10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 2005

Commission File Number: 001-31516

GETTY IMAGES, INC.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	98-0177556
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

601 NORTH 34TH STREET

SEATTLE, WASHINGTON 98103

(Address of Principal Executive Offices)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 925-5000

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

Title of Each Class	Name of Exchange on which Each Class is Registered
Common Stock, par value $0.01 per share	New York Stock Exchange
Convertible Subordinated Debentures, Series B	—

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant was approximately $3,795.6 million as of June 30, 2005 (the last business day of the registrant’s most recently completed second fiscal quarter) based upon the closing price of the registrant’s common stock of $74.26 as reported by the New York Stock Exchange on such date.

As of January 31, 2006, the registrant had 62,325,404 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Part III of this document is incorporated by reference to certain portions of our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Our Annual Meeting of Stockholders will be held on May 2, 2006.

An Index to Exhibits appears at Part IV, Item 15, pages 31 to 34 herein.

GETTY IMAGES, INC. December 31, 2005 FORM 10-K

TABLE OF CONTENTS

		PAGE
PART I
ITEM 1	Business	1
ITEM 1A	Risk Factors	6
ITEM 1B	Unresolved Staff Comments	8
ITEM 2	Properties	9
ITEM 3	Legal Proceedings	9
ITEM 4	Submission of Matters to a Vote of Security Holders	9
PART II
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
ITEM 6	Selected Consolidated Financial Data	11
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 7A	Quantitative and Qualitative Disclosures about Market Risk	26
ITEM 8	Consolidated Financial Statements and Supplementary Data	29
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	29
ITEM 9A	Controls and Procedures	29
ITEM 9B	Other Information	29
PART III
ITEM 10	Directors and Executive Officers of the Registrant	30
ITEM 11	Executive Compensation	30
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
ITEM 13	Certain Relationships and Related Transactions	31
ITEM 14	Principal Accountant Fees and Services	31
PART IV
ITEM 15	Exhibits and Financial Statement Schedules	31
SIGNATURES		35

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PART I

ITEM 1. BUSINESS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of Getty Images, Inc. We may, from time to time, make written or oral statements that are “forward-looking,” including statements contained in this Annual Report on Form 10-K, the documents incorporated herein by reference, and other documents filed with, and furnished to, the Securities and Exchange Commission. These statements are based on our current expectations, assumptions and projections about Getty Images, Inc. and its industry and are made on the basis of our views as of the time the statements are made. All statements, analyses and other information contained in this report relative to trends in revenue, anticipated expense levels and liquidity and capital resources, as well as other statements including, but not limited to, words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “seek,” “intend” and other similar expressions, constitute forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict and that could cause our actual results to differ materially from our past performance and our current expectations, assumptions and projections. Differences may result from actions taken by us as well as from risks and uncertainties beyond our control. Potential risks and uncertainties include, among others, those set forth in Part I, Item 1A. “Risk Factors” as well as in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise. Readers should carefully review the factors set forth in other reports or documents that we file with, and furnish to, the Securities and Exchange Commission from time to time.

In this Annual Report, “Getty Images,” “the company,” “we,” “us,” and “our” refer to Getty Images, Inc. and its consolidated subsidiaries, unless the context otherwise dictates.

GENERAL DEVELOPMENT AND NARRATIVE DESCRIPTION OF THE BUSINESS

Overview

Getty Images, Inc. was founded in 1995 and is a leading creator and distributor of visual content and one of the first places creative professionals turn to discover, license and manage imagery. The company’s award-winning photographers and imagery help customers create inspiring work which appears every day in the world’s most influential newspapers, magazines, advertising campaigns, films, television programs, books and websites. Headquartered in Seattle, Washington and serving customers in more than 100 countries, Getty Images believes in the power of imagery to drive positive change, educate, inform, and entertain. We deliver our products digitally via the Internet and CDs. Our products are sold through company-owned offices and a global network of delegates. We pioneered the solution to aggregate and distribute visual content and, since 1995, have brought many of the visual content industry’s leading image collections onto a single website, gettyimages.com.

