Document:

Exhibit
4.1

 

EXECUTION COPY

 

 

CEPHALON,
INC.

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033

FIRST PUTABLE JUNE 15, 2008

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033

FIRST PUTABLE JUNE 15, 2010

 

 

INDENTURE

DATED
AS OF JUNE 11, 2003

 

 

U.S.
BANK NATIONAL ASSOCIATION,

AS
TRUSTEE

 

 

 

TABLE OF CONTENTS

 

 

	
  ARTICLE
  1 DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.1.

  	
  DEFINITIONS

  
	
   

  	
  SECTION 1.2.

  	
  OTHER DEFINITIONS

  
	
   

  	
  SECTION 1.3.

  	
  TRUST INDENTURE ACT PROVISIONS

  
	
   

  	
  SECTION 1.4.

  	
  RULES OF CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE SECURITIES

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.

  	
  FORM AND DATING

  
	
   

  	
  SECTION 2.2.

  	
  EXECUTION AND AUTHENTICATION

  
	
   

  	
  SECTION
  2.3.

  	
  REGISTRAR,
  PAYING AGENT AND CONVERSION AGENT

  
	
   

  	
  SECTION 2.4.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST

  
	
   

  	
  SECTION 2.5.

  	
  SECURITYHOLDER LISTS

  
	
   

  	
  SECTION 2.6.

  	
  TRANSFER AND EXCHANGE

  
	
   

  	
  SECTION 2.7.

  	
  REPLACEMENT SECURITIES

  
	
   

  	
  SECTION 2.8.

  	
  OUTSTANDING SECURITIES

  
	
   

  	
  SECTION 2.9.

  	
  TREASURY SECURITIES

  
	
   

  	
  SECTION 2.10.

  	
  TEMPORARY SECURITIES

  
	
   

  	
  SECTION 2.11.

  	
  CANCELLATION

  
	
   

  	
  SECTION 2.12.

  	
  LEGEND; ADDITIONAL TRANSFER AND EXCHANGE
  REQUIREMENTS

  
	
   

  	
  SECTION 2.13.

  	
  CUSIP NUMBERS

  
	
   

  	
  SECTION 2.14.

  	
  SEPARATE SERIES

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION
  AND PURCHASES

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.1.

  	
  RIGHT TO REDEEM; NOTICE TO TRUSTEE

  
	
   

  	
  SECTION 3.2.

  	
  SELECTION OF SECURITIES TO BE REDEEMED

  
	
   

  	
  SECTION 3.3.

  	
  NOTICE OF REDEMPTION

  
	
   

  	
  SECTION 3.4.

  	
  EFFECT OF NOTICE OF REDEMPTION

  
	
   

  	
  SECTION 3.5.

  	
  DEPOSIT OF REDEMPTION PRICE

  
	
   

  	
  SECTION 3.6.

  	
  SECURITIES REDEEMED IN PART

  
	
   

  	
  SECTION 3.7.

  	
  CONVERSION ARRANGEMENT ON CALL FOR
  REDEMPTION

  
	
   

  	
  SECTION 3.8.

  	
  PURCHASE OF SECURITIES AT OPTION OF THE
  HOLDER UPON CHANGE IN CONTROL

  
	
   

  	
  SECTION 3.9.

  	
  EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE

  
	
   

  	
  SECTION 3.10.

  	
  DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE

  
	
   

  	
  SECTION 3.11.

  	
  PURCHASE OF SECURITIES AT OPTION OF THE
  HOLDER ON SPECIFIED DATES.

  
	
   

  	
  SECTION 3.12.

  	
  SECURITIES PURCHASED IN PART

  
	
   

  	
  SECTION 3.13.

  	
  COMPLIANCE WITH SECURITIES LAWS UPON
  PURCHASE OF SECURITIES

  

 

 

	
  ARTICLE 4 CONVERSION

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.1.

  	
  CONVERSION PRIVILEGE

  
	
   

  	
  SECTION 4.2.

  	
  CONVERSION PROCEDURE

  
	
   

  	
  SECTION 4.3.

  	
  FRACTIONAL SHARES

  
	
   

  	
  SECTION 4.4.

  	
  TAXES ON CONVERSION

  
	
   

  	
  SECTION 4.5.

  	
  COMPANY TO PROVIDE STOCK

  
	
   

  	
  SECTION 4.6.

  	
  ADJUSTMENT OF CONVERSION PRICE

  
	
   

  	
  SECTION 4.7.

  	
  NO ADJUSTMENT

  
	
   

  	
  SECTION 4.8.

  	
  ADJUSTMENT FOR TAX PURPOSES

  
	
   

  	
  SECTION 4.9.

  	
  NOTICE OF ADJUSTMENT

  
	
   

  	
  SECTION 4.10.

  	
  NOTICE OF CERTAIN TRANSACTIONS

  
	
   

  	
  SECTION 4.11.

  	
  EFFECT OF RECLASSIFICATION, CONSOLIDATION,
  MERGER OR SALE ON CONVERSION PRIVILEGE

  
	
   

  	
  SECTION 4.12.

  	
  TRUSTEE’S DISCLAIMER

  
	
   

  	
  SECTION 4.13.

  	
  VOLUNTARY REDUCTION

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 SUBORDINATION

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.

  	
  AGREEMENT OF SUBORDINATION

  
	
   

  	
  SECTION 5.2.

  	
  PAYMENTS TO HOLDERS

  
	
   

  	
  SECTION 5.3.

  	
  SUBROGATION OF SECURITIES

  
	
   

  	
  SECTION 5.4.

  	
  AUTHORIZATION TO EFFECT SUBORDINATION

  
	
   

  	
  SECTION 5.5.

  	
  NOTICE TO TRUSTEE

  
	
   

  	
  SECTION 5.6.

  	
  TRUSTEE’S RELATION TO SENIOR INDEBTEDNESS

  
	
   

  	
  SECTION 5.7.

  	
  NO IMPAIRMENT OF SUBORDINATION

  
	
   

  	
  SECTION 5.8.

  	
  CERTAIN CONVERSIONS DEEMED PAYMENT

  
	
   

  	
  SECTION 5.9.

  	
  ARTICLE APPLICABLE TO PAYING AGENTS

  
	
   

  	
  SECTION 5.10.

  	
  SENIOR INDEBTEDNESS ENTITLED TO RELY

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 COVENANTS

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.1.

  	
  PAYMENT OF SECURITIES

  
	
   

  	
  SECTION 6.2.

  	
  SEC REPORTS

  
	
   

  	
  SECTION 6.3.

  	
  COMPLIANCE CERTIFICATES

  
	
   

  	
  SECTION 6.4.

  	
  FURTHER INSTRUMENTS AND ACTS

  
	
   

  	
  SECTION 6.5.

  	
  MAINTENANCE OF CORPORATE EXISTENCE

  
	
   

  	
  SECTION 6.6.

  	
  RULE 144A INFORMATION REQUIREMENT

  
	
   

  	
  SECTION
  6.7.

  	
  STAY,
  EXTENSION AND USURY LAWS

  
	
   

  	
  SECTION 6.8.

  	
  PAYMENT OF INTEREST AMOUNTS

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.

  	
  COMPANY MAY CONSOLIDATE, ETC, ONLY ON
  CERTAIN TERMS

  
	
   

  	
  SECTION 7.2.

  	
  SUCCESSOR SUBSTITUTED

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 DEFAULT AND
  REMEDIES

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.1.

  	
  EVENTS OF DEFAULT

  
	
   

  	
  SECTION 8.2.

  	
  ACCELERATION

  

 

 

	
   

  	
  SECTION 8.3.

  	
  OTHER REMEDIES

  
	
   

  	
  SECTION 8.4.

  	
  WAIVER OF DEFAULTS AND EVENTS OF DEFAULT

  
	
   

  	
  SECTION 8.5.

  	
  CONTROL BY MAJORITY

  
	
   

  	
  SECTION 8.6.

  	
  LIMITATIONS ON SUITS

  
	
   

  	
  SECTION 8.7.

  	
  RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO
  CONVERT

  
	
   

  	
  SECTION 8.8.

  	
  COLLECTION SUIT BY TRUSTEE

  
	
   

  	
  SECTION 8.9.

  	
  TRUSTEE MAY FILE PROOFS OF CLAIM

  
	
   

  	
  SECTION 8.10.

  	
  PRIORITIES

  
	
   

  	
  SECTION 8.11.

  	
  UNDERTAKING FOR COSTS

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.

  	
  DUTIES OF TRUSTEE

  
	
   

  	
  SECTION 9.2.

  	
  RIGHTS OF TRUSTEE

  
	
   

  	
  SECTION 9.3.

  	
  INDIVIDUAL RIGHTS OF TRUSTEE

  
	
   

  	
  SECTION 9.4.

  	
  TRUSTEE’S DISCLAIMER

  
	
   

  	
  SECTION 9.5.

  	
  NOTICE OF DEFAULT OR EVENTS OF DEFAULT

  
	
   

  	
  SECTION 9.6.

  	
  REPORTS BY TRUSTEE TO HOLDERS

  
	
   

  	
  SECTION 9.7.

  	
  COMPENSATION AND INDEMNITY

  
	
   

  	
  SECTION 9.8.

  	
  REPLACEMENT OF TRUSTEE

  
	
   

  	
  SECTION 9.9.

  	
  SUCCESSOR TRUSTEE BY MERGER, ETC

  
	
   

  	
  SECTION 9.10.

  	
  ELIGIBILITY; DISQUALIFICATION

  
	
   

  	
  SECTION 9.11.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  COMPANY

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 10.1.

  	
  SATISFACTION AND DISCHARGE

  
	
   

  	
  SECTION 10.2.

  	
  APPLICATION OF TRUST MONEY

  
	
   

  	
  SECTION 10.3.

  	
  REPAYMENT TO COMPANY

  
	
   

  	
  SECTION 10.4.

  	
  REINSTATEMENT

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11 AMENDMENTS, SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.1.

  	
  WITHOUT CONSENT OF HOLDERS

  
	
   

  	
  SECTION 11.2.

  	
  WITH CONSENT OF HOLDERS

  
	
   

  	
  SECTION 11.3.

  	
  COMPLIANCE WITH TRUST INDENTURE ACT

  
	
   

  	
  SECTION 11.4.

  	
  REVOCATION AND EFFECT OF CONSENTS

  
	
   

  	
  SECTION 11.5.

  	
  NOTATION ON OR EXCHANGE OF SECURITIES

  
	
   

  	
  SECTION 11.6.

  	
  TRUSTEE TO SIGN AMENDMENTS, ETC

  
	
   

  	
  SECTION 11.7.

  	
  EFFECT OF SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 12.1.

  	
  TRUST INDENTURE ACT CONTROLS

  
	
   

  	
  SECTION 12.2.

  	
  NOTICES

  
	
   

  	
  SECTION 12.3.

  	
  COMMUNICATIONS BY HOLDERS WITH OTHER
  HOLDERS

  
	
   

  	
  SECTION 12.4.

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS
  PRECEDENT

  

 

 

	
   

  	
  SECTION 12.5.

  	
  RECORD DATE FOR VOTE OR CONSENT OF
  SECURITYHOLDERS

  
	
   

  	
  SECTION 12.6.

  	
  RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
  AND CONVERSION AGENT

  
	
   

  	
  SECTION 12.7.

  	
  LEGAL HOLIDAYS

  
	
   

  	
  SECTION 12.8.

  	
  GOVERNING LAW

  
	
   

  	
  SECTION 12.9.

  	
  NO ADVERSE INTERPRETATION OF OTHER
  AGREEMENTS

  
	
   

  	
  SECTION 12.10.

  	
  NO RECOURSE AGAINST OTHERS

  
	
   

  	
  SECTION 12.11.

  	
  SUCCESSORS

  
	
   

  	
  SECTION 12.12.

  	
  MULTIPLE COUNTERPARTS

  
	
   

  	
  SECTION 12.13.

  	
  SEPARABILITY

  
	
   

  	
  SECTION 12.14.

  	
  TABLE OF CONTENTS, HEADINGS, ETC

  

 

 

CROSS-REFERENCE TABLE*

 

	
  TIA

  SECTION

  	
   

  	
   

  	
   

  	
  INDENTURE

  SECTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
   

  	
  310(a)(1)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  N.A.**

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.8; 9.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  311(a)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  312(a)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (b)

  	
   

  	
  12.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.3

  
	
  Section

  	
   

  	
  313(a)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.6; 12.2

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.6

  
	
  Section

  	
   

  	
  314(a)

  	
   

  	
  6.2; 6.4; 12.2

  
	
   

  	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (e)

  	
   

  	
  12.4(b)

  
	
   

  	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  315(a)

  	
   

  	
  9.1(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.5; 12.2

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.1(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.1(c)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  8.11

  
	
  Section

  	
   

  	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
  8.5

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  8.4

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
  8.7

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.5

  
	
  Section

  	
   

  	
  317(a)(1)

  	
   

  	
  8.8

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  8.9

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
   

  	
   

  

 

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

**                                  N.A.
means Not Applicable.

 

 

THIS INDENTURE
dated as of June 11, 2003 is between Cephalon, Inc., a corporation duly
organized under the laws of the State of Delaware (the “Company”), and U.S.
Bank National Association, a national banking association organized and
existing under the laws of the United States, as Trustee (the “Trustee”).

