Document:

EXHIBIT 4.5

 

CURAGEN CORPORATION

 

AS ISSUER

 

THE BANK OF NEW YORK, AS TRUSTEE

 

UP TO $120,000,000 AGGREGATE
PRINCIPAL AMOUNT OF

4.0% CONVERTIBLE SUBORDINATED NOTES
DUE 2011

 

INDENTURE

DATED AS OF FEBRUARY 17, 2004

 

 

	
  ARTICLE I DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.2.

  	
   

  	
  Incorporation by
  Reference of Trust Indenture Act

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.3.

  	
   

  	
  Rules of
  Construction

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.4.

  	
   

  	
  Acts of Holders

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II
  THE SECURITIES

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Form and Dating

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.2.

  	
   

  	
  Execution and
  Authentication

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.3.

  	
   

  	
  Registrar, Paying Agent
  and Conversion Agent

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.4.

  	
   

  	
  Paying Agent to Hold
  Assets in Trust

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.5.

  	
   

  	
  Holder Lists

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.6.

  	
   

  	
  Transfer and Exchange

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.7.

  	
   

  	
  Replacement Securities

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.8.

  	
   

  	
  Outstanding Securities;
  Determinations of Holders’ Action

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.9.

  	
   

  	
  Temporary Securities

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.10.

  	
   

  	
  Cancellation

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.11.

  	
   

  	
  Persons Deemed Owners

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.12.

  	
   

  	
  Additional Transfer and
  Exchange Requirements

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.13.

  	
   

  	
  CUSIP Numbers

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.14.

  	
   

  	
  Ranking

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III
  REDEMPTION

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  The Company’s Right to
  Redeem; Notice to Trustee

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.2.

  	
   

  	
  Selection of Securities
  to Be Redeemed

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
   

  	
  Notice of Redemption

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.4.

  	
   

  	
  Effect of Notice of
  Redemption

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.5.

  	
   

  	
  Deposit of Redemption
  Price

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.6.

  	
   

  	
  Securities Redeemed in
  Part

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.7.

  	
   

  	
  Repayment to the
  Company

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.8.

  	
   

  	
  No Sinking Fund

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  SUBORDINATION

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Agreement of
  Subordination

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
   

  	
  Liquidation;
  Dissolution; Bankruptcy

  	
   

  	
  27

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.3.

  	
   

  	
  Default on Designated
  Senior Indebtedness

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.4.

  	
   

  	
  Acceleration of Convertible
  Subordinated Notes

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.5.

  	
   

  	
  When Distribution Must
  Be Paid Over

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.6.

  	
   

  	
  Subordination Notice by
  Company

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.7.

  	
   

  	
  Subrogation

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.8.

  	
   

  	
  Relative Rights

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.9.

  	
   

  	
  Subordination
  May Not Be Impaired by Company

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
   

  	
  Distribution or Notice
  to Representative

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
   

  	
  Rights of Trustee and
  Paying Agent

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.12.

  	
   

  	
  Authorization to Effect
  Subordination

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.13.

  	
   

  	
  Article Applicable
  to Paying Agents

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.14.

  	
   

  	
  Senior Indebtedness
  Entitled to Rely

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.15.

  	
   

  	
  Permitted Payments

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V PURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Fundamental Change Put

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.2.

  	
   

  	
  Conditions
  to the Company’s Election to Pay the Fundamental Change Purchase Price in
  Applicable Stock

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.3.

  	
   

  	
  Effect of Fundamental
  Change Purchase Notice

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.4.

  	
   

  	
  Deposit of Fundamental
  Change Purchase Price

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.5.

  	
   

  	
  Securities Purchased in
  Part

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.6.

  	
   

  	
  Covenant to Comply With
  Securities Laws Upon Purchase of Securities

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.7.

  	
   

  	
  Repayment to the
  Company

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI COVENANTS

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Payment of Securities

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.2.

  	
   

  	
  SEC and Other Reports
  to the Trustee

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.3.

  	
   

  	
  Compliance Certificate

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.4.

  	
   

  	
  Further Instruments and
  Acts

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.5.

  	
   

  	
  Maintenance
  of Office or Agency of the Trustee, Registrar, Paying Agent and Conversion
  Agent

  	
   

  	
  40

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.6.

  	
   

  	
  Delivery of Information
  Required Under Rule 144A

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.7.

  	
   

  	
  Waiver of Stay,
  Extension or Usury Laws

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.8.

  	
   

  	
  Statement by Officers
  as to Default

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII SUCCESSOR CORPORATION

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  When Company
  May Merge or Transfer Assets

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII DEFAULTS AND REMEDIES

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Events of Default

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.2.

  	
   

  	
  Acceleration

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.3.

  	
   

  	
  Other Remedies

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.4.

  	
   

  	
  Waiver of Existing
  Defaults

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.5.

  	
   

  	
  Control by Majority

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.6.

  	
   

  	
  Limitation on Suits

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.7.

  	
   

  	
  Rights of Holders to
  Receive Payment or to Convert

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.8.

  	
   

  	
  Collection Suit by
  Trustee

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.9.

  	
   

  	
  Trustee May File
  Proofs of Claim

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.10.

  	
   

  	
  Priorities

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.11.

  	
   

  	
  Undertaking for Costs

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X DISCHARGE OF INDENTURE

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Duties of Trustee

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.2.

  	
   

  	
  Rights of Trustee

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.3.

  	
   

  	
  Individual Rights of
  Trustee

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.4.

  	
   

  	
  Trustee’s Disclaimer

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.5.

  	
   

  	
  Notice of Defaults

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.6.

  	
   

  	
  Reports by Trustee to
  Holders

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.7.

  	
   

  	
  Compensation and
  Indemnity

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.8.

  	
   

  	
  Replacement of Trustee

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.9.

  	
   

  	
  Successor Trustee by
  Merger

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.10.

  	
   

  	
  Eligibility;
  Disqualification

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.11.

  	
   

  	
  Preferential Collection
  of Claims Against Company

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X DISCHARGE OF INDENTURE

  	
   

  	
  54

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Discharge of Liability
  on Securities

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.2.

  	
   

  	
  Repayment to the
  Company

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XI AMENDMENTS

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Without Consent of
  Holders

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.2.

  	
   

  	
  With Consent of Holders

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.3.

  	
   

  	
  Compliance with Trust
  Indenture Act

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.4.

  	
   

  	
  Revocation and Effect
  of Consents, Waivers and Actions

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.5.

  	
   

  	
  Notation on or Exchange
  of Securities

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.6.

  	
   

  	
  Trustee to Sign Supplemental
  Indentures

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.7.

  	
   

  	
  Effect of Supplemental
  Indentures

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XII CONVERSION

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Conversion Right

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.2.

  	
   

  	
  Conversion Procedures;
  Conversion Rate; Fractional Shares

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.3.

  	
   

  	
  Adjustment of
  Conversion Rate

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.4.

  	
   

  	
  Consolidation or Merger
  of the Company

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.5.

  	
   

  	
  Notice of Adjustment

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.6.

  	
   

  	
  Notice in Certain
  Events

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.7.

  	
   

  	
  Company To Reserve
  Stock; Registration; Listing

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.8.

  	
   

  	
  Taxes on Conversion

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.9.

  	
   

  	
  Conversion After
  Regular Record Date

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.10.

  	
   

  	
  Company Determination
  Final

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.11.

  	
   

  	
  Responsibility of
  Trustee for Conversion Provisions

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.12.

  	
   

  	
  Unconditional Right of
  Holders to Convert

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII TAX TREATMENT

  	
   

  	
  75

  
	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Tax Treatment

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIV MISCELLANEOUS

  	
   

  	
  76

  
	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
   

  	
  Trust Indenture Act
  Controls

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.2.

  	
   

  	
  Notices

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.3.

  	
   

  	
  Communication by
  Holders with Other Holders

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.4.

  	
   

  	
  Certificate and Opinion
  as to Conditions Precedent

  	
   

  	
  77

  

 

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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.5.

  	
   

  	
  Statements Required in
  Certificate or Opinion

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.6.

  	
   

  	
  Separability Clause

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.7.

  	
   

  	
  Rules by Trustee,
  Paying Agent, Conversion Agent, Registrar

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.8.

  	
   

  	
  Legal Holidays

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.9.

  	
   

  	
  Governing Law;
  Submission to Jurisdiction; Service of Process

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.10.

  	
   

  	
  No Recourse Against
  Others

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.11.

  	
   

  	
  Successors

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.12.

  	
   

  	
  Multiple Originals

  	
   

  	
  79

  

 

v

 

	
  EXHIBIT A

  	
   

  	
  Form  of
  Security

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
  Form  of
  Restrictive Legend for Common Stock Issues Upon Conversion

  	
   

  	
   

  

 

i

 

INDENTURE,
dated as of February 17, 2004, between CURAGEN CORPORATION, a Delaware
corporation (the “Company”), and The Bank of New York, a New York banking
corporation, as Trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other party and for the equal
and ratable benefit of the Holders of the Company’s 4.0% Convertible
Subordinated Notes due 2011:

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY
REFERENCE

 

Section 1.1. Definitions.

 

“Additional
Interest” has the meaning set forth in the Registration Rights Agreement.
All references herein or in the Securities to interest accrued or payable as of
any date shall include any Additional Interest accrued or payable as of such
date as provided in the Registration Rights Agreement.

 

“Additional
Shares” has the meaning set forth in the Registration Rights Agreement.

 

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

 

“Agent
Members” has the meaning set forth in Section 2.1(c).

 

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

 

“Applicable
Stock” means (a) the Common Stock and (b) in the event of a
transaction referred to in Section 12.4 in which the Securities become
convertible into Equity Interests of another person. such Equity Interests or
any other Equity Interests into which such Equity Interests shall be
reclassified or changed.

 

“Bankruptcy
Law” means Title 11, United States Code, or any similar United States
federal or state law for the relief of debtors.

 

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

 

“Board
Resolution” means a resolution of the Board of Directors.

 

“Business
Day” means each day of the year other than a Saturday or a Sunday or other
day on which banking institutions in the City of New York are required or authorized
by law, regulation or executive order to close.

 

“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
Securities” means Securities that are in substantially the form attached
hereto as Exhibit A and that do not include the information called for by
footnotes 1 and 2 thereof.

 

“Closing
Sale Price” of a share of Applicable Stock on any date means the closing
per share sale price (or, if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on such date as reported by the Nasdaq
National Market system or, if the shares of Applicable Stock are not quoted on
the Nasdaq National Market system, as reported on a national securities
exchange. If the Applicable Stock is not listed for trading on a national
securities exchange and not quoted by the Nasdaq National Market on the
relevant date, the “Closing Sale Price” shall be the last quoted bid for the
Applicable Stock in the over-the-counter market on the relevant date as
reported by the National Quotation Bureau or similar organization. If the
Applicable Stock is not so quoted, the “Closing Sale Price” shall be the
average of the midpoint of the last bid and ask prices for the Applicable Stock
on the relevant date from each of at least three nationally recognized
independent investment banking firms selected by the Company for this purpose.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Common
Stock” means the authorized common stock, $0.01 par value per share, of the
Company or any other shares of Equity Interest of the Company into which such
Common Stock shall be reclassified or changed; provided, that after the
consummation of any transaction referred to in Section 12.4, all
references to “Common Stock” shall, to the extent necessary to protect the
interests of the Holders, become references to “Applicable Stock”.

 

“Company”
means the party named as the “Company” in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this
Indenture and, thereafter, means such successor. The foregoing sentence shall
likewise apply to any subsequent successor or successors to such successors.

 

“Company
Request” or “Company Order” means a written request or order signed
in the name of the Company by any two Officers, at least one of whom is the
Chief Executive Officer or the Chief Financial Officer.

 

“Conversion
Agent” has the meaning set forth in Section 2.3.

 

“Conversion
Notice” has the meaning set forth in Section 12.2(c).

 

“Conversion
Price” means, at any time, $1,000 divided by the Conversion Rate in effect
at such time, rounded to two decimal places (rounded up if the third decimal
place thereof is 5 or more and otherwise rounded down).

 

“Conversion
Rate” means the number of shares of Common Stock issuable upon conversion
of each $1,000 of Principal Amount of Securities, which is initially 103.2429
shares, subject to adjustments as set forth in this Indenture.

 

“Corporate
Trust Office” means the office of the Trustee at which at any time its
corporate trust business shall be principally administered, which office at the
date hereof is located at 101 Barclay Street, New York, New York 10286,
Attention: Corporate Trust Division - Corporate Finance Unit or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any

 

2

 

successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).

 

“Current
Market Price” has the meaning set forth in Section 12.3(g).

 

“Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.

 

“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.

 

“Depositary”
means, with respect to any Global Securities, a securities clearing agency that
is registered as such under the Exchange Act and is designated by the Company
to act as Depositary for such Global Securities (or any successor securities
clearing agency so registered), which shall initially be DTC.

 

“Designated
Senior Indebtedness” means any particular Senior Indebtedness if the
instrument creating or evidencing the same or the assumption thereof (or related
agreements or documents to which the Company is a party) expressly provides
that such Indebtedness shall be “Designated Senior Indebtedness” for purposes
of this Indenture (provided that such instrument, agreement or other
document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness.)

 

“Designated
Subsidiary” means any existing or future, direct or indirect, Subsidiary of
the Company that would constitute a “significant subsidiary” as such term is
defined under Rule 1.02 of Regulation S-X.

 

“Distributed
Assets” has the meaning set forth in Section 12.3(d).

 

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

 

“EDGAR”
has the meaning set forth in Section 6.2(b).

 

“Equity
Interest” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person.

 

“Event
of Default” has the meaning set forth in Section 8.1.

 

“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.

 

“Ex-Dividend
Time” means, with respect to any issuance or distribution on Common Stock,
the first Trading Day on which the Common Stock trades regular way on the
principal securities market on which the Common Stock is then traded without
the right to receive such issuance or distribution.

 

“Expiration
Time” has the meaning set forth in Section 12.3(e).

 

“Fair
Market Value” has the meaning set forth in Section 12.3(g).

 

“Fundamental
Change” means the occurrence of any of the following events: (i) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a Person shall be deemed to have
beneficial ownership of all shares that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage

 

3

 

of time), directly or
indirectly, of more than 50% of the total outstanding Voting Stock of the
Company; (ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (together
with any new directors whose election to such Board of Directors or whose
nomination for election by the stockholders of the Company, was approved by a
vote of at least 662/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or conveys, transfers,
sells or otherwise disposes of or leases all or substantially all of its assets
to any Person, or any corporation consolidates with or merges into or with the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash, securities
or other property, other than (1) any such transaction where the outstanding
Voting Stock of the Company is not changed or exchanged at all (except to the
extent necessary to reflect a change in the jurisdiction of incorporation of
the Company) or (2) where the stockholders of the Company immediately
before such transaction own, directly or indirectly, immediately following such
transaction, more than 50% of the total outstanding Voting Stock of the
surviving corporation; or (iv) the Company is liquidated or dissolved or
adopts a plan of liquidation or dissolution other than in a transaction which
complies with the provisions described under Article VII.

 

A “Fundamental
Change” shall not be deemed to have occurred if either:

 

(1) the last Closing
Sale Price of the Common Stock for each of at least five Trading Days within:

 

(x)      the
period of the ten consecutive Trading Days immediately after the later of the
Fundamental Change or the public announcement of the Fundamental Change, in the
case of a Fundamental Change resulting solely from a Fundamental Change in
clause (i) of the definition of Fundamental Change; or

 

(y)      the
period of the ten consecutive Trading Days immediately preceding the
Fundamental Change, in the case of a Fundamental Change resulting from a
Fundamental Change in clauses (ii), (iii) or (iv) of the definition
of Fundamental Change;

 

is at least equal to 105%
of the quotient where the numerator is the Principal Amount and the denominator
is the Conversion Rate in effect on each of such five Trading Days, with such
calculation being made for each Trading Day; or

 

(2) in the case of a
merger or consolidation described in clause (iii) of the definition of
Fundamental Change, at least 95% of the consideration, excluding cash payments
for fractional shares and cash payments pursuant to dissenters’ approval
rights, in the merger or consolidation constituting the Fundamental Change,
consists of common stock traded on a U.S. national securities exchange or
quoted on the Nasdaq National Market (or which shall be so traded or quoted
when issued or exchanged in connection with such Fundamental Change) and as

 

4

 

a result of such transaction or transactions the
Securities become convertible solely into such common stock.

 

“Fundamental
Change Purchase Date” has the meaning set forth in Section 5.1(a).

 

“Fundamental
Change Purchase Notice” has the meaning set forth in Section 5.1(c).

 

“Fundamental
Change Purchase Price” has the meaning set forth in Section 5.1 (a).

 

“Global
Securities” means Securities that are in substantially the form attached
hereto as Exhibit A and that include the information called for by
footnotes 1 and 2 thereof and that are deposited with the Depositary or its
custodian and registered in the name of, the Depositary or its nominee.

 

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

 

“Indebtedness”
means, with respect to any Person,

 

(a) all
indebtedness, obligations and other liabilities, contingent or otherwise:

 

(i)      for
borrowed money, including obligations in respect of overdrafts 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 such Person’s
assets or to only a portion thereof, other than any account payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services;

 

(b) all
reimbursement obligations and other liabilities, contingent or otherwise, with
respect to letters of credit, bank guarantees or bankers’ acceptances;

 

(c) all obligations
and liabilities, contingent or otherwise, in respect of leases required, in
conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on such Person’s balance sheet;

 

(d) all obligations
and other liabilities, contingent or otherwise, 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, including such Person’s obligations
under such lease or related document to purchase or cause a third party to
purchase such leased property or pay an agreed upon residual value of the
leased property to the lessor;

 

(e) all obligations,
contingent or otherwise, with respect to an interest rate, currency or other
swap, cap, floor or collar agreement or hedge agreement,

 

5

 

forward contract or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument
or agreement;

 

(f) all direct or
indirect guarantees or similar agreements to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, Indebtedness,
Obligations or liabilities of another Person or the kind described in clauses (a) through
(e);

 

(g) any and all
deferral, renewals, extensions, refinancings and refundings of or amendment,
modifications or supplements to any indebtedness, obligation or liability of
the kinds described in clauses (a) through (f).

 

The
amount of Indebtedness of any Person at any date shall be (i) the
outstanding principal amount of all unconditional obligations described above,
as such amount would be reflected on a balance sheet prepared in accordance
with United States generally accepted accounting principles, and the maximum
liability at such date of such Person for any contingent obligations described
above, (ii) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount, and (iii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.

 

“Indenture”
means this Indenture, as amended or supplemented from time to time in
accordance with the terms hereof, including the provisions of the TIA that are
explicitly incorporated in this Indenture by reference to the TIA.

 

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

 

“Interest
Payment Date” has the meaning set forth in Exhibit A attached hereto.

 

“Issue
Date” of any Security means the date on which such Security was originally
issued or deemed issued as set forth on the face of the Security.

 

“Legal
Holiday” means any day other than a Business Day.

 

“Market
Price” means the average of the Closing Sale Prices of one share of
Applicable Stock for the 20-Trading Day period immediately preceding and
including the Business Day immediately preceding the Purchase Date or
Fundamental Change Purchase Date, as the case may be (or if the Business Day
immediately preceding the Purchase Date or Fundamental Change Purchase Date, as
the case may be, is not a Trading Day, then on the last Trading Day immediately
preceding the Business Day), appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such Trading Days during
such 20-Trading Day period and ending on the Purchase Date or Fundamental
Change Purchase Date, as the case may be, of any event described in Section 12.3
or Section 12.4.

 

“Non-Electing
Share” has the meaning set forth in Section 12.4.

 

6

 

“Obligations”
means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.

 

“Officer”
means the Chief Executive Officer, the President, the Chief Financial Officer,
any Vice President, the Treasurer, or the Secretary of the Company.

 

“Officers’
Certificate” means a written certificate containing the information
specified in Section 14.4 and Section 14.5, signed in the name of the
Company by any two Officers, at least one of whom is the Chief Executive
Officer or the Chief Financial Officer, and delivered to the Trustee. An
Officers’ Certificate given pursuant to Section 6.3 shall be signed by the
Chief Financial Officer and one other Officer.

 

“Opinion
of Counsel” means a written opinion containing the information specified in
Section 14.4 and Section 14.5, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to,
the Company.

 

“Paying
Agent” has the meaning set forth in Section 2.3.

 

“Payment
Blockage Notice” has the meaning set forth in Section 4.3(b).

 

“Payment
Blockage Period” has the meaning set forth in Section 4.3(b).

 

“Person”
or “Persons” means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof (and for purposes of the definition of “Fundamental Change”
shall also have the meaning set forth in such definition).

 

“Principal
Amount” of a Security means the principal amount of the Security as set
forth on the face of the Security.

 

“Purchase
Date” has the meaning set forth in Section 4.1(a).

 

“Purchase
Notice” has the meaning set forth in Section 4.1(c).

 

“Purchase
Price” has the meaning set forth in Section 4.1(a).

 

“QIB”
means a “qualified institutional buyer” as defined in Rule 144A.

 

“Record
Date” has the meaning set forth in Section 12.3(g).

 

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

 

“Redemption
Price” shall mean (i) with respect to a Redemption Date occurring
during the period commencing on February 18, 2009 to and including February 14,
2010, an amount equal to 101.143% of the Principal Amount of the Securities to
be redeemed plus any accrued and unpaid interest (including any Additional
Interest) to, but excluding, the Redemption Date and (ii) with respect to
a Redemption Date occurring on or after February 15, 2010, an amount equal
to 100.571% of the Principal Amount of the Securities to be redeemed plus any
accrued and unpaid interest (including any Additional Interest) to, but
excluding, the Redemption Date.

 

“Reference
Period” has the meaning set forth in Section 12.3(d).

 

“Registrar”
has the meaning set forth in Section 2.3.

 

“Register”
has the meaning set forth in Section 2.3.

 

7

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated February 17,
2004, between the Company and Bear, Stearns & Co. Inc., as amended,
modified or supplemented from time to time.

 

“Regular
Record Date” has the meaning set forth in Exhibit A attached hereto.

 

“Responsible
Officer” means (i) when used with respect to the Trustee, the officer
within the Corporate Finance Unit of the Corporate Trust Division of the
Trustee (or any successor unit, department or division of the Trustee) located
at the Corporate Trust Office of the Trustee, who has direct responsibility for
the administration of this Indenture and, for the purposes of Section 9.1(c)(ii) and
the second sentence of Section 9.5 shall also include any officer of the
Trustee to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with the particular subject and (ii) when
used with respect to the Company, means the Chief Executive Officer, the
President or the Chief Financial Officer.

 

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

 

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

 

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

 

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

 

“SEC”
means the United States Securities and Exchange Commission, or any successor
thereto.

 

“Securities”
means any of the Company’s 4.0% Convertible Subordinated Notes due 2011, as
amended or supplemented from time to time, issued under this Indenture.

 

“Securities
Act” means the United States Securities Act of 1933, as amended, or any
successor statute thereto and the rules and regulations thereunder.

 

“Senior
Indebtedness” means the principal of, premium, if any, interest, including
all interest accruing after the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowed as a
claim in the proceeding, and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued, due or to become due, on or in
connection with Indebtedness of the Company 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 amendment, modifications or supplements to, the foregoing,
unless in the case of any particular Indebtedness, the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of the Securities.

 

Notwithstanding
the foregoing, Senior Indebtedness does not include: (i) Indebtedness that
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities or expressly provides that such Indebtedness is on
the same basis or junior to the Securities and; (ii) any Indebtedness to
any of the Company’s majority-owned subsidiaries, other than Indebtedness to a
Subsidiary arising by reason of guarantees by the Company of Indebtedness of
such Subsidiary to a person that is not a Subsidiary. Senior Indebtedness does

 

8

 

not include any of the
Company’s obligations with respect to its outstanding 6.0% Convertible
Subordinated Debentures due 2007.

 

“Special
Record Date” has the meaning set forth in Exhibit A attached hereto.

 

“Spin-Off”
has the meaning set forth in Section 12.3(d).

 

“Stated
Maturity”, when used with respect to any Security, means February 15,
2011.

 

“Subsidiary”
means any person of which at least a majority of the outstanding Voting Stock
shall at the time directly or indirectly be owned or controlled by the Company
or by one or more Subsidiaries or by the Company and one or more Subsidiaries.

 

“TIA”
means the United States Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.

 

“Trading
Day” means a day during which trading in securities generally occurs on the
Nasdaq National Market system or, if the Applicable Stock is not quoted on the
Nasdaq National Market system, on the principal U.S. national or regional
securities exchange on which the Applicable Stock is then listed or, if the
Applicable Stock is not listed on a U.S. national or regional securities
exchange, and not quoted on the Nasdaq National Market system, on the principal
other market on which the Applicable Stock is then traded (provided that no day
on which trading of the Applicable Stock is suspended on such exchange or other
trading market will count as a Trading Day) (it being understood that for
purposes of this definition a market shall include obtaining quotations as
provided in the last sentence of the definition of “Closing Sales Price,” if
applicable).

 

“Transfer
Certificate” has the meaning set forth in Section 2.12(f).

 

“Transfer
Restricted Security” has the meaning set forth in Section 2.12(f).

 

“Trigger
Event” has the meaning set forth in Section 12.3(d).

 

“Trustee”
means the party named as the “Trustee” in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this
Indenture and, thereafter, shall mean such successor. The foregoing sentence
shall likewise apply to any such subsequent successor or successors.

 

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

 

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

 

“Voting
Stock” of a person means the Equity Interest of such person of the class or
classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time the Equity Interest of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).

 

9

 

Section 1.2. Incorporation
by Reference of Trust Indenture Act.

 

Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

 

“Commission”
means the SEC.

 

“Indenture
Securities” means the Securities.

 

“Indenture
Security Holder” means a Holder.

 

“Indenture
to be Qualified” means this Indenture.

 

“Indenture
Trustee” or “Institutional Trustee” means the Trustee.

 

“Obligor”
on the indenture securities means the Company.

 

All
other TIA terms used but not defined in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.

 

Section 1.3. Rules of
Construction.

 

Unless
the context otherwise requires:

 

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

 

(b) an accounting
term not otherwise defined has the meaning assigned to it in accordance with
accounting principles generally accepted in the United States as in effect from
time to time;

 

(c) “or” is not
exclusive;

 

(d) “including”
means including, without limitation; and

 

(e) words in the
singular include the plural, and words in the plural include the singular.

 

Section 1.4. Acts
of Holders.

 

(a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by the Holders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company, as described in Section 14.2.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section 1.4.

 

10

 

(b) The fact and
date of the execution by any person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or writing
acknowledged to such officer the execution thereof. Where such execution is by
a signer acting in a capacity other than such signer’s individual capacity,
such certificate or affidavit shall also constitute sufficient proof of such
signer’s authority, if it so states. The fact and date of the execution of any
such instrument or writing, or the authority of the person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

 

(c) The principal
amount and serial number of any Security and the ownership of Securities shall
be proved by the Register maintained by the Registrar for the Securities.

 

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

 

(e) If the Company
shall solicit from the Holders any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may, at its option, by or
pursuant to a Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after
the record date.

 

ARTICLE II

 

THE SECURITIES

 

Section 2.1. Form and
Dating. (a) The Securities shall be designated as the “4.0%
Convertible Subordinated Notes due 2011” of the Company. The aggregate
principal amount of Securities outstanding at any time may not exceed
$120,000,000 except as provided in Section 2.7.

 

The
Securities and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, which is
incorporated in and made a part of this Indenture.

 

11

 

The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage (provided that any such notation, legend or endorsement required by usage
is in a form acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.

 

(b) Restricted Global Securities. All of the
Securities are being offered and sold within the United States to QIBs in
reliance on Rule 144A and shall be issued, initially in the form of one or
more Restricted Global Securities, which shall be deposited with the Trustee at
its Corporate Trust Office, as custodian for and registered in the name of DTC
or the nominee thereof, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. Subject to Section 2.1(a), 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 Trustee and
the Depositary as hereinafter provided.

 

(c) 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 initially represent the
aggregate amount of outstanding Securities stated thereon, but that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges,
redemptions, repurchases and 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 and shall be made
on the records of the Trustee and the Depositary.

 

Neither
any members of, or participants in, the Depositary (collectively, the “Agent
Members”) nor any other persons on whose behalf Agent Members may act may
exercise any rights under this Indenture with respect to any Global Security
registered in the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the case may be,
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 contained 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 such nominee, as the case may be,
or (B) impair, as between the Depositary, its Agent Members and any other
person on whose behalf an Agent Member may act, the operation of customary
practices of such Persons governing the exercise of the rights of a holder of
any Security.

 

(d) Certificated Securities. Certificated
Securities shall be issued only under the limited circumstances provided in Section 2.12(a)(i).

 

Section 2.2. Execution
and Authentication.

 

The
Securities shall be executed on behalf of the Company by any Officer. The
signature of the Officer on the Securities may be manual or facsimile.

 

12

 

A
Security bearing the manual or facsimile signature of an individual who was at
the time of the execution of the Security an Officer shall bind the Company,
notwithstanding that such individual has ceased to hold such office(s) prior
to the authentication and delivery of such Securities or did not hold such
office(s) at the date of authentication of such Securities.

 

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

 

The
Trustee shall authenticate and deliver the Securities for original issuance in
an aggregate principal amount of up to $120,000,000 upon one or more Company
Orders without any further action by the Company (other than as contemplated
below and in Section 14.4 and Section 14.5). The aggregate principal
amount due at the Stated Maturity of the Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence except as provided in
Section 2.7. In authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall receive and shall be fully protected in relying
upon:

 

(a) a copy of the
Board Resolution in or pursuant to which the terms and form of the Securities
were established, the issuance and sale of the Securities was authorized, this
Indenture was authorized and specified Officers were authorized to establish
the form and determine the terms of the Securities and the form of this
Indenture, to execute the Securities and this Indenture on behalf of the
Company and to take any other necessary actions relating thereto and evidence
of any actions taken by authorized Officers pursuant to that Board Resolution,
certified by the Secretary, an Assistant Secretary or a Vice President of the
Company to have been duly adopted by the Board of Directors or taken by any
authorized Officer and to be in full force and effect as of the date of such
certificate; and

 

(b) an Officers’
Certificate delivered in accordance with Section 14.4 and Section 14.5.

 

(c) an Opinion of
Counsel delivered in accordance with Section 14.4 and Section 14.5.

 

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.