We provide high quality, relevant imagery to: creative professionals at advertising agencies, graphic design firms, corporations and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD and online publishing; and corporate marketing departments and other business customers. By aggregating the content of our various leading imagery collections on the Internet and partnering with other imagery providers, we offer a comprehensive and user-friendly solution for our customers’ imagery needs. Our goal is to be the leading image solutions provider in every major market, offering visual communications professionals imagery and related services at multiple price points on multiple platforms.

Products, Services and Customers

PRODUCTS AND SERVICES

We offer our customers a variety of visual content, including creative or “stock” imagery (both still and moving images), editorial photography (news, sports, entertainment and archival imagery), illustrations and related services. Imagery is offered to customers through our creative photography collections (The Image Bank, Photodisc, Digital Vision, Allsport Concepts, Iconica, MedioImages, Photonica, Photographer’s Choice, Reportage, Retrofile, Stone, Stone+, Taxi and Taxi Japan), our film collections (Archive Films, Image Bank Film, Digital Vision and Photodisc) and Getty Images Editorial collections (news, sports, entertainment and Hulton|Archive), as well as the collections of other imagery providers (image partners), such as National Geographic, Universal Studios and Time Life Pictures. We believe that by offering a selection of the highest quality images from other providers of visual content, we enhance our ability to serve our customers and to generate additional revenue with minimal incremental cost. In 2005, we

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added nearly 40 new collections from image partners to our website, including both creative and editorial imagery, nearly doubling the number of image partner collections we offer. Our images are offered through our website, CDs and our global network of delegates.

We also offer assignment services under which we handle all aspects of a custom photography project for a customer, such as photographing executives for an annual report, producing product shots for a brochure or documenting a news event. We use a global network of experienced photographers on staff or on contract for assignment photography projects.

CUSTOMERS

We serve a variety of customers in four major categories: creative customers (advertising and design agencies), editorial customers (publishing and media companies), corporate customers (in-house advertising groups and corporate marketing departments) and film customers (film and broadcast production companies). These customer categories are not mutually exclusive. Due to the large number of our customers and their dispersion across many geographic areas, we are not dependent on a single customer or a few customers, the loss of which would have a material adverse effect on us.

Creative Customers    For our creative customers, we supply images that cover a wide variety of contemporary subjects including lifestyle, business, science, health and beauty, sports, transportation and travel. These customers have a commercial or advertising message they are trying to convey and, consequently, are typically looking for a specific conceptual image. Image relevance and accessibility are important factors in the customer’s decision. Advertising and design agency customers need to access imagery as part of their everyday working lives.

Editorial Customers    We supply images to a customer base of professionals who use imagery in the publication of newspapers, books and magazines, both online and in traditional media. The imagery that is provided to these customers covers major political, news, social and sporting events ranging from contemporary photographs to imagery from the beginning of photography in the early nineteenth century. These customers are looking for imagery that illustrates the story they are covering and often require that the imagery be delivered during or immediately following the event. Many of these customers also license creative imagery.

Corporate Customers    We offer a variety of imagery to corporate marketing departments and other business customers. These customers require imagery for a wide range of business communication materials for internal and external use, including brochures, employee communications, annual reports, newsletters, websites, advertisements and presentations.

Film Customers    We offer film (moving imagery) to customers engaged in producing commercial motion pictures, television advertisements and programming, trade show and promotional videos, documentaries and other film-based media. These customers require contemporary and archival film clips covering a broad range of topics, and they often use still imagery as well.

Sources and Availability of Content

The imagery we provide our customers is created by a substantial number of contributors (photographers, filmmakers and illustrators). Therefore, we do not rely on any single or small group of contributors to meet our content needs.

CREATIVE

We have creative research and imagery teams in London, Los Angeles, Munich, New York, Paris, Sao Paolo, Seattle, Sydney and Tokyo that analyze customer requests and buying behavior and perform research in key markets in order to target, source and produce images. We have contractual relationships with contributing photographers, including highly respected, internationally renowned professional photographers representing a variety of styles, specialties and backgrounds. In many cases, we provide on-site art direction for our photographers, working with them on location around the world. We accepted approximately 100,000 new images from photographers into our creative photography collections, plus approximately 250,000 images from partner collections in 2005, bringing our total creative imagery collection to over one million images. All new images accepted into our collections are digitized, edited and assigned keywords, as necessary, and posted on our website and are available for search, selection, license and download 24 hours a day, seven days a week.

