 These paragraphs to be included only if this
Security is a Restricted Security.

 

B-1

 

ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN CLAUSE (A) ABOVE.  IN
ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT.](2)

[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.](2)

 

(2)                                  These paragraphs to be included only if
this Security is a Restricted Security.

 

B-2

CEPHALON, INC.

 

CUSIP:  ______________                                                                                                                                                      A-______

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2008

Cephalon, 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 ___________ _________________, or
registered assigns, the principal sum of ______________ ($_________) on
June 15, 2033 [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note].(3)

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.

SIGNATURE PAGE FOLLOWS

 

(3)                                  This phrase
should be included only if the Security is a Global Security.

 

 

B-3

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

	
   

  	
  CEPHALON,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trustee’s Certificate of
  Authentication: This is one of the

  	
   

  	
   

  
	
  Securities referred to in
  the within-mentioned Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
   as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

B-4

 

[FORM OF REVERSE SIDE OF
SECURITY]

CEPHALON, INC.

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2010

1.             INTEREST
AMOUNTS

Cephalon,
Inc., a Delaware corporation (the “Company”, which term shall include any
successor corporation under the Indenture hereinafter referred to), will not
pay interest on the principal amount of this Note other than Interest Amounts,
if any, accrued or payable as provided in the Registration Rights Agreement and
the Indenture.

2.             METHOD
OF PAYMENT

The
Company shall pay any Interest Amounts on this Note to the person who is the
Holder of this Note at the close of business on June 1 or December 1,
as the case may be, next preceding the related Interest Amount payment
date.  The Holder must surrender this
Note to a Paying Agent to collect payment of principal and premium, if
any.  The Company will pay principal,
premium, if any, and Interest Amounts, if any, 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,
premium, if any, and Interest Amounts, if any, in respect of any Certificated
Security by check or wire transfer 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.  The Company may mail a check
for Interest Amounts 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,
U.S. 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 Zero Coupon Convertible Subordinated Notes due June 15, 2033, First
Putable June 15, 2010 (the “Notes”), issued under an Indenture, dated as
of December 20, 2004 (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.

The
Notes are subordinated unsecured obligations of the Company limited to up to $375,000,000
aggregate principal amount.  The
Indenture does not limit other debt of the Company, secured or unsecured,
including Senior Indebtedness.

 

B-5

 

5.             OPTIONAL
REDEMPTION

The
Notes are subject to redemption, at any time on or after June 15, 2010, as
a whole or from time to time in part, at the election of the Company.  The Redemption Price is 100% (or 100.25% if
the Redemption Date is June 15, 2010) of the principal amount of the Notes
to be redeemed, together with accrued and unpaid Interest Amounts, if any, up
to but not including the Redemption Date; provided
that, if the Redemption Date falls after an Interest Amount payment record date
and on or before an Interest Amount payment date, then the Interest Amounts
will be payable to the Holders in whose names the Notes are registered at the
close of business on the relevant Interest Amount payment record dates.

No
sinking fund is provided for the Notes.

6.             NOTICE
OF REDEMPTION

Notice
of redemption will be mailed by first-class mail at least 15 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 Interest Amounts, if
any, accrued to, but excluding, the Redemption Date, Interest Amounts, if any,
shall cease to accrue on Notes or portions of them called for redemption.

7.             PURCHASE
OF NOTES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

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 30 Business Days after the occurrence of a
Fundamental Change, at a purchase price equal to 100% of the principal amount
thereof, together with any accrued Interest Amounts up to, but excluding, the
Fundamental Change Purchase Date, payable in cash.  The Holder shall have the right to withdraw
any Fundamental Change 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 5:00 p.m., New York City time, on the second Trading Day next
preceding the Fundamental Change Purchase Date by delivering a written notice
of withdrawal to the Paying Agent in accordance with the terms of the
Indenture.

8.             PURCHASE
OF NOTES AT OPTION OF HOLDER ON SPECIFIED DATES

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 applicable Put Right Purchase Date at a purchase price equal to
100% (or 100.25% if the Put Right Purchase Date is June 15, 2010) of the
principal amount thereof, together with any accrued Interest Amounts up to, but
excluding, the Put Right Purchase Date. 
The Holder shall have the right to withdraw any Put Right 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 5:00 p.m., New York City
time, on the second Business Day next preceding the Put Right Purchase Date by
delivering a written notice of withdrawal to the Paying Agent in accordance
with the terms of the Indenture.

9.             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 cash and shares of Common Stock at 

 

B-6

 

any
time prior to the close of business on June 15, 2033, subject to the
conditions set forth in Section 5.1 of the Indenture; provided, however, that, if the
Note is called for redemption or subject to purchase upon a Fundamental Change
or upon exercise of the purchase right described in paragraph 8 above, the
conversion right will terminate at the close of business on (1) the second
Trading Day immediately preceding the Redemption Date or the Fundamental Change
Purchase Date or (2) the second Business Day immediately preceding the Put
Right 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, Fundamental Change Purchase
Price or Put Right Purchase Price, as the case may be, when due, in which case
the conversion right shall 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 $56.50 per share, and the initial Conversion Rate
is 17.6991 shares of Common Stock, in each case subject to adjustment under
certain circumstances as provided in the Indenture.  No fractional shares will be issued upon
conversion; in lieu thereof, the Company shall deliver a number of shares of
Common Stock equal to the aggregate of the fractional shares otherwise
deliverable for each of the ten Trading Days following the Conversion Date
(rounding down to the nearest whole number) and shall pay an amount in cash for
the remainder based upon the Volume Weighted Average Price of the Common Stock
on the tenth Trading Day following 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.  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 Fundamental Change Purchase
Notice or Put Right Purchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if the
Fundamental Change Purchase Notice or Put Right Purchase Notice, as the case
may be, is withdrawn in accordance with the terms of the Indenture.