 

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

 

Section 2.3. Registrar,
Paying Agent and Conversion Agent.

 

Pursuant
to Section 6.5, the Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (“Registrar”),
an office or agency where Securities may be presented for redemption,
repurchase or payment (“Paying Agent”), an office or agency where
Securities may be presented for conversion (“Conversion Agent”) and an

 

13

 

office or agency where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. Pursuant to Section 6.5, the Company shall
at all times maintain a Registrar, Paying Agent, Conversion Agent 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, New
York City. The Registrar shall keep a register of the Securities (the “Register”)
and of their transfer and exchange.

 

The
Company may have one or more co-registrars, one or more additional paying
agents and one or more additional conversion agents. The term Paying Agent
includes any additional paying agent, including any named pursuant to Section 6.5.
The term Conversion Agent includes any additional conversion agent, including
any named pursuant to Section 6.5.

 

The
Company shall enter into an appropriate limited agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (in each case, if
such Registrar, agent or co-registrar is a Person other than the Trustee). Each
such agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall notify the Trustee of the name and address of any
such agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 9.7. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent or co-registrar and, if the Company fails to maintain a Conversion Agent,
the Company shall act as such.

 

The
Company hereby initially appoints The Bank of New York as Registrar, Paying
Agent and Conversion Agent in connection with the Securities. The initial
office of the Registrar, Paying Agent and Conversion Agent shall be the office
of the Trustee that is located in the Borough of Manhattan, New York City,
which office on the date hereof is 101 Barclay Street, New York, New York
10286, Attention: Corporate Trust Division - Corporate Finance Unit.

 

Section 2.4. Paying
Agent to Hold Assets in Trust.

 

Except
as otherwise provided herein, prior to 10:00 a.m., New York City time, on
each due date of payments in respect of any Security, the Company shall deposit
with the Paying Agent, cash (in immediately available funds if deposited on the
due date), sufficient to make such payments when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all cash and Applicable Stock held by the Paying Agent for the making
of payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. The Company at any time may
require a Paying Agent to pay all cash held by it to the Trustee, and to
account for any funds disbursed by it, and the Trustee may at any time during
the continuance of any such default, upon the written request to the Paying
Agent, require such Paying Agent to forthwith pay to the Trustee all cash so
held in trust. Upon doing so, the Paying Agent shall have no further liability
for such cash.

 

Section 2.5. Holder
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 Holders. If the
Trustee is not the Registrar, the Company shall cause to be furnished to the
Trustee on or before each semiannual interest payment date and at such other
times as the Trustee may request in writing a list in such

 

14

 

form and as of such date
as the Trustee may reasonably require of the names and addresses of Holders.

 

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 the Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the 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 attached
hereto and in form satisfactory to the Registrar and each 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 for such
purpose pursuant to Section 2.3, the Company shall execute, and the
Trustee shall authenticate, Securities of a like aggregate principal amount at
the Registrar’s request. Any transfer or exchange shall be without charge,
except that the Company or the Registrar may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges that may
be imposed in connection with the transfer or exchange of the Securities from
the Holder requesting such transfer or exchange.

 

Neither
the Company, the Registrar nor the Trustee shall be required to exchange or
register a transfer of (i) any Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed), or (ii) any Securities in respect of which a Purchase Notice or
a Fundamental Change Purchase Notice has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the
case of Securities to be repurchased in part, the portion thereof not to be
repurchased), or (iii) any Securities surrendered for conversion (except,
in the case of Securities to be converted in part, the portion thereof not to
be converted). All Securities issued upon any transfer or exchange of
Securities in accordance with this Indenture 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 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) 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.

 

15

 

Section 2.7. Replacement
Securities.

 

If (a) any
mutilated Security is surrendered to the Company, the Registrar or the Trustee,
or (b) the Company, the 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 Registrar and the Trustee such security or
indemnity as may be requested by them to save each of them harmless, then, in
the absence of notice to the Company, the 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, bearing
a certificate number not contemporaneously outstanding.

 

In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or is about to be redeemed by the Company
pursuant to Article III or repurchased by the Company pursuant to Article V,
the Company in its discretion may, instead of issuing a new Security, pay,
redeem or repurchase 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, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or the Registrar)
connected therewith.

 

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

 

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

 

Section 2.8. Outstanding
Securities; Determinations of Holders’ Action.

 

Securities
outstanding at any time are all the Securities authenticated by the Trustee,
except for:

 

(a) those cancelled
by it,

 

(b) those paid,
redeemed or repurchased pursuant to Section 2.7,

 

(c) those delivered
to it for cancellation, and

 

(d) those described
in this Section 2.8 as not outstanding.

 

A
Security does not cease to be outstanding because the Company or an Affiliate
thereof holds the Security; provided, however, that in determining whether the
Holders of the requisite principal amount of Securities have given or concurred
in any request, demand, authorization, direction, notice, consent, waiver, or
other Act hereunder, Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee

 

16

 

shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other Act, only Securities which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded. Subject to
the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination.

 

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

 

If the
Paying Agent holds, in accordance with the terms of this Indenture, prior to
10:00 a.m., New York City time, on a Redemption Date, a Purchase Date, a
Fundamental Change Purchase Date or Stated Maturity, as the case may be, cash
or securities, if permitted hereunder, sufficient to pay Securities payable on
that date, then on such Redemption Date, Purchase Date, Fundamental Change
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and interest and Additional Interest, if any, on such
Securities shall cease to accrue.

 

If a
Security is converted in accordance with Article XII, then from and after
the time of conversion on the date of conversion, such Security shall cease to
be outstanding and interest and Additional Interest, if any, on such Security
shall cease to accrue.

 

Section 2.9. Temporary
Securities.

 

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

 

If
temporary Securities are issued, the Company shall cause definitive Securities
to be prepared without unreasonable delay. After the preparation of definitive
Securities, the temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the office or agency
of the Company designated for such purpose pursuant to Section 2.3,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as definitive Securities.

 

Section 2.10. Cancellation.

 

All
Securities surrendered for payment, repurchase by the Company pursuant to Article V,
conversion, redemption or registration of transfer or exchange shall, if
surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it or, if surrendered to the Trustee, shall
be promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the Trustee. The Company
may not issue new

 

17

 

Securities to replace
Securities it has paid or delivered to the Trustee for cancellation or that any
Holder has converted pursuant to Article XII. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.10, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee’s customary procedure.

 

Section 2.11. Persons
Deemed Owners.

 

Prior
to due presentment of a Security for registration of transfer, the Company, the
Trustee, any Paying Agent and any agent of the Company, the Trustee or the
Paying Agent may treat the person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal
of, Redemption Price, Purchase Price or Fundamental Change Purchase Price, and
interest and Additional Interest, if any, on, the Security, for the purpose of
receiving cash or Applicable Stock upon conversion and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

 

Section 2.12. Additional
Transfer and Exchange Requirements.

 

(a) Transfer and Exchange of Global Securities.

 

	
   

  	
  (i)

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

  

 

18

 

	
   

  	
   

  	
  whose name such
  Securities are so registered. Such exchange shall be effected in accordance
  with the Applicable Procedures.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Notwithstanding any
  other provisions of this Indenture other than the provisions set forth in
  Section 2.12(a)(i), a Global 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.

  

 

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

 

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

 

(y) to exchange such
Certificated Securities for an equal principal amount of Certificated
Securities of other authorized denominations,

 

such
Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Securities presented or surrendered
for register of transfer or exchange:

 

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

 

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

 

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

 

(B)             if such Restricted Certificated Security is being
transferred to a person the Holder reasonably believes is a QIB in accordance
with Rule 144A or pursuant to an effective registration statement under 

 

19

 

the Securities
Act, a certification to that effect from such Holder (in substantially the form
set forth in the Transfer Certificate).

 

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

 

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

 

(ii)          if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144, a certification to that effect from the
Holder (in substantially the form set forth in the Transfer Certificate) and,
if the Company or the Trustee so requests, a customary Opinion of Counsel.

 

The Trustee, as the Registrar, shall reduce or cause
to be reduced the aggregate principal amount of the Restricted Global Security
by the appropriate principal amount and shall increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Security by a like
principal amount. Such transfer shall otherwise be effected in accordance with
the Applicable Procedures. If no Unrestricted Global Security is then
outstanding, the Company shall execute and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver an Unrestricted Global Security.

 

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

 

20

 

that such notice be given. Thereafter, if Certificated
Securities are presented by a Holder to a Registrar with a request:

 

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

 

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

 

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

 

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

 

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

 

(ii)               if such Restricted Certificated Security is being
transferred pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certification to that effect
from such Holder (in substantially the form set forth in the Transfer
Certificate) and, if the Company or the Registrar so requests, a customary
Opinion of Counsel; 

 

21

 

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

 

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

 

(e) Legends.

 

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

 

(2)          Upon any sale or transfer of a Transfer Restricted
Security (x) after the expiration of the holding period applicable to
sales of the Securities under Rule 144(k) of the Securities Act, (y) pursuant
to Rule 144 or (z) pursuant to an effective registration statement
under the Securities Act: 

 

(i)             in the case of any Restricted Certificated Security,
any Registrar shall permit the Holder thereof to exchange such Restricted
Certificated Security for an Unrestricted Certificated Security, or (under the
circumstances described in Section 2.12(e)) to transfer such Restricted
Certificated Security to a transferee who shall take such Security in the form 

 

22

 

of a beneficial interest in an Unrestricted Global
Security, and in each case shall rescind any restriction on the transfer of
such Security; provided, however, that the Holder of such Restricted
Certificated Security shall, in connection with such exchange or transfer, comply
with the other applicable provisions of this Section 2.12; and 

 

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

 

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

 

(4)          After the expiration of the holding period pursuant to
Rule 144(k) of the Securities Act, the Company shall remove any
restriction of transfer on such Security, and the Company shall execute, and
the Trustee upon receipt of a Company Request shall authenticate and deliver
Securities that do not bear such legend and that do not have a Transfer
Certificate attached thereto. 

 

(5)          Until the expiration of the holding period applicable
to sales of the Securities under Rule 144(k) of the Securities Act or
a transfer pursuant to Rule 144 or pursuant to an effective registration
statement under the Securities Act, the Applicable Stock issued upon conversion
of the Securities shall bear the legend in substantially the form called for by
Exhibit B attached hereto. 

 

(f) Transfers to the Company. Nothing
contained in this Indenture or in the Securities shall prohibit the sale or
other transfer of any Securities (including

 

23

 

beneficial interests in Global Securities) to the
Company or any of its Subsidiaries. The Company shall ensure that if any such
securities shall be reissued, such reissuance shall comply with applicable law
and any securities reissued as Transfer Restricted Securities shall be assigned
a different “CUSIP” number than any other securities.

 

(g) Amendments to Rule 144(k).
Notwithstanding any other provision in this Indenture, if Rule 144(k) as
promulgated under the Securities Act is amended to shorten the two-year period
under Rule 144(k), then the references to “two years” in the restrictive
legend of each Transfer Restricted Security and footnote one to Exhibit A
shall be deemed to refer to such shorter period, from and after receipt by the
Trustee of the documents described in Section 2.12(e)(2) from the
Company or from a Holder of a Transfer Restricted Security; provided that, a
Transfer Restricted Security shall not be deemed to refer to such shorter
period if to do so would be prohibited by, or would otherwise cause a violation
of, the U.S. federal securities laws applicable at the time. As soon as
practicable after a Responsible Officer of the Company receives notice of the
effectiveness of any such amendment to shorten the two-year period under Rule 144(k),
unless causing the Transfer Restricted Securities to refer to such shorter
period would otherwise be prohibited by, or would otherwise cause a violation
of, the U.S. federal securities laws applicable at the time, the Company will
provide to the Trustee the documents described in Section 2.12(e)(2) respecting
the effectiveness of such amendment.

 

Section2.13. CUSIP
Numbers. 

 

The
Company may issue the Securities with one or more “CUSIP” numbers (if then
generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices
of redemption or repurchase 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 repurchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company shall promptly notify the Trustee of any change in the CUSIP
numbers.

 

Section2.14. Ranking.

 

The
Company agrees, and each holder of Securities by accepting the same agrees,
that the indebtedness of the Company arising under or in connection with this Indenture
and every outstanding Security issued under this Indenture from time to time
constitutes and shall constitute a subordinate unsecured general obligation of
the Company. The Securities will be subordinated in right of payment to all
other existing and future Senior Indebtedness of the Company as provided in Section 4.1
hereof. Notwithstanding the foregoing, nothing in this Section 2.14 shall
impair the claims of, or payments to, the Trustee under or pursuant to Sections
8.10 and 9.07, and the Trustee’s rights to compensation, indemnification and
reimbursement of expenses under Sections 8.10 and 9.07 are not subordinated.

 

24

 

ARTICLE III

 

REDEMPTION

 

Section 3.1. The
Company’s Right to Redeem; Notice to Trustee.

 

Prior
to February 18, 2009, the Securities shall not be redeemable at the
Company’s option. On or after February 18, 2009, the Company, at its
option, may redeem the Securities in accordance with this Article III for
cash at any time as a whole, or from time to time in part, at the Redemption
Price.

 

In the
event that the Company elects to redeem the Securities on a date that is after
any Regular Record Date but on or before the corresponding Interest Payment
Date, the Company shall be required to pay any accrued and unpaid interest and
Additional Interest, if any, to the holder of the redeemed Security and not the
Holder on the corresponding Regular Record Date.

 

 

If the
Company elects to redeem Securities, it shall notify the Trustee in writing of
the Redemption Date, the principal amount of Securities to be redeemed and the
Redemption Price. The Company shall give this notice to the Trustee by a
Company Order at least 30 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).

 

Section 3.2. Selection
of Securities to Be Redeemed.

 

If
fewer than all of the outstanding Securities are to be redeemed, unless the
procedures of the Depositary provide otherwise, the Trustee shall select the
Securities to be redeemed by lot or on a pro rata basis or by another method
the Trustee, in its discretion, considers fair and appropriate. The Trustee
shall make the selection within five Business Days after it receives the notice
provided for in Section 3.1 from outstanding Securities not previously
called for redemption.

 

Securities
and portions of Securities that the Trustee selects shall be in principal
amounts of $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of the Securities to be redeemed.

 

Securities
and portions of Securities that are to be redeemed are convertible by the
Holder until 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Redemption Date. 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 (so far as may be) to be the portion selected for
redemption. Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for the
purpose of such selection.

 

Section 3.3. Notice
of Redemption.

 

At
least 20 calendar days but not more than 60 calendar days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed. The notice of redemption
shall identify the Securities to be redeemed and shall state:

 

(a) the Redemption
Date;

 

25

 

(b) the Redemption
Price;

 

(c) the Conversion
Rate and any adjustments thereto;

 

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

 

(e) that Securities
called for redemption may be converted at any time prior to 5:00 p.m., New
York City time, on the second Business Day preceding the Redemption Date;

 

(f) that Holders who
want to convert their Securities must satisfy the requirements set forth in Article XII;

 

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

 

(h) if fewer than
all of the outstanding Securities are to be redeemed, the serial numbers, if
any, and principal amounts of the particular Securities to be redeemed;

 

(i) that, unless the
Company defaults in making payment of such Redemption Price, interest and
Additional Interest, if any, on Securities called for redemption shall cease to
accrue on and after the Redemption Date;

 

(j) the CUSIP number(s) of
the Securities; and

 

(k) any other
information the Company wants to present.

 

At the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense; provided, however, that the
Company makes such request at least five Business Days (unless a shorter period
shall be satisfactory to the Trustee) prior to the date by which such notice of
redemption must be given to Holders in accordance with this Section 3.3;
provided, further, that the text of the notice of redemption shall be prepared
by the Company.

 

Section 3.4. Effect
of Notice of Redemption.

 

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

 

Section 3.5. Deposit
of Redemption Price.

 

Prior
to 10:00 a.m., New York City time, on the applicable Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.4) an amount of cash
(in immediately available funds if deposited on the Redemption

 

26

 

Date) sufficient to pay
the aggregate Redemption Price of all Securities or portions thereof which are
to be redeemed as of such Redemption Date other than Securities or portions of
Securities called for redemption which on or prior thereto have been delivered
by the Company to the Trustee for cancellation or have been converted.

 

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

 

Section 3.6. Securities
Redeemed in Part.

 

Any
Certificated Security which is to be redeemed only in part shall be surrendered
at the office of the Paying Agent and the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security, without charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to the unredeemed portion of
the Security surrendered.

 

Section 3.7. Repayment
to the Company.

 

To the
extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.5
exceeds the aggregate Redemption Price of the Securities or portions thereof
which the Company is redeeming as of the Redemption Date, then, promptly after
the Redemption Date, the Paying Agent shall return any such excess to the
Company together with interest, if any, thereon.

 

Section 3.8. No
Sinking Fund.

 

The
Securities shall not have a sinking fund.

 

ARTICLE IV

 

SUBORDINATION

 

Section 4.1. Agreement
of Subordination.

 

The
Company agrees, and each holder of Securities by accepting the same agrees,
that the Indebtedness evidenced by the Securities is subordinated in right of
payment (to the extent and in the manner provided in this Article IV) to
the prior payment in full in cash or payment satisfactory to holders of Senior
Indebtedness of all Senior Indebtedness (whether outstanding on the date hereof
or hereafter created, incurred or assumed), and that the subordination is for
the benefit of the holders of Senior Indebtedness.

 

Section 4.2. Liquidation;
Dissolution; Bankruptcy.

 

Upon
any distribution to creditors of the Company in a liquidation or dissolution of
the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding

 

27

 

relating to the Company
or its property, in an assignment for the benefit of creditors or any
marshaling of the Company’s assets and liabilities:

 

(a) holders of
Senior Indebtedness shall be entitled to receive payment in full of all
Obligations due in respect of such Senior Indebtedness (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Indebtedness) in cash or other payment satisfactory to the
holders of the Senior Indebtedness before holders of the Securities shall be
entitled to receive any payment with respect to the Securities; and

 

(b) until all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of the Senior Indebtedness, any distribution to which holders of the
Securities would be entitled but for this Article IV shall be made to
holders of Senior Indebtedness, as their interests may appear.

 

Section 4.3. Default
on Designated Senior Indebtedness.

 

Anything
in this Indenture to the contrary notwithstanding, no payment of Principal
Amount, plus any accrued and unpaid interest (including any Additional
Interest) on or other amounts due on the Securities, and no redemption, repurchase
or other acquisition of the Securities, shall be made by or on behalf of the
Company unless:

 

(a) full payment of
all amounts then due for principal of and interest on, and of all other amounts
then due on, all Designated Senior Indebtedness has been made or duly provided
for pursuant to the terms of the instruments governing such Designated Senior
Indebtedness; and

 

(b) at the time for,
and immediately after giving effect to, any such payment, redemption,
repurchase or other acquisition, there shall not exist under any Designated
Senior Indebtedness, or any agreement pursuant to which any Designated Senior
Indebtedness is issued, any default which shall not have been cured or waived
and which default shall have resulted in the full amount of such Designated
Senior Indebtedness being declared due and payable.

 

In
addition, if a Responsible Officer of the Trustee at the Corporate Trust Office
shall receive written notice from the holders of Designated Senior Indebtedness
or their representative (a “Payment Blockage Notice”) that there has
occurred and is continuing under such Designated Senior Indebtedness, or any
agreement pursuant to which such Designated Senior Indebtedness is issued, any
non-payment default, which default shall not have been cured or waived, giving
the holders of such Designated Senior Indebtedness the right to declare such
Designated Senior Indebtedness immediately due and payable, then, anything in
this Indenture to the contrary notwithstanding, no payment of Principal Amount,
plus any accrued and unpaid interest (including any Additional Interest) on, or
any other amounts due on the Securities, and no redemption, repurchase or other
acquisition of the Securities, shall be made by or on behalf of the Company
during the period (the “Payment Blockage Period”) commencing on the date
of receipt of the Payment Blockage Notice and ending on the earliest of (i) the
date on which such default shall have been cured or waived, (ii) 179 days
from the receipt of the Payment Blockage Notice and (iii) the date the
Payment Blockage Notice is withdrawn by the holders of such

 

28

 

Designated Senior
Indebtedness. Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in Section 4.2
and the first sentence of this Section 4.3), unless the holders of such
Designated Senior Indebtedness or the representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, the Company
may resume payments on the Securities after the end of such Payment Blockage
Period. Not more than one Payment Blockage Notice may be given in any
consecutive 365-day period, irrespective of the number of defaults with respect
to one or more issues of Designated Senior Indebtedness during such period.

 

Section 4.4. Acceleration
of Convertible Subordinated Notes.

 

In the
event of the acceleration of the Securities because of an Event of Default, the
Company may not make any payment or distribution to the Trustee or any holder
of Securities in respect of Obligations with respect to the Securities and may
not acquire or purchase from the Trustee or any holder of Securities any
Securities until all Senior Indebtedness has been paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness or such acceleration
is rescinded in accordance with the terms of this Indenture.

 

If
payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness or trustees of
such Senior Indebtedness of the acceleration.

 

Section 4.5. When
Distribution Must Be Paid Over.

 

In the
event that the Trustee, any holder of Securities or any other person receives
any payment or distributions of assets of the Company of any kind with respect
to the Securities in contravention of any subordination terms contained in this
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, then such payment shall be held by
the recipient in trust for the benefit of holders of Senior Indebtedness, and
shall be immediately paid over and delivered to the holders of Senior
Indebtedness or their representative, to the extent necessary to make payment
in full of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor, to or for the holders
of Senior Indebtedness; provided, however, that the foregoing shall apply to
the Trustee only if a Responsible Officer of the Trustee has actual knowledge
(as determined in accordance with Section 4.11) that such payment or
distribution is prohibited by this Indenture.

 

With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
only such obligations on the part of the Trustee as are specifically set forth
in this Article IV, 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 shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to or on
behalf of holders of Securities or the Company or any other person money or
assets to which any holders of Senior Indebtedness shall be entitled by virtue
of this Article IV.

 

Section 4.6. Subordination
Notice by Company.

 

The
Company shall promptly notify the Trustee in writing of any facts known to the
Company that would cause a payment of any Obligations with respect to the
Securities or the

 

29

 

purchase of any
Securities by the Company to violate this Article IV, but failure to give
such notice shall not affect the subordination of the Securities to the Senior
Indebtedness as provided in this Article IV.

 

Notwithstanding
the provisions of this 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 to or by the Trustee in respect of the
Securities, unless and until a Responsible Officer of the Trustee shall have
received written notice at the Corporate Trust Office from the Company or a holder
of Senior Indebtedness or from any trustee or agent therefor; and, prior to the
receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if a
Responsible Officer of the Trustee shall not have received, at least three
Business Days prior to the date upon which by the terms hereof any such money
may become payable for any purpose, the notice with respect to such money
provided for in this Section 4.6, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which may
be received by it within three Business Days prior to such date.

 

The
Trustee shall be entitled to conclusively rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior
Indebtedness (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee or
agent on behalf of any such holder). 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, 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, and if such evidence
is not furnished, the Trustee may defer any payment which it may be required to
make for the benefit of such person pursuant to the terms of this Indenture
pending judicial determination as to the rights of such person to receive such
payment.

 

Section 4.7. Subrogation.

 

After
all Senior Indebtedness is paid in full and until the Securities are paid in
full, holders of Securities shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Securities) to the rights of holders of
Senior Indebtedness to receive distributions applicable to Senior Indebtedness
to the extent that distributions otherwise payable to the holders of Securities
have been applied to the payment of Senior Indebtedness. A distribution made
under this Article IV to holders of Senior Indebtedness that otherwise
would have been made to holders of Securities is not, as between the Company
and holders of Securities, a payment by the Company on the Securities.

 

30

 

Section 4.8. Relative
Rights.

 

This Article IV
defines the relative rights of holders of Securities and holders of Senior
Indebtedness. Nothing in this Indenture shall:

 

(a) impair, as
between the Company and holders of Securities, the obligation of the Company,
which is absolute and unconditional, to pay the Principal Amount and interest
(including any Additional Interest) on the Securities in accordance with their
terms;

 

(b) affect the
relative rights of holders of Securities and creditors (other than with respect
to Senior Indebtedness) of the Company, other than their rights in relation to
holders of Senior Indebtedness; or

 

(c) prevent the
Trustee or any holder of Securities from exercising its available remedies upon
a Default or Event of Default, subject to the rights of holders and owners of
Senior Indebtedness to receive distributions and payments otherwise payable to
holders of Securities.

 

If the
Company fails because of this Article IV to pay the Principal Amount, plus
any accrued and unpaid interest (including any Additional Interest) on a
Security on the due date, the failure is still a Default or Event of Default.

 

Section 4.9. Subordination
May Not Be Impaired by Company.

 

No
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or any holder of Securities or by the failure of
the Company or any such holder to comply with this Indenture.

 

Section 4.10. Distribution
or Notice to Representative.

 

Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
representative.

 

Upon
any payment or distribution of assets of the Company referred to in this Article IV,
the Trustee and the holders of Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the holders of
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, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article IV.

 

Section 4.11. Rights
of Trustee and Paying Agent.

 

Notwithstanding
the provisions of this Article IV or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment or distribution by the Trustee,
and the Trustee may continue to make payments on the Securities, unless a
Responsible Officer of the Trustee shall have received at the Corporate Trust
Office at least five Business Days prior to the date of such payment or
distribution written notice of facts that would cause such payment or
distribution with respect to the Securities to violate this Article IV.
Only the Company may give such notice.

 

31

 

Nothing
in this Article IV shall impair the claims of, or payments to, the Trustee
under or pursuant to Section 8.1 and Section 9.7 hereof, and the Trustee’s
rights to compensation, reimbursement and indemnification under Section 8.10
and Section 9.07 are not subordinated.

 

The
Trustee in its individual or any other capacity may hold Senior Indebtedness
with the same rights it would have if it were not Trustee.

 

Section 4.12. 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 IV,
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 8.9
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 4.13. Article Applicable
to Paying Agents.

 

In
case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term “Trustee” as
used in this Article IV shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article IV in addition to or in place of the Trustee;
provided, however, that the second and third paragraphs of Section 4.11
shall not apply to the Company or any Subsidiary of the Company if it or such
Subsidiary acts as Paying Agent.

 

Section 4.14. Senior
Indebtedness Entitled to Rely.

 

The
holders of Senior Indebtedness shall have the right to rely upon this Article IV,
and no amendment or modification of the provisions contained herein shall
diminish the rights of such holders unless the holders affected thereby shall
have agreed in writing thereto.

 

Section 4.15. Permitted
Payments.

 

Notwithstanding
anything to the contrary in this Article IV, the holders of Securities may
receive and retain at any time on or prior to Stated Maturity (i) securities
that are subordinated to at least the same extent as the Securities to (a) Senior
Indebtedness and (b) any securities issued in exchange for Senior
Indebtedness and (ii) payments and other distributions made from any trust
created pursuant to Section 10.1.

 

ARTICLE V

 

PURCHASE AT THE OPTION OF HOLDERS
UPON A FUNDAMENTAL CHANGE

 

Section 5.1. Fundamental
Change Put.

 

(a) In the event
that a Fundamental Change shall occur at any time prior to February 15,
2011, each Holder shall have the right, at the Holder’s option, but subject to
the provisions of this Section 5.1, to require the Company to purchase,
and upon the

 

32

 

exercise of such right, the Company shall purchase,
all of such Holder’s Securities not theretofore called for redemption, or any
portion of the Principal Amount thereof that is equal to $1,000 or an integral
multiple thereof, as directed by such Holder pursuant to this Section 5.1,
on the date designated by the Company (the “Fundamental Change Purchase Date”)
that is a Business Day no later than 35 Business Days after the date of notice
pursuant to Section 5.1(b) of the occurrence of a Fundamental Change
(subject to extension to comply with applicable law). The Company shall be
required to purchase such Securities at a purchase price in cash or subject to
fulfillment by the Company of the conditions set forth in this Section 5,
shares of Applicable Stock (valued at 95% of the market price of such stock),
in an amount or value equal to 100% of the Principal Amount plus any accrued
and unpaid interest (including any Additional Interest) to, but excluding, the
Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”).
In the event that a Fundamental Change Purchase Date is a date that is after
any Regular Record Date but on or before the corresponding Interest Payment
Date, the Company shall be required to pay accrued and unpaid interest and
Additional Interest, if any, to the holder of the repurchased Security and not
the Holder on the Regular Record Date.

 

Subject
to the fulfillment by the Company of the conditions set forth in this Section 5,
the Company may elect to pay the Fundamental Change Purchase Price by
delivering a number of shares of Common Stock equal to (i) the Fundamental
Change Purchase Price divided by (ii) 95% of the average of the closing
sales prices per share of Common Stock for the five consecutive Trading Days
immediately preceding the second Trading Day prior to the Fundamental Change
Purchase Date.

 

(b) No later than 20
calendar days after the occurrence of a Fundamental Change, the Company shall
mail a written notice of the Fundamental Change by first class mail to the
Trustee (and the Paying Agent if the Trustee is not then acting as Paying
Agent) and to each Holder at its address shown in the Register of the Registrar,
and to beneficial owners as required by applicable law. The notice shall
include a form of Fundamental Change Purchase Notice to be completed by the
Holder and shall briefly state, as applicable:

 

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

 

(ii)       the
date by which the Fundamental Change Purchase Notice must be delivered to the
Paying Agent in order for a Holder to exercise the purchase right pursuant to
this Section 5.1; 

 

(iii)      the
Fundamental Change Purchase Date; 

 

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

 

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

 

33

 

(vi)     the Conversion Rate and any adjustments
thereto;

 

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

 

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

 

(ix)      that the Fundamental Change Purchase
Price for any Security as to which a Fundamental Change Purchase Notice has
been duly given and not withdrawn shall be paid promptly following the later of
the Fundamental Change Purchase Date and the time of surrender of such Security
as described in Section 5.1(b)(viii)

 

(x)       the procedures the Holder must follow to
exercise rights under this Section 5.1 and a brief description of such
rights;

 

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

 

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

 

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

 

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

 

Upon
receipt of a Company Request, the Trustee shall give the notice of purchase
right in the Company’s name and at the Company’s expense; provided, however,
that the Company makes such request at least five Business Days (unless a
shorter period shall be satisfactory to the Trustee) prior to the date by which
such notice of purchase right must be given to the Holders in accordance with
this Section 5.1(b); provided, further, that the text of the notice of
purchase right shall be prepared by the Company.