EDITORIAL

For editorial content, availability of imagery is time critical. To this end, we have production teams in London, New York and Sydney through which photographers may submit imagery at any time. We license editorial content produced by our staff photographers and by contributing photographers and other imagery providers with whom we have contractual relationships. We receive thousands of

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digital editorial images per week from our photographers around the world and make these available through our website and through a wire service. By using digital technology, we are able to make new images available online within minutes of photographer transmission from major news, sports and entertainment events. In addition, we have made available on our website, a core collection of archival imagery of interest to editorial customers. We identify upcoming events that will generate demand for particular archival images, and we actively market the availability of those images to our editorial customers. We also offer in-depth research services for our customers’ more extensive projects.

FILM

We maintain and license a growing library of commercially relevant cinematography covering a broad range of contemporary and archival subjects. Our film collections represent imagery from hundreds of filmmakers and film producers, and each film clip is cataloged for quick access and retrieval in film, videotape and digital formats.

Marketing, Sales and Distribution

MARKETING

We reach our customers through diverse marketing campaigns including: our website (online marketing), direct mail and e-mail (direct marketing) and events (experience marketing). These campaigns aim to build awareness for the Getty Images brand and promote the latest imagery and related services available on gettyimages.com. We strive to provide relevant materials to our international customers by producing localized marketing materials, including local language and locally applicable content, where appropriate.

Online Marketing    Our website acts as a marketing tool, in addition to a sales tool. For example, we often invite customers to view our latest creative imagery in special “galleries” on our website. We also promote images available on CD and regularly provide a summary of the latest breaking stories in the editorial section of our website.

Direct Marketing    Direct mail and e-mail are part of our integrated marketing campaigns aimed at gaining new customers through prospecting and at promoting our latest imagery and related services to our existing customer base.

Experience Marketing    Getty Images organizes events in leading creative cities around the world to showcase our photographers and their work. These events include lectures, seminars, exhibitions and sponsorship of major industry events such as the Cannes Advertising Festival and Visa Pour L’Image, the world’s largest photojournalism festival.

SALES AND DISTRIBUTION

We license our imagery through our website, company-owned offices and a global network of delegates, serving customers in more than 100 countries. A direct sales force and national accounts management team target high volume users of images, while our technical support staff, who have expertise in digital image applications, design tools and photo manipulation methodologies, assist customers in using our images.

We encourage our customers to take advantage of the comprehensive image search capabilities of our website and digital delivery of selected images. We believe the ability to search for, select, license and download images over the Internet offers our customers convenience and speed and enables us to achieve greater economies of scale. Direct communication with our customers, however, remains a significant component of our sales strategy. Our sales representatives assist customers in finding the images they need and keep them informed about our latest products and services.

Product Rights    Customers may license rights to use single images, film clips or multiple images through subscriptions or CDs. Ownership of imagery does not pass to customers who license the imagery.

Licensing Methods    Customers may license images using one of three licensing methods: rights-managed, royalty-free or subscription. We group our creative and moving image collections into categories corresponding to these licensing methods. Creative imagery may be licensed through any of these methods, while editorial imagery may be licensed through subscriptions or rights-managed licenses.

For rights-managed licensing, the license fee is based on how the image will be used, including geographical distribution, license duration, medium, exclusivity and circulation. For example, an image to be used as an eighth of a page photo in a brochure to be distributed in one city for three months will cost less to license than an image to be used in a global advertising campaign for a year

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that includes print advertising, billboards and point-of-purchase displays. We also offer Flexible License Packs, which provide customers a quick and cost effective way to license an image for multiple preset media without having to enter into separate license agreements.

For royalty-free licensing, the license fee is based on the size of the digital file, from standard resolution (generally one to three megabytes) to high resolution (generally 75 megabytes). Once the customer has licensed an image, that customer may use that image multiple times for multiple projects without paying additional fees. Royalty-free images may be licensed on a single image basis or as part of a collection of images on a CD or virtual CD (a group of images offered online for one fee) or through a subscription.

Subscription licensing is available for selected editorial and royalty-free creative images. Under this licensing method, customers pay a periodic fee and then may utilize the images as they require during the subscription period.