10.           CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION

Any
Notes called for redemption, unless surrendered for conversion before the close
of business on the second Trading Day immediately preceding the Redemption
Date, may be purchased from the Holders of such Notes at an amount not less
than the Redemption Price, together with accrued Interest Amounts, 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, and the obligation
of the Company to pay the Redemption Price of such Securities, including all
accrued Interest Amounts, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers.

11.           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 of all Senior Indebtedness of the Company.  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, 

 

B-7

 

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

12.           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 transfer 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.

13.           PERSONS
DEEMED OWNERS

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

14.           UNCLAIMED
MONEY

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

15.           AMENDMENT,
SUPPLEMENT AND WAIVER

Subject
to certain exceptions set forth in the Indenture, the Notes and the Indenture
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 with respect to the Notes and its
consequence or compliance with any provision of the Notes or the Indenture 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.

16.           SUCCESSOR
ENTITY

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 (except in certain circumstances
specified in the Indenture) shall be released from those obligations.

17.           DEFAULTS
AND REMEDIES

Under
the Indenture, an Event of Default with respect to the Notes includes:  (i) default for 30 days in payment
of any Interest Amounts on any Notes; (ii) default in payment of any
principal (including, without limitation, any premium, if any) on, or any Make
Whole 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 Notes or in the Indenture with respect to the
Notes; (iv) default in the payment of certain indebtedness of the Company or a
Significant Subsidiary and (v) certain events of bankruptcy, insolvency or
reorganization of the Company or any Significant Subsidiary.  If an Event of Default with respect to the
Notes (other than as a result of certain events of bankruptcy, insolvency or
reorganization specified in the Indenture) occurs and is continuing, the
Trustee or the Holders of at least 

 

B-8

 

25%
in aggregate principal 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
specified in the Indenture, 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 any
premium, Interest Amounts or Make Whole Premium) 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.

18.           TRUSTEE
DEALINGS WITH THE COMPANY

U.S.
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 or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Notes or the
Indenture or 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 used herein as so defined.

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.

 

B-9

 

The
Company will furnish to any Holder, upon written request and without charge, a
copy of the Indenture.  Requests may be
made to:  Cephalon, Inc., 145 Brandywine
Parkway, West Chester, PA  19380,
(610) 344-0200, Attention:  General
Counsel.

 

B-10

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.

 

B-11

CONVERSION NOTICE

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

To convert only part of this Note, state the principal
amount to be converted (must be $1,000 or a 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.

 

B-12

OPTION
TO ELECT REPURCHASE

UPON A FUNDAMENTAL CHANGE

To:          Cephalon, Inc.

The undersigned registered owner of this Security
hereby irrevocably acknowledges receipt of a notice from Cephalon, Inc. (the
“Company”) as to the occurrence of a Fundamental Change 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 a purchase price equal to the
Fundamental Change Purchase Price, payable in Cash.

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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.

 

B-13

 

OPTION
TO ELECT REPURCHASE

ON SPECIFIED DATES

To:          Cephalon, Inc.

The undersigned hereby 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, on
June 15, _____ in accordance with the terms of the Indenture referred to
in this Security at the Put Right Purchase Price, together with any accrued
Interest Amounts to, but excluding, such date, to the registered Holder hereof.

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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.

 

B-14

 

SCHEDULE OF EXCHANGES OF
NOTES(4)

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(4)           This schedule should be included only
if the Security is a Global Security.

 

B-15

 

EXHIBIT C

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF RESTRICTED SECURITIES(5)

Re:                               Zero Coupon
Convertible Subordinated Notes due June 15, 2033, First Putable
June 15, 2008 (the “Notes”) of Cephalon, Inc.

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

o   book-entry or    o   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 December 20, 2004, between Cephalon, Inc. and U.S. Bank National
Association, as trustee (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):

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

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

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

o                                    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.

o                                    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 provision thereto) (“Rule 144”) under the Securities
Act.

o                                    Such Note is being
transferred to a non-U.S. Person in an offshore transaction in compliance with
Rule 904 of Regulation S under the Securities Act (or any successor
provision thereto).

o                                    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 

(5)                                  This
certificate should only be included if this Security is a Restricted Security.

 

C-1

 

 

                                                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 to a “qualified institutional buyer” (as defined in
Rule 144A) or pursuant to Regulation S under the Securities Act.

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of
  Transferor)

  

 

C-2

 

EXHIBIT D

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF RESTRICTED SECURITIES(5)

Re:                               Zero Coupon
Convertible Subordinated Notes due June 15, 2033, First Putable
June 15, 2010 (the “Notes”) of Cephalon, Inc.

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

o   book-entry or    o   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 December 20, 2004, between Cephalon, Inc. and U.S. Bank National
Association, as trustee (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):

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

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

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

o                                    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.

o                                    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 provision thereto) (“Rule 144”) under the Securities Act.

o                                    Such Note is being
transferred to a non-U.S. Person in an offshore transaction in compliance with
Rule 904 of Regulation S under the Securities Act (or any successor
provision thereto).

o                                    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 

(5)                                  This
certificate should only be included if this Security is a Restricted Security.

 

 

 

 

                                                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 to a “qualified institutional buyer” (as defined in
Rule 144A) or pursuant to Regulation S under the Securities Act.

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of
  Transferor)

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