 

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

 

34

 

Simultaneously
with delivering the written notice pursuant to this Section 5.1(b), the
Company shall publish a notice containing all information specified in such
written notice in a newspaper of general circulation in New York, New York or
publish such information on the Company’s website, or through such other public
medium that reasonably could be expected to inform Holders of such information.

 

(c) A Holder may
exercise its rights specified in clause (a) of this Section 5.1 upon
delivery of a written notice (which shall be in substantially the form included
on the reverse side of the Securities entitled “Option of Holder to Elect
Purchase” 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 the Paying Agent at
any time on or before the 20th Business Day after the date of the Company’s
notice of the Fundamental Change (subject to extension to comply with
applicable law).

 

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

 

Delivery
of a Security (together with all necessary endorsements) to the Paying Agent by
book-entry transfer or physical delivery prior to, on or after the Fundamental
Change Purchase Date at the offices of the Paying Agent is a condition to
receipt by the Holder of the Fundamental Change Purchase Price therefor;
provided, however, that such Fundamental Change Purchase Price shall be so paid
pursuant to this Section 5.1 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Fundamental Change Purchase Notice, as determined by the Company.

 

The
Company shall purchase from the Holder thereof, pursuant to this Section 5.1,
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 Section 5.1 through Section 5.6
also apply to the purchase of such portion of such Security.

 

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.

 

35

 

Section 5.2. Conditions
to the Company’s Election to Pay the Fundamental Change Purchase Price in
Applicable Stock.

 

The
Company may, at its option pay the Fundamental Change Purchase Price payable to
Holders pursuant to Section 5.1 in shares of Applicable Stock, if the
following conditions are satisfied:

 

(1) The Company
shall have provided written notice of the Fundamental Change to the Trustee
(and the Paying Agent if the Trustee is not then acting as Paying Agent) and to
each Holder pursuant to Section 5.1(b).

 

(2) The shares of
Applicable Stock to be so issued:

 

(a) shall be, or
shall have been approved for, listing on a national securities exchange or
quoted on the Nasdaq National Market, prior to the Fundamental Change Purchase
Date;

 

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

 

(c) shall not
require qualification or registration with, or approval of, any governmental
authority under any state law before such shares may be validly issued or
delivered or if such qualification or registration is required or such approval
must be obtained, such qualification or registration shall be completed, or
such approval shall be obtained, prior to the Fundamental Change Purchase Date;
and

 

(d) shall, upon
issuance, be duly and validly issued and fully paid and nonassessable, free and
clear of any preemptive or similar rights.

 

Section 5.3. Effect
of Fundamental Change Purchase Notice.

 

(a) Upon receipt by
the Paying Agent of the Fundamental Change Purchase Notice specified in Section 5.1(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 in the following paragraph) 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, subject to
receipt of cash or if the conditions for payment in Applicable Stock set forth
in Section 5 are fulfilled, Common Stock by the Paying Agent, promptly
following the later of (a) the Fundamental Change Purchase Date with
respect to such Security (provided the conditions in Section 5.1(c) have
been satisfied) and (b) the time of book-entry transfer or delivery of
such Security to the Paying Agent by the Holder thereof in the manner required
by Section 5.1(c). Securities in respect of which a Fundamental Change
Purchase Notice has been given by the Holder thereof may not be converted
pursuant to Article XII on or after the date of the delivery of such

 

36

 

Fundamental Change Purchase Notice unless such
Fundamental Change Purchase Notice has first been validly withdrawn as
specified in the following paragraph.

 

(b) A Fundamental
Change Purchase Notice may be withdrawn by means of a written notice (which may
be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s customary procedures) of withdrawal delivered by the
Holder to the Paying Agent at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change Purchase Date,
specifying (a) 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, (b) if certificated Securities have been issued, the
certificate numbers of the withdrawn Securities, or if not certificated, such
notice must comply with Applicable Procedures, and (c) the Principal
Amount, if any, which remains subject to the Fundamental Change Purchase
Notice. If a Fundamental Change Purchase Notice has been properly withdrawn pursuant
to this Section 5.3(b) prior to the Fundamental Change Purchase Date,
the Company shall not be obligated to purchase those Securities so identified
in such notice of withdrawal.

 

Section 5.4. Deposit
of Fundamental Change Purchase Price.

 

Prior
to 10:00 a.m., New York City time, on the applicable Fundamental Change
Purchase Date, the Company shall deposit 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 of cash (in immediately available funds if deposited on such Business
Day) or, if the conditions for payment in Applicable Stock set forth in this Section 5
are fulfilled, Common Stock with a value sufficient to pay the aggregate
Fundamental Change Purchase Price of all the Securities or portions thereof
which are to be purchased as of such Fundamental Change Purchase Date.

 

If the
Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m.,
New York City time, on the applicable Fundamental Change Purchase Date, cash or
Applicable Stock sufficient to pay the Fundamental Change Purchase Price of any
Securities for which a Fundamental Change Purchase Notice has been tendered and
not withdrawn pursuant to Section 5.3(b), then, on such Fundamental Change
Purchase Date, such Securities shall cease to be outstanding and interest and
Additional Interest, if any, on such Securities shall cease to accrue, whether
or not such Securities are delivered to the Paying Agent, and the rights of the
Holders in respect thereof shall terminate (other than the right to receive the
Fundamental Change Purchase Price upon delivery of such Securities).

 

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 by publishing a notice containing such
information in a newspaper of general circulation in New York, New York or by
publishing such information on the Company’s website, or through such other
public medium that reasonably could be expected to inform Holders of such
information.

 

37

 

Section 5.5. Securities
Purchased in Part.

 

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

 

Section 5.6. Covenant
to Comply With Securities Laws Upon Purchase of Securities.

 

When
complying with the provisions of Section 5.1 hereof (provided that such
offer or purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under
the Exchange Act at the time of such offer or purchase), and subject to any
exemptions available under applicable law, the Company shall: (a) if
applicable, comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act; (b) file the related Schedule TO (or
any successor schedule, form or report) if required under the Exchange Act; and
(c) otherwise comply with all United States federal and state securities
laws so as to permit the rights and obligations under this Article V to be
exercised in the time and in the manner specified therein.

 

Section 5.7. Repayment
to the Company.

 

To the
extent that the aggregate amount of cash or Applicable Stock (valued in
accordance with the provisions of Section 5.1(a) hereof) deposited by
the Company pursuant to Section 5.4 exceeds the aggregate Fundamental
Change Purchase Price of the Securities or portions thereof which the Company
is obligated to purchase as of the Fundamental Change Purchase Date then,
promptly after the Fundamental Change Purchase Date, the Paying Agent shall
return any such excess to the Company together with interest, if any, thereon.

 

ARTICLE VI

 

COVENANTS

 

Section 6.1. Payment
of Securities.

 

The
Company shall pay interest on the Securities as provided in the Securities. The
Company shall promptly make all payments in respect of the Securities on the
dates and in the manner provided in the Securities or pursuant to this
Indenture. Principal amount, Redemption Price, Purchase Price and Fundamental
Change Purchase Price and accrued and unpaid interest and Additional Interest,
if any, shall be considered paid on the applicable date due if by 10:00 a.m.,
New York City time, on such date the Paying Agent holds, in accordance with
this Indenture, cash or securities, if permitted hereunder, sufficient to pay
all such amounts then due. The Company shall, to the fullest extent permitted
by law, pay interest on overdue principal and overdue installments of interest
and Additional Interest, if any, at the rate borne by the Securities

 

38

 

per annum. All references
in this Indenture or the Securities to interest shall be deemed to include
Additional Interest, if any, payable pursuant to the Registration Rights
Agreement.

 

Payment
of the principal of and interest and Additional Interest, if any, on the
Securities shall be 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
or in Applicable Stock, as the case may be.

 

Subject
to Section 3.1 and Section 5.1, the Company shall pay interest and
Additional Interest, if any, on the Securities to the Person in whose name the
Securities are registered at the close of business on the Regular Record Date
next preceding the corresponding Interest Payment Date. Any such interest and
Additional Interest, if any, not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
be paid (a) to the Person in whose name the Securities are registered at
the close of business on a Special Record Date for the payment of such
defaulted interest and Additional Interest, if any, to be fixed by the Trustee,
notice whereof shall be given to the Holders not less than 10 calendar days
prior to such Special Record Date or (b) at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on which
the Securities may be listed, and upon such notice as may be required by such
exchange.

 

The
Holder must surrender the Securities to the Paying Agent to collect payment of
principal. Payment of interest and Additional Interest, if any, on Certificated
Securities in the aggregate principal amount of $5,000,000 or less shall be
made by check mailed to the address of the Person entitled thereto as such
address appears in the Register, and payment of interest and Additional
Interest, if any, on Certificated Securities in aggregate principal amount in
excess of $5,000,000 shall be made by wire transfer in immediately available
funds at the election of such Holder. Notwithstanding the foregoing, so long as
the Securities are registered in the name of a Depositary or its nominee, all
payments with respect to the Securities shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

 

Section 6.2. SEC
and Other Reports to the Trustee.

 

(a) The Company
shall ensure delivery to the Trustee within 15 calendar days after it files
such annual and quarterly reports, information, documents and other reports
with the SEC, copies of its annual report and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
in accordance with TIA Section 314(a). In the event the Company is at any
time no longer subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, it shall continue to provide the Trustee with reports
containing substantially the same information as would have been required to be
filed with the SEC had the Company continued to have been subject to such
reporting requirements. In such event, such reports shall be provided at the
times the Company would have been required to provide reports had it continued
to have been subject to such reporting requirements. The Company also shall
comply with the other provisions of TIA Section 314(a). 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 conclusively on

 

39

 

Officers’ Certificates). The
Trustee shall have no duty or responsibility to review such reports,
information or documents.

 

(b) The Company
intends to file the reports referred to in paragraph (a) above in this Section 6.2
hereof with the SEC in electronic form pursuant to Regulation S-T of the SEC
using the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”)
system. Within 15 days after the Company files with the SEC copies of its
annual reports and other information, documents and reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which it is required to file with the SEC pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, the Company shall file
the same with the Trustee. The Company also shall comply with the other
provisions of TIA 314(a). The Company may deliver such reports to the Trustee
by electronic means in replace of mailing such reports, provided, however, the
Trustee agrees to such other means in writing. The Trustee shall have no duty
to search for or obtain any electronic or other filings that the Company makes
with the SEC, regardless of whether such filings are periodic, supplemental or
otherwise. Delivery of the reports, information and documents to the Trustee
pursuant to this Section 6.2(b) shall be solely for the purposes of
compliance with this Section 6.2(b) and with TIA Section 314(a).
The Trustee’s receipt of such reports, information and documents shall not
constitute notice to it of the contents thereof or of any matter determinable
from the content thereof, including the Company’s compliance with any of its
covenants hereunder, as to which the Trustee is entitled to rely upon Officers’
Certificates.

 

Section 6.3. Compliance
Certificate.

 

The
Company shall deliver to the Trustee within 120 calendar days after the end of
each fiscal year of the Company an Officers’ Certificate, stating whether or
not to the knowledge of the signers thereof, the Company is in compliance with
all conditions and covenants under this Indenture.

 

Section 6.4. Further
Instruments and Acts.

 

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

 

Section 6.5. Maintenance
of Office or Agency of the Trustee, Registrar, Paying Agent and Conversion
Agent.

 

The
Company shall maintain in the Borough of Manhattan, New York, New York, an
office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, exchange, redemption,
repurchase or conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The office of
the Trustee located in New York City at Corporate Trust Office, shall initially
be such office or agency for all of the aforesaid purposes. The Company shall
give prompt written notice to the Trustee of the location, and of any change in
the location, of any such office or agency (other than a change in the location
of the office of the Trustee). If at any time the

 

40

 

Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section 14.2.

 

The
Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York, New York, for such purposes.

 

Section 6.6. Delivery
of Information Required Under Rule 144A.

 

Upon
the request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of Common Stock issued upon conversion thereof, the Company
shall promptly furnish or cause to be furnished the information required
pursuant to Rule 144A(d)(4) under the Securities Act to such Holder
or any beneficial owner of Securities or holder or beneficial owner of Common
Stock, or to a prospective purchaser of any such security designated by any
such holder, as the case may be, to the extent required to permit compliance by
such Holder or holder with Rule 144A under the Securities Act in
connection with the resale of any such security. Whether a person is a
beneficial owner shall be determined by the Company to the Company’s reasonable
satisfaction.

 

Section 6.7. Waiver
of Stay, Extension or Usury Laws.

 

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

 

Section 6.8. Statement
by Officers as to Default.

 

The
Company shall deliver to the Trustee, as soon as practicable and in any event
within five Business Days after the Company becomes aware of the occurrence of
any Default or Event of Default, an Officers’ Certificate setting forth the
details of such Default or Event of Default and the action which the Company
proposes to take with respect thereto.

 

41

 

ARTICLE VII

 

SUCCESSOR CORPORATION

 

Section 7.1. When
Company May Merge or Transfer Assets.

 

The
Company shall not consolidate with or merge with or into any other person or
convey, transfer, sell, lease or otherwise dispose of all or substantially all
of its properties and assets to any person, unless:

 

(a) either (i) the
Company shall be the continuing corporation or (ii) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer, sale, lease or
other disposition all or substantially all of the properties and assets of the
Company substantially as an entirety (1) shall be organized and validly
existing under the laws of the United States or any State thereof or the
District of Columbia and (2) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all of the obligations of the Company under the
Securities, this Indenture and the Registration Rights Agreement and, to the
extent applicable, otherwise comply with the provisions of Section 12.4;

 

(b) immediately
after giving effect to such transaction, no Default shall have occurred and be
continuing; and

 

(c) the Company
shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer,
sale, lease or other disposition and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply with
this Article VII and that all conditions precedent herein provided for
relating to such transaction have been satisfied.

 

For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries, which, if
such assets were owned by the Company, together with the assets of all of the
other Subsidiaries of the Company, would constitute all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company unless
such transfer is to the Company or another Subsidiary. The successor Person
formed by such consolidation or into which the Company is merged or the
successor Person to which such conveyance, transfer, sale, lease or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor had been named as the Company herein; and thereafter,
except in the case of a conveyance, transfer, sale, lease or other disposition
and any obligations the Company may have under a supplemental indenture, the
Company shall be discharged from all obligations and covenants under this
Indenture and the Securities. Subject to Section 11.6, the Company, the
Trustee and the successor Person shall enter into a supplemental indenture to
evidence the succession and substitution of such successor Person and such
discharge and release of the Company.

 

42

 

ARTICLE VIII

 

DEFAULTS AND REMEDIES

 

Section 8.1. Events
of Default.

 

So
long as any Securities are outstanding, each of the following shall be an “Event
of Default”:

 

(a) the failure by
the Company to pay the principal amount of any Security when the same becomes
due and payable whether at maturity or upon acceleration;

 

(b) the failure by
the Company to pay any accrued and unpaid interest on any Security and
Additional Interest, if any, in each case, when due and payable, and such
default shall continue for a period of 30 days;

 

(c) the failure by
the Company to convert any portion of any Security following the exercise by
the Holder of the right to convert such Security into Common Stock pursuant to
and in accordance with Article XII;

 

(d) the failure by
the Company to redeem any Security, or any portion thereof, called for
redemption by the Company pursuant to and in accordance with Article III
and;

 

(e) the failure by
the Company to purchase any Security, or any portion thereof, upon the exercise
by the Holder of such Holder’s right to require the Company to purchase such
Securities pursuant to and in accordance with Article V;

 

(f) the failure by
the Company to provide notice in the event of a Fundamental Change in
accordance with Section 5.1(b);

 

(g) the failure by
the Company to perform or observe any other term, covenant or agreement
contained in the Securities or the Indenture for a period of 60 calendar days
after written notice of such failure has been given, by certified mail, (1) to
the Company by the Trustee or (2) to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding;

 

(h) there shall have
occurred a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company or any of its Subsidiaries for money
borrowed whether such Indebtedness now exists, or is created after the date of
this Indenture, which default (i) involves the failure to pay principal of
or any premium or interest on such Indebtedness in an amount in excess of $7.5
million when such Indebtedness becomes due and payable at the stated maturity
thereof, and such default shall continue after any applicable grace period or (ii) results
in the acceleration of such Indebtedness prior to the stated maturity thereof,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness so unpaid at its stated
maturity or the stated maturity of which has been so accelerated, aggregates
$10,000,000 or more;

 

43

 

(i) there shall be a failure by the Company or
any of its Subsidiaries to pay final judgments not covered by insurance
aggregating in excess of $7,500,000, which judgments are not paid, discharged
or stayed for a period of 60 calendar days;

 

(j) the Company or
any Designated Subsidiary, or any group of two or more Subsidiaries that, taken
as a whole, would constitute a Designated Subsidiary, pursuant to or under or
within the meaning of any Bankruptcy Law:

 

(i)        commences a voluntary case or proceeding;

 

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

 

(iii)      consents
to the appointment of a Custodian of it or for any substantial part of its
property;

 

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

 

(v)      files a petition in bankruptcy or answer
or consent seeking reorganization or relief; or

 

(vi)     consents to the filing of such petition
or the appointment of or taking possession by a Custodian; or

 

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

 

(i)        is for relief against the Company or any
Designated Subsidiary in an involuntary case or proceeding, or adjudicates the
Company or any Designated Subsidiary insolvent or bankrupt;

 

(ii)       appoints a Custodian of the Company or
any Designated Subsidiary or for any substantial part of the property of
either; or

 

(iii)      orders
the winding up or liquidation of the Company or any Designated Subsidiary, and
the order of decree remains unstayed and in effect for 60 days.

 

Section 8.2. Acceleration.

 

If an
Event of Default (other than an Event of Default specified in Section 8.1(j) or
Section 8.1(k) with respect to the Company) occurs and is continuing
(including an Event of Default specified in Section 8.1(j) or Section 8.1(k) with
respect to one or more Designated Subsidiaries), the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding by notice to the Company and the

 

44

 

Trustee, may declare the
principal amount plus accrued and unpaid interest and Additional Interest, if
any, on all the Securities to be immediately due and payable.

 

Upon
such a declaration, such accelerated amount shall be due and payable
immediately.

 

If an
Event of Default specified in Section 8.1(j) or Section 8.1(k) occurs
with respect to the Company and is continuing, the principal amount plus
accrued and unpaid interest and Additional Interest, if any, on all the
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders.

 

The
Holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding, by notice to the Trustee (and without
notice to any other Holder) may rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and if all existing Events of Default have been cured or
waived except nonpayment of the Principal Amount plus accrued and unpaid
interest and Additional Interest, if any, that have become due solely as a
result of acceleration. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.

 

Section 8.3. Other
Remedies.

 

If an
Event of Default occurs and is continuing, the Trustee may, but shall not be
obligated to, pursue any available remedy to collect the payment of the
Principal Amount plus accrued and unpaid interest and Additional Interest, if
any, on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.

 

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

 

Section 8.4. Waiver
of Existing Defaults.

 

Subject
to Section 8.7 and Section 11.2, the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Holder), may waive certain
provisions of this Indenture relating to the Securities, except for: (a) an
Event of Default described in Section 8.1(a), Section 8.1(b), or Section 8.1(c);
or (b) a Default in respect of any provision of this Indenture or the
Securities, which, under Section 11.2, cannot be amended or modified
without the consent of each Holder affected thereby.

 

When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right. This Section 8.4
shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

Section 8.5. Control
by Majority.

 

The
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee. However,

 

45

 

the Trustee may refuse to
follow any direction that conflicts with law or this Indenture or that the
Trustee determines in good faith is prejudicial to the rights of other Holders
or would involve the Trustee in personal liability or expense unless the
Trustee is provided security or indemnity satisfactory to it. This Section 8.5
shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

Section 8.6. Limitation
on Suits.

 

A
Holder may not pursue any remedy with respect to this Indenture or the
Securities unless:

 

(a) the Holder gives
to the Trustee written notice stating that an Event of Default is continuing;

 

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

 

(c) such Holder or
Holders provide to the Trustee security or indemnity satisfactory to the
Trustee against any loss, liability or expense;

 

(d) the Trustee does
not comply with the request within 60 days after receipt of such notice,
request and offer of security or indemnity; and

 

(e) the Holders of a
majority in aggregate principal amount of the Securities at the time
outstanding do not give the Trustee a direction inconsistent with the request
during such 60-day period.

 

A
Holder may not use this Indenture to prejudice the rights of any other Holder
or to obtain a preference or priority over any other Holder.

 

Section 8.7. Rights
of Holders to Receive Payment or to Convert.

 

Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount, Redemption Price, Purchase Price, Fundamental
Change Purchase Price or interest and Additional Interest, if any, in respect
of the Securities held by such Holder, on or after the respective due dates
expressed in the Securities and in this Indenture, and to convert such
Securities in accordance with Article XII, or 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
adversely without the consent of such Holder.

 

Section 8.8. Collection
Suit by Trustee.

 

If an
Event of Default described in Section 8.1(a), Section 8.1(b), Section 8.1(d) or
Section 8.1(e) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or another obligor on the Securities for the whole amount owing with respect to
the Securities and the amounts provided for in Section 9.7.

 

46

 

Section 8.9. Trustee
May File Proofs of Claim.

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest and Additional
Interest, if any, in respect of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of any such
amount) shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

(a) to file and
prove a claim for the whole amount of the Principal Amount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, or interest and Additional
Interest, if any, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel or any other amounts due the Trustee
under Section 9.7) and of the Holders allowed in such judicial proceeding,
and

 

(b) to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 9.7.

 

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

 

Section 8.10. Priorities.

 

After
an Event of Default any money or other property distributable in respect of the
Company’s obligations under this Indenture shall be paid in the following
order:

 

FIRST: to the Trustee
(including any predecessor trustee) for amounts due under Section 9.7;

 

SECOND: to Holders for
amounts due and unpaid on the Securities for the Principal Amount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest and
Additional Interest, if any, as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Securities; and

 

THIRD: the balance, if any,
to the Company.

 

47

 

The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 8.10. At least 10 calendar days prior to such
record date, the Trustee shall mail to each Holder and the Company a notice
that states the record date, the payment date and the amount to be paid.

 

Section 8.11. Undertaking
for Costs.

 

In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant (other
than the Trustee) in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 8.11 does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 8.7 or a suit by
Holders of more than 10% in aggregate principal amount of the Securities at the
time outstanding. This Section 8.11 shall be in lieu of Section 315(e) of
the TIA and such Section 315(e) is hereby expressly excluded from
this Indenture, as permitted by the TIA.

 

ARTICLE IX

 

TRUSTEE

 

Section 9.1. Duties
of Trustee.

 

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

 

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

 

	
   

  	
  (i)

  	
  the Trustee need
  perform only those duties that are specifically set forth in this Indenture
  and no implied covenants or obligations shall be read into this Indenture
  against the Trustee; and 

  

 

	
   

  	
  (ii)

  	
  in the absence of bad
  faith on its part, the Trustee may conclusively rely, as to the truth of the
  statements and the correctness of the opinions expressed therein, upon
  certificates or opinions furnished to the Trustee and conforming to the
  requirements of this Indenture, but in the case of any such certificates or
  opinions which by any provision hereof are specifically required to be
  furnished to the Trustee, the Trustee shall be under a duty to examine the
  certificates and opinions to determine whether or not they conform to the
  requirements of this Indenture, but need not confirm or investigate the
  accuracy of mathematical calculations or other facts stated therein. 

  

 

48

 

This Section 9.1(b) shall
be in lieu of Section 315(a) of the TIA and such Section 315(a) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

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

 

(i)               this clause (c) does not limit the
effect of clause (b) or (d) of this Section 9.1;

 

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

 

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

 

Subparagraphs (c)(i), (ii) and (iii) shall
be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA,
respectively, and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

(d) The Trustee may
refuse to perform any duty or exercise any right or power or expend or risk its
own funds or otherwise incur any financial liability unless it receives
security or indemnity reasonably satisfactory to it against any loss, liability
or expense.

 

(e) Money held by
the Trustee in trust hereunder need not be segregated from other funds except
to the extent required by law. The Trustee (acting in any capacity hereunder)
shall be under no liability for interest on any money received by it hereunder
unless otherwise agreed in writing with the Company.

 

(f) The Trustee
shall comply with the reporting requirements set forth in Section 313 of
the TIA.

 

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

 

Section 9.2. Rights
of Trustee.

 

Subject
to its duties and responsibilities under the TIA and this Indenture,

 

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

 

49

 

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

 

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

 

(d) the Trustee
shall not be liable for any action taken, suffered, or omitted to be taken by
it in good faith which it reasonably believes to be authorized or within its
rights or powers conferred under this Indenture;

 

(e) the Trustee may
consult with counsel selected by it and any advice or Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in reliance on
such advice or Opinion of 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, order or direction of any of the Holders,
pursuant to the provisions of this Indenture, unless such Holders shall have
provided to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;

 

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

 

(h) 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;

 

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

 

(j) the rights,
privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and

 

50

 

shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other person employed to
act hereunder;

 

(k) the Trustee may
request that the Company deliver an Officers’ Certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including
any person specified as so authorized in any such certificate previously
delivered and not superseded;

 

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

 

(m) The Trustee
shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Indenture arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other
military disturbances; sabotage; epidemics; riots; interruptions; loss or
malfunctions of utilities, computer (hardware or software) or communication
services; accidents; labor disputes; acts of civil or military authority and
governmental action.

 

Section 9.3. Individual
Rights of Trustee.

 

The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee; provided that the Trustee
must comply with Section 9.10 and Section 9.11. Any Paying Agent,
Registrar, Conversion Agent or co-registrar may do the same with like rights.

 

Section 9.4. Trustee’s
Disclaimer.

 

The
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company’s use
or application of the proceeds from the Securities, it shall not be responsible
for any statement in any registration statement for the Securities under the
Securities Act or in any offering document for the Securities, this Indenture
or the Securities (other than its certificate of authentication), or the
determination as to which beneficial owners are entitled to receive any notices
hereunder.

 

Section 9.5. Notice
of Defaults.

 

If a
Default occurs and if it is known to a Responsible Officer of the Trustee, the
Trustee shall give to each Holder notice of the Default within 90 calendar days
after it occurs or, if later, within 15 calendar days after it is known to the
Trustee, unless such Default shall have been cured or waived before the giving
of such notice. Notwithstanding the preceding sentence, except in the case of a
Default described in Section 8.1(a), Section 8.1(b), Section 8.1(d) or
Section 8.1(e), the Trustee may withhold the notice if and so long as the
Responsible Officer of the Trustee or a committee of its Responsible Officers
or a committee of its executive officers in

 

51

 

good faith determines
that withholding the notice is in the interest of the Holders. The preceding
sentence shall be in lieu of the proviso to Section 315(b) of the TIA
and such proviso is hereby expressly excluded from this Indenture, as permitted
by the TIA.

 

Section 9.6. Reports
by Trustee to Holders.

 

Within
60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 15 that complies with TIA Section 313(a), if
required by such Section 313(a). The Trustee also shall comply with TIA Section 313(b).

 

A copy
of each report at the time of its mailing to Holders shall be filed with the
SEC and each securities exchange, if any, on which the Securities are listed.
The Company agrees to notify the Trustee promptly whenever the Securities
become listed on any securities exchange and of any delisting thereof.

 

Section 9.7. Compensation
and Indemnity.

 

The
Company agrees to:

 

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

 

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

 

(c) fully indemnify
the Trustee or any predecessor Trustee and their agents for, and to hold them
harmless against, any and all loss, damage, claim, liability, cost or expense
(including attorney’s fees and expenses, and taxes (other than taxes based
upon, measured by or determined by the income of the Trustee)) incurred without
the Trustee’s negligent action, negligent failure to act or willful misconduct,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, or in connection with enforcing the provisions of this Section 9.7.

 

With
regard to its indemnification rights under Section 9.7(c) where the
Company has assumed the defense in any action or proceeding, the Trustee shall
have the right to employ separate counsel in any such action or proceeding and
participate in the investigation and defense thereof, and the Company shall pay
the reasonable fees and expenses of such separate counsel; provided, however,
that the Trustee may only employ separate counsel at the expense of the Company
if in the reasonable determination of the Trustee (i) a conflict of
interest exists by reason of common representation or (ii) there are legal
defenses available to the Trustee that are

 

52

 

different from or are in
addition to those available to the Company or (iii) if all parties
commonly represented do not agree as to the action (or inaction) of counsel.

 

To
secure the Company’s payment obligations in this Section 9.7, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay the Principal
Amount, Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest and Additional Interest, if any, as the case may be, on particular
Securities.

 

The
Company’s payment obligations pursuant to this Section 9.7 and the lien
referred to in this Section 9.7 shall survive the discharge of this
Indenture and the resignation or removal of the Trustee. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 8.1(j) or
Section 8.1(k), the expenses including the reasonable charges and expenses
of its counsel, are intended to constitute expenses of administration under any
Bankruptcy Law.

 

Section 9.8. Replacement
of Trustee.

 

The
Trustee may resign by so notifying the Company; provided, however, that no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 9.8. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may remove
the Trustee by so notifying the Trustee and the Company. The Company shall
remove the Trustee if:

 

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

 

(b) the Trustee is
adjudged bankrupt or insolvent;

 

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

 

(d) the Trustee
otherwise becomes incapable of acting.

 

If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint, by resolution of its Board
of Directors, a successor Trustee.

 

A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company satisfactory in form and substance to the retiring
Trustee and the Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, upon payment of all the retiring Trustee’s fees and expenses then due
and payable and subject to the lien provided for in Section 9.7.

 

If a
successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in aggregate principal amount of the Securities at the time
outstanding may petition at the expense of the Company any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.

 

53

 

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

 

Section 9.9. Successor
Trustee by Merger.

 

If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

 

Section 9.10. Eligibility;
Disqualification.

 

The
Trustee and any successor Trustee shall at all times satisfy the requirements
of TIA Sections 310(a)(1) and 310(b). The Trustee (or its parent holding
company) shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. Nothing
contained herein shall prevent the Trustee from filing with the Commission the
application referred to in the penultimate paragraph of TIA Section 310(b).
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.10, it shall resign immediately in the manner
and with the effect specified above in this Article.

 

Section 9.11. Preferential
Collection of Claims Against Company.

 

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

 

ARTICLE X

 

DISCHARGE OF INDENTURE

 

Section 10.1. Discharge
of Liability on Securities.