Operations and Technology

We employ a centralized and integrated technology platform as the foundation for our website as well as our back-office systems. This platform enables customers to search, select, license and download our imagery from one location, gettyimages.com. It also supports centralized sales order processing, customer database management, finance and accounting systems. These systems span multiple operational activities, including customer interaction, transaction processing, order fulfillment and invoicing. Our systems infrastructure is hosted internally as well as at an external hosting provider. Both internal and external hosting centers provide 24-hour monitoring, power generators and back-up systems.

In 2005, we created a second datacenter in London, England to provide regionalized e-commerce functions and serve as an alternate site to support business continuity in the event of an emergency. The London datacenter contains a complete, on-line copy of our image assets and will provide improved recovery capabilities beginning in early 2006. The London facility provides 24-hour monitoring, power generators and back-up systems.

Our website is available in six languages; U.S. English, U.K. English, French, German, Japanese and Spanish. In addition, in 2005, we made a small investment in a joint venture that is licensing our imagery through a Chinese language website. We also added subscription licensing functionality to the creative portion of our website to support subscription licensing of certain royalty-free images.

The technology architecture supporting gettyimages.com employs a set of software applications to: 1) categorize digital content and embed appropriate keywords and search data; 2) search large information databases across languages and linguistic context; 3) present detailed information related to specific digital content elements; 4) manage online e-commerce transactions for the license of much of our digital content; 5) manage invoice generation and accounts receivable from customers; and 6) track a broad range of intellectual property rights and permissions. These applications are a combination of our proprietary technologies and commercially available licensed technologies. We focus our internal development efforts on creating and enhancing the specialized proprietary software that is unique to our business. We intend to continue to investigate, qualify and develop technology and internal systems that support key areas of our business to enhance the experience of our customers.

Competition

The market for visual content and related services is highly competitive. We believe that the principal competitive factors are:

• name recognition;

• company reputation;

• the quality, relevance and breadth of the images in a company’s collections;

• the quality of contributing photographers, filmmakers and other imagery partners under contract with a company;

• effective use of current and emerging technology;

• customer service;

• pricing and licensing models, policies and practices; and

• accessibility of imagery and speed and ease of search and fulfillment.

Some of our current and potential competitors include:

• other general visual content providers such as Corbis Corporation, Jupitermedia Corporation, Amana Inc., Alamy Limited, Index Stock Imagery, Inc., Photolibrary Group Limited and Masterfile Corporation;

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• specialized visual content companies that are well established in their local, content or product-specific market segments such as Reuters Group PLC, the Associated Press, MediaVast, Inc. and ZUMA Press, Inc.;

• stock film footage companies such as Corbis Corporation; and

• commissioned photographers.

There are also hundreds, if not thousands, of small stock photography and film footage agencies and image content aggregators throughout the world with whom we compete.

Intellectual Property

Most of the images in our creative collections are obtained from independent photographers and filmmakers on an exclusive basis. Professional photographers and filmmakers prefer to retain ownership of their work. As a result, copyright to an image remains with the contributing photographer or filmmaker in most cases, while we obtain the right to market the image on their behalf for a period of time. A substantial portion of the images in our editorial collections and certain images in our creative collections are owned by us or are in the public domain.

We also own numerous trademarks that are important to our business. Depending on the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained and they have not been found to have become generic. Registrations of trademarks generally can be renewed indefinitely as long as the trademarks are in use. Please see “We May Lose the Right to Use ‘Getty Images’ Trademarks in the Event We Experience a Change of Control” within Item 1A of this Annual Report on Form 10-K for more information about certain of our trademarks.

Relationship with Our Employees

At December 31, 2005, we had 1,823 employees (excluding those on leave). Of these, 975 were located in the Americas, 711 in Europe and 137 in the rest of the world. We believe that we have satisfactory relations with our employees.

Compliance with Federal, State and Local Environmental Provisions

All of our facilities are subject to environmental laws and regulations. Compliance with these provisions has not had, and we do not expect such compliance to have, any material adverse effect on our capital expenditures, earnings or competitive position.