 

In consideration
of the premises and the purchase of the Securities by the Holders thereof, both
parties agree as follows for the benefit of the other and for the equal and
ratable benefit of the registered Holders of the Securities.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1.                  DEFINITIONS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Common Stock”
means the common stock of the Company, $0.01 par value, as it exists on the
date of this Indenture and any shares of any class or classes of capital stock
of the Company resulting from any reclassification or reclassifications thereof
and which have no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which are not subject to redemption by the
Company; provided, however, that if at any time there shall be
more than one such resulting class, the shares of each such class then so
issuable

 

1

 

on conversion of Securities shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

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

 

“Conversion Rate”
means, as of any date of determination with respect to Securities of a series,
the numbers of shares of Common Stock into which a Security of that Series may
be converted in accordance with Article 4 hereof.

 

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

 

“Corporate
Trust Office” means the office of the Trustee at which at any time the trust
created by this Indenture shall be administered, which office at the date of
the execution of this Indenture is located at 225 Asylum Street, 23rd
Floor, Hartford, CT  06103,
Attention:  Corporate Trust Services
(Cephalon, Inc. Zero Coupon Convertible Subordinated Notes due June 15,
2033), or at any other time at such other address as the Trustee may designate
from time to time by notice to the Company.

 

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

 

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

 

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

 

“Final
Maturity Date” means June 15, 2033.

 

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

 

2

 

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

 

“Global Security”
means a permanent Global Security that is in substantially the form attached
hereto as Exhibit A, in the case of a 2008 Security, or Exhibit
B, in the case of a 2010 Security, and that includes the information and
schedule called for by footnotes 1, 3 and 4 thereof and which is deposited
with the Depositary or its custodian and registered in the name of the
Depositary or its nominee.

 

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

 

“Indebtedness”
means, with respect to any Person, without duplication, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person (i) for borrowed money (including obligations of such Person
in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or (ii) 
evidenced by credit or loan agreements, bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof) (other than any accounts
payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services), (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers’ acceptances, (c) all obligations and
liabilities (contingent or otherwise) of such Person (i) in respect of
leases of such Person required, in conformity with GAAP, to be accounted for as
capitalized lease obligations on the balance sheet of such Person (as
determined by the Company), or (ii) under any lease or related document
(including a purchase agreement, conditional sale or other title retention
agreement) in connection with the lease of real property or improvement thereon
(or any personal property included as part of any such lease) which provides
that such Person is contractually obligated to purchase or cause a third party
to purchase the leased property or pay an agreed upon residual value of the
leased property to the lessor (whether or not such lease transaction is
characterized as an operating lease or a capitalized lease in accordance with
GAAP), (d) all obligations (contingent or otherwise) of such Person with
respect to any interest rate or other swap, cap, floor or collar agreement,
hedge agreement, forward contract, or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;
(e) all direct or indirect guaranties, agreements to be jointly liable or
similar agreements by such Person in respect of, and obligations or liabilities
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), and (f) any and
all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (e).

 

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

 

“Initial
Purchasers” means Credit Suisse First Boston Corporation, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, SG Cowen Securities
Corporation, ABN AMRO Rothschild LLC, Citigroup Global Markets Inc. and Lehman
Brothers Inc.

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

“Put Right Purchase Date”
means either the 2008 Purchase Date, the applicable 2018-2028 Purchase Date, the
2010 Purchase Date or the applicable 2015-2030 Purchase Date, as the case may
be.

 

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

 

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

 

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

 

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

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of
June 11, 2003, between the Company and the Initial Purchasers.

 

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

 

4

 

bind such holders or owners of such Senior Indebtedness and
(ii) in the case of all other such Senior Indebtedness, the holder or
owner of such Senior Indebtedness.

 

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

 

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

 

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

 

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

 

“SEC”
means the Securities and Exchange Commission.

 

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

 

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

 

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

 

“Senior
Indebtedness” means the principal of, premium, if any, interest (including all
interest accruing subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowed as a
claim in any such proceeding) and rent payable on or in connection with, and
all fees, costs, expenses and other amounts accrued or due on or in connection
with, Indebtedness of the Company, whether secured or unsecured, absolute or
contingent, due or to become due, outstanding on the date of this Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities or
expressly provides that such Indebtedness is “pari passu” or “junior” to the
Securities.  Notwithstanding the
foregoing, the term Senior Indebtedness shall not include (i) any
Indebtedness of the Company to any Subsidiary of the Company (other than Indebtedness
of the Company to such Subsidiary arising by reason of guarantees by the
Company of Indebtedness of such Subsidiary to a Person that is not a Subsidiary
of the Company) or (ii) Indebtedness for trade payables or the deferred
purchase price of assets or services incurred in the ordinary course of
business.  If any payment made to any
holder of any Senior Indebtedness or its Representative with respect to such
Senior Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the reinstated Indebtedness of the Company arising as a
result of such rescission or return shall constitute Senior Indebtedness
effective as of the date of such rescission or return.

 

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

 

“Subsidiary”
means, in respect of any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other

 

5

 

interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers, general partners or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person; (ii) such
Person and one or more Subsidiaries of such Person; or (iii) one or more
Subsidiaries of such Person.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

SECTION
1.2.                  OTHER
DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
   

  	
  8.1

  
	
  “Change in Control”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Change in Control
  Purchase Date”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Change in Control
  Purchase Notice”

  	
   

  	
   

  	
  3.8(c)

  
	
  “Change in Control
  Purchase Price”

  	
   

  	
   

  	
  3.8(a)

  
	
  “Closing Price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Company Order”

  	
   

  	
   

  	
  2.2

  
	
  “Company Put Right
  Notice”

  	
   

  	
   

  	
  3.11(c)

  
	
  “Conversion Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Conversion Date”

  	
   

  	
   

  	
  4.2

  
	
  “Conversion Price”

  	
   

  	
   

  	
  4.6

  
	
  “Current Market Price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Custodian”

  	
   

  	
   

  	
  8.1

  
	
  “DTC”

  	
   

  	
   

  	
  2.1

  
	
  “Depositary”

  	
   

  	
   

  	
  2.1

  
	
  “Determination Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Event of Default”

  	
   

  	
   

  	
  8.1

  
	
  “Expiration Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Expiration Time”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Legal Holiday”

  	
   

  	
     12.7

  
	
  “Legend”

  	
   

  	
   

  	
  2.12

  
	
  “Instrument”

  	
   

  	
   

  	
  8.1

  
	
  “NNM”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Paying Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Payment Blockage
  Notice”

  	
   

  	
   

  	
  5.2

  
	
  “Primary Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Purchase Agreement”

  	
   

  	
   

  	
  2.1

  
	
  “Purchased Shares”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Put Right Purchase
  Notice”

  	
   

  	
   

  	
  3.11(c)

  
	
  “QIB”

  	
   

  	
   

  	
  2.1

  
	
  “Quoted Price
  Condition”

  	
   

  	
   

  	
  4.1(a)

  
	
  “Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Rights Plan”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Significant
  Subsidiary”

  	
   

  	
   

  	
  8.1

  
	
  “Triggering
  Distribution”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Trigger Event”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Unissued Shares”

  	
   

  	
   

  	
  3.8(a)

  
	
  “2008 Purchase Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2008 Purchase Price”

  	
   

  	
   

  	
  3.11(a)

  

 

7

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  “2010 Purchase Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2010 Purchase Price”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2013-2028 Purchase
  Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2013-2028 Purchase
  Price”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2015-2030 Purchase
  Date”

  	
   

  	
   

  	
  3.11(a)

  
	
  “2015-2030 Purchase
  Price”

  	
   

  	
   

  	
  3.11(a)

  

 

SECTION
1.3.                  TRUST INDENTURE
ACT PROVISIONS.

 

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

 

“indenture
securities” means the Securities;

 

“indenture
security holder” means a Securityholder;

 

“indenture
to be qualified” means this Indenture;

 

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

 

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

 

SECTION
1.4.                  RULES OF
CONSTRUCTION.

 

Unless
the context otherwise requires:

 

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

 

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

 

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

 

(D)          provisions apply to
successive events and transactions;

 

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

 

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

 

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

 

8

 

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

 

ARTICLE
2

THE SECURITIES

 

SECTION 2.1.                  FORM AND DATING.

 

The
2008 Securities and the corresponding Trustee’s certificate of authentication
shall be substantially in the respective forms set forth in Exhibit A,
which Exhibit is incorporated in and made part of this Indenture.  The 2010 Securities and the corresponding
Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit B, which Exhibit is
incorporated in and made part of this Indenture.  The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. 
The Company shall provide any such notations, legends or endorsements to
the Trustee in writing.  Each Security
shall be dated the date of its authentication. 
The Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated June 11, 2003 (the “Purchase Agreement”),
between the Company and the Initial Purchasers, in transactions exempt from, or
not subject to, the registration requirements of the Securities Act.

 

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

 

(b)           Global Securities In
General.  Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, purchases or
conversions of such Securities.  Any
adjustment of the aggregate principal amount of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.

 

Members
of, or participants in, the Depositary (“Agent Members”) shall have no rights
under this Indenture with respect to any Global Security held on their behalf
by the Depositary or under the Global Security, and the Depositary (including,
for this purpose, its nominee) may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner and Holder of
such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall
(A) prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or (B) impair, as between the
Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.

 

9

 

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

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO CEPHALON, INC. (THE
“COMPANY”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.  TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

SECTION
2.2.                  EXECUTION AND
AUTHENTICATION.

 

An
Officer shall sign the Securities for the Company by manual or facsimile
signature.  Typographic and other minor
errors or defects in any such facsimile signature shall not affect the validity
or enforceability of any Security which has been authenticated and delivered by
the Trustee.

 

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

 

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

 

The
Trustee shall authenticate and make available for delivery 2008 Securities for
original issue in the aggregate principal amount of up to $375,000,000 upon
receipt of a written order or orders of the Company signed by two Officers of
the Company (a “Company Order”).  The
Trustee shall authenticate and make available for delivery 2010 Securities for
original issue in the aggregate principal amount of up to $375,000,000 upon
receipt of a Company Order.  Each
Company Order shall specify the amount of Securities to be authenticated, shall
provide that all such Securities will be represented by a Restricted Global
Security and the date on which each original issue of Securities is to be
authenticated.  The aggregate principal
amount of 2008 Securities outstanding at any time may not exceed $375,000,000
and the aggregate principal amount of 2010 Securities outstanding at any time
may not exceed $375,000,000, in each except as provided in Section 2.7.

 

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

 

10

 

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

 

SECTION 2.3.                  REGISTRAR,
PAYING AGENT AND CONVERSION AGENT.

 

The
Company shall maintain one or more offices or agencies where Securities may be
presented for registration of transfer or for exchange (each, a “Registrar”),
one or more offices or agencies where Securities may be presented for payment
(each, a “Paying Agent”), one or more offices or agencies where Securities may
be presented for conversion (each, a “Conversion Agent”) and one or more
offices or agencies where notices and demands to or upon the Company in respect
of the Securities and this Indenture may be served.  The Company will at all times maintain a Paying Agent, Conversion
Agent, Registrar and an office or agency where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served in
the Borough of Manhattan, The City of New York.  One of the Registrars (the “Primary Registrar”) shall keep a
register of the Securities and of their transfer and exchange.

 

The
Company shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture.  The agreement
shall implement the provisions of this Indenture that relate to such
Agent.  The Company shall notify the
Trustee of the name and address of any Agent not a party to this
Indenture.  If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent or agent for service of
notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such.  The Company or any Affiliate of the Company may act as Paying
Agent (except for the purposes of Section 6.1 and Article 10).

 

The
Company hereby initially designates the Trustee as Paying Agent, Registrar,
Custodian and Conversion Agent, and each of the Corporate Trust Office of the
Trustee and the office or agency of the Trustee in the Borough of Manhattan,
The City of New York (which shall initially be U.S. Bank Trust National
Association, an Affiliate of the Trustee), one such office or agency of the
Company for each of the aforesaid purposes.

 

SECTION
2.4.                  PAYING AGENT TO
HOLD MONEY IN TRUST.

 

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

 

SECTION
2.5.                  SECURITYHOLDER
LISTS.