 

When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced or repaid pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable (whether at
the Stated Maturity or upon acceleration, or on any Redemption Date, Purchase
Date or Fundamental Change Purchase Date, or upon conversion) and the Company
deposits with the Paying Agent or Conversion Agent cash or Applicable Stock
sufficient to pay all amounts due and owing on all outstanding Securities
(other than Securities replaced pursuant to Section 2.7), and if in either
case the Company pays all other sums payable hereunder by the Company, then
this Indenture shall, subject to Section 9.7, cease to be of further
effect subject to any extension required by Section 12. to effect
settlement upon conversion of the Notes. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers’
Certificate and Opinion of Counsel and at the cost and expense of the Company.

 

Section 10.2. Repayment
to the Company.

 

The
Trustee and the Paying Agent shall return to the Company upon written request
any cash or securities held by them for the payment of any amount with respect
to the Securities that

 

54

 

remains unclaimed for two
years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the cash or securities must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person and the Trustee and the Paying Agent shall have no
further liability to the Holders with respect to such cash or securities for
that period commencing after the return thereof.

 

ARTICLE XI

 

AMENDMENTS

 

Section 11.1. Without
Consent of Holders.

 

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

 

(a) add to the
covenants of the Company for the benefit of the Holders of Securities;

 

(b) surrender any
right or power herein conferred upon the Company;

 

(c) provide for
conversion rights of Holders of Securities if any reclassification or change of
the Common Stock or any consolidation, merger or sale of all or substantially all
of the Company’s assets occurs;

 

(d) provide for the
assumption of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition pursuant to Article VII;

 

(e) increase the
Conversion Rate; provided, however, that such increase in the Conversion Rate
shall not adversely affect the interests of the Holders of Securities (after
taking into account tax and other consequences of such increase);

 

(f) comply with the
requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(g) make any changes
or modifications necessary in connection with the registration of the
Securities under the Securities Act as contemplated in the Registration Rights
Agreement; provided, however, that such action pursuant to this clause (g) does
not, in the good faith opinion of the Board of Directors (as evidenced by a
Board Resolution), adversely affect the interests of the Holders of Securities
in any material respect;

 

(h) cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein or which is otherwise defective, or to make any
other provisions with respect to matters or questions arising under this
Indenture which the Company may deem necessary or desirable and which shall not
be inconsistent with the provisions of this Indenture; provided, however, that
such action pursuant to this clause (h)

 

55

 

does not, in the good faith opinion of the Board of
Directors (as evidenced by a Board Resolution), adversely affect the interests
of the Holders of Securities in any material respect;

 

(i) to evidence the
succession of another Person to the Company or any other obligor upon the
Securities, and the assumption by any such successor of the covenants of the
Company or such obligor herein and in the Securities, in each case in
compliance with the provisions of this Indenture;

 

(j) to evidence and
provide the acceptance of the appointment of a successor trustee hereunder; or

 

(k) add or modify
any other provisions herein with respect to matters or questions arising
hereunder which the Company and the Trustee may deem necessary or desirable and
which shall not adversely affect the interests of the Holders of Securities.

 

Section 11.2. With
Consent of Holders.

 

Except
as provided below in this Section 11.2, this Indenture or the Securities
may be amended, modified or supplemented, and noncompliance in any particular
instance with any provision of this Indenture or the Securities may be waived,
in each case with the written consent or affirmative vote of the Holders of at
least a majority of the principal amount of the Securities at the time
outstanding.

 

This
Indenture and the Securities may not be modified or amended without the written
consent or the affirmative vote of each Holder of Securities affected thereby,
to:

 

(a) change the
maturity of the principal amount of, or the payment date of any installment of interest
or Additional Interest, if any, on, any Security;

 

(b) reduce the
Principal Amount of, or interest or Additional Interest, if any, on, or the
Redemption Price, Purchase Price or Fundamental Change Purchase Price of, any
Security;

 

(c) change the currency
of payment of Principal Amount of, or interest or Additional Interest, if any,
on, or the Redemption Price, Purchase Price or Fundamental Change Purchase
Price of, any Security from U.S. Dollars;

 

(d) impair or
adversely affect the rate of accrual of interest or Additional Interest, if
any, on any Security, or the manner of calculation thereof;

 

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

 

(f) modify the Company’s
obligation to maintain a Paying Agent in the Borough of Manhattan, New York
City;

 

(g) impair or
adversely affect the conversion rights of the Holder of the Securities as
provided in Article XII;

 

56

 

(h) impair or
adversely affect the purchase rights of the Holders of the Securities as
provided in Article V;

 

(i) modify the
optional redemption provisions of Article III in a manner adverse to the
Holders of the Securities;

 

(j) reduce the
percentage of the Principal Amount of the outstanding Securities the written
consent or affirmative vote of whose Holders is required for any amendment,
modification or supplement to this Indenture;

 

(k) reduce the
percentage of the Principal Amount of the outstanding Securities the written
consent or affirmative vote of whose Holders is required to rescind an
acceleration and its consequences or for any waiver of any past Default
provided for in this Indenture; or

 

(l) waive any matter
set forth in Section 8.4(a), Section 8.4(b), or Section 8.4(c).

 

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

 

After
an amendment under this Section 11.2 becomes effective, the Company shall
mail to each Holder a notice briefly describing the amendment.

 

Nothing
contained in this Section 11.2 shall impair the ability of the Company and
the Trustee to amend this Indenture or the Securities without the consent of
any Holder to provide for the assumption of the Company’s obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer, sale, lease or other disposition pursuant to Article VII.

 

Section 11.3. Compliance
with Trust Indenture Act.

 

Every
supplemental indenture executed pursuant to this Article shall comply with
the TIA.

 

Section 11.4. Revocation
and Effect of Consents, Waivers and Actions.

 

Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same obligation as the consenting Holder’s Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action
as to such Holder’s Security or portion of the Security if the Trustee receives
the notice of revocation before the date the amendment, waiver or action
becomes effective. After an amendment, waiver or action becomes effective, it
shall bind every Holder.

 

57

 

Section 11.5. Notation
on or Exchange of Securities.

 

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

 

Section 11.6. Trustee
to Sign Supplemental Indentures.

 

The
Trustee shall sign any supplemental indenture authorized pursuant to this Article XI
if the amendment contained therein does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but need not, sign such supplemental indenture. In signing such supplemental
indenture the Trustee shall receive, and (subject to the provisions of Section 9.1)
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.

 

Section 11.7. 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 XII

 

CONVERSION

 

Section 12.1. Conversion Right.

 

(a) Subject to and
upon compliance with the provisions of this Article XII, a Holder of a
Security shall have the right, at such Holder’s option, to convert all or any
portion (if the portion to be converted is $1,000 or an integral multiple of
$1,000) of the Principal Amount of such Security into a number of shares of
Common Stock equal to the product of (x) the Conversion Rate in effect on
the date of conversion times (y) the quotient of the Principal Amount at
Issuance of the Security or portion thereof surrendered for conversion divided
by 1,000:

 

	
   

  	
  (i)

  	
  At any time prior to
  Stated Maturity unless such Security has been previously redeemed or
  repurchased by the Company; or 

  

 

	
   

  	
  (ii)

  	
  as provided in clause (b) of
  this Section 12.1. 

  

 

With respect to any
conversion of a Security during a Registration Default Period following
satisfaction of any of the conditions to conversion described in this Indenture
(and during the prescribed time periods in respect thereof), a Holder shall be
entitled to, 103% of the number

 

58

 

of shares of Common Stock
that the Holder would have otherwise been entitled to upon conversion.

 

(b) (i)    In
the event that:

 

(A)           the Company distributes to all holders of
its Common Stock rights or warrants entitling them (for a period expiring
within 60 days of the Record Date for such distribution) to subscribe for or
purchase Common Stock at a price per share of Common Stock less than the
Closing Sale Price of the Common Stock on the Business Day immediately
preceding the announcement of such distribution;

 

(B)             the Company distributes to all holders of
its Common Stock cash or other assets, debt securities or rights or warrants to
purchase its securities, including the declaration of any cash dividends,
payable quarterly or otherwise, where the Fair Market Value (as determined by
the Board of Directors) of such distribution per share of Common Stock exceeds
10% of the Closing Sale Price of the Common Stock on the Business Day
immediately preceding the date of declaration of such distribution; or

 

(C)             a Fundamental Change occurs,

 

then, in each case, the
Securities may be surrendered for conversion at any time on and after the date
that the Company gives notice to the Holders of such right, which shall be, in
the case of (A) or (B), not less than 15 Business Days prior to the
Ex-Dividend Time for such distribution, or, in the case of (C), within 15
Business Days after the occurrence of the Fundamental Change, until 5:00 p.m.,
New York City time, on the earlier of the Business Day immediately preceding
the Ex-Dividend Time and the date the Company announces that such distribution
shall not take place in the case of (A) or (B), or within 20 Business Days
of the Company’s delivery of the notice of the Fundamental Change in the case
of (C); provided, however, that in the case of (A) or (B), a Holder of
Securities may not surrender Securities for conversion if the Holder shall
otherwise participate in such distribution without conversion.

 

(ii)          In addition, in the event that the
Company consolidates with or merges into another corporation, or is a party to
a binding share exchange pursuant to which the Common Stock would be converted
into cash, securities or other property as set forth in Section 12.4, then
the Securities may be surrendered for conversion at any time from and after the
date which is 15 calendar days prior to the date announced by the Company as
the anticipated effective

 

59

 

time of such transaction
until 15 calendar days after the actual date of such transaction.

 

(c) Notwithstanding
the foregoing, a Security in respect of which a Holder has delivered a
Fundamental Change Purchase Notice, as the case may be, exercising such Holder’s
right to require the Company to repurchase such Security may be converted only
if such Fundamental Change Purchase Notice is withdrawn in accordance with Section 4.2(b) or
Section 5.2(b) prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding such Purchase Date or Fundamental Change
Purchase Date.

 

Section 12.2. Conversion
Procedures; Conversion Rate; Fractional Shares.

 

(a) Each Security
shall be convertible at the office of the Conversion Agent into fully paid and
nonassessable shares of Common Stock (calculated to the nearest 1/10,000th of a
share).

 

(b) The Conversion
Agent shall notify the Company when it receives a Conversion Notice. The
Company shall determine the number of shares of Common Stock and/or the amount
of cash, if any, that the Holder that submitted the Conversion Notice is
entitled to receive upon surrender of the Securities covered by that Conversion
Notice. A certificate for the number of full shares of Common Stock into which
the Securities are converted (and cash in lieu of fractional shares) shall be
delivered to such Holder, assuming all of the other requirements have been
satisfied by such Holder, as soon as practicable. Notwithstanding the
foregoing, the Company shall not be required to deliver certificates for Common
Stock while the stock transfer books for such stock or the security register
are duly closed for any purpose, but certificates for Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register. No cash payment of accrued and unpaid interest or Additional
Interest shall be paid by the Company on a converted Security, except as
described in Section 12.9. Accrued and unpaid interest and Additional
Interest, if any, shall be deemed to be paid in full with the shares of Common
Stock issued or cash paid upon conversion, rather than deemed cancelled,
extinguished or forfeited.

 

Except
as described in Section 12.9, the Company will not make any payment in
cash or Common Stock or other adjustment for accrued and unpaid interest or
Additional Interest on any Securities when they are converted. The Company’s
delivery to the Holder of the full number of shares of Common Stock into which
the Security is convertible, together with any cash payment for such Holder’s
fractional shares, shall be deemed to satisfy the Company’s obligation to pay
the Principal Amount of the Security and to satisfy its obligation to pay
accrued and unpaid interest and Additional Interest, if any through the
conversion date. As a result, accrued interest, and Additional Interest are
deemed paid in full rather than cancelled, extinguished or forfeited.
Notwithstanding the foregoing, accrued interest and Additional Interest, if
any, will be payable upon any conversion of Securities made concurrently with
or after acceleration of the Securities following an Event of Default.

 

If a
Holder has submitted any or all of its Securities for repurchase, a Holder’s
conversion rights on the Securities so subject to repurchase shall expire at
5:00 p.m., New York City time, on the Business Day immediately preceding
the Fundamental Change Purchase Date. Notwithstanding the foregoing, a Security
in respect of which a Holder has delivered a

 

60

 

Fundamental Change
Purchase Notice exercising such Holder’s right to require the Company to
repurchase such Security may be converted only if such Fundamental Change
Purchase Notice is withdrawn in accordance with Section 4.2(b) prior
to 5:00 p.m., New York City time, on the Business Day immediately
preceding the Fundamental Change Purchase Date.

 

(c) Before any
Holder shall be entitled to convert the same into Common Stock, such Holder
shall, in the case of Global Securities, comply with the Applicable Procedures
of the Depositary in effect at that time, and in the case of Certificated
Securities, surrender such Securities, duly endorsed to the Company or in
blank, at the office of the Conversion Agent, and shall give written notice to
the Company at said office or place in the form of the Conversion Notice
attached to the Security (the “Conversion Notice”) that such Holder
elects to convert the same and shall state in writing therein the Principal
Amount at issuance of Securities to be converted (in whole or in part so long
as the Principal Amount to be converted is in multiples of $1,000) and the name
or names (with addresses) in which such Holder wishes the certificate or
certificates for Common Stock to be issued.

 

Before
any such conversion, a Holder also shall pay all funds required, if any,
relating to interest or Additional Interest, if any, on the Securities, as
provided in Section 12.9 and all taxes or duties, if any, as provided in Section 12.8.

 

If
more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock that shall be
deliverable upon conversion shall be computed on the basis of the aggregate
Principal Amount at issuance of the Securities (or specified portions thereof
to the extent permitted thereby) so surrendered.

 

If
shares of Common Stock to be issued upon conversion of a Restricted Security is
to be issued in the name of a Person other than the Holder of such Restricted
Security, such Holder shall deliver to the Conversion Agent a certification in
substantially the form set forth in a Transfer Certificate dated the date of
surrender of such Restricted Security and signed by such Holder, as to
compliance with the restrictions on transfer applicable to such Restricted
Security. The Company shall not be required to issue Common Stock upon
conversion of any such Restricted Security to a Person other than the Holder if
such Restricted Security is not so accompanied by a properly completed
certification, and the Registrar shall not be required to register Common Stock
upon conversion of any such Restricted Security in the name of a Person other
than the Holder if such Restricted Security is not so accompanied by a properly
completed certification.

 

(d) A Security shall
be deemed to have been converted immediately prior to 5:00 p.m., New York
City time, on the date on which all of the conversion requirements set forth in
Section 12.2(b) have been satisfied, and the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Common Stock
as of 5:00 p.m., New York City time, on such date.

 

(e) In case any
Certificated Security shall be surrendered for partial conversion, the Company
shall execute and the Trustee shall authenticate and deliver to or upon the
written order of the Holder of the Security so surrendered, without charge to
such Holder (subject to the provisions of Section 12.8), a new Security or
Securities in authorized

 

61

 

denominations in an aggregate principal amount equal
to the unconverted portion of the surrendered Certificated Securities.

 

Section 12.3. Adjustment
of Conversion Rate.

 

The
Conversion Rate shall be adjusted from time to time as follows:

 

(a) In case the
Company shall, at any time or from time to time while any of the Securities are
outstanding, pay a dividend or make a distribution in Common Stock to all or
substantially all holders of its outstanding Common Stock, then the Conversion
Rate in effect immediately prior to the close of business on the Record Date
fixed for the determination of stockholders entitled to receive such dividend
or other distribution 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 received had such Security been
converted immediately prior to the happening of such event as well as such
additional shares it would have received as a result of such event. Such
adjustment shall become effective immediately prior to the opening of business
on the day following the Record Date fixed for such determination. If any
dividend or distribution of the type described in this Section 12.3(a) is
declared but not so paid or made, the Conversion Rate shall again be adjusted
to the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared.

 

(b) In case the
Company shall, at any time or from time to time while any of the Securities are
outstanding, subdivide its outstanding shares of Common Stock into a greater
number of Common Stock or combine its outstanding shares of Common Stock into a
smaller number of Common Stock, then the Conversion Rate in effect immediately
prior to the close of business on the day upon which such subdivision or
combination becomes effective 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 received had such
Security been converted immediately prior to the happening of such event as
well as such additional shares as it would have received as a result of such
event. Such adjustment shall become effective immediately prior to the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.

 

(c) In case the
Company shall, at any time or from time to time while any of the Securities are
outstanding, issue rights or warrants for a period expiring within 60 days
(other than any rights or warrants referred to in Section 12.3(d)) to all
or substantially all holders of its outstanding Common Stock entitling them to
subscribe for or purchase Common Stock (or securities convertible into or
exchangeable or exercisable for Common Stock), at a price per share of Common
Stock (or having a conversion, exchange or exercise price per share of Common
Stock) less than the Closing Sale Price of the Common Stock on the Business Day
immediately preceding the date of announcement of such issuance (treating the
conversion, exchange or exercise price per share of Common Stock of the
securities convertible, exchangeable or exercisable into Common Stock as equal to
(x) the sum of (i) the price for a unit of the security convertible
into or exchangeable or exercisable for Common Stock and (ii) any
additional consideration initially payable upon the conversion of or exchange
or exercise for such security into Common Stock divided by (y) the number
of shares of Common Stock initially underlying such convertible, exchangeable
or exercisable

 

62

 

security), then the Conversion Rate shall be adjusted
by multiplying the Conversion Rate in effect at the opening of business on the
date after such date of announcement by a fraction:

 

(i)             the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date of announcement, plus the total number of additional shares of Common
Stock so offered for subscription or purchase (or into which the convertible,
exchangeable or exercisable securities so offered are convertible, exchangeable
or exercisable); and

 

(ii)          the denominator of which shall be the
number of shares of Common Stock outstanding on the close of business on the
date of announcement, plus the number of shares of Common Stock (or
convertible, exchangeable or exercisable securities) which the aggregate
offering price of the total number of shares of Common Stock (or convertible,
exchangeable or exercisable securities) so offered for subscription or purchase
(or the aggregate conversion, exchange or exercise price of the convertible,
exchangeable or exercisable securities so offered) would purchase at such
Closing Sale Price of the Common Stock.

 

Such
adjustment shall become effective immediately prior to the opening of business
on the day following the Record Date for such determination. To the extent that
shares of Common Stock (or securities convertible, exchangeable or exercisable
into shares of Common Stock) are not delivered pursuant to such rights or
warrants, upon the expiration or termination of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of the delivery of only the number of shares of Common
Stock (or securities convertible, exchangeable or exercisable into shares of
Common Stock) actually delivered. In the event that such rights or warrants are
not so issued, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be in effect if the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Closing Sale Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration if other
than cash, to be determined by the Board of Directors.

 

(d) (A) In case
the Company shall, at any time or from time to time while any of the Securities
are outstanding, by dividend or otherwise, distribute to all or substantially
all holders of its outstanding shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the shares of Common Stock are not
changed or exchanged), shares of its capital stock, evidences of its
Indebtedness or other assets, including securities, but excluding (i) dividends
or distributions of Common Stock referred to in Section 12.3(a),

 

63

 

(ii) any rights or warrants referred to in Section 12.3(c),
(iii) dividends and distributions paid exclusively in cash referred to in
this Section 12.3(d) and (iv) dividends and distributions of
stock, securities or other property or assets (including cash) in connection
with the reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance to which Section 12.4 applies
(such capital stock, evidence of its indebtedness, other assets or securities
being distributed hereinafter in this Section 12.3(d) called the “Distributed
Assets”), then, in each such case, subject to paragraphs (D) and (E) of
this Section 12.3(d), the Conversion Rate shall be adjusted by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction:

 

(i)    the numerator of which shall be the
Current Market Price; and

 

(ii)   the denominator of which shall be such
Current Market Price of the Common Stock, less the Fair Market Value on such
date of the portion of the distributed assets so distributed applicable to one
share of Common Stock (determined on the basis of the number of shares of
Common Stock outstanding on the Record Date) on such date.

 

Such adjustment
shall become effective immediately prior to the opening of business on the day
following the Record Date for such distribution. 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 which would then be in effect if
such dividend or distribution had not been declared.

 

(B)   If the Board of Directors determines the
Fair Market Value of any distribution for purposes of this Section 12.3(d) by
reference to the actual or when issued trading market for any distributed
assets comprising all or part of such distribution, it must in doing so consider
the prices in such market over the same period (the “Reference Period”)
used in computing the Current Market Price pursuant to Section 12.3(g) to
the extent possible, unless the Board of Directors determines in good faith
that determining the Fair Market Value during the Reference Period would not be
in the best interest of the Holders.

 

(C)   In the event any such distribution
consists of shares of capital stock of, or similar equity interests in, one or
more of the Company’s Subsidiaries (a “Spin-Off”), the Fair Market Value
of the securities to be distributed shall equal the average of the Closing Sale
Prices of such securities on the principal securities market on which such
securities are traded for the five consecutive Trading Days commencing on and
including the sixth Trading Day of those securities after the effectiveness of
the Spin-Off, and the Current Market Price shall be measured for the same
period. In the event, however, that an underwritten initial public offering of
the securities in the Spin-Off occurs simultaneously with the Spin-Off, Fair
Market Value of the securities distributed in the Spin-Off shall mean the
initial public offering price of such securities and the Current Market Price
shall mean the Closing Sale Price for the Common Stock on the same Trading Day.

 

64

 

(D)  Rights or warrants distributed by the
Company to all holders of its outstanding shares of Common Stock entitling them
to subscribe for
or purchase shares of Equity Interest (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events (“Trigger Event”), (x) are deemed to be transferred
with such shares of Common Stock, (y) are not exercisable and (z) are
also issued in respect of future issuances of Common Stock shall be deemed not
to have been distributed for purposes of this Section 12.3(d) (and no
adjustment to the Conversion Rate under this Section 12.3(d) shall be
required) until the occurrence of the earliest Trigger Event. If such right or
warrant is subject to subsequent events, upon the occurrence of which such
right or warrant shall become exercisable to purchase different distributed
assets, evidences of indebtedness or other assets, or entitle the holder to
purchase a different number or amount of the foregoing or to purchase any of
the foregoing at a different purchase price, then the occurrence of each such
event shall be deemed to be the date of issuance and Record Date with respect
to a new right or warrant (and a termination or expiration of the existing
right or warrant without exercise by the holder 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 resulted in an adjustment to the
Conversion Rate under this Section 12.3(d):

 

(i)    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 Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or purchase price received by a holder of shares 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 purchase; and

 

(ii)   in the case of such rights or warrants
which shall have expired or been terminated without exercise, the Conversion
Rate shall be readjusted as if such rights and warrants had never been issued.

 

(E)   For purposes of this Section 12.3(d) and
Section 12.3(a), Section 12.3(b) and Section 12.3(c), any
dividend or distribution to which this Section 12.3(d) is applicable
that also includes (x) shares of Common Stock, (y) a subdivision or
combination of Common Stock to which Section 12.3(b) applies or (z) rights
or warrants to subscribe for or purchase shares of Common Stock to which Section 12.3(c) applies
(or any combination thereof), shall be deemed instead to be:

 

(i)    a dividend or distribution of the
evidences of indebtedness, assets, shares of capital stock, rights or warrants,
other than such shares of Common

 

65

 

Stock, such subdivision
or combination or such rights or warrants to which Section 12.3(a), Section 12.3(b) and
Section 12.3(c) apply, respectively (and any Conversion Rate
adjustment required by this Section 12.3(d) with respect to such
dividend or distribution shall then be made), immediately followed by

 

(ii)   a dividend or distribution of such shares
of Common Stock, such subdivision or combination or such rights or warrants
(and any further Conversion Rate adjustment required by Section 12.3(a), Section 12.3(b) and
Section 12.3(c) with respect to such dividend or distribution shall
then be made), except:

 

(1)    the Record Date of such dividend or distribution shall
be substituted as (i) “the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution,” “Record
Date fixed for such determinations” and “Record Date” within the meaning of Section 12.3(a),
(ii) “the day upon which such subdivision or combination becomes
effective” within the meaning of Section 12.3(b), and (iii) as “the
Record Date fixed for the determination of the stockholders entitled to receive
such rights or warrants” and such “Record Date” within the meaning of Section 12.3(c);
and

 

(2)    any reduction or increase in the number of shares of
Common Stock resulting from such subdivision or combination shall be
disregarded in connection with such dividend or distribution.

 

(e) In case the Company
shall, at any time or from time to time after the initial Issue Date while any
of the Securities are outstanding, by dividend or otherwise, distribute to all
or substantially all holders of its outstanding shares of Common Stock, cash
(including any quarterly cash dividends, but excluding any cash that is
distributed upon a reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance to which Section 12.4
applies or as part of a distribution referred to in Section 12.3(d)),
then, and in each case, immediately after the close of business on such date,
the Conversion Rate shall be adjusted by multiplying the Conversion Rate in
effect immediately prior to the close of business of such Record Date by a
fraction:

 

(A)  the numerator of which shall be equal to
the Current Market Price on such date; and

 

(B)   the denominator of which shall be equal
to the Current Market Price on the Record Date, less an amount equal to the
quotient of (x) the aggregate amount of such cash distribution and (y) the
number of shares of Common Stock outstanding on the Record Date.

 

66

 

Such
adjustment shall become effective immediately prior to the opening of business
on the day following the Record Date for such distribution. In the event that
such distribution is not so made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such distribution
had not been declared.

 

Notwithstanding
the foregoing, adjustments to the conversion rate resulting from any quarterly
cash dividends may not cause the conversion rate (as adjusted for any other
adjustment) to exceed the quotient obtained by dividing the principal amount of
a note by the last reported sale price of our common stock on the cover page of
this offering memorandum.

 

(f) In case a tender
offer or exchange offer (other than as part of a stock option exchange offer)
made by the Company or any of its Subsidiaries for all or any portion of the
Common Stock shall expire, then and in each such case, immediately prior to the
opening of business on the day after the date of the last time (the “Expiration
Time”) tenders or exchanges could have been made pursuant to such tender
offer or exchange offer, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date of the Expiration Time
by a fraction:

 

(A)  the numerator of which shall be the sum
of (x) the product of (i) the number of shares of Common Stock
outstanding (excluding any tendered or exchanged shares) at the Expiration Time
and (ii) the Current Market Price of the Common Stock at the Expiration
Time, and (y) the Fair Market Value of the aggregate consideration payable
to stockholders based on acceptance (up to any maximum specified in the terms
of the tender offer or exchange offer) of all shares validly tendered and not
withdrawn as of the Expiration Time; and

 

(B)   the denominator of which shall be the
product of the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time and the Current Market
Price of the Common Stock at the Expiration Time.

 

Such
adjustment (if any) shall become effective immediately prior to the opening of
business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all or a portion of such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be in effect if such (or such portion of the) tender
offer or exchange offer had not been made. If the application of this Section 12.3(e) to
any tender offer or exchange offer would result in a decrease in the Conversion
Rate, no adjustment shall be made for such tender offer under this Section 12.3(e).

 

67

 

To the
extent the Company has a rights plan in effect upon the conversion of the
Securities, if Holders of the Securities exercising the right of conversion
attaching after the date the rights separate from the underlying Common Stock
are not entitled to receive the rights that would otherwise be attributable to
the Common Stock received upon conversion, the Conversion Rate shall be
adjusted as though the rights were being distributed to holders of Common Stock
on the date of such separation. If such an adjustment is made and the rights
are later redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Rate on an equitable basis.

 

(g) For purposes of
this Article XII, the following terms shall have the meanings indicated:

 

“Current
Market Price” on any date means the average of the daily Closing Sale
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to such date; provided, however, that if:

 

(i)    the “ex” date (as hereinafter defined)
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Rate pursuant to Section 12.3(a),
Section 12.3(b), Section 12.3(c), Section 12.3(d), Section 12.3(e) or
Section 12.3(f) occurs during such ten consecutive Trading Days, the
Closing Sale Price for each Trading Day prior to the “ex” date for such other
event shall be adjusted by multiplying such Closing Sale Price by the same
fraction by which the Conversion Rate is so required to be adjusted as a result
of such other event;

 

(ii)   the “ex” date for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 12.3(a), Section 12.3(b),
Section 12.3(c), Section 12.3(d), Section 12.3(e) or Section 12.3(f) occurs
on or after the “ex” date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Sale Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted
by multiplying such Closing Sale Price by the reciprocal of the fraction by
which the Conversion Rate is so required to be adjusted as a result of such
other event; and

 

(iii)  the “ex”
date for the issuance or distribution requiring such computation is prior to
the day in question, after taking into account any adjustment required pursuant
to clause (1) or (2) of this proviso, the Closing Sale Price for each
Trading Day on or after such “ex” date shall be adjusted by adding thereto the
amount of any cash and the Fair Market Value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 12.3(d), Section 12.3(e) or Section 12.3(f))
of the evidences of Indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the close of business
on the day before such “ex” date.

 

68

 

For purposes of any
computation under Section 12.3(e), if the “ex” date for any event (other
than the tender offer requiring such computation) that requires an adjustment
to the Conversion Rate pursuant to Section 12.3(a), Section 12.3(b), Section 12.3(c),
Section 12.3(d), Section 12.3(e) or Section 12.3(f) occurs
on or after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Sale Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted
by multiplying such Closing Sale Price by the reciprocal of the fraction by
which the Conversion Rate is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term “ex” date, when used:

 

(i)    with respect to any issuance or
distribution, means the first date on which the Common Stock trade regular way
on the relevant exchange or in the relevant market from which the Closing Sale
Price was obtained without the right to receive such issuance or distribution;

 

(ii)   with respect to any subdivision or
combination of Common Stock, means the first date on which the Common Stock
trade regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective; and

 

(iii)  with
respect to any tender offer or exchange offer, means the first date on which
the Common Stock trade regular way on such exchange or in such market after the
Expiration Time of such offer.

 

Notwithstanding
the foregoing, whenever successive adjustments to the Conversion Rate are
called for pursuant to this Section 12.3, such adjustments shall be made
to the Current Market Price as may be necessary or appropriate to effectuate
the intent of this Section 12.3 and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.

 

“Fair
Market Value” means the amount which a willing buyer would pay a willing
seller in an arm’s length transaction (as determined by the Board of Directors,
whose determination shall be made in good faith and, absent manifest error,
shall be final and binding on Holders of the Securities).