Financial Information about Segments and Geographic Areas

We operate the company as one business segment. Our revenue is generated through a diverse customer base, and there is no reliance on a single customer or small group of customers; no customer represented 10% or more of our total revenue in the periods presented in this Annual Report on Form 10-K.

The geographic information required herein is contained in Note 9 to our Consolidated Financial Statements “Business Segments and Geographic Areas” in Part IV, Item 15(A) of this Annual Report on Form 10-K and is incorporated by reference herein.

Available Information

We file reports with, and furnish reports to, the Securities and Exchange Commission (SEC), including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We maintain an Internet site, http://www.gettyimages.com, where we make these reports and related amendments available free of charge as soon as reasonably practicable after we electronically deliver such material to the SEC. The following documents are available in the Corporate Governance section of gettyimages.com: our Corporate Governance Guidelines; charters for the Audit, Compensation, and Nominating and Corporate Governance Committees; Code of Business Conduct; and Code of Ethics for Getty Images’ Management and Board of Directors. These guidelines, charters and codes are also available in print to any stockholder on request. Please write to Investor Relations Department, Getty Images, Inc., 601 North 34th Street, Seattle, Washington 98103 or investorrelations@gettyimages.com or call us at 1-866-275-4389. Our website and the information contained therein or connected thereto are not incorporated by reference into this Annual Report on Form 10-K. If any material provisions of our Code of Ethics or our Code of Business Conduct are waived for any member of Getty Images’ management or the Board of Directors, or if any substantive changes are made to our Code of Ethics as they relate to any member of Getty Images’ management or the Board of Directors, we will disclose that fact on our website within four business days. In addition, any other material amendments to our Codes will be disclosed.

On May 31, 2005, our Chief Executive Officer filed a Section 303A.12(a) CEO Certification with the New York Stock Exchange. The CEO Certification attests that the Chief Executive Officer is not aware of any violations by the company of NYSE’s Corporate Governance Listing Standards.

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ITEM 1A. RISK FACTORS

WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST COMPETITORS

The market for visual content and related services is highly competitive. We believe the principal competitive factors are:

• name recognition;

• company reputation;

• the quality, relevance, and breadth of the images in a company’s collections;

• the quality of contributing photographers, filmmakers and other imagery partners under contract with a company;

• effective use of current and emerging technology;

• customer service;

• pricing and licensing models, policies and practices; and

• accessibility of imagery and speed and ease of search and fulfillment.

Some of our existing and potential competitors may have or may develop products, services or technology superior to ours, or otherwise have competitive advantages. If we are not able to compete effectively, we could lose market share, which could have an adverse impact on our revenues and operating results. See the listing of some of our current and potential competitors under “Competition” within Item 1 above.

OUR FINANCIAL RESULTS AND STOCK PRICE MAY FLUCTUATE

We expect our revenues and operating results to vary from quarter to quarter due to a number of factors, both within and outside of our control, including, but not limited to, the following:

• demand for our existing and new imagery and related services, and those of our competitors;

• changes in our pricing and licensing models, policies and practices;

• changes in the mix of imagery licensed and services sold, including the mix of licensed uses, company-owned versus contributor-supplied imagery, and the geographic distribution of such licenses, each of which affect the price of a license and/or the royalty we pay on the license;

• our ability to attract and retain customers;

• costs related to potential acquisitions and the development and/or use of technology, services or products;

• fluctuations in foreign currency exchange rates, changes in global capital markets and economic conditions, and changes to applicable tax laws and regulations;

• the termination or expiration of certain image partner, distributor, or reseller agreements; and

• changes in estimates and assumptions made by us in preparing our financial statements, including those discussed in the “Critical Accounting Policies and Estimates and Assumptions” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 in Part II of this Annual Report on Form 10-K.

Because of these risks and others, it is possible that our future results may differ from our expectations and the expectations of analysts and investors, causing our stock price to fluctuate.