 

The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of 2008
Securityholders and the most recent list available to it of 2010
Securityholders.  If the Trustee is not
the Primary Registrar, the Company shall furnish to the

 

11

 

Trustee on or before each semiannual Interest Amount payment date, and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of 2008 Securityholders and/or 2010 Securityholders.

 

SECTION
2.6.                  TRANSFER AND
EXCHANGE.

 

(a)           Subject to compliance
with any applicable additional requirements contained in Section 2.12,
when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations of the same series, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by an assignment
form and, if applicable, a transfer certificate each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. 
To permit registration of transfers and exchanges, upon surrender of any
Security for registration of transfer or exchange at an office or agency
maintained pursuant to Section 2.3, the Company shall execute and the
Trustee shall authenticate Securities of a like aggregate principal amount of
the same series at the Registrar’s request. 
Any exchange or transfer shall be without charge, except that the
Company or the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto; and provided,
that this sentence shall not apply to any exchange pursuant to
Section 2.10, 2.12(a), 3.6, 3.12, 4.2 (last paragraph) or 11.5.

 

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

 

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

 

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

 

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

 

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

 

12

 

SECTION
2.7.                  REPLACEMENT
SECURITIES.

 

If any
mutilated Security is surrendered to the Company, a Registrar or the Trustee,
or the Company, a Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company, the applicable Registrar and the Trustee such
security or indemnity as will be required by them to save each of them
harmless, then, in the absence of notice to the Company, such Registrar or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount of the same series, bearing a number not
contemporaneously outstanding.

 

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

 

Upon
the issuance of any new Securities under this Section 2.7, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the reasonable fees and expenses of the Trustee or the
Registrar) in connection therewith.

 

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

 

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

 

SECTION
2.8.                  OUTSTANDING
SECURITIES.

 

Securities
outstanding at any time are all Securities authenticated by the Trustee, except
for those canceled by it, those converted pursuant to Article IV, those
delivered to it for cancellation or surrendered for transfer or exchange and
those described in this Section 2.8 as not outstanding.

 

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

 

If a
Paying Agent (other than the Company or an Affiliate of the Company) holds in
respect of a series of Securities on a Redemption Date, a Change in Control
Purchase Date, a Put Right Purchase Date or the Final Maturity Date money
sufficient to pay the principal of (including premium, if any) and any accrued
Interest Amounts on Securities of such series (or portions thereof) payable on
that date, then on and after such Redemption Date, Change in Control Purchase
Date, Put Right Purchase Date or the final Maturity Date, as the case may be,
such Securities (or portions thereof, as the case may be) shall cease to be
outstanding and any Interest Amounts on them shall cease to accrue; provided,
that if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefore satisfactory to
the Trustee has been made.

 

13

 

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

 

SECTION
2.9.                  TREASURY
SECURITIES.

 

In
determining whether the Holders of the required principal amount of Securities
have concurred in any notice, direction, waiver or consent, Securities owned by
the Company or any other obligor on the Securities or by any Affiliate of the
Company or of such other obligor shall be disregarded, except that, for
purposes of determining whether the Trustee shall be protected in relying on
any such notice, direction, waiver or consent, only Securities which a Trust
Officer of the Trustee actually knows are so owned shall be so
disregarded.  Securities so owned which
have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to the Securities and that the pledgee is not the Company or any
other obligor on the Securities or any Affiliate of the Company or of such
other obligor.

 

SECTION
2.10.           TEMPORARY SECURITIES.

 

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

 

SECTION 2.11.           CANCELLATION.

 

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

 

SECTION
2.12.           LEGEND; ADDITIONAL
TRANSFER AND EXCHANGE REQUIREMENTS.

 

(a)           If Securities are
issued upon the transfer, exchange or replacement of Securities subject to
restrictions on transfer and bearing the legends set forth on the forms of
Securities attached hereto as Exhibit A and Exhibit B
(collectively, the “Legend”), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company
and the Registrar such satisfactory evidence, which shall include an opinion of
counsel if requested by the Company or such Registrar, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144

 

14

 

under the Securities Act or that such Securities are not “restricted”
within the meaning of Rule 144 under the Securities Act; provided  that
no such evidence need be supplied in connection with the sale of such Security
pursuant to a registration statement that is effective at the time of such sale.  Upon (i) provision of such satisfactory
evidence if requested, or (ii) notification by the Company to the Trustee
and Registrar of the sale of such Security pursuant to a registration statement
that is effective at the time of such sale, the Trustee, at the written
direction of the Company, shall authenticate and deliver a Security that does
not bear the Legend.  If the Legend is
removed from the face of a Security and the Security is subsequently held by an
Affiliate of the Company, the Legend shall be reinstated.

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

SECTION 2.13.           CUSIP NUMBERS.

 

The
Company in issuing the Securities may use one or more “CUSIP” numbers (if then
generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices
of redemption or purchase as a convenience to Holders; provided  that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption or purchase and that reliance may be placed only on the
other identification numbers printed

 

16

 

on the Securities, and any such redemption or purchase shall not be
affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
of any change in the “CUSIP” numbers.

 

SECTION 2.14.           SEPARATE SERIES

 

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

 

ARTICLE 3

REDEMPTION AND PURCHASES

 

SECTION
3.1.                  RIGHT TO REDEEM;
NOTICE TO TRUSTEE.

 

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

 

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

 

If the
Company elects to redeem Securities pursuant to this Section 3.1 and
paragraph 5 of the Securities, it shall notify the Trustee at least 25
days prior to the Redemption Date as fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee) of the Redemption Date and the
principal amount of Securities to be redeemed. 
If fewer than all of the Securities of a series are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall not be less than ten days after
the date of notice to the Trustee.

 

SECTION
3.2.                  SELECTION OF
SECURITIES TO BE REDEEMED.

 

If
less than all of the Securities of a series are to be redeemed, unless the
procedures of the Depositary provide otherwise, the Trustee shall, at least 15
days but not more than 60 days prior to the Redemption Date, select the
Securities to be redeemed.  The Trustee
shall make the selection from the Securities of that series outstanding and not
previously called for redemption, by lot, or in its discretion, on a pro rata
basis.  Securities in denominations of
$1,000 may only be redeemed in whole. 
The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000.  Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.

 

If any
Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed to be the
portion selected for redemption. 
Securities which have been converted

 

17

 

subsequent to the Trustee commencing selection of Securities to be
redeemed but prior to redemption of such Securities shall be treated by the
Trustee as outstanding for the purpose of such selection.

 

SECTION
3.3.                  NOTICE OF
REDEMPTION.

 

At
least 15 days but not more than 60 days before a Redemption Date, the Company
shall mail or cause to be mailed a notice of redemption to each Holder of
Securities to be redeemed at such Holder’s address as it appears on the Primary
Registrar’s books.

 

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

 

(1)           the Redemption Date;

 

(2)           the Redemption Price;

 

(3)           the then current
Conversion Price;

 

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

 

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

 

(6)           that Holders who wish
to convert Securities must surrender such Securities for conversion no later
than the close of business on the Business Day immediately preceding the
Redemption Date and must satisfy the other requirements set forth in
paragraph 9 of the Securities and Article 4 hereof;

 

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

 

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

 

If any
of the Securities to be redeemed is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to redemptions.  At the Company’s written request, which
request shall (i) be irrevocable once given and (ii) set forth all
relevant information required by clauses (1) through (8) of the preceding
paragraph, the Trustee shall give the notice of redemption to each Holder in
the Company’s name and at the Company’s expense.

 

SECTION
3.4.                  EFFECT OF NOTICE
OF REDEMPTION.

 

Once
notice of redemption is mailed, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the
notice, together with accrued Interest Amounts, if any, except for Securities
that are converted in accordance with the provisions of Article 4.

 

18

 

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

 

SECTION
3.5.                  DEPOSIT OF
REDEMPTION PRICE.

 

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

 

SECTION
3.6.                  SECURITIES
REDEEMED IN PART.

 

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

 

SECTION
3.7.                  CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION.

 

In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to a Paying Agent (other than the Company or any of its
Affiliates) in trust for the Holders, on or before 11:00 a.m. New York City
time on the Redemption Date, an amount that, together with any amounts
deposited with such Paying Agent by the Company for the redemption of such
Securities, is not less than the Redemption Price, together with any Interest
Amounts accrued to, but not including, the Redemption Date, of such
Securities.  Notwithstanding anything to
the contrary contained in this Article 3, the obligation of the Company to
pay the Redemption Price of such Securities, including all accrued Interest
Amounts, if any, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers; provided, however,
that nothing in this Section 3.7 shall relieve the Company of its
obligation to pay the Redemption Price, plus any accrued Interest Amounts to
but excluding the relevant Redemption Date, on Securities called for
redemption.  If such an agreement with
one or more investment banks or other purchasers is entered into, any
Securities called for redemption and not surrendered for conversion by the
Holders thereof prior to the relevant Redemption Date may, at the option of the
Company upon written notice to the Trustee, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 4) surrendered
by such purchasers for conversion, all as of 11:00 a.m. New York City time on
the Redemption Date, subject to payment of the above amount as aforesaid.  The Paying Agent shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase in the same manner as it would money deposited with it by the
Company for the redemption of Securities. 
Without the Paying Agent’s prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent from, and hold
it harmless against, any loss, liability or expense arising

 

19

 

out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Company and such purchasers, including
the costs and expenses incurred by the Paying Agent in the defense of any claim
or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this
Indenture.

 

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

 

(a)           If at any time that
Securities remain outstanding there shall occur a Change in Control, Securities
shall be purchased by the Company at the option of the Holders, as of the date
that is 30 Business Days after the occurrence of the Change in Control
(the “Change in Control Purchase Date”) at a purchase price equal to 100% of
the principal amount of the Securities, together with any accrued and unpaid
Interest Amounts to, but excluding, the Change in Control Purchase Date (the
“Change in Control Purchase Price”), subject to satisfaction by or on behalf of
any Holder of the requirements set forth in subsection (c) of this
Section 3.8.

 

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

 

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

 

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

 

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

 

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

 

20

 

purchase or conversion privileges exercisable within 60 days of the
date of determination of a Change in Control.

 

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

 

(1)           the Closing Price
(determined in accordance with Section 4.6(d) of this Indenture) of the
Common Stock for any five Trading Days during the ten Trading Days immediately
preceding the Change in Control is at least equal to 110% of the Conversion
Price in effect on such Trading Day; or

 

(2)           in the case of a merger
or consolidation, all of the consideration (excluding cash payments for
fractional shares and cash payments pursuant to dissenters’ appraisal rights)
in the merger or consolidation constituting the Change in Control consists of
common stock traded on a United States national securities exchange or quoted
on the Nasdaq National Market (or which will be so traded or quoted when issued
or exchanged in connection with such Change in Control) and as a result of such
transaction or transactions the Securities become convertible solely into such
common stock.

 

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

 

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

 

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

 

(3)           the Change in Control
Purchase Date;

 

(4)           the Change in Control
Purchase Price;

 

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

 

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

 

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

 

(8)           the Conversion Price
and any adjustments thereto;

 

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

 

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

 

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

 

21

 

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

 

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

 

(c)           A Holder may exercise
its rights specified in subsection (a) of this Section 3.8 upon
delivery of a written notice (which shall be in substantially the form included
in Exhibit A hereto, in the case of 2008 Securities, and Exhibit B
hereto, in the case of 2010 Securities, and which may be delivered by letter,
overnight courier, hand delivery, facsimile transmission or in any other
written form and, in the case of Global Securities, may be delivered
electronically or by other means in accordance with the Depositary’s customary
procedures) of the exercise of such rights (a “Change in Control Purchase
Notice”) to any Paying Agent at any time prior to the close of business on the
Business Day next preceding the Change in Control Purchase Date.

 

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

 

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

 

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

 

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

 

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

 

SECTION
3.9.                  EFFECT OF CHANGE
IN CONTROL PURCHASE NOTICE.

 

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

 

22

 

Article 4 on or after the date of the delivery of such Change in
Control Purchase Notice unless such Change in Control Purchase Notice has first
been validly withdrawn.

 

A
Change in Control Purchase Notice may be withdrawn by means of a written notice
(which may be delivered by mail, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s customary procedures) of withdrawal delivered by the
Holder to a Paying Agent at any time prior to the close of business on the
Business Day immediately preceding the Change in Control Purchase Date,
specifying the principal amount of the Security or portion thereof (which must
be a principal amount of $1,000 or an integral multiple of $1,000 in excess
thereof) with respect to which such notice of withdrawal is being submitted.

 

SECTION
3.10.           DEPOSIT OF CHANGE IN
CONTROL PURCHASE PRICE.