 

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

 

(h) The Company
shall be entitled to make such additional adjustments in the Conversion Rate,
in addition to those required by Section 12.3(a), Section 12.3(b), Section 12.3(c),
Section 12.3(d), Section 12.3(e) or Section 12.3(f) if
the Board of Directors determines that it is advisable, subject to compliance
with Nasdaq Marketplace Rule 4350(i), in order that any dividend or
distribution of Common Stock, any subdivision, reclassification or combination
of Common Stock or any issuance of rights or warrants referred to above shall
not be taxable to the holders of Common Stock for United States federal income
tax purposes.

 

69

 

(i) To the extent
permitted by applicable law, the Company may, from time to time, increase the
Conversion Rate by any amount for any period of time if such period is at least
20 calendar days, the increase is irrevocable during the period and the Board
of Directors, in good faith and absent manifest error, determines that such
increase would be in the best interest of the Company, subject to compliance with
Nasdaq Marketplace Rule 4350(i). Whenever the Conversion Rate is increased
pursuant to the preceding sentence or clause (h) above, the Company shall
mail to the Trustee and each Holder at the address of such Holder as it appears
in the register of the Securities maintained by the Registrar, at least 15
calendar days prior to the date the increased Conversion Rate takes effect, a
notice of the increase stating the increased Conversion Rate and the period
during which it shall be in effect.

 

(j) In any case in
which this Section 12.3 shall require that any adjustment be made
effective as of or retroactively immediately following a Record Date, the
Company may elect to defer (but only for five Trading Days following the filing
of the notice referred to in Section 12.5) issuing to the Holder of any
Securities converted after such Record Date the Common Stock issuable upon such
conversion over and above the Common Stock issuable upon such conversion on the
basis of the Conversion Rate prior to adjustment; provided, however, that the
Company shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder’s right to receive such additional Common Stock upon the
occurrence of the event requiring such adjustment.

 

(k) All calculations
under this Section 12.3 shall be made to the nearest cent or one-hundredth
of a share, with one-half cent and 0.005 of a share, respectively, being
rounded upward. Notwithstanding any other provision of this Section 12.3,
the Company shall not be required to make any adjustment of the Conversion Rate
unless such adjustment would require an increase or decrease of at least 1% in
the Conversion Rate as last adjusted. Any lesser adjustment shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least 1% in the
Conversion Rate as last adjusted. Any adjustments under this Section 12.3
shall be made successively whenever an event requiring such an adjustment
occurs.

 

(l) In the event
that at any time, as a result of an adjustment made pursuant to this Section 12.3,
the Holder of any Securities thereafter surrendered for conversion shall become
entitled to receive any shares of Applicable Stock of the Company other than
Common Stock into which the Securities originally were convertible, the
Conversion Rate of such other shares so receivable upon conversion of any such
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in subparagraphs (a) through (j) of this Section 12.3,
and the provision of Section 12.1, Section 12.2 and Section 12.4
through Section 12.9 with respect to the Common Stock shall apply on like
or similar terms to any such other shares and the determination of the Board of
Directors as to any such adjustment shall be conclusive.

 

70

 

(m) No adjustment
shall be made pursuant to this Section 12.3 if the effect thereof would be
to reduce the Conversion Price below the par value (if any) of the Common
Stock.

 

Section 12.4. Consolidation
or Merger of the Company.

 

If any
of the following events occurs, namely:

 

(a) any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination);

 

(b) any merger,
consolidation, statutory share exchange or combination of the Company with
another Person as a result of which holders of Common Stock shall be entitled
to receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock; or

 

(c) any sale or
conveyance of all or substantially all the properties and assets of the Company
as, or substantially as, an entirety to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock;

 

the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture, if
such supplemental indenture is then required to so comply) providing that such
Securities shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance (provided, that if the kind or
amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance is not the same for
each share of Common Stock in respect of which such rights of election shall
not have been exercised (“Non-Electing Share”), then for the purposes of
this Section 12.4, the kind and amount of securities, cash or other
property receivable upon such merger, consolidation, statutory share exchange,
sale or conveyance for each Non-Electing Share shall be deemed to be the kind
and amount so receivable per share by a plurality of the Non-Electing Shares).
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article XII. If, in the case of any such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, the
stock or other securities and assets receivable thereupon by a holder of Common
Stock includes shares of stock or other securities and assets of a Person other
than the successor or purchasing Person, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other Person and shall contain such

 

71

 

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
Company shall cause notice of the execution of such supplemental indenture to
be mailed to each Holder, at the address of such Holder as it appears on the
register of the Securities maintained by the Registrar, within 20 days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.

 

The
above provisions of this Section 12.4 shall similarly apply to successive
reclassifications, mergers, consolidations, statutory share exchanges, combinations,
sales and conveyances.

 

If
this Section 12.4 applies to any event or occurrence, Section 12.3
shall not apply.

 

Section 12.5. Notice
of Adjustment.

 

Whenever
an adjustment in the Conversion Rate with respect to the Securities is
required:

 

(a) the Company
shall forthwith place on file with the Trustee and any Conversion Agent for
such securities a certificate of the Chief Financial Officer of the Company,
stating the adjusted Conversion Rate determined as provided herein and setting
forth in reasonable detail such facts as shall be necessary to show the reason
for and the manner of computing such adjustment; and

 

(b) a notice stating
that the Conversion Rate has been adjusted and setting forth the adjusted
Conversion Rate shall forthwith be given by the Company or, upon a Company
Request, by the Trustee in the name and at the expense of the Company, to each
Holder in the manner provided in Section 14.2. Any notice so given shall
be conclusively presumed to have been duly given, whether or not the Holder
receives such notice.

 

Section 12.6. Notice
in Certain Events.

 

In
case of:

 

(a) a consolidation
or merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or conveyance to
another Person or entity or group of Persons or entities acting in concert as a
partnership, limited partnership, syndicate or other group (within the meaning
of Rule 13d-3 under the Exchange Act) of all or substantially all of the
property and assets of the Company; or

 

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

 

(c) any action
triggering an adjustment of the Conversion Rate referred to in clauses (x) or
(y) below;

 

then,
in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given to the Holders of the Securities
in the manner provided in Section 14.2, at least 15 days prior to the
applicable date hereinafter specified, a notice stating:

 

72

 

(x) the
date on which a record is to be taken for the purpose of any distribution or
grant of rights or warrants triggering an adjustment to the Conversion Rate
pursuant to this Article XII, or, if a record is not to be taken, the date
as of which the holders of record of Common Stock entitled to such
distribution, rights or warrants are to be determined; or

 

(y) the
date on which any reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up triggering an adjustment to the
Conversion Rate pursuant to this Article XII is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding
up.

 

Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings described in Section 12.6(a),
Section 12.6(b) or Section 12.6(c).

 

Section 12.7.
Company To Reserve Stock; Registration; Listing.

 

(a) The
Company shall, prior to issuance of any Securities hereunder, and from time to
time as may be necessary, reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of the Securities, such number of its duly authorized
Common Stock as shall from time to time be sufficient to effect the conversion
of all Securities then outstanding into such Common Stock at any time (assuming
that, at the time of the computation of such number of Common Stock, all such
Securities would be held by a single Holder). The Company covenants that all
Common Stock which may be issued upon conversion of Securities shall upon issue
be fully paid and nonassessable and free from all liens and charges and, except
as provided in Section 12.8, taxes with respect to the issue thereof.

 

(b) Except
with respect to shares issued upon conversion of a Transfer Restricted Security
prior to the second anniversary of the initial Issue Date, if any shares of
Applicable Stock which would be issuable upon conversion of Securities
hereunder (including, without limitation, in connection with any transaction
referred to in Section 12.4) require registration with or approval of any
governmental authority before such shares may be issued upon such conversion,
the Company shall use its reasonable best efforts to cause such shares to be
duly registered or approved, as the case may be, or to cause such shares not to
be Transfer Restricted Securities. In addition, in connection with any
transaction referred to in Section 12.4, the Company and any parent
company of the Company required to issue Applicable Stock upon conversion of a
Note shall take such actions as are required to entitle the Company or such
parent company, as the case may be, to rely on Section 3(a)(9) of the
Securities Act in connection with conversion of the Securities without
extending any holding periods under Rule 144 or otherwise permit such
Applicable Stock issued upon conversion of the Securities to be resold without
requiring registration thereof under the Securities Act. The Company further
covenants that so long as the Common Stock shall be quoted on the Nasdaq
National Market system, the Company shall use its reasonable best efforts, if
permitted by the rules of the Nasdaq National Market system, to keep so
quoted all Common Stock issuable

 

73

 

upon conversion of the
Securities, and the Company shall use its reasonable best efforts to list or
obtain approval for the quotation of the Common Stock to be delivered upon
conversion of the Securities prior to such delivery upon any other national
securities exchange or quotation system upon which the outstanding Common Stock
is listed or quoted at the time of such delivery.

 

Section 12.8.
Taxes on Conversion.

 

The issue of stock certificates on conversion of
Securities shall be made without charge to the converting Holder for any
documentary, stamp or similar issue or transfer taxes in respect of the issue
thereof, and the Company shall pay any and all documentary, stamp or similar
issue or transfer taxes that may be payable in respect of the issue or delivery
of Common Stock on conversion of Securities pursuant hereto. The Company shall
not, however, be required to pay any such tax which may be payable in respect
of any transfer involved in the issue or delivery of Common Stock or the
portion, if any, of the Securities which are not so converted in a name other
than that in which the Securities so converted were registered, and no such
issue or delivery shall be made unless and until the Person requesting such
issue has paid to the Company the amount of such tax or has established to the
satisfaction of the Company that such tax has been paid.

 

Section 12.9.
Conversion After Regular Record Date.

 

Except as provided in the succeeding paragraph, upon
conversion the Holder of Securities shall not be entitled to receive any
accrued and unpaid interest or Additional Interest, if any.

 

If any Securities are surrendered for conversion
subsequent to the close of business on any Regular Record Date but prior to the
opening of business on the corresponding Interest Payment Date, the Holder of
such Securities at the close of business on such Regular Record Date shall
receive the interest and Additional Interest, if any, payable on such
Securities on such Interest Payment Date notwithstanding the conversion thereof.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date shall (except in the case of Securities
which have been called for redemption on a Redemption Date within such period
or Securities surrendered for conversion after acceleration of the Securities)
be accompanied by payment by Holders, for the account of the Company, in New
York Clearing House funds or other funds acceptable to the Company of an amount
equal to the interest and Additional Interest, if any, payable on such interest
payment date on the Securities being surrendered for conversion.

 

Except as described in Section 12.2(a) and
this Section 12.9, the Company will not make any payment in cash or other
adjustment for Common Stock accrued and unpaid interest or Additional Interest,
if any, on a Security when it is converted.

 

Section 12.10.
Company Determination Final.

 

Except as otherwise provided herein or the Security,
the Company or its agents shall be responsible for making all calculations
required under the terms of this Article XII. Any determination that the
Company or the Board of Directors must make pursuant to this Article XII
shall be set forth in a Board Resolution, shall be made in good faith and,
absent manifest error,

 

74

 

shall
be final and binding on holders of the Securities. The Company or its agents
shall be required to deliver to the Trustee a schedule of its calculations and
the Trustee shall be entitled to conclusively rely upon the accuracy of such
calculations without independent verification.

 

Section 12.11.
Responsibility of Trustee for Conversion Provisions.

 

The Trustee has no duty to determine when an
adjustment under this Article XII should be made, how it should be made or
what it should be. The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for any failure of the Company to comply with
this Article XII. Each Conversion Agent other than the Company shall have
the same protection under this Section 12.11 as the Trustee.

 

The rights, privileges, protections, immunities and
benefits given to the Trustee under this Indenture including, without
limitation, its rights to be indemnified, are extended to, and shall be
enforceable by, other than the Company, the Trustee in each of its capacities
hereunder, and each Paying Agent or Conversion Agent, other than the Company,
acting hereunder.

 

Section 12.12.
Unconditional Right of Holders to Convert.

 

Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to convert its Security in accordance with this Article XII
and to bring an action against the Company for the enforcement of any such
right to convert, and such rights shall not be impaired or affected without the
consent of such Holder.

 

ARTICLE XIII

 

TAX TREATMENT

 

Section 13.1.
Tax Treatment.

 

The Company agrees, and by acceptance of beneficial
ownership interest in the Securities each beneficial holder of the Securities
will be deemed to have agreed, for United States federal income tax purposes (1) to
treat the Securities as indebtedness that is subject to Treas. Reg. Sec.
1.1275-4 (the “Contingent Payment Regulations”) and, for purposes of the
Contingent Payment Regulations, to treat the fair market value of any stock
beneficially received by a beneficial holder upon any conversion of the
Securities as a contingent payment and (2) to be bound by the Company’s
determination of the “comparable yield” and “projected payment schedule,”
within the meaning of the Contingent Payment Regulations, with respect to the
Securities. A Holder may obtain the issue price, amount of original issue
discount, issue date, yield to maturity, comparable yield and projected payment
schedule for the Securities by submitting a written request for such
information to the Company at the address set forth in Section 14.2.

 

75

 

ARTICLE XIV

 

MISCELLANEOUS

 

Section 14.1.
Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies,
or conflicts with the duties imposed by Section 318(c) of the TIA,
such section of the TIA shall control. If any provision of this Indenture
expressly modifies or excludes any provision of the TIA that may be so modified
or excluded under the TIA, the Indenture provision so modifying or excluding
such provision of the TIA shall be deemed to apply.

 

Section 14.2.
Notices.

 

Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person (including
by commercial courier services) or mailed by first-class mail, postage prepaid,
addressed as follows or transmitted by facsimile transmission (confirmed by
guaranteed overnight courier) to the following facsimile numbers:

 

if to the Company:

 

CURAGEN CORPORATION

555 Long Wharf Drive, 11th Floor

New Haven, Connecticut
06511

Attention: Chief
Financial Officer

Facsimile No.: (03)
401-3333

 

with a copy to:

 

MINTZ, LEVIN, COHN,
FERRIS, GLOVSKY & POPEO, P.C.

One Financial Center

Boston, Massachusetts
02111

Attention: Michael
Fantozzi, Esq.

Facsimile No.: (617)
542-2241

 

if to the Trustee:

 

THE BANK OF NEW YORK

101 Barclay Street

New York, New York 10286

Attention: Corporate
Trust Department

Facsimile No.:

 

The Company or the Trustee by notice given to the
other in the manner provided above may designate additional or different
addresses for subsequent notices or communications.

 

Any notice or communication given to a Holder shall be
mailed to the Holder, by first-class mail, postage prepaid, at the Holder’s
address as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.

 

76

 

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

 

If the Company mails a notice or communication to the
Holders, it shall mail a copy to the Trustee and each Registrar, Paying Agent,
Conversion Agent, or co-registrar.

 

Notwithstanding the foregoing, in the case of the
Trustee, notice must be actually received by the Corporate Trust Office of the
Trustee.

 

Section 14.3.
Communication by Holders with Other Holders.

 

Holders may communicate pursuant to Section 312(b) of
the TIA with other Holders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section 312(c).

 

Section 14.4.
Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee:

 

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

 

(b) an
Opinion of Counsel (except in connection with the original issuance of
Securities) stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.

 

Section 14.5.
Statements Required in Certificate or Opinion.

 

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

 

(a) a
statement that each person making such Officers’ Certificate or Opinion of
Counsel has read such covenant or condition;

 

(b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such Officers’ Certificate
or Opinion of Counsel are based;

 

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

 

(d) a
statement that, in the opinion of such person, such covenant or condition has
been complied with.

 

In giving such Opinion of Counsel, counsel may rely as
to factual matters on an Officers’ Certificate or on certificates of public
officials.

 

77

 

Section 14.6.
Separability Clause.

 

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

 

Section 14.7.
Rules by Trustee, Paying Agent, Conversion Agent, Registrar.

 

The Trustee may make reasonable rules for action
by or a meeting of Holders. The Registrar, the Conversion Agent and the Paying
Agent may make reasonable rules for their functions.

 

Section 14.8.
Legal Holidays.

 

If any specified date (including a date for giving
notice) is a Legal Holiday, the action shall be taken on the next succeeding
day that is not a Legal Holiday, and, if the action to be taken on such date is
a payment in respect of the Securities, no interest, if any, shall accrue for
the intervening period.

 

Section 14.9.
Governing Law; Submission to Jurisdiction; Service of Process.

 

This Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York. The Company submits to the
non-exclusive jurisdiction of the courts of the State of New York and the
courts of the United States of America, in each case located in the Borough of
Manhattan, New York, New York over any suit, action or proceeding arising under
or in connection with this Indenture or the transactions contemplated hereby or
the Securities. The Company waives any objection that it may have to the venue
of any suit, action or proceeding arising under or in connection with this
Indenture or the transactions contemplated hereby or the Securities in the
courts of the State of New York or the courts of the United States of America,
in each case located in the Borough of Manhattan, New York, New York, or that
such suit, action or proceeding brought in the courts of the State of New York
or the courts of the United States of America, in each case located in the
Borough of Manhattan, New York, New York, was brought in an inconvenient court
and agrees not to plead or claim the same.

 

The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding arising under or in connection
with this Indenture or the transactions contemplated thereby or the Securities
against the Company in any court of the State of New York or any United States
Federal court, in each case, sitting in the Borough of Manhattan, New York, New
York, may be made upon Corporation Service Company at 80 State Street, Albany,
New York 12207, whom the Company irrevocably appoints as its authorized agent
for service of process. The Company represents and warrants that Corporation
Service Company has agreed to act as the Company’s agent for service of
process. The Company agrees that such appointment shall be irrevocable until
the irrevocable appointment by the Company of a successor in New York, New York
as its authorized agent for such purpose and the acceptance of such appointment
by such successor. The Company further agrees to take any and all action,
including the filing of any and all documents and instruments that may be necessary
to continue such appointment in full force and effect as aforesaid. If
Corporation Service Company shall cease to act as the agent for service of
process for the Company, the Company shall appoint without delay, another such
agent and provide prompt written notice to the Trustee of such appointment.

 

78

 

Section 14.10.
No Recourse Against Others.

 

No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Security, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, as such,
or against any past, present or future stockholder, officer or director, as
such, of the Company or of any successor, either directly or through the Company
or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of the Securities by the Holders and as part of the
consideration for the issue of the Securities.

 

Section 14.11.
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 14.12.
Multiple Originals.

 

The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this
Indenture.

 

* * * *

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]

 

79

 

IN WITNESS WHEREOF, the undersigned, being duly
authorized, have executed this Indenture on behalf of the respective parties
hereto as of the date first above written.

 

	
   

  	
  CURAGEN
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/    JONATHAN M. ROTHBERG

  
	
   

  	
  Name:

  	
  Jonathan M.
  Rothberg, Ph.D.

  
	
   

  	
  Title:

  	
  Chief Executive
  Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW
  YORK

  As Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/    GEOVANNI BARRIS

  
	
   

  	
  Name:

  	
  Geovanni Barris

  
	
   

  	
  Title:

  	
  Vice President

  

 

80

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

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

 

[THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT OF 1933”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF OR A
BENEFICIAL INTEREST HEREIN, THE HOLDER:

 

(1) REPRESENTS
THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT OF 1933;

 

(2) AGREES
THAT IT SHALL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON THAT THE HOLDER
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN, AND IN
COMPLIANCE WITH, RULE 144A UNDER THE SECURITIES ACT OF 1933, (C) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT OF 1933 (IF AVAILABLE), (D) PURSUANT TO AN

 

	
  (1)

  	
   

  	
  This legend
  should be included only if the Security is a Global Security.

  

 

A-1

 

EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 (IF AVAILABLE) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
AMERICAN STOCK TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT (OR ANY SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS AND OPINION OF COUNSEL
REQUIRED BY THE COMPANY OR THE TRANSFER AGENT OR (E) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT OF 1933 AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
AND

 

(3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(C) OR 2(E) ABOVE),
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.](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)

  	
   

  	
  This legend
  should be included only if the Security is a Transfer Restricted Security.

  

 

A-2

 

CURAGEN CORPORATION

4.0% CONVERTIBLE SENIOR NOTES DUE 2011

 

No.         
CUSIP:

 

CURAGEN CORPORATION, a Delaware corporation (the “Company”,
which term shall include any successor corporation under the Indenture referred
to on the reverse hereof), for value received, promises to pay to                             ,
or registered assigns, the principal amount of                     
Dollars ($            )
on February 15, 2011

 

In addition, for value received, the Company hereby
promises to pay interest to the Holder of this security from February 17,
2004 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, on February 15 and August 15 in each year
(each, an “INTEREST PAYMENT DATE”), commencing on August 15, 2004, at the
rate of 4.0% per annum until the principal hereof is paid or made available for
payment at February 15, 2011 or upon acceleration, or until such date on
which the Securities are converted, redeemed or purchased as provided herein.

 

Interest, and Additional Interest, if any, on
Securities converted after the close of business on a Regular Record Date but
prior to the opening of business on the corresponding Interest Payment Date
shall be paid to the Holder of the Securities on the Regular Record Date but,
upon conversion, the Holder must pay the Company an amount equal to the
interest and Additional Interest, if any, which has accrued and shall be paid
on such Interest Payment Date. No such payment need be made with respect to
Notes converted after a Regular Record Date and prior to the corresponding
Interest Payment Date after being called for redemption or upon acceleration.

 

All references herein to interest accrued or payable
as of any date shall, without duplication, be deemed to include Additional
Interest, if any, payable pursuant to the Registration Rights Agreement.

 

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

 

A-3

 

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

 

	
  Dated:

  	
   

  	
  CURAGEN
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/    Jonathan M. Rothberg

  
	
   

  	
   

  	
  Name:

  	
  Jonathan
  M. Rothberg

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and President

  

 

A-4

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  Dated:
  February 17, 2004

  	
   

  	
  THE BANK OF NEW
  YORK

  as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

A-5

 

[FORM OF REVERSE OF SECURITY]

4.0% CONVERTIBLE SENIOR NOTES DUE 2011

 

This Security is one of a duly authorized issue of
4.0% Convertible Senior Notes due 2011 (the “Securities”) of CURAGEN
CORPORATION, a Delaware corporation (including any successor corporation under
the Indenture hereinafter referred to, the “Company”), issued under an
Indenture, dated as of February 17, 2004 (the “Indenture”), between the
Company and The Bank of New York, a New York banking corporation, as Trustee
(the “Trustee”). The terms of the Security include those stated in the
Indenture, those made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended (“TIA”), and those set forth in this Security. This
Security is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the
terms of this Security and the terms of the Indenture, the terms of the
Indenture shall control. Capitalized terms used but not defined herein have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.

 

1. Interest.

 

Interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months. If this Security is redeemed
pursuant to Section 6 of this Security or the Holder elects to require the
Company to purchase this Security pursuant to Section 7 of this Security,
on a date that is after the Regular Record Date and on or before the
corresponding Interest Payment Date, interest and Additional Interest, if any,
accrued and unpaid hereon to, but excluding, the applicable Redemption Date or
Fundamental Change Purchase Date shall be paid to the same Holder to whom the
Company pays the principal of this Security. Interest and Additional Interest,
if any, accrued and unpaid hereon at the Stated Maturity also shall be paid to
the same Holder to whom the Company pays the principal of this security.

 

Interest and Additional Interest, if any, on
Securities converted after the close of business on a Regular Record Date but
prior to the opening of business on the corresponding Interest Payment Date
shall be paid to the Holder of the Securities on the Regular Record Date but,
upon conversion, the Holder must pay the Company an amount equal to interest
and Additional Interest, if any, which has accrued and shall be paid on such
Interest Payment Date. No such payment need be made with respect to Securities
which shall be converted after a Regular Record Date and prior to the
corresponding Interest Payment Date after being called for redemption.

 

All references herein to interest accrued or payable
as of any date shall without duplication be deemed to include any Additional
Interest, if any, pursuant to the Registration Rights Agreement.

 

2. Method of Payment.

 

Payment of the principal of and interest and
Additional Interest, if any, on the Securities shall be 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 or in Applicable Stock, as the
case may be. The Holder must surrender the Securities to the Paying Agent to
collect payment of principal. Payment of interest and Additional Interest, if
any, on Certificated Securities in the aggregate principal amount of $5,000,000
or less shall be made by check mailed to the address of the Person entitled
thereto as such address appears in the Register and payment of interest and

 

A-6

 

Additional Interest, if
any, on Certificated Securities in aggregate principal amount in excess of
$5,000,000 shall be made by wire transfer in immediately available funds at the
election of such Holder. Notwithstanding the foregoing, so long as the Securities
are registered in the name of a Depositary or its nominee, all payments with
respect to the Securities shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

 

3. Paying
Agent, Registrar, Conversion Agent.

 

Initially,
The Bank of New York shall act as Paying Agent, Registrar and Conversion Agent.
The Company may appoint and change any Paying Agent, Registrar and Conversion
Agent without notice, other than notice to the Trustee; provided that the Company
shall maintain at least one Paying Agent in Borough of Manhattan, New York, New
York, which shall initially be an office or agency of the Trustee. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Registrar or Conversion Agent.

 

4. Indenture.

 

The
Securities are general unsecured obligations of the Company limited to up to
$120,000,000 aggregate principal amount. The Indenture does not limit other
indebtedness of the Company, secured or unsecured.

 

5. Subordination.

 

The
indebtedness evidenced by the Securities is, to the extent and in the manner
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full in cash of all Senior Indebtedness. Any Holder by
accepting this Security agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect.

 

6. Redemption
of the Notes by the Company.

 

The
Securities are redeemable for cash at the option of the Company, in whole or in
part, at any time or from time to time on, or after February 18, 2009 at
the Redemption Price.

 

Notice
of redemption pursuant to this Section of this Security shall be mailed at
least 20 calendar days but not more than 60 calendar days before the Redemption
Date to each Holder of Securities to be redeemed at the Holder’s registered
address. If cash sufficient to pay the Redemption Price of all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to 10:00 a.m., New York City time, on the Redemption
Date, then, on such Redemption Date interest and Additional Interest, if any
ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of principal amount may be redeemed in part
but only in integral multiples of $1,000 of principal amount.

 

7. Purchase
by the Company at the Option of the Holder or Upon a Fundamental Change.

 

In the
event that a Fundamental Change shall occur at any time prior to the Stated
Maturity, each Holder shall have the right, at the Holder’s option, but subject
to the provisions of the Indenture, to require the Company to purchase all or
any part of such Holder’s Notes not theretofore called for redemption, or any
portion of the Principal Amount at issuance thereof that is equal to $1,000 or
an integral multiple thereof. The Company shall be required to purchase such
Notes at a purchase price in cash equal to 100% of the Principal Amount plus
any accrued and unpaid interest and Additional Interest, if any to, but
excluding, the Fundamental Change Purchase Date. The Company may, at its
option, in lieu of paying the Fundamental Change

 

A-7

 

Purchase Price in cash,
pay the Fundamental Change Purchase Price in Common Stock valued at 95% of the
average of the Closing Sales Prices of the Common Stock for the five
consecutive Trading Days immediately preceding the second Trading Day prior to
the Fundamental Change Purchase Date. To exercise such right, a Holder shall
deliver a Fundamental Change Purchase Notice to the Paying Agent at any time on
or before the 20th Business Day after the date of the Company’s notice of the
Fundamental Change (subject to extension to comply with applicable law).

 

Holders
have the right to withdraw any Purchase Notice or Fundamental Change Purchase
Notice by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture.

 

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

 

8. Conversion.

 

Subject
to and in compliance with the provisions of the Indenture (including, without
limitation, the conditions to conversion of this Security set forth in Section 12.1
thereof), a Holder is entitled, at such Holder’s option, to convert the Holder’s
Security (or any portion of the principal amount thereof that is $1,000 or an
integral multiple $1,000), into fully paid and nonassessable shares of Common
Stock at the Conversion Rate in effect on the date of conversion. The number of
shares of Common Stock issuable upon conversion of each $1,000 of Principal
Amount of Securities is initially 103.2429 shares of Common Stock, and is
subject to adjustment in certain events as set forth in the Indenture.

 

A
Security in respect of which a Holder has delivered a Fundamental Change
Purchase Notice, as the case may be, exercising the right of such Holder to
require the Company to purchase such Security may be converted only if such
Fundamental Change Purchase Notice is withdrawn in accordance with the terms of
the Indenture.

 

Except
as described in the Indenture, the Company will not make any payment in cash or
Common Stock or other adjustment for accrued and unpaid interest or Additional
interest on any Securities when they are converted. The Company’s delivery to
the Holder of the full number of shares of Common Stock into which the Security
is convertible, together with any cash payment for such Holder’s fractional
shares, shall be deemed to satisfy the Company’s obligation to pay the
Principal Amount of the Security and to satisfy its obligation to pay accrued
and unpaid interest and Additional Interest, if any through the conversion
date. As a result, accrued interest and Additional Interest are deemed paid in
full rather than cancelled, extinguished or forfeited. Notwithstanding the
foregoing, accrued interest and Additional

 

A-8

 

Interest, if any, will be
payable upon any conversion of Securities made concurrently with or after
acceleration of the Securities following an Event of Default.

 

Before
any Holder shall be entitled to convert any Securities into Common Stock, such
Holder shall, in the case of Global Securities, comply with the Applicable
Procedures of the Depositary in effect at that time, and in the case of
Certificated Securities, complete and manually sign the conversion notice on
the back of the Securities (or a facsimile thereof), deliver the completed
conversion notice and the Security to be converted to the office of the
Conversion Agent and, if required by the Conversion Agent, furnish appropriate
endorsements and transfer documents. Before any such conversion, a Holder also
shall pay all funds required, if any, relating to interest or Additional
Interest, if any, on the Securities, as provided in the Indenture, and all
taxes or duties, if any, as provided in the Indenture.

 

If the
Company (i) reclassifies the Common Stock, (ii) is a party to a
consolidation, merger or binding share exchange or (iii) sell or conveys
all or substantially all of its properties or assets to any Person, the right
to convert a Security into shares of Common Stock may be changed into a right
to convert it into securities, cash or other assets of the Company or such other
Person, in each case in accordance with the Indenture.

 

9. Denominations;
Transfer; Exchange.

 

The
Securities are in fully registered form, without coupons, in denominations of
$1,000 of principal amount and integral multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. Neither the Company, the Trustee or the Registrar shall be
required to exchange or register a transfer of (i) any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or (ii) any Securities in
respect of which a Fundamental Change Purchase Notice has been given and not
withdrawn by the Holder thereof in accordance with the terms of this Indenture
(except, in the case of a Security to be repurchased in part, the portion of
the Security not to be repurchased) or (iii) any Securities surrendered
for conversion.