WE MAY NOT BE SUCCESSFUL IN ACQUIRING OR INTEGRATING BUSINESSES

As part of our business strategy, we have in the past acquired and invested in, and may in the future seek to acquire or invest in businesses, products or technologies that could complement or expand our business. The evaluation and negotiation of potential acquisitions, as well as the integration of acquired businesses, divert management time and other resources. Certain other risks related to acquisitions that may have a material impact on our business or prevent us from benefiting from an acquisition or investment include:

• costs incurred in performing due diligence relating to potential acquisitions;

• use of cash resources, incurrence of debt or stockholder dilution through issuances of our securities to fund acquisitions;

• assumption of actual or contingent liabilities that are or are not identified during due diligence;

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• amortization expense related to acquired intangible assets, impairment of any goodwill acquired and other adverse accounting consequences;

• difficulties and expenses in assimilating the operations, products, technology and information systems of an acquired company;

• retention of key employees, customers, and suppliers of an acquired business; and

• an adverse review of an acquisition or potential acquisition, or limitations put on such acquisitions, by a regulatory body.

WE MAY EXPERIENCE SYSTEM AND SERVICE DISRUPTIONS AND DIFFICULTIES

The digitization and Internet distribution of our visual content is a key component of our business. As a result, we are particularly dependent upon, and have expended significant resources to ensure, the efficient functioning of our website (and the technology behind it) to allow our customers to access and conduct transactions through our website. We also have focused significant resources and attention on the installation and development of systems for technology, business processes, sales and marketing systems, royalty and other finance systems, customer interfaces, and other corporate administrative functions, on which we depend to manage and control our operations.

We will need to continue to improve our website and systems, as well as our network infrastructure, to improve our customer experience and to accommodate anticipated increased traffic, sales volume, and processing of the resulting information. If we do not continue to update and upgrade our website, network and systems, or if we experience significant disruptions or difficulties as a result of or during any such updates or upgrades, we may face system interruptions, poor website response times, diminished customer services, impaired quality and speed of order fulfillment, and potential problems with our internal control over financial reporting.

In the past, we have experienced infrequent and brief system interruptions that made portions of our website unavailable or prevented us from efficiently uploading images to our website, or taking, processing or fulfilling orders. Additionally, we depend on certain third-party software and system providers for the processing and distribution of our imagery and related services. System disruptions and difficulties, whether as a result of our internally developed systems or those of the third-party providers, may inconvenience our customers and/or result in negative publicity, and may negatively affect our ability to provide services and the volume of images we license and deliver over the Internet.

Additionally, the computer and communications hardware necessary to operate our corporate functions are located in metropolitan areas worldwide. Any of these systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, earthquake and similar events. In certain of our offices and facilities, we may not have complete redundancy for all of our network and telecommunications facilities.

SYSTEMS SECURITY RISKS AND CONCERNS MAY HARM OUR BUSINESS

An important component of our business is the secure transmission of confidential information and the transaction of commerce over the Internet. Developments in computer capabilities, viruses, or other events could result in compromises or breaches of our systems, website or networks, jeopardizing proprietary and confidential information belonging to us or our customers, or causing potentially serious interruptions in our services, sales or operations. We continue to expend significant resources to protect against the threat of security breaches or to alleviate problems caused by such breaches. Significant compromises of our security system or the Internet may reduce our customers’ desire to transact business over the Internet.

CERTAIN OF OUR STOCKHOLDERS CAN EXERCISE SIGNIFICANT INFLUENCE OVER OUR BUSINESS AND AFFAIRS

Some of our stockholders own substantial percentages of the outstanding shares of our common stock. Getty Investments L.L.C., the October 1993 Trust, the JD Klein Family Settlement, Mr. Mark H. Getty, our Chairman, and Mr. Jonathan D. Klein, our Chief Executive Officer (collectively the “Getty Group”), owned approximately 17% of the outstanding shares of our common stock at December 31, 2005. Getty Investments alone owned approximately 15% of the outstanding shares of our common stock at December 31, 2005. Mr. Getty serves as the Chairman of the Board of Directors of Getty Investments, and Mr. Klein serves on the Board of Directors of Getty Investments.

As a result of their share ownership, the Getty Group has significant influence over all matters requiring approval of our stockholders, including the election of directors and the approval of business acquisitions. The substantial percentage of our common stock held by the Getty Group could also make us a less attractive acquisition candidate or have the effect of delaying or preventing a third party from acquiring control over us at a premium over the then-current price of our common stock. In addition to ownership of our common stock, the Getty Group’s influence over us is increased by Mr. Getty’s role as the Chairman of our Board of Directors, and Mr. Klein’s role as Chief Executive Officer and as a member of our Board of Directors.