 

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

 

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

 

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

 

23

 

SECTION
3.11.           PURCHASE OF SECURITIES
AT OPTION OF THE HOLDER ON SPECIFIED DATES.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(D)          delivery of such
Security to the Paying Agent prior to, on or after the Put Right Purchase Date
(together with all necessary endorsements) at the offices of the Paying Agent,
such delivery being a condition to receipt by the Holder of the Put Right
Purchase Price therefor, together with any accrued Interest Amounts, shall be
so paid pursuant to this Section 3.11 only if the Security so

 

24

 

delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Put Right Purchase Notice, as determined by
the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)          that Securities as to
which a Put Right Purchase Notice has been given may be converted if they are
otherwise convertible only in accordance with Article 4 hereof and paragraph 9
of the Securities if the applicable Put Right Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

(x)            the CUSIP number of
the Securities.

 

If any
of the Securities are to be redeemed in the form of a Global Security, the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to redemptions.

 

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

 

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

 

(e)           Upon receipt by the
Paying Agent of the Put Right Purchase Notice specified in Section 3.11(a), the
Holder of the Security in respect of which such Put Right Purchase Notice was
given shall (unless such Put Right Purchase Notice is withdrawn as specified in
the following two paragraphs) thereafter be entitled to receive solely the Put
Right Purchase Price, together with any accrued Interest Amounts to, but not
including, the Put Right Purchase Date thereon, with respect to such Security.  Such Put Right Purchase Price, together with
any accrued Interest Amounts to, but not including, the Put Right Purchase Date
thereon, shall be paid to such Holder, subject to receipt of funds by the
Paying Agent, promptly following the later of (x) the Put Right Purchase Date
with respect to such Security (provided the conditions in Section 3.11(a) have
been satisfied) and (y) the time of delivery of such Security to the Paying
Agent by the Holder thereof in the manner required by Section 3.11(a).  Securities in respect of which a Put Right
Purchase Notice has been given by the Holder thereof may not be converted
pursuant to Article 4 hereof on or after the date of the delivery of such Put
Right Purchase Notice, unless such Put Right Purchase Notice has first been
validly withdrawn as specified in the following two paragraphs.

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
3.12.           SECURITIES PURCHASED IN
PART.

 

Any
Security that is to be purchased only in part shall be surrendered at the
office of a Paying Agent, and promptly after the Change in Control Purchase
Date or the Put Right Purchase Date, as the case may be, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of such
authorized denomination or denominations as may be requested by such Holder, in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.

 

27

 

SECTION
3.13.           COMPLIANCE WITH
SECURITIES LAWS UPON PURCHASE OF SECURITIES.

 

In
connection with any offer to purchase or purchase of Securities under Section
3.8 or 3.11, the Company shall (a) comply with Rule 13e-4 and Rule 14e-1
(or any successor to either such Rule), if applicable, under the Exchange Act,
(b) file the related Schedule TO (or any successor or similar schedule,
form or report) if required under the Exchange Act, and (c) otherwise
comply with all federal and state securities laws in connection with such offer
to purchase or purchase of Securities, all so as to permit the rights of the Holders
and obligations of the Company under Sections 3.8 through 3.12 to be exercised
in the time and in the manner specified therein.

 

ARTICLE
4

CONVERSION

 

SECTION
4.1.                  CONVERSION
PRIVILEGE.

 

(a)           Subject to the further
provisions of this Article 4 and paragraph 9 of the Securities, a Holder of a
Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into Common Stock at any time prior to the close of business on the Final
Maturity Date, at the Conversion Price then in effect, if, as of such
Conversion Date, the Quoted Price of the Common Stock on the first Trading Day
immediately prior to the Conversion Date is more than 120% of the Conversion
Price of Common Stock on the first Trading Day immediately prior to such
conversion date (the “Quoted Price Condition”), subject to the exceptions
provided in Section 4.1(b); provided, however, that, if such
Security is called for redemption or submitted or presented for purchase
pursuant to Article 3, such conversion right shall terminate at the close
of business on the Business Day immediately preceding the Redemption Date or
Change in Control Purchase Date, as the case may be, for such Security or such
earlier date as the Holder presents such Security for redemption or for
purchase (unless the Company shall default in making the redemption payment or
Change in Control Purchase Price payment when due, in which case the conversion
right shall terminate at the close of business on the date such default is
cured and such Security is redeemed or purchased, as the case may be).  The number of shares of Common Stock
issuable upon conversion of a Security shall be determined by dividing the
principal amount of the Security or portion thereof surrendered for conversion
by the Conversion Price in effect on the Conversion Date.  The initial Conversion Price is set forth in
paragraph 9 of the Securities and is subject to adjustment as provided in this
Article 4.

 

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

 

A
Security in respect of which a Holder has delivered a Change in Control
Purchase Notice pursuant to Section 3.8(c) exercising the option of such
Holder to require the Company to purchase such Security may be converted only
if such Change in Control Purchase Notice is withdrawn by a written notice of
withdrawal delivered to a Paying Agent prior to the close of business on the
Business Day immediately preceding the Change in Control Purchase Date in
accordance with Section 3.9.  A
Security in respect of which a Holder has delivered a Put Right Purchase Notice
pursuant to Section 3.11(a) exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such Put
Right Purchase Notice is withdrawn by a written notice of withdrawal delivered
to a Paying Agent prior to the close of business on the second Business Day
immediately preceding the Put Right Purchase Date in accordance with
Section 3.11(e).

 

28

 

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

 

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

 

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

 

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

 

(3)           in the event that the
Company declares

 

(A)          a dividend or
distribution of any rights or warrants to all holders of Common Stock entitling
them to subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price per share (as defined in Section 4.6(d))
(other than a distribution of rights by the Company to its stockholders
pursuant to the Company’s Amended and Restated Rights Agreement, dated as of
January 1, 1999, between the Company and StockTrans, Inc., as Rights
Agent, and any successor or similar stockholders rights plan until the
occurrence of a triggering event under such plan), or

 

(B)           a dividend or
distribution of cash, debt securities (or other evidences of indebtedness), or
other assets (excluding dividends or distributions for which Conversion Price
adjustment is required to be made under Section 4.6(a) or 4.6(b) of the
Indenture) where the fair market value of such dividend or distribution per
share of Common Stock, as determined in the Indenture, together with all other
such dividends and distributions within the preceding twelve months, exceeds
10% of the Current Market Price of the Common Stock as of the Trading Day
immediately prior to the date of declaration,

 

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

 

(4)           in the event that the
Company is a party to a consolidation, merger, transfer or lease of all or
substantially all of its assets or a merger which reclassifies or changes its
Common Stock pursuant to which the Common Stock would be converted into cash,
securities or other assets, the Securities may be surrendered for conversion at
any time from or after the date which is 15 days prior to the anticipated
effective time of the transaction as announced by the Company, which
announcement must occur no later than 15 days prior to such anticipated
effective time, until 15 days after the actual date of such transaction.

 

29

 

SECTION
4.2.                  CONVERSION
PROCEDURE.

 

To
convert a Security, a Holder must (a) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to a
Conversion Agent, (b) surrender the Security to a Conversion Agent,
(c) furnish appropriate endorsements and transfer documents if required by
a Registrar or a Conversion Agent, and (d) pay any transfer or similar
tax, if required.  The date on which the
Holder satisfies all of those requirements is the “Conversion Date.”  As soon as practicable after the Conversion
Date, the Company shall deliver to the Holder through a Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to
Section 4.3.  Anything herein to
the contrary notwithstanding, in the case of Global Securities, conversion
notices may be delivered and such Securities may be surrendered for conversion
in accordance with the Applicable Procedures as in effect from time to time.

 

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

 

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

 

SECTION
4.3.                  FRACTIONAL
SHARES.

 

The
Company will not issue fractional shares of Common Stock upon conversion of
Securities.  In lieu thereof, the
Company will pay an amount in cash for the current market value of the
fractional shares.  The current market
value of a fractional share shall be determined, (calculated to the nearest
1/1000th of a share) by multiplying the Closing Price (determined as
set forth in Section 4.6(d)) of the Common Stock on the Trading Day immediately
prior to the Conversion Date by such fractional share and rounding the product
to the nearest whole cent.

 

SECTION
4.4.                  TAXES ON
CONVERSION.

 

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

 

30

 

SECTION
4.5.                  COMPANY TO
PROVIDE STOCK.

 

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

 

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

 

The
Company will endeavor promptly to comply with all federal and state securities
laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or on the Nasdaq
National Market or other over-the-counter market or such other market on which
the Common Stock is then listed or quoted; provided, however,
that if rules of such automated quotation system or exchange permit the Company
to defer the listing of such Common Stock until the first conversion of the
Notes into Common Stock in accordance with the provisions of this Indenture,
the Company covenants to list such Common Stock issuable upon conversion of the
Notes in accordance with the requirements of such automated quotation system or
exchange at such time.  Any Common Stock
issued upon conversion of a Security hereunder which at the time of conversion
was a Restricted Security will also be a Restricted Security.

 

SECTION
4.6.                  ADJUSTMENT OF
CONVERSION PRICE.

 

The
conversion price as stated in paragraph 9 of the Securities (the
“Conversion Price”) shall be adjusted from time to time by the Company as
follows:

 

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

 

(b)           In case the Company
shall issue rights or warrants to all or substantially all holders of its
Common Stock entitling them (for a period commencing no earlier than the record
date described below and expiring not more than 60 days after such record date)
to subscribe for or purchase shares of Common Stock (or securities convertible
into Common Stock) at a price per share (or having a conversion price per
share) less than the Current Market Price per share of Common Stock (as
determined in accordance with subsection (d) of this Section 4.6) on
the record date for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to such record
date by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares which
the aggregate offering price of the total number of shares of Common Stock so
offered (or the aggregate conversion price of the convertible securities so
offered, which shall be determined by multiplying the number of shares of
Common Stock issuable upon conversion of such convertible securities by the
conversion price

 

31

 

per share of Common Stock pursuant to the terms of such convertible
securities) would purchase at the Current Market Price per share (as defined in
subsection (d) of this Section 4.6) of Common Stock on such record
date, and of which the denominator shall be the number of shares of Common
Stock outstanding on such record date plus the number of additional shares of
Common Stock offered (or into which the convertible securities so offered are
convertible).  Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after such record date.  If at the end of the period during which such rights or warrants
are exercisable not all rights or warrants shall have been exercised, the
adjusted Conversion Price shall be immediately readjusted to what it would have
been based upon the number of additional shares of Common Stock actually issued
(or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).

 

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

 

In the
event the then fair market value (as so determined) of the portion of the
capital stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one share of Common
Stock is equal to or greater than the Current Market Price per share of the
Common Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of capital stock, evidences of
indebtedness or other non-cash assets so distributed or of such rights or
warrants such holder would have received had such holder converted each
Security on such record date.  In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.  If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 4.6(c)
by reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.

 

In the
event that the Company implements a preferred shares rights plan (“Rights
Plan”), upon conversion of the Securities into Common Stock, to the extent that
the Rights Plan has been implemented and is still in effect upon such
conversion, the holders of Securities will receive, in addition to the

 

32

 

Common Stock, the rights described therein (whether or not the rights
have separated from the Common Stock at the time of conversion), subject to the
limitations set forth in the Rights Plan. 
Any distribution of rights or warrants pursuant to a Rights Plan complying
with the requirements set forth in the immediately preceding sentence of this
paragraph shall not constitute a distribution of rights or warrants pursuant to
this Section 4.6(c).

 

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

 

(1)           In case the Company
shall, by dividend or otherwise, at any time distribute (a “Triggering
Distribution”) to all or substantially all holders of its Common Stock cash in
an aggregate amount that, together with the aggregate amount of (A) any
cash and the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the
12 months preceding the date of payment of the Triggering Distribution and
in respect of which no Conversion Price adjustment pursuant to this
Section 4.6 has been made and (B) all other cash distributions to all
or substantially all holders of its Common Stock made within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.6 has been
made, exceeds an amount equal to 3.0% of the product of the Current Market
Price per share of Common Stock (as determined in

 

33

 

accordance with subsection (d) of this Section 4.6) on the
Business Day (the “Determination Date”) immediately preceding the day on which
such Triggering Distribution is declared by the Company multiplied by the
number of shares of Common Stock outstanding on the Determination Date
(excluding shares held in the treasury of the Company), the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to the Determination
Date by a fraction of which the numerator shall be the Current Market Price per
share of the Common Stock (as determined in accordance with subsection (d)
of this Section 4.6) on the Determination Date less the sum of the
aggregate amount of cash and the aggregate fair market value (determined as
aforesaid in this Section 4.6(c)(1)) of any such other consideration so
distributed, paid or payable within such 12 months (including, without
limitation, the Triggering Distribution) applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Determination Date) and the denominator shall be such
Current Market Price per share of the Common Stock (as determined in accordance
with subsection (d) of this Section 4.6) on the Determination Date,
such reduction to become effective immediately prior to the opening of business
on the day following the date on which the Triggering Distribution is paid.