 

10. Persons
Deemed Owners.

 

The
registered Holder of this Security may be treated as the owner of this Security
for all purposes.

 

11. Unclaimed
Money or Securities.

 

The
Trustee and the Paying Agent shall return to the Company upon written request
any cash or securities held by them for the payment of any amount with respect
to the Securities that remains unclaimed for two years, subject to applicable
unclaimed property law. After return to the Company, Holders entitled to the
money or securities must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person.

 

12. Amendment;
Waiver.

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended with the written consent or affirmative vote of the
Holders of at least a majority in aggregate principal amount of the outstanding
Securities and (ii) certain Defaults may be

 

A-9

 

waived with the written
consent or affirmative vote of the Holders of a majority in aggregate principal
amount of the outstanding Securities.

 

Without
the consent of any Holder, the Company and the Trustee may amend the Indenture
or the Securities to:

 

(a) add to the
covenants of the Company for the benefit of the Holders of Securities;

 

(b) surrender any
right or power herein conferred upon the Company;

 

(c) provide for
conversion rights of Holders of Securities if any reclassification or change of
the Common Stock or any consolidation, merger or sale of all or substantially
all of the Company’s assets occurs;

 

(d) provide for the
assumption of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition pursuant to Article VII;

 

(e) increase the
Conversion Rate; provided, however, that such increase in the Conversion Rate
shall not adversely affect the interests of the Holders of Securities (after
taking into account tax and other consequences of such increase);

 

(f) comply with the
requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(g) make any changes
or modifications necessary in connection with the registration of the
Securities under the Securities Act as contemplated in the Registration Rights
Agreement; provided, however, that such action pursuant to this clause (g) does
not, in the good faith opinion of the Board of Directors (as evidenced by a
Board Resolution), adversely affect the interests of the Holders of Securities
in any material respect;

 

(h) cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein or which is otherwise defective, or to make any
other provisions with respect to matters or questions arising under this
Indenture which the Company may deem necessary or desirable and which shall not
be inconsistent with the provisions of this Indenture; provided, however, that
such action pursuant to this clause (h) does not, in the good faith
opinion of the Board of Directors (as evidenced by a Board Resolution),
adversely affect the interests of the Holders of Securities in any material
respect;

 

(i) to evidence the
succession of another Person to the Company or any other obligor upon the
Securities, and the assumption by any such successor of the covenants of the
Company or such obligor herein and in the Securities, in each case in
compliance with the provisions of this Indenture;

 

(j) to evidence and
provide the acceptance of the appointment of a successor trustee hereunder; or

 

A-10

 

(k) add or modify
any other provisions herein with respect to matters or questions arising
hereunder which the Company and the Trustee may deem necessary or desirable and
which shall not adversely affect the interests of the Holders of Securities.

 

13. Defaults
and Remedies.

 

If any
Event of Default other than as a result of certain events of bankruptcy,
insolvency or reorganization of the Company or its designated Subsidiaries
occurs and is continuing, the principal of all the Securities may be declared
due and payable in the manner and with the effect provided in the Indenture. If
an Event of Default occurs as a result of certain events of bankruptcy,
insolvency or reorganization of the Company or its designated Subsidiaries, the
principal of all the Securities 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.

 

14. Trustee
Dealings with the Company.

 

Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.

 

15. Calculations
in Respect of Securities.

 

The
Company or its agents shall be responsible for making all calculations called
for under the Securities including, but not limited to, determination of the
Market Price and Closing Sale Price of the Applicable Stock, the number of
shares of Applicable Stock and/or the amount of cash issuable or payable upon
conversion and the amounts of interest and Additional Interest, if any, on the
Securities. Any calculations made in good faith and without manifest error
shall be final and binding on Holders of the Securities. The Company or its
agents shall be required to deliver to the Trustee a schedule of its
calculations and the Trustee shall be entitled to conclusively rely upon the
accuracy of such calculations without independent verification.

 

16. No
Recourse Against Others.

 

No
recourse under or upon any obligation, covenant or agreement contained in the
Indenture, or in this Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future stockholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders and as part of the consideration
for the issue of the Securities.

 

17. Authentication.

 

This
Security shall not be valid until an authorized signatory of the Trustee signs,
manually or by facsimile, the Trustee’s Certificate of Authentication on the
other side of this Security.

 

A-11

 

18. Abbreviations.

 

Customary
abbreviations may be used in the name of a 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 U/G/M/A (=Uniform Gift to Minors Act).

 

19. INDENTURE
TO CONTROL; GOVERNING LAW.

 

IN THE
CASE OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS SECURITY AND THE INDENTURE,
THE PROVISIONS OF THE INDENTURE SHALL CONTROL. THE INDENTURE AND THIS SECURITY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

The
Company shall furnish to any Holder upon written request and without charge a
copy of the Indenture which has in it the text of this Security in larger type.
Requests may be made to:

 

if to
the Company:

 

CURAGEN CORPORATION

555 Long Wharf Drive, 11th Floor

New Haven, Connecticut 06511

Attention: Chief Financial Officer

Facsimile No.: (403) 401-3333

 

with a
copy to:

 

MINTZ, LEVIN, COHN, FERRIS, GLOVSKY & POPEO,
P.C.

One Financial Center

Boston, Massachusetts 02111

Attention: Michael Fantozzi, Esq.

Facsimile No.: (617) 542-2241

 

20. Registration
Rights.

 

The
Holders of the Securities are entitled to the benefits of a Registration Rights
Agreement, dated as of February 17, 2004, between the Company and Bear,
Stearns & Co. Inc., as amended, modified or supplements in accordance
therewith, including the receipt of Additional Interest upon a Registration
Default (as defined in such agreement).

 

A-12

 

ASSIGNMENT FORM

 

To
assign this Security, fill in the form below:

 

I or
we assign and transfer this Security to

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
				

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

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

(Print
or type assignee’s name, address and zip code) and irrevocably appoint                                         
                
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.

 

	
   

  	
  Your Signature(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

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

 

	
   

  	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
						

 

A-13

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you
wish to have this Security purchased by the Company pursuant to Article V
(Purchase at the Option of Holders Upon a Fundamental Change) of the Indenture,
check the box: Article V o.

 

If you
wish to have a portion of this Security purchased by the Company pursuant to Article V
of the Indenture, as applicable, state the amount (in Principal Amount): $                    .

 

If
certificated, the certificate numbers of the Securities to be delivered for
purchase are: .

 

Any
purchase of Securities pursuant hereto shall be pursuant to the terms and
conditions specified in the Indenture.

 

	
   

  	
   

  	
  Your Signature(s):

  	
   

  

 

	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

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

 

	
   

  	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
						

 

A-14

 

CONVERSION NOTICE

 

To
convert this Security into Common Stock of the Company, check the box o.

 

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

 

Please
check one:

 

	
  o

  	
  I certify that neither
  I nor any other Person shall become a 10% Stockholder upon satisfaction by
  the Company of the Conversion Obligation underlying this Conversion Notice in
  Common Stock.

  
	
   

  	
   

  
	
  o

  	
  I do not certify that
  neither I nor any other Person shall become a 10% Stockholder upon
  satisfaction by the Company of the Conversion Obligation underlying this
  Conversion Notice in Common Stock.

  

 

“10%
Stockholder” means a Person that owns, directly or indirectly, applying the
provisions of Section 958(a) of the Internal Revenue Code of 1986, as
amended (the “Code”), or by attribution, applying the provisions of Section 958(b) of
the Code, 10% or more of the outstanding shares of Common Stock.

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
				

(Insert the other
person’s soc. sec. or tax ID no.)

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

(Print or type the other person’s name, address and zip code) Your
Signature(s):

 

	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

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

 

	
   

  	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature

  Guarantee Medallion
  Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
						

 

A-15

 

TRANSFER CERTIFICATE(3)

RE: 4.0% CONVERTIBLE SENIOR NOTES DUE 2011 (THE “SECURITIES”) OF

CURAGEN CORPORATION (THE “COMPANY”)

 

This
certificate relates to $            
principal amount of Securities owned in (check applicable box) o book-entry o definitive form by                                 
(the “Transferor”).

 

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

 

In
connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Securities as provided in Section 2.6 and Section 2.12
of the Indenture dated February         , 2004
between the Company and The Bank of New York, as Trustee (the “Indenture”), and
the transfer of such Security 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 Security does not require registration under the Securities Act because
(check applicable box):

 

	
  o

  	
  Such Security is being
  transferred to the Company or a Subsidiary; or 

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Such Security is being
  transferred to a Qualified Institutional Buyer in compliance with
  Rule 144A under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
   

  	
  o

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

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Such Security is being
  transferred to an institutional investor that is an “accredited investor” (as
  defined in Rule 501(a)(1), (2), (3) or (7) under the
  Securities Act) that has transferred a letter making certain representations,
  warranties and agreements relating to restrictions on transfer and an opinion
  of counsel to as transfer agent (or any successor transfer agent, as
  applicable) that such transfer is in compliance with the Securities Act.

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Such Security is being
  transferred pursuant to an effective registration statement under the
  Securities Act; or

  
	
   

  	
   

  	
   

  
	
   

  	
  o

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

  

 

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

 

	
   

  	
  Date:

  	
   

  	
   

  

 

Signature(s) of Transferor

 

	
  (3)

  	
  This certificate should
  only be included if this Security is a Transfer Restricted Security.

  

 

A-16

 

(If
the registered owner is a corporation, partnership or fiduciary, the title of
the person signing on behalf of such registered owner must be stated. )
Signature Guaranteed

 

	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature

  Guarantee Medallion
  Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
					

 

A-17

 

EXHIBIT B

[FORM OF RESTRICTIVE LEGEND FOR

COMMON STOCK ISSUED UPON CONVERSION](4)

 

THE
SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

 

(1) REPRESENTS THAT
IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT OF 1933;

 

(2) AGREES THAT IT
SHALL NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY UPON
THE CONVERSION OF WHICH THE SHARES OF COMMON STOCK EVIDENCED HEREBY WERE
ISSUED, RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF
AVAILABLE), (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933 (IF AVAILABLE) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT PRIOR TO SUCH TRANSFER, FURNISHES TO, AS TRANSFER
AGENT (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE), CERTIFICATIONS AND
OPINION OF COUNSEL REQUIRED BY THE COMPANY OR TRANSFER AGENT OR (D) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER; AND (3) AGREES THAT IT SHALL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(B) OR 2(D) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.]

 

	
  (4)

  	
  This legend should be
  included only if the Security is a Global Security.

  

 

B-1Exhibit 10.27

 

COLLABORATION AGREEMENT

 

This Agreement is entered
into as of June 18, 2004 by and between:

 

SEATTLE GENETICS, INC., a Delaware corporation, having its
principal place of business at 21823 30th Drive S.E., Bothell, Washington 98021

 

(hereinafter referred to as “SGI”)

 

and:

 

CURAGEN CORPORATION, a Delaware corporation, having its
principal place of business at 555 Long Wharf Avenue, New Haven, CT 06511

 

(hereinafter referred to as “Licensee”).

 

WITNESSETH

 

WHEREAS, SGI owns or controls intellectual property rights
relating to certain technology useful for linking certain proprietary
cytotoxins to other molecules such as antibodies capable of directing such
cytotoxins to specific tissues and/or cells;

 

WHEREAS, Licensee is currently conducting research and
development programs to discover antigens that may have activity in certain
disease-related pathways, and to develop antibodies that bind to those
antigens;

 

WHEREAS, the Parties have created ADCs (as such term is defined
below) to, and conducted initial characterization work regarding, the First
Exclusive Antigen (as such term is defined below) pursuant to the terms and
subject to the conditions of the Initial Agreements (as such term is defined
below);

 

WHEREAS, Licensee wishes to obtain an exclusive worldwide
license under certain of SGI’s patent rights and know-how related to SGI’s
proprietary cytotoxin and linker technology to the First Exclusive Antigen for
use in conjunction with Licensee’s antibodies on the terms set forth below and
Licensee wishes to acquire from SGI an exclusive option to obtain an exclusive
worldwide license under SGI’s patent rights and know-how related to SGI’s
proprietary cytotoxin and linker technology to a Second Exclusive Antigen for
use in conjunction with Licensee’s antibodies; and

 

WHEREAS, SGI wishes to grant to Licensee such license and
option and to allow Licensee to evaluate SGI’s cytotoxin and linker technology
for use with certain of Licensee’s antigens and antibodies.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

 

NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth herein, the Parties hereto, intending to be legally
bound, agree as follows:

 

ARTICLE
1 - DEFINITIONS AND INTERPRETATION

 

1.1  Definitions: For
the purposes of this Agreement the following words and phrases shall have the
following meanings:

 

1.1.1 “AAA”
has the meaning set forth in Section 19.3.4.

 

1.1.2 “ADC”
or “Antibody-Drug Conjugate” means
an Antibody that is linked to a cytotoxin or cytostatic agent and that
contains, uses or is made using SGI Technology.

 

1.1.3 “ADC
Access Fee” has the meaning set forth in Section 6.1.1.

 

1.1.4 “Affiliate”
of a Party means any corporation or other business entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with a Party. As used herein, the term “control” means
the direct or indirect ownership of [***] or more of the stock having the right
to vote for directors thereof or the ability to otherwise control the
management thereof.

 

1.1.5 “Agreement”
means this agreement, all amendments and supplements to this Agreement and all
schedules to this Agreement, including the following:

 

1.1.6  Schedule A - Research Plan.

 

1.1.7  Schedule B - SGI Patents.

 

1.1.8  Schedule C - SGI In-Licenses.

 

1.1.9  Schedule D - Designated Antigens
and Exclusive Antigens.

 

1.1.10 “Antibody”
or “Antibodies” means any
antibody, or [***], that binds to an Antigen.

 

1.1.11 “Antigen”
means any [***], that is Controlled by Licensee.

 

1.1.12  “[***]”
means [***] having a GenBank accession number of [***].

 

1.1.13  “[***]”
means the SGI Technology licensed to SGI under the BMS Agreement (as defined in
the definition of “SGI In-Licenses”).

 

1.1.14 “Breaching
Party” has the meaning set forth in Section 13.3.

 

1.1.15 “Calendar
Quarter” means any of the three-month periods beginning January 1,
April 1, July 1 and October 1 in any year.

 

1.1.16 “Change
in Control” has the meaning set forth in Article 16.

 

1.1.17 “Claims”
has the meaning set forth in Section 14.1.1.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

2

 

1.1.18 “Combination
Product” means any Licensed Product that contains, in addition to an
ADC, one or more other ingredients that (a) are not covered by SGI
Technology, and (b) [***].

 

1.1.19 “Confidential
Information” has the meaning set forth in Section 8.1.

 

1.1.20 “Control”
means, with respect to any information or intellectual property right,
possession by a Party of the ability to grant the right to access or use, or to
grant a license or a sublicense to, such information or intellectual property
right as provided for herein without violating the terms of any agreement or
other arrangement with any Third Party. [***].

 

1.1.21 “Cost
of Goods” shall mean with respect to Drug Conjugate Materials
supplied to Licensee (a) for manufacturing activities performed by Third Parties,
[***], as well as [***], including without limitation [***]; and (b) for
manufacturing activities performed by SGI or its Affiliates, the [***].

 

1.1.22 “Designated
Antigen” means the [***] Antigens targeted by the ADCs prepared by
SGI and designated as such in accordance with Section 2.5 of this
Agreement.

 

1.1.23 “[***]”
means the [***] that may be [***] pursuant to [***] of this Agreement.

 

1.1.24 “Drug
Conjugation Materials” means the compound monomethyl
Auristatin E and [***] and [***] thereof, including [***], as well as
compounds that are useful in attaching such compounds to [***], in each case to
the extent included in or covered by the SGI Technology. Drug Conjugation
Materials shall also include Improvements to Drug Conjugation Materials and any
additional cytotoxic or cytostatic compounds that are included in New
Technologies and that the Parties agree to include under this Agreement
pursuant to Section 3.7.2.

 

1.1.25 “Drug
Conjugation Technology” means chemical compositions and methods that
are useful to attach cytotoxins or cytostatic compounds to Antibodies,
including the composition and methods of making and using cytotoxic or
cytostatic compounds, as well as compositions and methods useful for attaching
the foregoing cytotoxic or cytostatic compounds to Antibodies.

 

1.1.26 “Effective
Date” means the date set forth in the first line of this Agreement.

 

1.1.27 “Events
of Force Majeure” has the meaning set forth in Article 15.

 

1.1.28 “Exclusive
Antigen” means collectively, the First Exclusive Antigen, the Second
Exclusive Antigen and any Replacement Antigen.

 

1.1.29 “Exclusive
License” has the meaning set forth in Section 3.2.

 

1.1.30 “Exclusive
License Maintenance Fee” has the meaning set forth in Section 6.2.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

3

 

1.1.31 “Existing
Third Party Royalties” has the meaning set forth in Section 6.5.1.

 

1.1.32 “FD&C
Act” means the federal Food, Drug & Cosmetic Act, as
amended.

 

1.1.33 “FDA”
means the United States Food and Drug Administration, and any successor agency
thereto.

 

1.1.34 “Field” means the [***]; provided, that, with
respect to use of the [***], the Field shall be limited to [***].

 

1.1.35 “First
Commercial Sale” means, in each country of the Territory, the first
commercial sale of a Licensed Product by Licensee, its Affiliates or
Sublicensees to a Third Party following, if required by law, Regulatory
Approval and, when Regulatory Approval is not required by law, the first
commercial sale in that country, in each case for use or consumption of such
Licensed Product in such country by the general public. Sales for test
marketing, sampling and promotional uses, clinical trial purposes or
compassionate or similar use shall not be considered to constitute a First
Commercial Sale.

 

1.1.36 “First
Exclusive Antigen” means Antigen CG56972 having a [***].

 

1.1.37 “FTE
Fees” has the meaning set forth in Section 6.1.2.

 

1.1.38  “GAAP”
means generally accepted accounting principles in the United States.

 

1.1.39 “Good
Laboratory Practices” means the then-current standards for
laboratory activities for pharmaceuticals, as set forth in the FD&C Act and
applicable regulations and guidances promulgated thereunder, including without
limitation the Code of Federal Regulations, as amended from time to time.

 

1.1.40 “Improvements”
means all patentable or non-patentable inventions, discoveries, or other
know-how developed and Controlled by either Party during the Term that utilize,
incorporate, are derived from, or are made using, the SGI Technology; provided
that Improvements shall not include any [***] or any of the foregoing developed
by SGI that, within a reasonable time period after such inventions, discoveries
or know-how are made or identified, [***], which instead shall be included in
[***].

 

1.1.41 “IND”
means (a) an Investigational New Drug Application filed with the FDA or
its equivalent in any country outside the United States where a regulatory
filing is required or obtained to conduct a clinical trial; or (b) with
respect to any country where a regulatory filing is not required or obtained to
conduct a clinical trial, the first enrollment of a patient in the first trial
involving the first use of a Licensed Product in humans.

 

1.1.42 “Indemnitee”
has the meaning set forth in Section 14.2.

 

1.1.43 “Indemnitor”
has the meaning set forth in Section 14.2.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

4

 

1.1.44 “Initial
Agreements” means (a) the [***] by and between the Parties and (b) the
[***] by and between the Parties.

 

1.1.45 “Initiation”
means, with respect to a human clinical trial, the dosing of the first patient
with a Licensed Product pursuant to the clinical protocol for the specified
clinical trial.

 

1.1.46 “Joint
Patents” has the meaning set forth in Section 9.2.2.

 

1.1.47 “Liabilities”
has the meaning set forth in Section 14.1.1.

 

1.1.48 “Licensed
Product” means any and all products containing an ADC comprised of
an Antibody that binds specifically to an Exclusive Antigen and that is
attached to a cytotoxin or cytostatic agent included in the Drug Conjugation
Materials: (a) the manufacture, use, sale, offer for sale or import of
which [***]; or (b) [***].

 

1.1.49 “Licensee
ADC Know-How” means all Program Inventions developed by Licensee
using SGI Technology, and that are necessary or useful for identifying,
developing, making, using or selling ADCs that bind to any Exclusive Antigen or
Designated Antigen.

 

1.1.50 “Licensee
ADC Patents” means all patent applications and patents that are
Controlled by Licensee that claim Licensee ADC Know-How.

 

1.1.51 “Licensee
Know-How” means all technical information, processes, formulae,
data, inventions, methods, chemical compounds, biological or physical
materials, know-how and trade secrets, in each case that are not in the public
domain, used by Licensee in the Research Program and that are Controlled by
Licensee, including technical information, processes, formulae, data,
inventions, methods, chemical compounds, biological or physical materials,
know-how and trade secrets that relate to (a) the composition, method of
using or method of making an Exclusive Antigen or Designated Antigen, or (b) the
composition, method of using or method of making an Antibody that binds
specifically to an Exclusive Antigen or Designated Antigen. [***].

 

1.1.52 “Licensee
Materials” means any tangible chemical, biological or physical
research materials that are furnished by or on behalf of Licensee to SGI in
connection with this Agreement.

 

1.1.53 “Licensee
Patents” means all patent applications and patents that claim
Licensee Know-How.

 

1.1.54 “Net
Sales” means, as to each calendar quarter, the gross invoiced sales
prices charged for all Licensed Products sold by or for Licensee, its
Affiliates and Sublicensees to independent Third Parties during such quarter,
[***]:

 

(a) [***];

 

(b) [***];

 

Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

5

 

(c) [***]; and

 

(d) [***].

 

All of
the [***] from the gross invoiced sales prices of Licensed Products shall be
determined in accordance with GAAP. In the event that Licensee, its Affiliates
or Sublicensees make any adjustments [***] after the associated Net Sales have
been reported pursuant to this Agreement, the adjustments shall be reported and
reconciled in the next report and payment of any royalties due.

 

In the
event a Licensed Product is sold as part of a Combination Product, the Net
Sales from the Combination Product, for the purposes of determining royalty
payments, shall be determined by multiplying the Net Sales of the Combination
Product (as defined in the standard Net Sales definition above), during the
applicable royalty reporting period, by [***]. In the event that such average
sale price cannot be determined for the Licensed Product, on the one hand, and
all other product(s) included in the Combination Product, on the other,
Net Sales for the purposes of determining royalty payments shall be [***].

 

1.1.55 “[***]” means any [***], or other [***]
that either: (a) are developed by SGI after the Effective Date and that,
within a reasonable time period after such [***] are made or identified, SGI
determines are [***] or (b) are in-licensed by SGI after the Effective
Date, and that in each case either (x) [***], or (y) [***]. [***]
shall include without limitation cytotoxic or cytostatic compounds other than
those included in the Drug Conjugation Materials as of the Effective Date that
SGI Controls during the Term.

 

1.1.56 “Notice
of Dispute” has the meaning set forth in Section 19.3.1.

 

1.1.57 “Option”
has the meaning set forth in Section 3.3.

 

1.1.58 “Option
Period” means, with respect to each Designated Antigen, the period
commencing on the date such [***] and continuing until [***] (a) [***] or (b) [***];
provided that all Option Periods shall terminate when [***] pursuant to
the terms hereof; and provided further that, if applicable, the Option
Period for [***] shall be for a period of [***] after SGI notifies Licensee
that [***].

 

1.1.59 “Parties”
means Licensee and SGI, and “Party” means either of them.

 

1.1.60 “Phase
II Clinical Trial” means a controlled dose clinical trial
prospectively designed to evaluate the efficacy and safety of a candidate drug
in the targeted patient population and to define the optimal dosing regimen.

 

1.1.61 “Phase
III Clinical Trial” means a controlled, and usually multi-center,
clinical trial, involving patients with the disease or condition of interest to
obtain sufficient efficacy and safety data to support Regulatory Approval of a
candidate drug.

 

1.1.62 “Program
Invention” means any process, formula, method, chemical compound,
biological or physical material, invention, technology, know-how, trade secret
or data conceived or reduced to practice by either Party or jointly by both
Parties in the conduct of the

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

6

 

activities under this Agreement and/or under the
Initial Agreements; provided, that any Program Inventions made pursuant
to the Initial Agreements that are not related to a Designated Antigen or an
Exclusive Antigen shall remain governed by the terms of the Initial Agreements.

 

1.1.63 “Program
Licensee Patents” has the meaning set forth in Section 9.3.3.

 

1.1.64 “Publication”
has the meaning set forth in Section 8.5.

 

1.1.65 “Regulatory
Approval” means final regulatory approval (including, where
applicable, pricing approval in the event that actual sales do not take place
before such approval) required to market a Licensed Product for a disease or
condition in accordance with the applicable laws and regulations of a given
country. In the United States, its territories and possessions, Regulatory
Approval means approval of a New Drug Application (“NDA”), Biologics
License Application (“BLA”) or an equivalent by the FDA.

 

1.1.66 “[***]”
means the Designated Antigen, if any, designated by Licensee to replace the
[***] in accordance with [***] of this Agreement.

 

1.1.67 “Reports”
has the meaning set forth in Section 7.1.1.

 

1.1.68 “Research
Fees” has the meaning set forth in Section 6.1.2.

 

1.1.69 “Research
Fees Report” has the meaning set forth in Section 6.1.2.

 

1.1.70  “Research
License” has the meaning set forth in Section 3.1.

 

1.1.71 “Research
Plan” means the plan for the Research Program agreed upon by the
Parties and attached hereto as Schedule A.

 

1.1.72 “Research
Program” means the research program conducted pursuant to Article 2.

 

1.1.73 “Research
Program Term” means the term of the Research Program set forth in Section 2.2.

 

1.1.74 “Royalty
Term” means, on a Licensed Product-by-Licensed Product and
country-by-country basis, until the later to occur of: (a) the (10th) tenth anniversary of the date of First
Commercial Sale of the Licensed Product in such country; or (b) the expiration
of the last to expire Valid Patent Claim that would be infringed by the sale of
the Licensed Product in such country, if not for the licenses granted
hereunder.

 

1.1.75 “Second
Exclusive Antigen” means a Designated Antigen, other than the First
Exclusive Antigen, for which Licensee exercises the Option for an Exclusive
License under Section 3 of this Agreement.

 

1.1.76 “SGI
In-Licenses” means the following agreements between SGI and the
indicated Third Parties: (a) the [***]); (b) [***]; and (c) any
other license agreement between SGI and a Third Party covering [***] under
which Licensee is [***].

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

7

 

1.1.77 “SGI
Know-How” means any and all technical information, processes,
formulae, data, inventions, methods, chemical compounds, biological or physical
materials, know-how and trade secrets, in each case that are not in the public
domain, that relate to or are useful to practice the Drug Conjugation
Technology and that have been, or hereafter are during the Term, Controlled by SGI.
SGI Know-How shall include Improvements Controlled by SGI but shall exclude
[***] unless [***].

 

1.1.78 “SGI
Patents” means:

 

(a) any existing
patents and patent applications listed in Schedule B to this
Agreement, which shall be amended from time to time to reflect any other
patents and patent applications;

 

(b) any patents and
patent applications covering Improvements and, solely to the extent the Parties
so agree [***], [***], in each case that are Controlled by SGI;

 

(c) any future
patents issued from any patent applications referred to above and any future
patents issued from any continuation, continuation-in part (to the extent
Controlled by SGI), or divisional of any of the foregoing patent applications
or any patent applications from which the foregoing patents issued, in each
case to the extent Controlled by SGI; and

 

(d) any reissues,
reexaminations, confirmations, renewals, registrations, substitutions,
extensions, or counterparts of any of the foregoing, in each case to the extent
Controlled by SGI.

 

1.1.79 “SGI
Technology” means the SGI Patents and the SGI Know-How.

 

1.1.80 “Sublicensees”
means any person or entity that is granted a sublicense under the SGI
Technology by Licensee or its Affiliates in accordance with the terms of this
Agreement.

 

1.1.81 “Supply
Fees” has the meaning set forth in Section 6.1.2.

 

1.1.82 “Term”
has the meaning set forth in Article 13.

 

1.1.83 “Territory”
means all countries in the world.

 

1.1.84 “Third
Party” means any person or entity other than Licensee, SGI and their
respective Affiliates.

 

1.1.85 “Valid
Patent Claim” means (a) an unexpired claim of an issued patent
which has not been found to be unpatentable, invalid or unenforceable by an
unreversed and unappealable decision of a court or other authority in the
subject country; or (b) a claim of an application for a patent that has
been pending for less than [***].

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

8

 

1.2  Certain Rules of Interpretation
in this Agreement and the Schedules.

 

1.2.1 Unless otherwise specified, all references
to monetary amounts are to United States of America currency (U.S. Dollars);

 

1.2.2 The preamble to this Agreement and the
descriptive headings of Articles and Sections are inserted solely for
convenience of reference and are not intended as complete or accurate
descriptions of the content of this Agreement or of such Articles or Sections;

 

1.2.3 The use of words in the singular or
plural, or with a particular gender, shall not limit the scope or exclude the
application of any provision of this Agreement to such person or persons or
circumstances as the context otherwise permits;

 

1.2.4 The words “include” and “including” have
the inclusive meaning frequently identified with the phrases “without
limitation” and “but not limited to”;

 

1.2.5 Unless otherwise specified, time periods
within or following which any payment is to be made or act is to be done shall
be calculated by excluding the day on which the period commences and including
the day on which the period ends and by extending the period to the next
business day following if the last day of the period is not a business day in
the jurisdiction of the Party to make such payment or do such act; and

 

1.2.6 Whenever any payment is to be made or
action to be taken under this Agreement is required to be made or taken on a
day other than a business day, such payment shall be made or action taken on
the next business day following such day to make such payment or do such act.

 

ARTICLE
2 - RESEARCH PROGRAM

 

2.1  Objective and Conduct of the
Research Program. Licensee intends to conduct a Research
Program, with SGI’s support, to evaluate ADCs for commercial development under
this Agreement with the goal of using SGI Technology to identify [***] for
further development by Licensee as Licensed Products, as more fully described
in the Research Plan. Licensee acknowledges that, in addition to the licenses
to the SGI Patents granted hereunder, the SGI Know-How transferred to Licensee
under this Agreement contains valuable information that is critical to Licensee’s
development of ADCs hereunder. All research work performed by Licensee and SGI
hereunder shall be performed in a good scientific manner and in compliance with
all applicable laws.

 

2.2  Term of the Research Program.
The term of the Research Program shall initially be for a period of [***]
after the Effective Date (the “Research Program Term”), unless
terminated earlier in accordance with Article 13.