 

(2)           In case any tender
offer made by the Company or any of its Subsidiaries for Common Stock shall
expire and such tender offer (as amended upon the expiration thereof) shall
involve the payment of aggregate consideration in an amount (determined as the
sum of the aggregate amount of cash consideration and the aggregate fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive evidence thereof and which shall be evidenced by an Officers’
Certificate delivered to the Trustee thereof) of any other consideration) that,
together with the aggregate amount of (A) any cash and the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive evidence thereof and which shall be evidenced by an Officers’
Certificate delivered to the Trustee) of any other consideration payable in
respect of any other tender offers by the Company or any Subsidiary of the
Company for Common Stock consummated within the 12 months preceding the date of
the Expiration Date (as defined below) and in respect of which no Conversion
Price adjustment pursuant to this Section 4.6 has been made and
(B) all cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the Expiration Date and in
respect of which no Conversion Price adjustment pursuant to this
Section 4.6 has been made, exceeds an amount equal to 3.0% of the product
of the Current Market Price per share of Common Stock (as determined in
accordance with subsection (d) of this Section 4.6) as of the last
date (the “Expiration Date”) tenders could have been made pursuant to such
tender offer (as it may be amended) (the last time at which such tenders could
have been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”) multiplied by the number of shares of Common Stock
outstanding (including tendered shares but excluding any shares held in the
treasury of the Company) at the Expiration Time, then, immediately prior to the
opening of business on the day after the Expiration Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the Expiration Date by a fraction of which the numerator shall be
the product of the number of shares of Common Stock outstanding (including
tendered shares but excluding any shares held in the treasury of the Company)
at the Expiration Time multiplied by the Current Market Price per share of the
Common Stock (as determined in accordance with subsection (d) of this
Section 4.6) on the Trading Day next succeeding the Expiration Date and
the denominator shall be the sum of (x) the aggregate consideration
(determined as aforesaid) payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender offer) of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted, up to any such maximum, being referred to as the “Purchased
Shares”) and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares and excluding any shares held in the
treasury of the Company) at the Expiration Time and the Current Market Price
per share of Common Stock (as determined in accordance with subsection (d)
of this Section 4.6) on the Trading Day next succeeding the Expiration
Date, such reduction to become effective immediately prior to the opening of
business on the day following the Expiration Date.  In the event that the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any or all such purchases or any or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would have been in effect based upon the number of
shares actually purchased.  If the
application of this Section 4.6(c)(2) to any

 

34

 

tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this
Section 4.6(c)(2).

 

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

 

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

 

(e)           In any case in which
this Section 4.6 shall require that an adjustment be made following a
record date or a Determination Date or Expiration Date, as the case may be,
established for purposes of this Section 4.6, the Company may elect to
defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 4.9) issuing to
the Holder of any Security converted after such record date or Determination
Date or Expiration Date the shares of Common Stock and other capital stock of
the Company issuable upon such conversion over and above the shares of Common
Stock and other capital stock of the Company issuable upon such conversion only
on the basis of the Conversion Price prior to adjustment; and, in lieu of the
shares the issuance of which is so deferred, the Company shall issue or cause
its transfer agents to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such shares.  If any distribution in respect of which an adjustment to the Conversion
Price is required to be made as of the record date or Determination Date or
Expiration Date therefor is not thereafter made or paid by the Company for any
reason, the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect if such record date had not been fixed or such
effective date or Determination Date or Expiration Date had not occurred.

 

SECTION 4.7.                  NO ADJUSTMENT.

 

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

 

35

 

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

 

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

 

SECTION
4.8.                  ADJUSTMENT FOR
TAX PURPOSES.

 

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

 

SECTION
4.9.                  NOTICE OF
ADJUSTMENT.

 

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

 

SECTION
4.10.           NOTICE OF CERTAIN
TRANSACTIONS.

 

In the
event that:

 

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

 

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

 

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

 

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

 

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

 

If any
of the following shall occur, namely: 
(a) any reclassification or change of shares of Common Stock
issuable upon conversion of the Securities (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination, or any other change for which an
adjustment is provided in Section 4.6); (b) any consolidation or
merger or combination to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in
any reclassification of, or change (other than in par

 

36

 

value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding shares
of Common Stock; or (c) any sale or conveyance as an entirety or
substantially as an entirety of the property and assets of the Company,
directly or indirectly, to any person, then the Company, or such successor, purchasing
or transferee corporation, as the case may be, shall, as a condition precedent
to such reclassification, change, combination, consolidation, merger, sale or
conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the
right to convert such Security into the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such
reclassification, change, combination, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
combination, consolidation, merger, sale or conveyance.  Such supplemental indenture shall provide
for adjustments of the Conversion Price which shall be as nearly equivalent as
may be practicable to the adjustments of the Conversion Price provided for in
this Article 4.  If, in the case of
any such consolidation, merger, combination, sale or conveyance, the stock or
other securities and property (including cash) receivable thereupon by a holder
of Common Stock include shares of stock or other securities and property of a
person other than the successor, purchasing or transferee corporation, as the
case may be, in such consolidation, merger, combination, sale or conveyance,
then such supplemental indenture shall also be executed by such other person
and shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. 
The provisions of this Section 4.11 shall similarly apply to
successive reclassifications, changes, combinations, consolidations, mergers,
sales or conveyances.

 

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

 

SECTION
4.12.           TRUSTEE’S DISCLAIMER.

 

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

 

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

 

SECTION
4.13.           VOLUNTARY REDUCTION.

 

The
Company from time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least 20 days and if the reduction is
irrevocable during the period if our Board of Directors determines that such
reduction would be in the best interest of the Company or to avoid or diminish
income tax to holders of shares of our Common Stock in connection with a
dividend or

 

37

 

distribution of stock or similar event, and the Company provides 15
days prior notice of any reduction in the Conversion Price; provided,
however, that in no event may the Company reduce the Conversion Price to be
less than the par value of a share of Common Stock.

 

ARTICLE
5

SUBORDINATION

 

SECTION
5.1.                  AGREEMENT OF
SUBORDINATION.

 

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

 

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

 

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

 

SECTION
5.2.                  PAYMENTS TO
HOLDERS.

 

No
payment shall be made with respect to the principal of, or premium, if any, or
Interest Amounts, if any, on the Securities (including, but not limited to, the
Redemption Price with respect to the Securities to be called for redemption or
the Change in Control Purchase Price or Put Right Purchase Price with respect
to the Securities subject to purchase in accordance with Article 3 as provided
in this Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 5.5, if:

 

(i)            a
default in the payment of principal, premium, interest, rent or other
obligations due on any Senior Indebtedness occurs and is continuing (or, in the
case of Senior Indebtedness for which there is a period of grace, in the event
of such a default that continues beyond the period of grace, if any, specified
in the instrument or lease evidencing such Senior Indebtedness), unless and
until such default shall have been cured or waived or shall have ceased to
exist; or

 

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

 

Subject
to the provisions of Section 5.5, if the Trustee receives any Payment Blockage
Notice pursuant to clause (ii) above, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until at
least 365 days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and all scheduled payments on the
Securities that have come due have been paid in full in cash.  No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee (unless such default was waived, cured or

 

38

 

otherwise ceased to exist and thereafter subsequently reoccurred) shall
be, or be made, the basis for a subsequent Payment Blockage Notice.

 

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

 

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

 

(b)           in the case of a
default referred to in clause (ii) above, 
the earlier of the date on which such default is cured or waived or
ceases to exist or 179 days pass after the date on which the applicable Payment
Blockage Notice is received, if the maturity of such Designated Senior
Indebtedness has not been accelerated, unless this Article 5 otherwise
prohibits the payment or distribution at the time of such payment or
distribution.

 

Upon
any payment by the Company, or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding-up or liquidation or reorganization of the Company
(whether voluntary or involuntary) or in bankruptcy, insolvency, receivership
or similar proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in cash, or other payments
satisfactory to the holders of Senior Indebtedness before any payment is made
on account of the principal of, premium, if any, or Interest Amounts, if any,
on the Securities (except payments made pursuant to Article 10 from monies
deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation or reorganization);
and upon any such dissolution or winding-up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provision of this
Article 5, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full in cash, or other payment satisfactory to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the Holders of the Securities or to the Trustee.

 

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

 

39

 

liquidation or reorganization for the purposes of this Section 5.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions stated in Article 7.

 

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

 

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

 

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

 

SECTION
5.3.                  SUBROGATION OF
SECURITIES.

 

Subject
to the payment in full, in cash or other payment satisfactory to the holders of
Senior Indebtedness, of all Senior Indebtedness, the rights of the Holders of
the Securities of a series shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article 5 (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to the Senior
Indebtedness until the principal, premium, if any, and Interest Amounts, if
any, on the Securities of that series shall be paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness; and, for the
purposes of such subrogation, no payments or distributions to the holders of
the Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities of that series or the Trustee would be entitled
except for the provisions of this Article 5, and no payment over pursuant to
the provisions of this Article 5, to or for the benefit of the holders of
Senior Indebtedness by Holders of the Securities of that series or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities of that series, be deemed to be
a payment by the Company to or on account of

 

40

 

the Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the Holders of the Securities
of that series pursuant to the subrogation provisions of this Article 5, which
would otherwise have been paid to the holders of Senior Indebtedness shall be
deemed to be a payment by the Company to or for the account of the
Securities.  It is understood that the
provisions of this Article 5 are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.

 

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

 

Upon
any payment or distribution of assets of the Company referred to in this
Article 5, the Trustee, subject to the provisions of Section 9.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 5.

 

SECTION
5.4.                  AUTHORIZATION TO
EFFECT SUBORDINATION.

 

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

 

SECTION
5.5.                  NOTICE TO
TRUSTEE.

 

The
Company shall give prompt written notice in the form of an Officers’
Certificate to a Trust Officer of the Trustee and to any Paying Agent of any
fact known to the Company which would prohibit the making of any payment of
monies to or by the Trustee or any Paying Agent in respect of the Securities
pursuant to the provisions of this Article 5. 
Notwithstanding the provisions of this Article 5 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article 5, unless and until a Trust Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers’ Certificate) or a Representative or a holder or
holders of Senior Indebtedness or from any trustee thereof; and before the
receipt of any such written notice, the Trustee, subject to the provisions of

 

41

 

Section 9.1, shall be entitled in all respects to assume that no such
facts exist; provided  that if on a date not less than one
Business Day prior to the date upon which by the terms hereof any such monies
may become payable for any purpose (including, without limitation, the payment
of the principal of, or premium, if any, or Interest Amounts, if any, on any
Security) the Trustee shall not have received, with respect to such monies, the
notice provided for in this Section 5.5, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date. 
Notwithstanding anything in this Article 5 to the contrary, nothing
shall prevent any payment by the Trustee to the Holders of monies deposited
with it pursuant to Article 10, and any such payment shall not be subject to the
provisions of Article 5.

 

The
Trustee, subject to the provisions of Section 9.1, shall be entitled to rely on
the delivery to it of a written notice by a Representative or a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders.  In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 5, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 5, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.

 

SECTION
5.6.                  TRUSTEE’S
RELATION TO SENIOR INDEBTEDNESS.

 

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

 

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

 

SECTION
5.7.                  NO IMPAIRMENT OF
SUBORDINATION.

 

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

 

42

 

SECTION
5.8.                  CERTAIN
CONVERSIONS DEEMED PAYMENT.

 

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

 

SECTION
5.9.                  ARTICLE
APPLICABLE TO PAYING AGENTS.

 

If at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term “Trustee” as used in this
Article shall (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that the first
paragraph of Section 5.5 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.

 

SECTION
5.10.           SENIOR INDEBTEDNESS
ENTITLED TO RELY.

 

The
holders of Senior Indebtedness (including, without limitation, Designated
Senior Indebtedness) shall have the right to rely upon this Article 5, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing
thereto.

 

ARTICLE
6

COVENANTS

 

SECTION
6.1.                  PAYMENT OF
SECURITIES.

 

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

 

Payment
of the principal of (and premium, if any) and any Interest Amounts on the
Securities shall be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York (which shall
initially be U.S. Bank Trust National Association, an Affiliate of the Trustee)
or at the Corporate Trust Office of the Trustee in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private

 

43

 

debts; provided, however, that at the option of the
Company payment of Interest Amounts may be made by check mailed to the address
of the Person entitled thereto as such address appears in the Register; provided
further that a Holder with an aggregate principal amount in excess of
$2,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder if such Holder has provided wire transfer instructions
to the Company at least 10 Business Days prior to the payment date.

 

SECTION 6.2.                  SEC REPORTS.

 

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

 

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

 

SECTION
6.3.                  COMPLIANCE
CERTIFICATES.