 

2.3  Delivery of Drug Conjugation
Materials. In support of the Research Program, SGI will deliver
Drug Conjugation Materials to Licensee at mutually agreed upon times and in
mutually agreed upon quantities to enable Licensee to attach such materials to
Licensee’s Antibodies to create ADCs. At Licensee’s request, SGI will also
provide Licensee with the [***] provided to Licensee to [***]. All such Drug
Conjugation Materials and other information provided by SGI to Licensee
hereunder will be deemed Confidential Information of SGI pursuant to Article 8.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

9

 

2.4  SGI Preparation of ADCs.
[***]. In order to identify the Second Exclusive Antigen during the Research
Program Term, SGI will prepare mutually agreed upon research quantities of ADCs
using the Drug Conjugation Materials for up to [***] targeted to up to [***]
supplied by Licensee to SGI.

 

2.5  Availability of Antigens.
Licensee shall provide SGI with a confidential written description of each
Antigen, including to the extent available, the GenBank accession number and
the cDNA and/or amino acid sequence for each Antigen, which Licensee desires to
designate as a Designated Antigen for purposes of this Agreement. Within [***]
following SGI’s receipt of such written notice with respect to a particular
Antigen, SGI shall notify Licensee in writing whether the Exclusive License
described in Article 3 of this Agreement is available with respect to such
Antigen. In addition, SGI shall promptly notify Licensee in writing if at any
time during the Research Program Term [***]. To the extent such Exclusive
License to [***] is and/or becomes available as described in this Section 2.5,
then [***] shall be deemed to be a Designated Antigen under this Agreement and
Licensee shall have an Option Period of [***] thereafter to determine whether
to exercise an Exclusive License to [***] as the Second Exclusive Antigen. Schedule D
to this Agreement will be amended from time to time to list the Designated
Antigens and the Second Exclusive Antigen (including a description thereof)
under this Agreement. The Parties hereby acknowledge and agree that an Antigen
shall be available for designation by Licensee as a Designated Antigen unless (a) [***]
or (b) [***]. Licensee may not designate Antigens as Designated Antigens
following expiration of the Research Program Term. If, after designation of an
Antigen as a Designated Antigen, a [***], SGI shall inform Licensee in writing,
and Licensee shall have a period of [***] to inform SGI in writing that
Licensee [***]. If Licensee does not exercise an Exclusive License for such
Designated Antigen [***], then (a) [***] (b) below and (b) [***].

 

2.6  Additional Activities under
Research Program. Upon mutual agreement of the Parties, the
Research Program may also include the development by SGI of a technology
transfer program for the conjugation of toxins to Antibodies, including the
associated purification and analytics.

 

2.7  Payment. Licensee
shall pay SGI the amounts set forth in Section 6.1.2 for any research
efforts or other assistance provided by SGI.

 

2.8  Supply of Licensee Materials.
From time to time during the Term, Licensee may supply SGI with Licensee
Materials for use in the Research Program. In connection therewith, SGI hereby
agrees that (a) it shall not use Licensee Materials for any purpose other
than exercising any rights granted to it hereunder; (b) it shall use the
Licensee Materials only in compliance with all applicable federal, state, and
local laws and regulations; (c) it shall not transfer any Licensee
Materials to any Third Party without the prior written consent of Licensee; (d) Licensee
shall retain full ownership of all such Licensee Materials; and (e) upon
the expiration or termination of this Agreement, SGI shall at the instruction
of Licensee either destroy or return any unused Licensee Materials.

 

2.9  Disclaimers. EXCEPT
AS MAY BE OTHERWISE PROVIDED IN ARTICLE 12, SGI MAKES NO REPRESENTATIONS
AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF
LAW, BY STATUTE OR

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

10

 

OTHERWISE, REGARDING THE
DRUG CONJUGATION MATERIALS OR ANY ADCs PREPARED BY SGI, INCLUDING ANY WARRANTY
OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR USE
OR PURPOSE. EXCEPT AS MAY BE OTHERWISE PROVIDED IN ARTICLE 12, LICENSEE
MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER
IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, REGARDING THE LICENSEE
MATERIALS, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT
OR FITNESS FOR A PARTICULAR USE OR PURPOSE.

 

ARTICLE
3 - LICENSES; OPTION; DROPPED ANTIGENS

 

3.1  Research License Grants.
Upon payment of the ADC Access Fee set forth in Section 6.1.1, subject
to the terms and conditions of this Agreement, SGI shall automatically be
deemed to have granted to Licensee a non-exclusive, worldwide, royalty-free
license under the SGI Technology solely to conduct the Research Program in
accordance with Article 2 of this Agreement (the “Research License”).
The Research License shall include the right to evaluate and conduct research
on ADCs that bind to any Designated Antigen solely for the purpose of
determining Licensee’s interest in exercising the Option for such Designated
Antigen, but shall not include (a) the right to grant sublicenses thereto
to any Third Party, (b) the right to initiate any human clinical trial
utilizing such ADCs in any country or (c) the right to make, have made,
use or sell a Licensed Product or any SGI Technology. Notwithstanding the
foregoing, [***], a form of which has been provided by Licensee to SGI. The
Research License shall continue for the Research Program Term, unless earlier
terminated pursuant to Article 13; provided that the Research
License shall terminate when Licensee no longer has the right to designate any
Designated Antigen(s) as either a Replacement Antigen or a Second
Exclusive Antigen pursuant to the terms hereof.

 

3.2  Exclusive License Grants.
Upon payment of the ADC Access Fee set forth in Section 6.1.1 with respect
to the First Exclusive Antigen, and the Option Exercise Fee set forth in Section 6.3
of this Agreement with respect to the Second Exclusive Antigen, subject to the
terms and conditions of this Agreement, and commencing as of the date SGI has
received the ADC Access Fee or Option Exercise Fee, as the case may be, from
Licensee, SGI shall automatically be deemed to have granted to Licensee an
exclusive (even as to SGI), royalty-bearing license under the SGI Technology,
with the right to sublicense as permitted in Section 3.6, to discover,
develop, have developed, make, have made, import, use, offer for sale, and sell
Licensed Products that bind specifically to the Exclusive Antigen within the
Field in the Territory (each, an “Exclusive License” and collectively,
the “Exclusive Licenses”). Each Exclusive License shall continue for the
Royalty Term, unless earlier terminated pursuant to Article 13, subject to
payment of applicable milestones, royalties and the Exclusive License
Maintenance Fees set forth in Section 6.2 of this Agreement applicable to
such Exclusive License.

 

3.3  Grant of Option.
Subject to the provisions of this Agreement, SGI hereby grants Licensee an
option to obtain the Exclusive License described in Section 3.2 of this
Agreement to the Second Exclusive Antigen (the “Option”) during the
Option Period.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

11

 

3.4  Procedure to Exercise Option.
At any time during the Option Period, Licensee shall have the right to
notify SGI in writing that it desires to obtain the Exclusive License to the
Second Exclusive Antigen by providing written notice to SGI. Licensee shall pay
SGI the Option Exercise Fee described in Section 6.3 of this Agreement
(the date of payment by Licensee of the Option Exercise Fee being referred to
herein as the “Option Exercise Date”) whereupon (a) such Designated
Antigen shall be deemed to be the Second Exclusive Antigen for purposes of this
Agreement and (b) Licensee shall be deemed to have been granted an
Exclusive License with respect to such Second Exclusive Antigen in accordance
with Section 3.2 of this Agreement, without any further action of the
Parties. [***].

 

3.5 [***]. If at any time during the period commencing on the
Effective Date and continuing for a period of [***] thereafter, Licensee
reasonably determines [***] for purposes of this Agreement by providing SGI
with written notice of same. Licensee shall have the right to designate [***]
as a [***] in accordance with the procedure described in Sections 2.5 and 3.4
of this Agreement. Once the [***] becomes a [***] (a) [***], (b) [***]
and (c) [***].

 

3.6 Rights to Sublicense.

 

3.6.1 Licensee shall have the right to grant
sublicenses of each Exclusive License to any Affiliate or Third Party with
respect to any Licensed Product for which Licensee has either retained
marketing rights or upon which Licensee has expended material research and/or
development effort, it being understood that any Licensed Product that contains
a Designated Antigen and/or an Antibody to a Designated Antigen developed by
Licensee shall be deemed to have satisfied the foregoing condition and that
Licensee shall have the right to grant sublicenses under the Exclusive License
with respect to such Licensed Product, subject to the remainder of this Section 3.6.1.
Licensee agrees to contractually obligate any Sublicensee to make all payments
due to SGI pursuant to this Agreement by reason of achievement of any
milestones set forth in Section 6.6 or owed on Net Sales of any Licensed
Products by any such Sublicensee pursuant to Sections 6.4 and 6.5, as well as
to comply with all terms of this Agreement and the SGI In-Licenses applicable
to Licensee (including all terms of this Agreement identified as applicable to
Sublicensee). Licensee shall also require any such Sublicensee to agree in
writing to keep books and records and permit SGI to review the information
concerning such books and records in accordance with the terms of this
Agreement.

 

3.6.2 Licensee shall notify SGI of each
sublicense granted to Affiliates or Third Parties and shall provide SGI with
the name and address of each Sublicensee and a description of the rights
granted and the territory covered by each Sublicensee.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

12

 

3.7 Improvements and New Technologies.

 

3.7.1 Improvements. In the event that, during the Research
Program Term, either Party conceives, develops or reduces to practice an
Improvement, such Party shall promptly notify the other Party of the discovery
of such Improvement. SGI shall own all Improvements and, to the extent that any
Improvements shall have been conceived, developed or reduced to practice by
Licensee, Licensee hereby assigns all of its right, title and interest therein
to SGI. SGI’s interest in any such Improvements shall be included in the SGI
Technology and made available to Licensee via the Research License and
Exclusive License provided in Article 3.

 

3.7.2 [***]. Subject to the [***], Licensee shall
have the right to practice any [***] pursuant to the Exclusive Licenses granted
under Article 3 as follows: SGI shall [***] of any [***] by providing to
Licensee a written [***] of the [***], including all [***] under which [***]
would be able to access such [***]. If Licensee is interested in practicing
such [***], the Parties shall discuss in good faith modifications to this
Agreement to reflect the terms governing Licensee’s access to any [***]
pursuant to this Agreement, which shall include without limitation Licensee’s
agreement to [***] attributable to Licensee’s use of such [***] and; provided
that the [***] shall be deemed to include [***] (as applicable) relating to or
covering such [***] only after the Parties execute an amendment to this
Agreement specifying such modified terms. Except as set forth in the foregoing
sentence and any modifications to this Agreement including any such
modification relating to [***] for [***], SGI shall be responsible for [***] of
all consideration (including all [***]) [***] under any agreements covering
[***].

 

3.7.3  [***]. [***] shall
be amended from time to time to [***] Controlled by SGI [***] in accordance
with this Section 3.7.

 

3.8 Compliance with the SGI In-Licenses.

 

3.8.1 Licensee, its Affiliates and
Sublicensees shall comply with all obligations, covenants and conditions of the
SGI In-Licenses listed in Schedule C applicable to Licensee and its
Affiliates and Sublicensees, and any amendments thereto following written
disclosure thereof to Licensee, that apply under each of the SGI In-Licenses.
The Parties agree that BMS is a Third Party beneficiary of this Agreement
solely to the extent SGI Technology licensed to Licensee hereunder includes
technology sublicensed by SGI under the BMS Agreement.

 

3.8.2 SGI will not [***] any [***] to an [***]
that [***] or [***] of the [***] hereunder [***].

 

3.9  License to SGI.
Subject to the provisions of this Agreement, Licensee hereby grants to SGI
during the Research Program Term a non-exclusive, royalty-free, sublicenseable
license under the Licensee Patents and Licensee Know-How, to enable SGI to
perform or have performed its responsibilities under the Research Program.

 

ARTICLE
4 - TECHNOLOGY DISCLOSURE

 

4.1  Disclosure of Drug Conjugation
Technology. During the Term, SGI shall (a) disclose to
Licensee such SGI Know-How as is reasonably useful to enable Licensee to use
the

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

13

 

 

 

Drug Conjugation
Materials and Drug Conjugation Technology as provided in the Research Plan or
to practice the Research License and Exclusive Licenses, and subject to the
conditions, of this Agreement and (b) upon Licensee’s reasonable request
and with adequate notice to SGI, make available to Licensee at SGI’s
facilities, SGI’s personnel to provide a reasonable amount of technical
assistance and training to Licensee’s personnel. Licensee shall pay to SGI for
such assistance an amount equal to the FTE Fees in accordance with Section 6.1.2
for SGI employees providing such assistance.

 

ARTICLE
5 - DEVELOPMENT AND COMMERCIALIZATION; MANUFACTURING

 

5.1  Diligence.
Licensee shall use commercially reasonable efforts to develop, commercialize
and market Licensed Products, such efforts to be consistent with the exercise
of prudent scientific and business judgment and comparable to the efforts
Licensee applies to its other projects of similar potential and market size.
Without limiting the foregoing, Licensee shall, as commercially prudent, (a) conduct
such preclinical and clinical trials as are necessary to obtain Regulatory
Approvals for Licensed Products in major markets therefor, (b) diligently
obtain any necessary approvals to market such Licensed Products in major
markets therefor (including, as relevant, pricing and reimbursement approval),
and (c) market such Licensed Products in each country in which Licensee
has received Regulatory Approval therefor. Licensee shall comply with all
applicable laws, rules and regulations (including Good Laboratory
Practices, and good clinical and manufacturing practices, to the extent
applicable) in the development and commercialization of such Licensed Products,
and shall cause its Affiliates and Sublicensees to do the same.

 

5.2  Funding and Progress Reports.
Except as expressly set forth herein, as between SGI and Licensee, Licensee
shall be solely responsible for funding all costs of the development and
commercialization of Licensed Products. Licensee shall keep SGI informed in a
timely manner as to the progress of the development of Licensed Products.

 

5.3 Manufacturing. Except as otherwise expressly set forth in this
Agreement, Licensee shall be responsible for all manufacturing and supply of
the Licensed Products. Notwithstanding the foregoing, SGI shall (a) [***],
including in accordance with good manufacturing practices for clinical trials,
on an [***] and (b) consider in good faith any request by Licensee for
supply of other Drug Conjugate Materials. In the event SGI [***], the Parties
shall [***], including [***] and other such terms as may be appropriate and
customary in [***].

 

ARTICLE
6 - FEES, ROYALTIES AND PAYMENTS

 

6.1  Research Fees.
Licensee shall pay to SGI the following amounts in consideration of the
Research Program:

 

6.1.1 Within ten (10) business days of
the Effective Date, Licensee shall pay to SGI the sum of Two Million U.S.
Dollars ($2,000,000) by wire transfer of immediately available funds (the “ADC
Access Fee”).

 

6.1.2 Licensee shall pay SGI at an annual rate
of [***] per FTE who provides assistance as requested by Licensee pursuant to
this Agreement in each of the first [***] of the Term (the “FTE Fees”).
Commencing upon the [***] of the Effective Date (the “[***]”) and

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

14

 

upon [***] thereafter, the FTE Fees will [***] by
[***] per FTE per year; provided, that, notwithstanding the
foregoing, the Parties hereby agree that Licensee shall pay no consideration to
SGI in connection with any preparation of ADCs or related characterization work
performed by SGI under the Initial Agreements. Licensee shall also pay SGI for
all Drug Conjugation Materials supplied by SGI to Licensee hereunder at the
rate of [***] of SGI’s Cost of Goods therefor (the “Supply Fees”). The
FTE Fees and the Supply Fees are collectively referred to herein as (the “Research
Fees”). Within [***] after the end of each [***], SGI shall submit a report
to Licensee supporting the calculation of the Research Fees due for such [***]
(a “Research Fees Report”). Licensee shall pay all Research Fees to SGI
within [***] of receipt of each Research Fees Report.

 

6.2  Exclusive License Maintenance
Fees. Licensee shall be [***] to SGI in the sum of [***] per
Exclusive Antigen by wire transfer of immediately available funds (the “Exclusive
License Maintenance Fee”) on [***] (with respect to the [***]) and the
Option Exercise Date (with respect to the [***] ) up through the date on which
[***].

 

6.3  Option Exercise Fee. Licensee
shall pay to SGI an Option Exercise Fee of [***] for the Exclusive License
obtained by Licensee with respect to the [***] to the extent such Exclusive
License is obtained on or before the [***] of the Effective Date, [***] to the
extent such Exclusive License is obtained on or before the [***] of the Effective
Date and [***] to the extent such Exclusive License is obtained on or before
the [***] of the Effective Date, payable in either case, within [***] after the
exercise by Licensee of the Option with respect to the [***] in accordance with
Section 3.4 of this Agreement.

 

6.4  Royalties Payable by Licensee.
In consideration for the Exclusive Licenses granted to Licensee herein,
during the Royalty Term, and subject to Section 6.5, Licensee shall pay to
SGI and BMS royalties on Net Sales of Licensed Products during the Royalty
Term. Such royalties shall be paid at the following rates, determined on a
Licensed Product-by-Licensed Product basis as set forth below:

 

6.4.1 Royalties
Payable to SGI.

 

(a) [***] of the first [***] in aggregate
[***] of [***] in each [***]; and

 

(b) [***] of the portion of aggregate [***]
of [***] in excess of [***] in each [***].

 

6.4.2 Royalties
Payable to BMS. [***]
of [***] of [***] in each [***] during the Royalty Term, subject to all of the
terms and conditions of the BMS Agreement. Solely for the purpose of this Section 6.4.2,
the terms “Net Sales”, “Licensed Products” and “Royalty Term” and any other
relevant terms related to calculation of royalties payable to BMS shall have
their respective meanings set forth in the BMS Agreement.

 

6.4.3 Royalty
Background.
In establishing the royalty structure of this Section 6.4, the Parties
recognize, and Licensee acknowledges, the substantial value of the various
actions and investments undertaken by SGI prior to the Effective Date. Such value
is significant and in addition to the value of SGI’s grant to Licensee of the
Exclusive License pursuant to

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

15

 

Section 3.2, as it enables the rapid and
effective development and commercialization of the Licensed Products in the
Territory. Therefore, the Parties agree that the royalty payments calculated as
a percentage of Net Sales (plus the license fee, milestone payments and other
payment provided for elsewhere herein) provide fair compensation to SGI for
these additional benefits.

 

6.5 Third Party Royalties; Adjustments to Royalties.

 

6.5.1 Licensee shall be solely responsible for
paying all royalties owed to Third Parties by either Licensee or SGI on account
of sales of Licensed Products by Licensee, its Affiliates or Sublicensees,
including royalties owed due to use of the SGI Technology, [***]. SGI shall be
responsible for the payment of all other consideration (including any milestone
payments) due and payable under the SGI In-Licenses except as described in the
foregoing sentence and/or except as set forth in Section 3.7.2 with regard
to any New Technologies. SGI represents and warrants that [***].

 

6.5.2 The royalties otherwise due and payable
to SGI pursuant to Section 6.4.1 of this Agreement shall [***] with respect
to any Licensed Product sold in any country where commercialization,
manufacture, marketing or sale of such Licensed Product [***].

 

6.5.3 If the sum of (a) [***] under [***]
and (b) any other royalties Licensee is required to pay any [***] in order
to practice the SGI Technology to make, use and sell [***] (including any
royalties payable with respect to [***] of [***] of a [***] in any calendar
year, then the royalties otherwise due and payable by Licensee under Section 6.4.1
[***] of any royalties due by Licensee with respect to Net Sales of a Licensed
Product in such [***] of such [***]; provided, however, that in
no event shall the [***] pursuant to Section 6.4.1 with respect to a
Licensed Product in any calendar year be [***] of the [***] under Section 6.4.1
but for such offsets.

 

6.5.4 If, as a result of either (a) negotiations
between [***] conducted during the Term of this Agreement and/or (b) use
of SGI Technology in Licensed Products that does not [***], the royalty payable
to [***] under [***] above by Licensee, its Affiliates or Sublicensees is [***]
of [***] (the amount of any such [***], the [***]), then the royalty otherwise
due and payable by Licensee to SGI under [***] shall be [***] of the [***]. For
purposes of clarity, this Section 6.5.4 shall not apply to any [***] to
the [***] agreed to or implemented pursuant to [***] above prior to the
Effective Date (including without limitation any [***] that are contained in
the [***] as of the Effective Date), which [***] shall be applied to the royalty
payable by Licensee [***] under [***] without any corresponding increase in the
[***].

 

6.6  Milestone Payments.
As additional consideration for the licenses, rights and privileges granted to
it hereunder, Licensee shall pay to SGI the following milestone payments within
[***] of the first occurrence of each event set forth below with respect to the
[***] Licensed Product that targets each Exclusive Antigen (regardless of how
many Licensed Products are developed to target that Exclusive Antigen), whether
such events are achieved by Licensee, its Affiliates or Sublicensees, as
follows:

 

(a) Upon [***] for a [***];

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

16

 

(b) Upon [***] for a [***];

 

(c) Upon [***] for a [***];

 

(d) Upon [***] or equivalent for a [***]; and

 

(e) Upon [***] for a [***].

 

If any
of (a) through (d) above is achieved before a preceding milestone
payment has become due, then such payment shall be deemed to become due within
[***] of the achievement of the subsequent milestone.

 

6.7  Payment Terms. Royalties
shown to have accrued by each Report provided for under Article 6 of this
Agreement shall be due on the date such Report is due pursuant to Section 7.1.3.

 

6.8  Payment Method. All
payments by Licensee to SGI under this Agreement shall be paid in U.S. dollars,
and all such payments shall be made by bank wire transfer in immediately
available funds to the bank account designated by SGI in writing.

 

6.9  Exchange Control. If
at any time legal restrictions prevent the prompt remittance of part or all
royalties with respect to any country in the Territory where Licensed Product
is sold, payment shall be made through such lawful means or method as the
Parties reasonably shall determine.

 

6.10  Withholding Taxes. Except
as otherwise provided below, all amounts due from Licensee to SGI under this
Agreement are gross amounts. Licensee shall be entitled to deduct the amount of
any withholding taxes payable or required to be withheld by Licensee, its
Affiliates or Sublicensees, to the extent Licensee, its Affiliates or
Sublicensees pay such withheld amounts to the appropriate governmental
authority on behalf of SGI. Licensee shall use commercially reasonable efforts
to minimize any such taxes, levies or charges required to be withheld on behalf
of SGI by Licensee, its Affiliates or Sublicensees. Licensee promptly shall
deliver to SGI proof of payment of all such taxes, levies and other charges,
together with copies of all communications from or with such governmental
authority with respect thereto, and shall cooperate with SGI in seeking any
related tax credits that may be available to SGI with respect thereto.

 

ARTICLE
7 - ROYALTY REPORTS AND ACCOUNTING

 

7.1 Reports, Exchange Rates.

 

7.1.1 During the Royalty Term, Licensee shall
furnish to SGI, with respect to each [***], a written report showing, on a
consolidated basis in reasonably specific detail and on a country-by-country
basis, (a) the gross sales of Licensed Products sold by Licensee, its
Affiliates and its Sublicensees in the Territory during the [***] and the
calculation of Net Sales from such gross sales; (b) the royalties payable
in U.S. dollars, if any, which shall have accrued hereunder based upon such Net
Sales of Licensed Products; (c) the withholding taxes, if any, required by
law to be deducted in respect of such royalties; (d) the dates of the
First Commercial

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

17

 

Sale of each Licensed Product in each country in the
Territory, if it has occurred during the corresponding [***]; and (e) the
exchange rates (as determined pursuant to Section 7.1.4 herein) used in
determining the royalty amount expressed in U.S. dollars (collectively, “Reports”).

 

7.1.2 Licensee shall include in each permitted
sublicense granted by it pursuant to this Agreement a provision requiring its
Affiliates and Sublicensees to make Reports to Licensee within [***] of the
close of each [***] and to keep and maintain records of sales made pursuant to
such sublicense as if such sales were by Licensee for the purpose of Section 7.1.1.

 

7.1.3 Reports shall be due on the [***]
following the end of the [***] to which such Report relates. Licensee shall
keep complete and accurate records in sufficient detail to properly reflect all
gross sales and Net Sales and to enable the royalties payable hereunder to be
determined.

 

7.1.4 With respect to sales of Licensed
Products invoiced in U.S. dollars, the gross sales, Net Sales, and royalties
payable shall be expressed in U.S. dollars. With respect to sales of Licensed
Products invoiced in a currency other than U.S. dollars, the gross sales, Net
Sales and royalties payable shall be expressed in the currency of the invoice
issued by the Party making the sale together with the U.S. dollars equivalent
of the royalty due, calculated using the [***].

 

7.2 Audits.

 

7.2.1 Upon the written request of SGI and with
at least [***] prior written notice, but not more than [***] in any [***],
Licensee shall permit an independent certified public accounting firm of
internationally recognized standing, selected by SGI and reasonably acceptable
to Licensee, [***], to have access during normal business hours to such of the
records of Licensee as required to be maintained under this Agreement to verify
the accuracy of the Reports due hereunder. Such accountants may audit records
relating to Reports made for any year ending not more than [***] prior to the
date of such request. The accounting firm shall disclose to SGI only whether
the Reports were correct or not, and the specific details concerning any
discrepancies. No other information obtained by such accountants shall be
shared with SGI.

 

7.2.2 If such accounting firm concludes that
any royalties were owed but not paid to SGI, Licensee shall pay the additional
royalties within [***] of the date SGI delivers to Licensee such accounting
firm’s written report so concluding. The fees charged by such accounting firm
shall be [***]; provided, however, if the audit discloses that
the royalties payable by Licensee for the audited period [***] of the royalties
actually paid for such period, then [***] charged by such accounting firm. If
such accounting firm concludes that the royalties paid were more than what was
owed during such period, SGI shall refund the overpayments within [***] of the
date SGI receives such accounting firm’s written report so concluding.

 

7.3  Confidential Financial
Information. SGI shall treat all financial information subject
to review under this Article 7 or under any sublicense agreement as
Confidential Information of Licensee as set forth in Article 8, and shall
cause its accounting firm to retain all such financial information in
confidence under terms substantially similar to those set forth in Article 8.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

18

 

ARTICLE
8 - CONFIDENTIALITY

 

8.1  Non-Disclosure Obligations.
Except as otherwise provided in this Article 8, during the Term and
for a period of [***] thereafter, each Party shall maintain in confidence, and
use only for purposes as expressly authorized and contemplated by this
Agreement, all confidential or proprietary information, data, documents or
other materials supplied by the other Party under this Agreement and marked or
otherwise identified as “Confidential.” Confidential Information of SGI shall
include SGI Technology and SGI’s interest in any Improvements and [***].
Confidential Information of a Party may also include information relating to
such Party’s research programs, development, marketing and other business
practices and finances. For purposes of this Agreement, information and data
described above shall be hereinafter referred to as “Confidential
Information.” Each Party shall use at least the same standard of care as it
uses to protect its own Confidential Information to ensure that its and its
Affiliates’ employees, agents, consultants and clinical investigators only make
use of the other Party’s Confidential Information for purposes as expressly
authorized and contemplated by this Agreement and do not disclose or make any
unauthorized use of such Confidential Information.

 

8.2  Permitted Disclosures.
Notwithstanding the foregoing, but subject to the last sentence of this Section 8.2,
the provisions of Section 8.1 shall not apply to information, documents or
materials that the receiving Party can conclusively establish:

 

(a) have become published or otherwise
entered the public domain other than by breach of this Agreement by the
receiving Party or its Affiliates;

 

(b) are permitted to be disclosed by prior
consent of the other Party;

 

(c) have become known to the disclosing Party
by a Third Party, provided such Confidential Information was not obtained by
such Third Party directly or indirectly from the other Party under this
Agreement on a confidential basis;

 

(d) prior to disclosure under the Agreement,
was already in the possession of the receiving Party, its Affiliates or Sublicensees,
provided such Confidential Information was not obtained directly or indirectly
from the other Party under this Agreement;

 

(e) are required to be disclosed by the
receiving Party to comply with any applicable law, regulation or court order,
or are reasonably necessary to obtain patents, copyrights or authorizations to
conduct clinical trials with, and to commercially market, Licensed Product(s),
provided that the receiving Party shall provide prior notice of such disclosure
to the other Party and take reasonable and lawful actions to avoid or minimize
the degree of disclosure;

 

(f) to the extent reasonably needed in a
patent application claiming Program Inventions made hereunder to be filed with
the United States Patent and Trademark Office and/or any similar foreign
agency, provided that the Party filing the patent shall provide prior notice of
such disclosure to the other Party and take reasonable and lawful actions to
avoid or minimize the degree of disclosure;

 

(g) to a potential Sublicensee or Sublicensee
as permitted hereunder, provided that such potential Sublicensee or Sublicensee
is then subject to obligations of confidentiality

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

19

 

and limitations on use of such Confidential
Information substantially similar to those contained herein; and

 

(h) to a potential or bona fide collaborator
or manufacturing, development or sales contractor or partner, but only to the
extent directly relevant to the collaboration, partnership or contract and
provided that such collaborator, partner or contractor is then subject to
obligations of confidentiality and limitations on use of such Confidential
Information substantially similar to those contained herein.

 

Notwithstanding the
disclosures permitted under subsections (e)-(h), if the information, documents
or materials covered by such subsection is otherwise protected by obligations
of confidentiality, then the confidentiality obligations of Section 8.1
shall still apply.

 

8.3  Terms of the Agreement.
Licensee and SGI shall not disclose any terms or conditions of this
Agreement to any Third Party without the prior consent of the other Party,
except as required by applicable laws, regulations or a court order or to
comply with rules of a securities exchange, in which case the disclosing
Party shall provide notice to the other Party and take reasonable and lawful
actions to avoid or minimize the degree of such disclosures.

 

8.4  Press Releases and Other
Disclosures to Third Parties. Neither SGI nor Licensee will,
without the prior consent of the other, issue any press release or make any
other public announcement or furnish any statement to any person or entity
(other than either Parties’ respective Affiliates) concerning the existence of
this Agreement, its terms and the transactions contemplated hereby, except for (i) an
initial press release mutually agreed upon by the Parties, (ii) disclosures
made in compliance with Sections 8.2 and 8.3, (iii) attorneys,
consultants, and accountants retained to represent the Parties in connection
with the transactions contemplated hereby.