 

The
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending
December 31, 2003), an Officers’ Certificate as to the signer’s knowledge
of the Company’s compliance with all conditions and covenants on its part
contained in this Indenture and stating whether or not the signer knows of any
default or Event of Default.  If such
signer knows of such a default or Event of Default, the Officers’ Certificate
shall describe the default or Event of Default and the efforts to remedy the
same.  For the purposes of this
Section 6.3, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture.

 

SECTION
6.4.                  FURTHER
INSTRUMENTS AND ACTS.

 

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

 

SECTION
6.5.                  MAINTENANCE OF
CORPORATE EXISTENCE.

 

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

 

SECTION
6.6.                  RULE 144A
INFORMATION REQUIREMENT.

 

Within
the period prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange Act,
upon the request of any Holder or beneficial holder of the Securities make available
to such Holder or beneficial holder of Securities or any Common Stock issued
upon conversion thereof which continue to be Restricted Securities in
connection with any sale thereof and any prospective purchaser of Securities or
such Common Stock designated by such Holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act
or such Common Stock and it will take such further action as

 

44

 

any Holder or beneficial holder of such Securities or such Common Stock
may reasonably request, all to the extent required from time to time to enable
such Holder or beneficial holder to sell its Securities or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time.  Upon the request of any Holder or any
beneficial holder of the Securities or such Common Stock, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.

 

SECTION 6.7.                  STAY, EXTENSION
AND USURY LAWS.

 

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

 

SECTION
6.8.                  PAYMENT OF
INTEREST AMOUNTS.

 

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

 

ARTICLE
7

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

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

 

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

 

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

 

45

 

Company) formed by such consolidation or into which the Company shall
have been merged or by the Person which shall have acquired the Company’s
assets;

 

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

 

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

 

SECTION
7.2.                  SUCCESSOR
SUBSTITUTED.

 

Upon
any consolidation of the Company with, or merger of the Company into, any other
Person or any conveyance, transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section 7.1, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

 

ARTICLE 8

DEFAULT AND REMEDIES

 

SECTION
8.1.                  EVENTS OF
DEFAULT.

 

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

 

(1)           the Company defaults in
the payment of Interest Amounts, if any, payable to all holders of Registrable
Securities (as defined in the Registration Rights Agreement) on any Security of
that series when the same becomes due and payable and the default continues for
a period of 30 days, whether or not such payment shall be prohibited by the
provisions of Article 5 hereof;

 

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

 

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

 

(4)           the Company defaults in
the payment of the purchase price of any Security of that series when the same
becomes due and payable, whether or not such payment shall be prohibited by the
provisions of Article 5 hereof; or

 

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

 

46

 

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

 

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

 

(A)                              commences
a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

A default under
clause (3) above is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities of that series then outstanding notify the Company and the Trustee,
in writing of the default, and the Company does not cure the default within 60
days after receipt of such notice. The notice given pursuant to this
Section 8.1

 

47

 

must specify the default,
demand that it be remedied and state that the notice is a “Notice of
Default.”  When any default under this
Section 8.1 is cured, it ceases.

 

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

 

SECTION 8.2.                  ACCELERATION.

 

If an
Event of Default (other than an Event of Default specified in clause (7)
or (8) of Section 8.1) occurs and is continuing with respect to a series
of Securities, the Trustee may, by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities of that series then
outstanding may, by notice to the Company and the Trustee, declare all unpaid
principal to the date of acceleration on the Securities of that series then
outstanding (if not then due and payable) to be due and payable upon any such
declaration, and the same shall become and be immediately due and payable.  If an Event of Default specified in clause (7)
or (8) of Section 8.1 occurs, all unpaid principal of the Securities then
outstanding shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.  The Holders of a majority in aggregate
principal amount of the Securities of a series then outstanding by notice to
the Trustee may rescind an acceleration of Securities of that series and its
consequences if (a) all existing Events of Default with respect to that
series, other than the nonpayment of the principal of the Securities of that
series which has become due solely by such declaration of acceleration, have
been cured or waived; (b) to the extent the payment of such interest is
lawful, interest (calculated at the rate of 21⁄2% per annum) on overdue
installments of Interest Amounts and overdue principal of that series, which
has become due otherwise than by such declaration of acceleration, has been
paid; (c) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction; and (d) all payments due to the Trustee
and any predecessor Trustee under Section 9.7 have been made.  No such rescission shall affect any
subsequent default or impair any right consequent thereto.

 

SECTION 8.3.                  OTHER REMEDIES.

 

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

 

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

 

SECTION
8.4.                  WAIVER OF
DEFAULTS AND EVENTS OF DEFAULT.

 

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

 

48

 

SECTION
8.5.                  CONTROL BY
MAJORITY.

 

The
Holders of a majority in aggregate principal amount of the Securities of a
series then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or power
conferred on it with respect to that series. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder or the Trustee, or that may involve
the Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it; provided, however, that the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.

 

SECTION 8.6.                  LIMITATIONS ON SUITS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of and Interest Amounts on the Security, on or
after the respective due dates expressed in the Security and this Indenture, to
convert such Security in accordance with Article 4 and to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to convert, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.

 

SECTION
8.8.                  COLLECTION SUIT
BY TRUSTEE.

 

If an
Event of Default with respect to a series of Securities in the payment of
principal or Interest Amounts specified in clause (1) or (2) of
Section 8.1 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or another
obligor on the Securities of that series for the whole amount of principal and
accrued Interest Amounts remaining

 

49

 

unpaid, together with, to the extent that payment of such interest is
lawful, interest on overdue principal and on overdue installments of Interest
Amounts, in each case at the rate of 21⁄2% per annum, and such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

 

SECTION
8.9.                  TRUSTEE
MAY FILE PROOFS OF CLAIM.

 

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

 

SECTION 8.10.           PRIORITIES.

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
8.11.           UNDERTAKING FOR COSTS.

 

In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees
and expenses, against any party litigant

 

50

 

in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. 
This Section 8.11 does not apply to a suit made by the Trustee, a
suit by a Holder pursuant to Section 8.7, or a suit by Holders of more
than 10% in aggregate principal amount of the Securities of a series then
outstanding.

 

ARTICLE 9

TRUSTEE

 

SECTION
9.1.                  DUTIES OF
TRUSTEE.

 

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

 

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

 

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

 

(2)           in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  The
Trustee, however, shall examine any certificates and opinions which by any
provision hereof are specifically required to be delivered to the Trustee to
determine whether or not they conform to the requirements of this Indenture.

 

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

 

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

 

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

 

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

 

(d)           No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers unless the Trustee
shall have received adequate indemnity in its opinion against potential costs
and liabilities incurred by it relating thereto.

 

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

 

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

 

SECTION
9.2.                  RIGHTS OF
TRUSTEE.

 

Subject
to Section 9.1:

 

51

 

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

 

(b)           Before the Trustee acts
or refrains from acting, it may require an Officers’ Certificate or an Opinion
of Counsel, which shall conform to Section 12.4(b).  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
9.3.                  INDIVIDUAL
RIGHTS OF TRUSTEE.

 

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

 

52

 

SECTION
9.4.                  TRUSTEE’S
DISCLAIMER.

 

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

 

SECTION
9.5.                  NOTICE OF
DEFAULT OR EVENTS OF DEFAULT.

 

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

 

SECTION
9.6.                  REPORTS BY
TRUSTEE TO HOLDERS.

 

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

 

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

 

SECTION
9.7.                  COMPENSATION AND
INDEMNITY.

 

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

 

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

 

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

 

53

 

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

 

When
the Trustee incurs expenses or renders services after an Event of Default
specified in clause (7) or (8) of Section 8.1 occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. 
The provisions of this Section shall survive the termination of
this Indenture.

 

SECTION
9.8.                  REPLACEMENT OF
TRUSTEE.

 

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

 

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

 

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

 

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

 

(4)           the Trustee becomes
incapable of acting.

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

SECTION
9.9.                  SUCCESSOR
TRUSTEE BY MERGER, ETC.

 

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

 

SECTION
9.10.           ELIGIBILITY;
DISQUALIFICATION.

 

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

 

SECTION
9.11.           PREFERENTIAL COLLECTION
OF CLAIMS AGAINST COMPANY.

 

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

 

ARTICLE 10

SATISFACTION AND DISCHARGE

 

SECTION
10.1.           SATISFACTION AND
DISCHARGE.

 

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

 

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

 

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

 

(3)           the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect to
that series have been complied with.

 

55

 

Notwithstanding
the satisfaction and discharge of this Indenture with respect to a series of
Securities, the obligations of the Company to the Trustee under
Section 9.7 shall survive.

 

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

 

(1)           have
become due and payable, or

 

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

 

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

 

and the Company, in the case of clause (1), (2) or (3) above, has
irrevocably, subject to the limitations set forth in the following sentence,
deposited or caused to be irrevocably, subject to the limitations set forth in
the following sentence, deposited with the Trustee or a Paying Agent (other
than the Company or any of its Affiliates) as trust funds in trust for the
purpose cash in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and Interest Amounts, if any, to the date of such
deposit (in the case of Securities which have become due and payable) or to the
Final Maturity Date or Redemption Date, as the case may be.  In the event that the Company exercises its
right to redeem the Securities of a series as provided for in Article 3 herein,
the Company shall have the right to withdraw its funds previously deposited
with the Trustee or Paying Agent pursuant to the immediately preceding
sentence.

 

SECTION
10.2.           APPLICATION OF TRUST
MONEY.

 

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

 

SECTION
10.3.           REPAYMENT TO COMPANY.

 

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

 

The
Trustee and each Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or Interest Amounts that remains
unclaimed for two years after a right to such money has matured; provided,
however, that the Trustee or such Paying Agent, before being required to
make any such payment, may at the expense of the Company cause to be mailed to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from the
date of such mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.  After payment
to the Company, Holders entitled to

 

56

 

money must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another person.

 

SECTION 10.4.           REINSTATEMENT.

 

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

 

(b)           If, pursuant to the
last sentence of Section 10.1(b), the Company withdraws its previously
deposited funds as a result of its exercise of its redemption right, the
Company’s obligations under this Indenture and the Securities of the applicable
series shall be revived and reinstated as though no deposit has occurred
pursuant to Section 10.1.

 

ARTICLE
11

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION
11.1.           WITHOUT CONSENT OF
HOLDERS.

 

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

 

(a)           to comply with
Sections 4.11 and 7.1;

 

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

 

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

 

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

 

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

 

(f)            to appoint a successor
Trustee.

 

SECTION
11.2.           WITH CONSENT OF HOLDERS.

 

The
Company and the Trustee may amend or supplement the Securities of a series or
this Indenture with respect to that series with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
of that series then outstanding.  The
Holders of at least a majority in aggregate principal amount of the Securities
of a series then outstanding may waive compliance in a particular instance by
the Company with any provision of the Securities of that series or this
Indenture with respect to that series without notice to any
Securityholder.  However,
notwithstanding

 

57

 

the foregoing but subject to Section 11.4, without the written
consent of each Securityholder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 8.4, may not:

 

(a)           change the stated
maturity of the principal of, or Interest Amounts on, any Security;

 

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

 

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

 

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

 

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

 

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

 

(g)           modify the
subordination provisions of Article 5 in a manner materially adverse to the
Holders of Securities;

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
11.3.           COMPLIANCE WITH TRUST
INDENTURE ACT.

 

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

 

58

 

SECTION
11.4.           REVOCATION AND EFFECT
OF CONSENTS.

 

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

 

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

 

SECTION
11.5.           NOTATION ON OR EXCHANGE
OF SECURITIES.

 

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

 

SECTION
11.6.           TRUSTEE TO SIGN
AMENDMENTS, ETC.

 

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

 

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 12

MISCELLANEOUS

 

SECTION
12.1.           TRUST INDENTURE ACT
CONTROLS.

 

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

 

59

 

SECTION 12.2.           NOTICES.

 

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

 

If to the Company, to:

 

Cephalon, Inc.

145 Brandywine Parkway

West Chester, Pennsylvania  19380

Attention:  Chief Financial Officer

Facsimile No.:  (610) 344-7563

 

if to the Trustee, to:

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, Connecticut  06103

Attention:  Corporate Trust Services
(Cephalon, Inc.

Zero Coupon Convertible Subordinated Notes due

June 15, 2033)

Facsimile No.:  (860) 241-6881

 

Such
notices or communications shall be effective when received.

 

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

 

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

 

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

 

SECTION
12.3.           COMMUNICATIONS BY
HOLDERS WITH OTHER HOLDERS.

 

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

 

SECTION
12.4.           CERTIFICATE AND OPINION
AS TO CONDITIONS PRECEDENT.

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)           a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with;

 

provided  however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers’
Certificate or certificates of public officials.

 

SECTION
12.5.           RECORD DATE FOR VOTE OR
CONSENT OF SECURITYHOLDERS.