 

8.5  Publications Regarding Results of
the Research Program. Neither Party may publish, present or
announce results of the Research Program either orally or in writing (a “Publication”)
without complying with the provisions of this Section 8.5. The other Party
shall have [***] from receipt of a proposed Publication to provide comments
and/or proposed changes to the publishing Party. The publishing Party shall
take into account the comments and/or proposed changes made by the other Party
on any Publication and shall agree to designate employees or others acting on
behalf of the other Party as co-authors on any Publication describing results
to which such persons have contributed in accordance with standards applicable
to authorship of scientific publications. If the other Party reasonably
determines that the Publication would entail the public disclosure of such
Party’s Confidential Information and/or of a patentable invention upon which a
patent application should be filed prior to any such disclosure, submission of
the concerned Publication to Third Parties shall be delayed for [***] any such
Confidential Information of the other Party (if the other Party has requested
deletion thereof from the proposed Publication), and/or the drafting and filing
of a patent application covering such invention, provided such additional
period shall not exceed [***] from the date the publishing Party first provided
the proposed Publication to the other Party.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

20

 

ARTICLE
9 - INVENTIONS AND PATENTS

 

9.1 Ownership of Inventions and Technology; Use of Data.

 

9.1.1  Disclosure
of Inventions. Each Party shall promptly disclose to the other
Party the making, conception or reduction to practice of any Program Inventions.

 

9.1.2  Ownership
of Program Inventions. All right, title and interest in all
Program Inventions that are discovered, made or conceived as part of the
activities conducted pursuant to this Agreement shall be owned as follows:

 

(a) [***] shall own
all Program Inventions that (A) are invented solely by one or more
employees, agents or consultants of [***] and do not primarily relate to the
[***] or (B) are invented solely or jointly by employees, agents or
consultants of Licensee and/or [***] and [***]. To the extent that any such
Program Inventions relating primarily to an [***] shall have been invented by
[***] and are owned by [***], [***] hereby assigns all of its right, title and
interest therein to [***].

 

(b) [***] shall own
all Program Inventions that (i) are invented solely by one or more
employees, agents or consultants of [***] and do not primarily relate to an
[***] or (ii) are invented solely or jointly by employees, agents or
consultants of Licensee and/or SGI and primarily relate to the [***]. To the
extent that any Program Inventions relating primarily to [***] shall have been
invented by [***] and are owned by [***], [***] hereby assigns all of its
right, title and interest therein to [***].

 

(c) Except as set
forth in Sections 9.1.2(a) and 9.1.2(b), [***] and [***] shall [***] own
all other Program Inventions. For purposes of clarification and notwithstanding
anything to the contrary set forth herein, all Program Inventions that relate
primarily to [***], including without limitation, [***] owned.

 

(d) Inventorship,
for the purposes of this Agreement, shall be determined in accordance with U.S.
laws of inventorship.

 

9.1.3  Ownership
of Technology.

 

(a) Licensee shall
own all right, title and interest in and to all Licensee Know-How.

 

(b) SGI shall own
all right, title and interest in and to all SGI Technology.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

21

 

9.2 Patent Prosecution and Maintenance.

 

9.2.1 SGI shall be responsible for and shall
control the preparation, filing, prosecution, grant and maintenance of all SGI
Patents. SGI shall, at its sole expense, prepare, file, prosecute and maintain
such SGI Patents in good faith consistent with its customary patent policy and
its reasonable business judgment, and shall consider in good faith the
interests of Licensee in so doing.

 

9.2.2 Each Party shall be responsible for and
shall control the preparation, filing, prosecution, grant and maintenance, of
any patents and patent applications claiming Program Inventions owned solely by
it in accordance with Section 9.1 and shall, at its sole expense, prepare,
file, prosecute and maintain such patent rights in good faith consistent with
its customary patent policy and its reasonable business judgment. Patents and
patent applications claiming Program Inventions owned [***] in accordance with
[***]([***]) shall be controlled, prepared, filed, prosecuted and maintained by
[***] (a) [***], (b) [***] or (c) of [***]. The cost of such
outside legal expenses shall be borne by the Party that controls such [***]
under (a) or (b) above and [***] if such [***] is controlled by
[***]. The Party responsible for filing and controlling patent prosecution and
maintenance for Program Inventions shall provide to the other Party copies of
any response, document or communication with patent authorities that could
materially affect the scope of any patent or patent application covering
Program Inventions or detrimentally effect the rights of the Parties in such
inventions in any way, at least [***] prior to the planned submission or
communication. Such other Party shall have the opportunity to comment on the
response or document within such [***] period, which comments shall be
reasonably considered by the Party primarily responsible for the prosecution.

 

9.2.3 If either Party decides not to continue
prosecuting patent applications or not to maintain a patent claiming an
invention assigned to such Party pursuant to Section 9.1 in whole or in
part, then such Party shall promptly so notify the other Party (which notice
shall be at least [***] before any relevant deadline for such patent
application or patent). Thereafter, the other Party shall have the right to
prosecute or maintain such patent application or patent, at such Party’s sole
expense.

 

9.2.4 The Parties shall at all times fully
cooperate in order to reasonably implement the foregoing provisions, such
cooperation may include the execution of necessary legal documents and the
provision of the assistance of its relevant personnel.

 

9.3 Enforcement of SGI Patents.

 

9.3.1 SGI shall have the first right, at its
sole expense, but not the obligation, to determine the appropriate course of
action to enforce the SGI Patents or otherwise abate the infringement thereof,
to take (or refrain from taking) appropriate action to enforce the SGI Patents,
to control any litigation or other enforcement action and to enter into, or
permit, the settlement of any such litigation or other enforcement action with
respect to the SGI Patents. SGI shall in good faith consider the interests of
Licensee in conducting the foregoing activities. All monies recovered upon the
final judgment or settlement of any such suit to enforce any SGI Patents with
respect to the manufacture, use or sale by Third Parties of products
competitive with Licensed Products or technologies competitive with SGI Patents
shall be [***]. Licensee shall

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

22

 

fully cooperate with SGI in any such action at SGI’s
expense, to enforce the SGI Patents, including being joined as a party to such
action if necessary.

 

9.3.2 If SGI fails to take any action to
enforce the SGI Patents or control any litigation with respect to the SGI
Patents with respect to the manufacture, use or sale by Third Parties of
products competitive with Licensed Products or technologies competitive with
SGI Patents within a period of [***] after the Parties receive reasonable
notice of the infringement of the SGI Patents, then Licensee shall have the
right to bring and control any such action by counsel of its own choice, [***].
In such case, all monies recovered upon the final judgment or settlement of any
such suit to enforce any SGI Patents shall be [***]. In such a case, SGI shall
cooperate fully with Licensee, at Licensee’s expense, in its efforts to enforce
the SGI Patents, including being joined as a party to such action if necessary.
In no event may Licensee assert an argument or settle a suit in a manner which
would render a claim in the SGI Patents invalid or unenforceable without SGI’s
prior written consent.

 

9.3.3 Licensee shall have the right, at its
sole expense, to determine the appropriate course of action to enforce patents
claiming Program Inventions owned solely by Licensee in accordance with Section 9.1
(“Program Licensee Patents”), or otherwise to abate the infringement
thereof, to take (or refrain from taking) appropriate action to enforce the
Program Licensee Patents, to control any litigation or other enforcement action
and to enter into, or permit, the settlement of any such litigation or other
enforcement action with respect to the Program Licensee Patents. All monies
recovered upon the final judgment or settlement of any such suit to enforce any
Program Licensee Patents shall be retained by Licensee. SGI shall fully
cooperate with Licensee, at Licensee’s expense, in any action to enforce the
Program Licensee Patents.

 

9.3.4 In the event either Party becomes aware
of an infringement by a Third Party of a Joint Patent, it shall promptly notify
the other Party and the Parties shall determine a mutually agreeable course of
action. In no event shall a Party make an argument or settle a dispute which
would render a claim in a Joint Patent to be invalid or unenforceable without
the other Party’s prior written consent.

 

9.4  Prior Patent Rights.
Notwithstanding anything to the contrary in this Agreement, with respect to any
SGI Patents that are subject to the SGI In-Licenses, the rights and obligations
of the Parties under Section 9.2 and 9.3 shall be subject to SGI’s
licensors’ rights to participate in and control prosecution, maintenance and
enforcement of such SGI Patents, and to receive a share of damages recovered in
such action, in accordance with the terms and conditions of the applicable SGI
In-License.

 

ARTICLE
10 - INFRINGEMENT ACTIONS BROUGHT BY THIRD PARTIES

 

If
Licensee, SGI or any of their respective Affiliates, or any of Licensee’s
Sublicensees, is sued by a Third Party for infringement of a Third Party’s
patent because of the use of the SGI Technology in connection with activities
conducted pursuant to this Agreement, the Party that has been sued shall
promptly notify the other Party within [***] of its receipt of notice of such
suit. The notice shall set forth the facts of such infringement available to
the relevant Party. The Parties shall then meet to discuss each Party’s
commercial interests in the defense of the suit, a

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

23

 

plan for the defense of
the suit, how the costs of the suit should be allocated, and which Party should
have primary control of the suit, provided that if such infringement relates
previously to SGI Technology, then SGI shall have the first right to control
such suit. In no event may the Party controlling the suit settle or otherwise
consent to an adverse judgment in such suit that diminishes the rights or
interests of the non-controlling Party without the express written consent of
the non-controlling Party.

 

ARTICLE
11 - REGULATORY ASSISTANCE

 

Licensee
shall be solely responsible for, and shall solely own, all applications for
Regulatory Approval with respect to Licensed Products. Should Licensee desire
to file an IND or an application for Regulatory Approval, or equivalents of the
foregoing, for a Licensed Product, SGI will use reasonable commercial efforts
to provide at Licensee’s request, technical information reasonably required for
Licensee, including information relating to the chemical structure of the ADC,
the toxin used to create such ADC, and the linker and chemistry used to create
such ADC, as well as documents necessary to compile the Chemistry Manufacturing
and Controls section of any application for Regulatory Approval, or to provide
other toxicity and safety data for such filings, and any other relevant
information as the Parties may mutually agree. Licensee shall reimburse SGI for
any out-of-pocket costs incurred by SGI in providing any such information plus
an amount equal to SGI’s then current FTE Fee for SGI’s personnel engaged in
such activities, as set forth in Section 6.1.2. If SGI has a drug master
file with the FDA or equivalent that contains information related to Drug
Conjugation Materials that is useful to support an IND or application for
Regulatory Approval, Licensee shall have a right of reference or access to the
contents of such drug master file on mutually agreeable terms.

 

ARTICLE
12 - REPRESENTATIONS AND WARRANTIES

 

12.1 Representations and Warranties.

 

12.1.1 This Agreement has been duly executed
and delivered by each Party and constitutes the valid and binding obligation of
each Party, enforceable against such Party in accordance with its terms, except
as enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other laws relating to or affecting
creditors’ rights generally and by general equitable principals. The execution,
delivery and performance of this Agreement has been duly authorized by all
necessary action on the part of each Party, its officers and directors.

 

12.1.2 The execution, delivery and performance
of the Agreement by each Party does not conflict with any agreement, instrument
or understanding, oral or written, to which it is a party or by which it is
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.

 

12.1.3 SGI represents and warrants that (a) the
SGI Technology is [***] on the Effective Date related to SGI’s [***] of
Licensed Products in the manner contemplated hereunder, (b) it has the
right to grant the licenses granted herein and that as of the Effective Date it
has no knowledge of any rights of any Third Parties that would be infringed by
the practice of the SGI Patents or other SGI Technology in connection with
activities to be

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

24

 

conducted hereunder, (c) as of the Effective
Date, there are no claims, judgments or settlements against SGI pending or to
its knowledge, threatened, seeking to invalidate the SGI Patents; (d) SGI
has provided Licensee with accurate and complete copies of the SGI In-Licenses,
with certain information redacted therefrom that has no impact on the grant of
the license to Licensee under this Agreement; and (e) as of the Effective
Date, (i) the SGI In-Licenses are the only in-license agreements executed
by SGI with respect to the SGI Technology licensed to Licensee under this
Agreement, (ii) each of the SGI In-Licenses is in full force and effect
and (iii) SGI has not breached, or received notice regarding any actual or
alleged breach of, or issued any notice of breach to any party to, the SGI
In-Licenses. Licensee represents and warrants that it has the right to grant
the licenses granted to SGI herein and that as of the Effective Date it has no
knowledge of any rights of any Third Parties that would be infringed by
activities to be conducted by the Parties hereunder.

 

12.2  Performance by Affiliates.
The Parties recognize that each may perform some or all of its obligations
under this Agreement through Affiliates, provided, however, that each Party
shall remain responsible and be a guarantor of the performance by its
Affiliates and shall cause its Affiliates to comply with the provisions of this
Agreement in connection with such performance.

 

ARTICLE
13 - TERM AND TERMINATION

 

13.1  Term. Unless
earlier terminated pursuant to this Article 13, the term of this Agreement
(the “Term”) shall commence on the Effective Date and shall remain in
full force and effect until the later of: (a) the expiration or
termination of the [***]; or (b) with respect to each Exclusive License
obtained by Licensee prior to the expiration or termination of the [***], the
expiration of the last to expire Royalty Term.

 

13.2  Termination of Exclusive License
by Licensee. Licensee shall have the right to terminate an
Exclusive License under this Agreement by providing not less than [***] prior
written notice to SGI of such termination. [***].

 

13.3  Termination for Cause.
Either Party may terminate this Agreement for material breach by the other
Party (the “Breaching Party”) of any material provision of the
Agreement, if the Breaching Party has not cured such breach within [***] after notice
thereof.

 

13.4  Termination Upon Insolvency.
Either Party may terminate this Agreement if, at any time, (a) the other
Party shall file in any court or agency pursuant to any statute or regulation
of any state, country or jurisdiction, a petition in bankruptcy or insolvency
or for reorganization or for an arrangement or for the appointment of a
receiver or trustee of that Party or of its assets, (b) such other Party
proposes a written agreement of composition or extension of its debts, (c) such
other Party shall be served with an involuntary petition against it, filed in
any insolvency proceeding, and such petition shall not be dismissed within
[***] after the filing thereof, (d) such other Party shall propose or be a
party to any dissolution or liquidation, or (e) such other Party shall
make an assignment for the benefit of its creditors. All rights and licenses
granted under this Agreement are, and shall be deemed to be, for purposes of Section 365(n) of
the United States Bankruptcy Code, licenses of rights to “intellectual property”
as defined under Section 101(56) of the United States Bankruptcy Code. The
Parties agree that in the event of the

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

25

 

 

 

commencement of a
bankruptcy proceeding by or against one Party hereunder under the United States
Bankruptcy Code, the other Party shall be entitled to complete access to any
such intellectual property, and all embodiments of such intellectual property, pertaining
to the rights granted in the licenses hereunder of the Party by or against whom
a bankruptcy proceeding has been commenced, subject, however, to payment of the
fees, milestone payments and royalties set forth in this Agreement through the
effective date of any termination hereunder.

 

13.5  Termination of SGI In-Licenses.
All rights and obligations under an SGI In-License sublicensed under this
Agreement shall terminate upon [***] prior written notice by SGI to Licensee if
Licensee performs any action that would constitute a breach of any material
provision of such SGI In-License Agreement and fails to cure such breach within
such [***] period; provided, however, such cure period may be extended by
mutual written consent of the Parties. All rights and obligations under the BMS
Agreement shall automatically terminate if Licensee fails to maintain the
insurance required under Article 18 of this Agreement. SGI covenants that (a) it
will use reasonable commercial efforts to maintain all SGI In-Licenses for the
duration of this Agreement, (b) it shall not modify Section 13.7 of
the BMS Agreement without Licensee’s prior written consent and (c) it
shall provide Licensee with prompt written notice if it receives or issues any
notice of breach or alleged breach under the SGI In-Licenses.

 

13.6 Effect of Expiration and Termination.

 

13.6.1 In the event that this Agreement is
terminated by Licensee pursuant to Sections 13.3 or by either Party pursuant to
13.4, Licensee shall continue to have all Exclusive Licenses then in effect,
subject to its continued payment of the applicable fees, milestone payments and
royalties with respect thereto as set forth in Article 6.

 

13.6.2 In the event that this Agreement is
terminated by SGI pursuant to Section 13.3 or 13.5 (a) all licenses
granted by SGI to Licensee hereunder, including all Exclusive Licenses, will
immediately terminate and (b) any Sublicense agreement in effect as of the
date of such termination that is not the subject of the material breach shall
not terminate but instead, shall become a direct license between SGI and the
Sublicensee and shall otherwise continue in full force and effect in accordance
with its terms, subject to each such Sublicensee signing a written
acknowledgement with SGI agreeing to be bound by all of the terms and
conditions of this Agreement applicable to such Sublicensee.

 

13.6.3 Upon any termination of any Exclusive
License (except for termination by Licensee pursuant to Section 13.3) and
in the case of a [***] and/or any Designated Antigens for which the relevant
Option Periods have expired, Licensee shall be automatically deemed to have
granted to SGI a worldwide, nonexclusive, irrevocable, royalty-free,
sublicensable license in the Territory under the Licensee ADC Know-How and
Licensee ADC Patents to identify, develop and commercialize products that
contain an ADC consisting of an Antibody that binds specifically to the Antigen
that was the subject of the terminated Exclusive License(s) or Option(s).

 

13.6.4 Except where explicitly provided within
this Agreement, termination of this Agreement for any reason, or expiration of
this Agreement, will not affect any: (a) obligations, including payment of
any royalties or other sums which have accrued as of the date

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

26

 

of termination or expiration, and (b) rights and
obligations which, from the context thereof, are intended to survive
termination or expiration of this Agreement, including provisions of
Articles 1, 8, 9, 10, 14 (as to actions arising during the term of this
Agreement or in the course of a Party practicing any licenses retained by such
Party thereafter), 18 and 19, Sections 3.5, 7.2, 7.3 and 13.6 and any payment
obligations pursuant to Article 6 incurred prior to termination.

 

13.6.5 Upon the expiration of the Royalty Term,
SGI shall grant, and shall by this provision be deemed to have granted, to
Licensee a royalty-free, perpetual, worldwide, nonexclusive license to use the
SGI Technology to make, use, sell, offer for sale and import Licensed Products
that bind specifically to each Exclusive Antigen, with no further obligation to
SGI.

 

ARTICLE
14 - INDEMNITY

 

14.1 Direct Indemnity.

 

14.1.1 Each Party shall defend, indemnify and
hold harmless the other Party from and against all liabilities, losses, damages,
and expenses, including reasonable attorneys’ fees and costs, (collectively,
the “Liabilities”) resulting from all Third Party claims, suits,
actions, terminations or demands (collectively, the “Claims”) that are
incurred, relate to or arise out of (a) the breach of any material
provision of this Agreement by the indemnifying Party (or the inaccuracy of any
representation or warranty made by such Party in this Agreement), or (b) the
gross negligence, recklessness or willful misconduct of the indemnifying Party
in connection with the performance of its obligations hereunder.

 

14.1.2 Licensee shall defend, indemnify and
hold harmless SGI from and against all Liabilities resulting from all Claims
that are incurred, relate to or arise out of the development, manufacture or
commercialization of Licensed Products by SGI for Licensee or by Licensee, its
Affiliates or Sublicensees, including any failure to test for or provide
adequate warnings of adverse side effects, or any manufacturing defect in any
Licensed Product; except in each case to the extent such Liabilities resulted
from the gross negligence, recklessness or willful misconduct by SGI or the
inaccuracy of any representation or warranty made by SGI in this Agreement or
from any other action for which SGI must indemnify Licensee under Section 14.1.3.

 

14.1.3 SGI shall defend, indemnify and hold
harmless Licensee from and against all Liabilities resulting from all Claims
that are incurred, relate to or arise out of any claims of infringement of
Third Party rights arising out of the use of SGI Technology to make Antibodies
that bind specifically to a Research Antigen or to make a Licensed Product (but
not any other technology, including the composition or methods of making or
using Antibodies or technology not relating to SGI Technology), except to the
extent such Liabilities resulted from the gross negligence, recklessness or
willful misconduct by Licensee or the inaccuracy of any representation or
warranty made by Licensee in this Agreement or any other action for which
Licensee must indemnify SGI hereunder.

 

14.2  Procedure. A Party
(the “Indemnitee”) that intends to claim indemnification under this Article 14
shall promptly provide notice to the other Party (the “Indemnitor”) of
any

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

27

 

Liability or action in
respect of which the Indemnitee intends to claim such indemnification, which
notice shall include a reasonable identification of the alleged facts giving
rise to such Liability, and the Indemnitor shall have the right to participate
in, and, to the extent the Indemnitor so desires, jointly with any other
Indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor. However, notwithstanding the foregoing, the
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitor, if representation of such Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other Party
represented by such counsel in such proceedings. Any settlement of a Liability
for which any Indemnitee seeks to be indemnified, defended or held harmless
under this Article 14 that could adversely affect the Indemnitee shall be subject
to prior consent of such Indemnitee, provided that such consent shall not be
withheld unreasonably

 

ARTICLE
15 - FORCE MAJEURE

 

No
Party (or any of its Affiliates) shall be held liable or responsible to the
other Party (or any of its Affiliates), or be deemed to have defaulted under or
breached the Agreement, for failure or delay by such Party in fulfilling or
performing any term of the Agreement when such failure or delay is caused by or
results from causes beyond the reasonable control of the affected Party (or any
of its Affiliates), including fire, floods, embargoes, war, acts of war
(whether war be declared or not), insurrections, riots, civil commotions, acts
of God or acts, earthquakes, or omissions or delays in acting by any
governmental authority (collectively, “Events of Force Majeure”); provided,
however, that the affected Party shall exert all reasonable efforts to
eliminate, cure or overcome any such Event of Force Majeure and to resume
performance of its covenants promptly. Notwithstanding the foregoing, to the
extent that an Event of Force Majeure continues for a period in excess of
[***], the affected Party shall promptly notify in writing the other Party of
such Event of Force Majeure and within [***] of the other Party’s receipt of such
notice, the Parties shall negotiate in good faith either (a) a resolution
of the Event of Force Majeure, if possible, (b) an extension by mutual
agreement of the time period to resolve, eliminate, cure or overcome such Event
of Force Majeure, (c) an amendment of this Agreement to the extent
reasonably possible, or (d) an early termination of this Agreement.

 

ARTICLE
16 - ASSIGNMENT

 

This
Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations hereunder be
assigned or transferred to any Third Party by either Party without the consent
of the other Party, such consent not to be unreasonably withheld; provided,
however, that either Party may, without such consent but with
notification, assign this Agreement and its rights and obligations hereunder to
any of its Affiliates or in connection with the transfer or sale of all or
substantially all of its business, or in the event of its merger or
consolidation of such Party (such merger or consolidation shall be hereinafter
referred to as a “Change in Control”). Any permitted assignee shall
assume all rights and obligations of its assignor under this Agreement; [***].
Any attempted assignment of this Agreement not in accordance with this Article 16
shall be void and of no effect.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

28

 

ARTICLE
17 - SEVERABILITY

 

Each
Party hereby agrees that it does not intend to violate any public policy,
statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or
become invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions, in their economic effect, are
sufficiently similar to the invalid provisions that it can be reasonably
assumed that the Parties would have entered into this Agreement based on such
valid provisions. In case such alternative provisions cannot be agreed upon,
the invalidity of one or several provisions of this Agreement shall not affect
the validity of this Agreement as a whole, unless the invalid provisions are of
such essential importance to this Agreement that it is to be reasonably assumed
that the Parties would not have entered into this Agreement without the invalid
provisions.

 

ARTICLE
18 - INSURANCE

 

During
the Term and thereafter for the period of time required below, each Party shall
maintain an [***]; and commencing not later than [***] and thereafter for the
period of time required below, Licensee shall obtain and maintain on an ongoing
basis [***] (including [***] coverage on Licensee’s [***] under this Agreement)
in the amount of at least [***]. All of such insurance coverage shall be maintained
with an insurance company or companies having an [***] or better and an
aggregate deductible not to exceed [***]. Not later than the Effective Date,
and not later than [***], Licensee shall provide to SGI a certificate(s) evidencing
all required coverage hereunder. Thereafter, Licensee shall maintain such
insurance coverage without interruption during the Term and for a period of at
least [***] thereafter, and shall provide certificates evidencing such
insurance coverage without interruption on an annual basis during the period of
time for which such coverage must be maintained. Licensee’s insurance shall
name [***] and [***] as additional insureds on the [***] required hereunder and
shall state that SGI shall be provided at least [***] prior written notice of
any cancellation or material change in the insurance policy.

 

ARTICLE
19 - MISCELLANEOUS

 

19.1  Notices. Any
consent, notice or report required or permitted to be given or made under this
Agreement by one of the Parties hereto to the other shall be in writing,
delivered personally or by facsimile (and promptly confirmed by personal
delivery, first class air mail or courier), first class air mail or courier,
postage prepaid (where applicable), addressed to such other Party at its
address indicated below, or to such other address as the addressee shall have
last furnished in writing to the address or in accordance with this Section 19.1
and (except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

29

 

If to SGI:

Seattle Genetics, Inc.

21823 30th Drive S.E.

Bothell, WA 98021

Attention: General
Counsel

Telephone:
(425) 527-4000

Facsimile:
(425) 527-4109

 

If to Licensee:

CuraGen Corporation

555 Long Wharf Avenue

New Haven, CT 06511

Attention: Executive Vice
President

Telephone: 203-401-3330

Facsimile: 203-401-3333

 

With a copy to:

[***]

[***]

[***]

Attention: [***]

Telephone: [***]

Facsimile: [***]

 

19.2  Applicable Law. The
Agreement shall be governed by and construed in accordance with the laws of the
State of Washington, without regard to the conflict of law principles thereof
that may dictate application of the laws of any other state.

 

19.3  Dispute Resolution. The
Parties agree that if any dispute or disagreement arises between Licensee on
the one hand and SGI on the other in respect of this Agreement, they shall
follow the following procedure in an attempt to resolve the dispute or
disagreement.

 

19.3.1 The Party claiming that such a dispute
exists shall give notice in writing (“Notice of Dispute”) to the other
Party of the nature of the dispute;

 

19.3.2 Within [***] of receipt of a Notice of
Dispute, a nominee or nominees of Licensee and a nominee or nominees of SGI
shall meet in person and exchange written summaries reflecting, in reasonable
detail, the nature and extent of the dispute, and at this meeting they shall
use their reasonable endeavors to resolve the dispute.

 

19.3.3 If, within a further period of [***],
the dispute has not been resolved, the President of SGI and the President of
Licensee shall meet at a mutually agreed upon time and location for the purpose
of resolving such dispute.

 

19.3.4 If, within a further period of [***],
the dispute has not been resolved or if, for any reason, the required meeting
has not been held, then the same shall be submitted by the

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

30

 

Parties for resolution by an arbitral body in [***] in
accordance with the then-current commercial arbitration rules of the
American Arbitration Association (“AAA”) except as otherwise provided
herein. The Parties shall choose, by mutual agreement, [***] within [***] of
receipt of notice of the intent to arbitrate. If no arbitrator is appointed
within the times herein provided or any extension of time that is mutually
agreed upon, the AAA shall make such appointment within [***] of such failure.
The judgment rendered by the arbitrator shall include costs of arbitration,
reasonable attorneys’ fees and reasonable costs for expert and other witnesses.
Nothing in this Agreement shall be deemed as preventing either Party from
seeking injunctive relief (or any other equitable or provisional remedy). If
the issues in dispute involve scientific, technical or commercial matters, any
arbitrator chosen hereunder shall have educational training and/or industry
experience sufficient to demonstrate a reasonable level of relevant scientific,
medical and industry knowledge.

 

19.3.5 In the event of a dispute regarding any
payments owing under this Agreement, all undisputed amounts shall be paid
promptly when due and the balance, if any, promptly after resolution of the
dispute.

 

19.3.6 Notwithstanding the foregoing, any
disputes relating to inventorship or the validity, enforceability or scope of
any patent or trademark rights shall be submitted for resolution by a court of
competent jurisdiction.

 

19.4  Entire Agreement. This
Agreement contains the entire understanding of the Parties with respect to the
specific subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly
superseded by this Agreement. This Agreement may be amended, or any term hereof
modified, only by a written instrument duly executed by both Parties hereto.

 

19.5  Independent Contractors.
SGI and Licensee each acknowledge that they shall be independent
contractors and that the relationship between the two Parties shall not
constitute a partnership, joint venture, agency or any type of fiduciary
relationship. Neither SGI nor Licensee shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other Party, without the prior consent of the other Party to
do so.

 

19.6  Affiliates. Each
Party shall cause its respective Affiliates to comply fully with the provisions
of this Agreement to the extent such provisions specifically relate to, or are
intended to specifically relate to, such Affiliates, as though such Affiliates
were expressly named as joint obligors hereunder.

 

19.7  Waiver. The waiver
by either Party hereto of any right hereunder or the failure to perform or of a
breach by the other Party shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other Party whether of a
similar nature or otherwise.

 

19.8  Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

31

 

[Signature page follows]

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

32

 

IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

	
   

  	
  SEATTLE
  GENETICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clay B. Siegall

  
	
   

  	
  Name:

  	
  Clay B. Siegall

  
	
   

  	
  Title:

  	
  President &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  CURAGEN
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan M.
  Rothberg

  
	
   

  	
  Name:

  	
  Jonathan M. Rothberg

  
	
   

  	
  Title:

  	
  CEO

  

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

 

SCHEDULE A

 

RESEARCH PLAN

 

RESEARCH
SUPPORT

 

SGI will conjugate
research quantities [***] of Antibodies to Designated Antigens with several
combinations of [***]. Licensee shall perform or have performed [***].

 

DEVELOPMENT
SUPPORT

 

Assistance will be
provided in the form of [***].

 

Preclinical
Development

 

SGI will provide the
following preclinical support:

 

a. [***]

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

 

SCHEDULE B

 

SGI PATENTS

 

Existing SGI Technology

 

	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
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  [***]

  	
   

  	
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  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

 

SCHEDULE C

 

SGI IN-LICENSES

 

The following SGI
In-Licenses are attached:

 

[***]

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

 

 

SCHEDULE D

 

DESIGNATED ANTIGENS AND EXCLUSIVE
ANTIGENS

 

“First Exclusive Antigen” means Antigen
CG56972 having a [***].

 

Portions of this Exhibit were
omitted and have been filed separately with the Secretary of the Commission
pursuant to the Company’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934.

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