 

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

 

SECTION 12.6.           RULES
BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT.

 

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

 

SECTION 12.7.           LEGAL HOLIDAYS.

 

A
“Legal Holiday” is a Saturday, Sunday or a day on which state or federally
chartered banking institutions in New York, New York and the state in which the
Corporate Trust Office is located are not required to be open.  If a payment date is a Legal Holiday,
payment shall be made on the next succeeding

 

61

 

day that is not a Legal Holiday, and no Interest Amounts shall accrue
for the intervening period.  If a
regular record date is a Legal Holiday, the record date shall not be affected.

 

SECTION 12.8.           GOVERNING LAW.

 

This
Indenture and the Securities shall be governed by, and construed in accordance
with, the laws of the State of New York.

 

SECTION
12.9.           NO ADVERSE
INTERPRETATION OF OTHER AGREEMENTS.

 

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

 

SECTION 12.10.    NO RECOURSE AGAINST OTHERS.

 

All
liability described in paragraph 18 of the Securities of any director, officer,
employee or shareholder, as such, of the Company is waived and released.

 

SECTION
12.11.    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 12.12.    MULTIPLE COUNTERPARTS.

 

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

 

SECTION 12.13.    SEPARABILITY.

 

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

 

SECTION
12.14.    TABLE OF CONTENTS, HEADINGS,
ETC.

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

62

 

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

 

 

	
   

  	
  Cephalon, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. KEVIN BUCHI

  	
   

  
	
   

  	
  Name: J. Kevin
  Buchi

  	
   

  
	
   

  	
  Title: Senior Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. Bank National Association,

  	
   

  
	
   

  	
   as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PHILIP G. KANE, JR.

  	
   

  
	
   

  	
  Name:

  	
  Philip G. Kane,
  Jr.

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

63

 

EXHIBIT A

[FORM OF FACE OF SECURITY]

 

[UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE THEREOF. 
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1)

 

[THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”), AND THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.](2)

 

THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT

 

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

 

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

 

A-1

 

PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.  IN ANY CASE, THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS
SECURITY EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.](2)

 

[THE HOLDER OF
THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT
(AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF)
AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)

 

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

 

 

A-2

 

CEPHALON, INC.

 

	
   

  	
  CUSIP:

  	
   

  	
  A-

  

 

ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2008

 

Cephalon, Inc., a
Delaware corporation (the “Company”, which term shall include any successor
corporation under the Indenture referred to on the reverse hereof), promises to
pay to
                                                          ,
or registered assigns, the principal sum of
                         
($              )
on June 15, 2033 [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note].(3)

 

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

 

SIGNATURE PAGE FOLLOWS

 

 

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

 

A-3

 

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

 

	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

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

Securities referred to in the within-mentioned Indenture.

 

U.S.
BANK NATIONAL ASSOCIATION,

  as Trustee

 

 

	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

A-4

 

[FORM OF REVERSE SIDE OF
SECURITY]

 

CEPHALON, INC.

 

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2008

 

1.             INTEREST
AMOUNTS

 

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

 

2.             METHOD OF PAYMENT

 

The Company shall
pay any Interest Amounts on this Note to the person who is the Holder of this
Note at the close of business on June 1 or December 1, as the case may be, next
preceding the related Interest Amount payment date.  The Holder must surrender this Note to a Paying Agent to collect
payment of principal.  The Company will
pay principal and Interest Amounts in money of the United States that at the
time of payment is legal tender for payment of public and private debts.  The Company may, however, pay principal and
Interest Amounts in respect of any Certificated Security by check or wire
payable in such money; provided, however, that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided wire transfer instructions to the Company.  The Company may mail an check for Interest
Amounts to the Holder’s registered address. 
Notwithstanding the foregoing, so long as this Note is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

 

3.             PAYING AGENT, REGISTRAR AND
CONVERSION AGENT

 

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

 

4.             INDENTURE, LIMITATIONS

 

This Note is one
of a duly authorized issue of Securities of the Company designated as its Zero
Coupon Convertible Subordinated Notes due June 15, 2033, First Putable June 15,
2008 (the “Notes”), issued under an Indenture dated as of June 11, 2003
(together with any supplemental indentures thereto, the “Indenture”), between
the Company and the Trustee.  The terms
of this Note include those stated in the Indenture and those required by or
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended, as in effect on the date of the Indenture.  This Note is subject to all such terms, and the Holder of this
Note is referred to the Indenture and said Act for a statement of them.

 

A-5

 

The Notes are
subordinated unsecured obligations of the Company limited to $375,000,000
aggregate principal amount.  The
Indenture does not limit other debt of the Company, secured or unsecured,
including Senior Indebtedness.

 

5.             OPTIONAL REDEMPTION

 

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

 

No sinking fund is
provided for the Notes.

 

6.             NOTICE OF REDEMPTION

 

Notice of
redemption will be mailed by first-class mail at least 15 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at its registered address.  Notes in
denominations larger than $1,000 may be redeemed in part, but only in whole
multiples of $1,000.  On and after the
Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price plus accrued Interest Amounts, if any,
accrued to, but excluding, the Redemption Date, Interest Amounts, if any, shall
cease to accrue on Notes or portions of them called for redemption.

 

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

 

At the option of
the Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase all or any part specified by the
Holder (so long as the principal amount of such part is $1,000 or an integral
multiple of $1,000 in excess thereof) of the Notes held by such Holder on the
date that is 30 Business Days after the occurrence of a Change in Control, at a
purchase price equal to 100% of the principal amount thereof together with any
accrued Interest Amounts up to, but excluding, the Change in Control Purchase
Date.  The Holder shall have the right
to withdraw any Change in Control Purchase Notice (in whole or in a portion
thereof that is $1,000 or an integral multiple of $1,000 in excess thereof) at
any time prior to the close of business on the Business Day next preceding the
Change in Control Purchase Date by delivering a written notice of withdrawal to
the Paying Agent in accordance with the terms of the Indenture.

 

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

 

At the option of the Holder and subject to the terms
and conditions of the Indenture, the Company shall become obligated to purchase
all or any part specified by the Holder (so long as the principal amount of
such part is $1,000 or an integral multiple of $1,000 in excess thereof) of the
Notes held by such Holder on the applicable Put Right Purchase Date at a
purchase price equal to 100% (or 100.25% if the Put Right Purchase Date is June
15, 2008) of the principal amount thereof together with any accrued Interest
Amounts up to, but excluding, the Put Right Purchase Date.  The Holder shall have the right to withdraw
any Put Right Purchase Notice (in whole or in a portion thereof that is $1,000
or an integral multiple of $1,000 in excess thereof) at any time prior to the
close of business on the Business Day next preceding the Put Right Purchase
Date by delivering a written notice of withdrawal to the Paying Agent in
accordance with the terms of the Indenture.

 

A-6

 

9.             CONVERSION

 

A Holder of a Note
may convert the principal amount of such Note (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) into shares of
Common Stock at any time prior to the close of business on June 15, 2033,
subject to the conditions set forth in Section 4.1(a) of the Indenture; provided,
however, that if the Note is called for redemption or subject to purchase
upon a Change in Control or upon exercise of the purchase right described in
paragraph 8 above, the conversion right will terminate at the close of business
on the Business Day immediately preceding the Redemption Date, the Change in
Control Purchase Date or the Put Right Purchase Date, as the case may be, for
such Note or such earlier date as the Holder presents such Note for redemption
or purchase (unless the Company shall default in making the redemption payment,
Change in Control Purchase Price or Put Right Purchase Price, as the case may
be, when due, in which case the conversion right shall terminate at the close
of business on the date such default is cured and such Note is redeemed or
purchased).

 

The initial
Conversion Price is $59.50 per share, subject to adjustment under certain
circumstances as provided in the Indenture. 
The number of shares of Common Stock issuable upon conversion of a Note
is determined by dividing the principal amount of the Note or portion thereof
converted by the Conversion Price in effect on the Conversion Date.  No fractional shares will be issued upon
conversion; in lieu thereof, an amount will be paid in cash based upon the
Closing Price (as defined in the Indenture) of the Common Stock on the Trading
Day immediately prior to the Conversion Date.

 

To convert a Note,
a Holder must (a) complete and manually sign the conversion notice set
forth below and deliver such notice to a Conversion Agent, (b) surrender
the Note to a Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent, and
(d) pay any transfer or similar tax, if required.  A Holder may convert a portion of a Note
equal to $1,000 or any integral multiple thereof.

 

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

 

10.           CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION

 

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

 

11.           SUBORDINATION

 

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

 

A-7

 

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

 

12.           DENOMINATIONS, TRANSFER, EXCHANGE

 

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

 

13.           PERSONS DEEMED OWNERS

 

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

 

14.           UNCLAIMED MONEY

 

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

 

15.           AMENDMENT, SUPPLEMENT AND WAIVER

 

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

 

16.           SUCCESSOR ENTITY

 

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

 

17.           DEFAULTS AND REMEDIES

 

Under the
Indenture, an Event of Default with respect to the Notes includes:  (i) default for 30 days in payment of
any Interest Amounts on any Notes; (ii) default in payment of any
principal (including, without limitation, any premium, if any) on the Notes
when due; (iii) failure by the Company for 60 days after notice to it to
comply with any of its other agreements contained in the Notes or in the
Indenture with respect to the Notes; (iv) default in the payment of certain
indebtedness of the Company or a Significant Subsidiary and (v) certain
events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary.  If an Event of
Default with respect to the Notes (other than as a result of certain events of
bankruptcy, insolvency or reorganization of the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then

 

A-8

 

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

 

18.           TRUSTEE DEALINGS WITH THE COMPANY

 

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

 

19.           NO RECOURSE AGAINST OTHERS

 

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

 

20.           AUTHENTICATION

 

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

 

21.           ABBREVIATIONS AND DEFINITIONS

 

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

 

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

 

22.           INDENTURE TO CONTROL; GOVERNING LAW

 

In the case of any
conflict between the provisions of this Note and the Indenture, the provisions
of the Indenture shall control.  This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.

 

A-9

 

The Company will
furnish to any Holder, upon written request and without charge, a copy of the
Indenture.  Requests may be made
to:  Cephalon, Inc., 145 Brandywine
Parkway, West Chester, PA  19380,
(610) 344-0200, Attention:  General
Counsel.

 

A-10

 

ASSIGNMENT FORM

To assign this
Note, fill in the form below:

 

I or we assign and
transfer this Note to

 

 

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

 

 

 

 

 

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

 

and irrevocably
appoint

 

 

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

 

 

	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  
	
   

  	
   

  	
   

  	
  other side of this
  Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Signature
  guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
							

 

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

 

A-11

 

CONVERSION NOTICE

 

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

 

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

 

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

 

 

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

 

 

 

 

 

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

 

 

	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  
	
   

  	
   

  	
   

  	
  other side of this
  Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Signature
  guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
								

 

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

 

A-12

 

OPTION TO ELECT REPURCHASE

UPON A CHANGE OF CONTROL

 

To:          Cephalon, Inc.

 

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

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be redeemed

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

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

 

A-13

 

OPTION
TO ELECT REPURCHASE

ON SPECIFIED DATES

 

To:          Cephalon, Inc.

 

The undersigned hereby requests and instructs the
Company to redeem the entire principal amount of this Security, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, on
June 15,           in accordance
with the terms of the Indenture referred to in this Security at the Put Right
Purchase Price, together with any accrued Interest Amounts to, but excluding,
such date, to the registered Holder hereof.

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be redeemed

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

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

 

A-14

 

SCHEDULE OF EXCHANGES OF
NOTES(4)

 

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

 

	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date

  of Exchange (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of
  Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(4) This schedule should be included only if the Security is a Global
Security.

 

A-15

 

EXHIBIT B

[FORM OF FACE OF SECURITY]

 

[UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE THEREOF. 
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](3)

 

[THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”), AND THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.](4)

 

THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT

 

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

 

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

 

B-1

 

PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.  IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY,
ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT.](2)

 

[THE HOLDER OF
THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT
(AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF)
AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)

 

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

 

B-2

 

CEPHALON, INC.

 

	
   

  	
  CUSIP:  

  	
   

  	
  A-

  

 

ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2010

 

Cephalon, Inc., a
Delaware corporation (the “Company”, which term shall include any successor
corporation under the Indenture referred to on the reverse hereof), promises to
pay to                                                            ,
or registered assigns, the principal sum of
                       
($             )
on June 15, 2033 [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note].(3)

 

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

 

SIGNATURE PAGE FOLLOWS

 

 

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

 

B-3

 

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

 

	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

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

Securities referred to in the within-mentioned Indenture.

 

U.S.
BANK NATIONAL ASSOCIATION,

  as Trustee

 

 

	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
				

 

B-4

 

[FORM OF REVERSE SIDE OF
SECURITY]

 

CEPHALON, INC.

 

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2033,

FIRST PUTABLE JUNE 15, 2010

 

1.             INTEREST
AMOUNTS

 

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

 

2.             METHOD OF PAYMENT

 

The Company shall
pay any Interest Amounts on this Note to the person who is the Holder of this
Note at the close of business on June 1 or December 1, as the case may be, next
preceding the related Interest Amount payment date.  The Holder must surrender this Note to a Paying Agent to collect
payment of principal.  The Company will
pay principal and Interest Amounts in money of the United States that at the
time of payment is legal tender for payment of public and private debts.  The Company may, however, pay principal and
Interest Amounts in respect of any Certificated Security by check or wire
payable in such money; provided, however, that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided wire transfer instructions to the Company.  The Company may mail an check for Interest
Amounts to the Holder’s registered address. 
Notwithstanding the foregoing, so long as this Note is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

 

3.             PAYING AGENT, REGISTRAR AND
CONVERSION AGENT

 

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

 

4.             INDENTURE, LIMITATIONS

 

This Note is one
of a duly authorized issue of Securities of the Company designated as its Zero
Coupon Convertible Subordinated Notes due June 15, 2033, First Putable June 15,
2010 (the “Notes”), issued under an Indenture dated as of June 11, 2003
(together with any supplemental indentures thereto, the “Indenture”), between
the Company and the Trustee.  The terms
of this Note include those stated in the Indenture and those required by or
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended, as in effect on the date of the Indenture.  This Note is subject to all such terms, and the Holder of this
Note is referred to the Indenture and said Act for a statement of them.

 

B-5

 

The Notes are
subordinated unsecured obligations of the Company limited to $375,000,000
aggregate principal amount.  The
Indenture does not limit other debt of the Company, secured or unsecured,
including Senior Indebtedness.

 

5.             OPTIONAL REDEMPTION

 

The Notes are
subject to redemption, at any time on or after June 15, 2010, as a whole or
from time to time in part, at the election of the Company.  The Redemption Price is 100% (or 100.25% if
the Redemption Date is June 15, 2010) of the principal amount of the Notes to
be redeemed, together with accrued and unpaid Interest Amounts up to but not
including the Redemption Date; provided  that if the Redemption
Date falls after an Interest Amount payment record date and on or before an
Interest Amount payment date, then the Interest Amounts will be payable to the
Holders in whose names the Notes are registered at the close of business on the
relevant Interest Amount payment record dates.

 

No sinking fund is
provided for the Notes.

 

6.             NOTICE OF REDEMPTION

 

Notice of
redemption will be mailed by first-class mail at least 15 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at its registered address.  Notes in
denominations larger than $1,000 may be redeemed in part, but only in whole
multiples of $1,000.  On and after the
Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price plus accrued Interest Amounts, if any,
accrued to, but excluding, the Redemption Date, Interest Amounts, if any, shall
cease to accrue on Notes or portions of them called for redemption.

 

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

 

At the option of
the Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase all or any part specified by the
Holder (so long as the principal amount of such part is $1,000 or an integral
multiple of $1,000 in excess thereof) of the Notes held by such Holder on the
date that is 30 Business Days after the occurrence of a Change in Control, at a
purchase price equal to 100% of the principal amount thereof together with any
accrued Interest Amounts up to, but excluding, the Change in Control Purchase
Date.  The Holder shall have the right
to withdraw any Change in Control Purchase Notice (in whole or in a portion
thereof that is $1,000 or an integral multiple of $1,000 in excess thereof) at
any time prior to the close of business on the Business Day next preceding the
Change in Control Purchase Date by delivering a written notice of withdrawal to
the Paying Agent in accordance with the terms of the Indenture.

 

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

 

At the option of the Holder and subject to the terms
and conditions of the Indenture, the Company shall become obligated to purchase
all or any part specified by the Holder (so long as the principal amount of
such part is $1,000 or an integral multiple of $1,000 in excess thereof) of the
Notes held by such Holder on the applicable Put Right Purchase Date at a
purchase price equal to 100% (or 100.25% if the Put Right Purchase Date is June
15, 2010) of the principal amount thereof together with any accrued Interest
Amounts up to, but excluding, the Put Right Purchase Date.  The Holder shall have the right to withdraw
any Put Right Purchase Notice (in whole or in a portion thereof that is $1,000
or an integral multiple of $1,000 in excess thereof) at any time prior to the
close of business on the Business Day next preceding the Put Right Purchase
Date by delivering a written notice of withdrawal to the Paying Agent in
accordance with the terms of the Indenture.

 

B-6

 

9.             CONVERSION

 

A Holder of a Note
may convert the principal amount of such Note (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) into shares of
Common Stock at any time prior to the close of business on June 15, 2033,
subject to the conditions set forth in Section 4.1(a) of the Indenture; provided,
however, that if the Note is called for redemption or subject to purchase
upon a Change in Control or upon exercise of the purchase right described in
paragraph 8 above, the conversion right will terminate at the close of business
on the Business Day immediately preceding the Redemption Date, the Change in
Control Purchase Date or the Put Right Purchase Date, as the case may be, for
such Note or such earlier date as the Holder presents such Note for redemption
or purchase (unless the Company shall default in making the redemption payment,
Change in Control Purchase Price or Put Right Purchase Price, as the case may
be, when due, in which case the conversion right shall terminate at the close
of business on the date such default is cured and such Note is redeemed or
purchased).

 

The initial
Conversion Price is $56.50 per share, subject to adjustment under certain
circumstances as provided in the Indenture. 
The number of shares of Common Stock issuable upon conversion of a Note
is determined by dividing the principal amount of the Note or portion thereof
converted by the Conversion Price in effect on the Conversion Date.  No fractional shares will be issued upon
conversion; in lieu thereof, an amount will be paid in cash based upon the
Closing Price (as defined in the Indenture) of the Common Stock on the Trading
Day immediately prior to the Conversion Date.

 

To convert a Note,
a Holder must (a) complete and manually sign the conversion notice set
forth below and deliver such notice to a Conversion Agent, (b) surrender
the Note to a Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent, and
(d) pay any transfer or similar tax, if required.  A Holder may convert a portion of a Note
equal to $1,000 or any integral multiple thereof.

 

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

 

10.           CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION

 

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

 

11.           SUBORDINATION

 

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

 

B-7

 

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

 

12.           DENOMINATIONS, TRANSFER, EXCHANGE

 

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

 

13.           PERSONS DEEMED OWNERS

 

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

 

14.           UNCLAIMED MONEY

 

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

 

15.           AMENDMENT, SUPPLEMENT AND WAIVER

 

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

 

16.           SUCCESSOR ENTITY

 

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

 

17.           DEFAULTS AND REMEDIES

 

Under the
Indenture, an Event of Default with respect to the Notes includes:  (i) default for 30 days in payment of
any Interest Amounts on any Notes; (ii) default in payment of any
principal (including, without limitation, any premium, if any) on the Notes when
due; (iii) failure by the Company for 60 days after notice to it to comply
with any of its other agreements contained in the Notes or in the Indenture
with respect to the Notes; (iv) default in the payment of certain indebtedness
of the Company or a Significant Subsidiary and (v) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary.  If an Event of Default with respect to the
Notes (other than as a result of certain events of bankruptcy, insolvency or
reorganization of the Company) occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then

 

B-8

 

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

 

18.           TRUSTEE DEALINGS WITH THE COMPANY

 

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

 

19.           NO RECOURSE AGAINST OTHERS

 

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

 

20.           AUTHENTICATION

 

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

 

21.           ABBREVIATIONS AND DEFINITIONS

 

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

 

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

 

22.           INDENTURE TO CONTROL; GOVERNING LAW

 

In the case of any
conflict between the provisions of this Note and the Indenture, the provisions
of the Indenture shall control.  This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.

 

B-9

 

The Company will
furnish to any Holder, upon written request and without charge, a copy of the
Indenture.  Requests may be made
to:  Cephalon, Inc., 145 Brandywine
Parkway, West Chester, PA  19380,
(610) 344-0200, Attention:  General
Counsel.

 

B-10

 

ASSIGNMENT FORM

To assign this
Note, fill in the form below:

 

I or we assign and
transfer this Note to

 

 

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

 

 

 

 

 

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

 

and irrevocably
appoint

 

 

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

 

	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  
	
   

  	
   

  	
   

  	
  other side of this
  Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Signature guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
								

 

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

 

B-11

 

CONVERSION NOTICE

 

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

 

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

 

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

 

 

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

 

 

 

 

 

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

 

 

	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears on the

  
	
   

  	
   

  	
   

  	
  other side of this
  Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Signature guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
								

 

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

 

B-12

 

OPTION TO ELECT
REPURCHASE

UPON A CHANGE OF CONTROL

 

To:          Cephalon, Inc.

 

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

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be redeemed

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

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

 

B-13

 

OPTION TO ELECT
REPURCHASE

ON SPECIFIED DATES

 

To:          Cephalon, Inc.

 

The undersigned hereby requests and instructs the
Company to redeem the entire principal amount of this Security, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, on
June 15,            in accordance with the terms of the
Indenture referred to in this Security at the Put Right Purchase Price,
together with any accrued Interest Amounts to, but excluding, such date, to the
registered Holder hereof.

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be redeemed

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

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

 

B-14

 

SCHEDULE OF EXCHANGES OF
NOTES(4)

 

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

 

	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date

  of Exchange (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of
  Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(4) This schedule should
be included only if the Security is a Global Security.

 

B-15

 

EXHIBIT C

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF RESTRICTED SECURITIES(5)

 

Re:                               Zero
Coupon Convertible Subordinated Notes due June 15, 2033, First Putable June 15,
2008 (the “Notes”) of Cephalon, Inc.

 

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

 

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

 

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

 

In connection with
such request and in respect of each such Note, the Transferor does hereby
certify that the Transferor is familiar with transfer restrictions relating to
the Notes as provided in Section 2.12 of the Indenture dated as of June
11, 2003 between Cephalon, Inc. and U.S. Bank National Association, as trustee
(the “Indenture”), and the transfer of such Note is being made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) (check applicable box) or the transfer or exchange, as
the case may be, of such Note does not require registration under the
Securities Act because (check applicable box):

 

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

 

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

 

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

 

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

 

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

 

o                                    Such
Note is being transferred to a non-U.S. Person in an offshore transaction in
compliance with Rule 904 of Regulation S under the Securities Act (or any
successor thereto).

 

(5) This certificate
should only be included if this Security is a Restricted Security.

 

C-1

 

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

 

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

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of
  Transferor)

  
	
   

  	
   

  

 

C-2

 

EXHIBIT D

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF RESTRICTED SECURITIES(5)

 

Re:                               Zero
Coupon Convertible Subordinated Notes due June 15, 2033, First Putable June 15,
2010 (the “Notes”) of Cephalon, Inc.

 

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

 

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

 

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

 

In connection with
such request and in respect of each such Note, the Transferor does hereby
certify that the Transferor is familiar with transfer restrictions relating to
the Notes as provided in Section 2.12 of the Indenture dated as of June
11, 2003 between Cephalon, Inc. and U.S. Bank National Association, as trustee
(the “Indenture”), and the transfer of such Note is being made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) (check applicable box) or the transfer or exchange, as
the case may be, of such Note does not require registration under the
Securities Act because (check applicable box):

 

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

 

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

 

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

 

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

 

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

 

o                                    Such
Note is being transferred to a non-U.S. Person in an offshore transaction in
compliance with Rule 904 of Regulation S under the Securities Act (or any
successor thereto).

 

(5) This certificate
should only be included if this Security is a Restricted Security.

 

D-1

 

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

 

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

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Insert Name of
  Transferor)

  

 

D-2EXHIBIT
10.3

 

March 31, 2003

 

 

Martyn D. Greenacre

327 South Valley Road

Paoli, PA 19301

 

 

	
  Re:

  	
   

  	
  Termination of Consulting Agreement dated October 1,
  2001, as amended April 1, 2002 and December 10, 2002, between Martyn D.
  Greenacre and Cephalon, Inc. (collectively, the “Agreement”)

  

 

 

Dear Martyn:

 

Please allow this letter to evidence our mutual agreement to terminate
the Agreement effective as of the date hereof.

 

I appreciate the many valuable contributions you have made to Cephalon
during the term of this Agreement, and look forward to your continued service
as a member of the Board of Directors.

 

 

	
  Very truly yours,

  
	
   

  
	
   

  
	
  /s/ Frank Baldino, Jr.

  	
   

  
	
  Frank Baldino, Jr., Ph.D.

  
	
  Chairman and Chief Executive Officer

  
	
   

  
	
   

  
	
  AGREED
  AND ACCEPTED:

   

  
	
   

  
	
  /s/ Martyn D. Greenacre

  	
   

  
	
  Martyn D. Greenacre

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