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WE MAY LOSE THE RIGHT TO USE “GETTY IMAGES” TRADEMARKS IN THE EVENT WE EXPERIENCE A CHANGE OF CONTROL

We own trademarks and trademark applications for the name “Getty Images.” We use “Getty Images” as a corporate identity, as do certain of our subsidiaries, and we use “Getty Images” as a product and service brand. We refer to these trademarks and trademark applications as the Getty Images Trademarks. In the event that a third party or parties not affiliated with the Getty family acquires control of Getty Images, Getty Investments L.L.C. has the right to call for an assignment to it, for a nominal sum, all rights to the Getty Images Trademarks. In the event of an assignment, we will have 12 months to continue to use the Getty Images Trademarks, after which time we no longer would have the right to use them. Getty Investments’ right to cause such an assignment might have a negative impact on the amount of consideration that a potential acquirer would be willing to pay to acquire our common stock.

AN INCREASE IN GOVERNMENT REGULATION OF THE INTERNET AND E-COMMERCE COULD HAVE A NEGATIVE IMPACT ON OUR BUSINESS

We are subject to a number of laws and regulations directly applicable to e-commerce. State, federal and foreign governments have adopted, and may continue to adopt, legislation regulating the Internet and e-commerce. Such regulation could both increase our cost of doing business and impede the growth of our business or of the Internet, while decreasing the Internet’s acceptance or effectiveness as a communications and commerce medium.

Existing or future laws and other regulations that may impact our business include, but are not limited to, those that govern or restrict:

• privacy issues and data collection, processing, retention and transmission;

• pricing and taxation of goods and services offered over the Internet;

• website content, or the manner in which products and services may be offered and/or marketed over the Internet; and

• sources of liability for companies involved in Internet services or e-commerce.

WE MAY NOT BE ABLE TO OBTAIN EXTERNAL FINANCING OR SERVICE OUR INDEBTEDNESS

While we currently anticipate that our current cash and cash equivalents and short-term investments and future operating cash flows will be sufficient to meet our needs for working capital and capital expenditures for at least the next 12 months, we could be required to obtain external financing should our financial results not meet our expectations or should we need additional funds to acquire selected businesses or otherwise achieve our objectives. In addition, our convertible subordinated debentures require cash repayment of up to the $265.0 million of principal borrowed potentially at any time upon certain conditions and no later than upon maturity in 2023. On June 21, 2005, we announced that the debentures were convertible by the holders as of July 1, 2005, due to a conversion condition having been met. The conversion condition was met again at December 31, 2005. Should all or some of the holders elect to convert, we would be required to repay the applicable principal in cash up to $265.0 million. The ability for the holders to convert will expire on March 31, 2006 unless the conversion condition is met again in the last 30 trading days ending on that date. See discussion of the terms of these debentures in the “Financial Condition” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II, Item 7 of this Annual Report on Form 10-K. Should we need to obtain external financing, through debt or equity, our ability to do so could be affected by changes in U.S. and global capital markets and economies, significant fluctuations in interest rates, the price of our equity securities, fluctuations in the results of our operations, and other financial and business conditions, many of which are beyond our control.

CERTAIN PROVISIONS OF OUR CORPORATE DOCUMENTS AND DELAWARE CORPORATE LAW MAY DETER A THIRD PARTY FROM ACQUIRING US

Our Board of Directors has the authority to issue up to five million shares of preferred stock and to fix the rights, preferences, privileges and restrictions of such shares without any further vote, approval or action by our stockholders. This authority, together with certain provisions of our restated certificate of incorporation, may have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of us. This could occur even if our stockholders consider such change in control to be in their best interests. In addition, the concentration of beneficial ownership of our common stock in the Getty Group, along with certain provisions of Delaware law, may have the effect of delaying, deterring or preventing a takeover of us.

ITEM IB. UNRESOLVED STAFF COMMENTS

None

9 GETTY IMAGES, INC. 2005 FORM 10-K PART I ITEM 2

ITEM 2. PROPERTIES

Our principal executive offices and worldwide headquarters are located in Seattle, Washington. We also have a significant presence in New York, New York and London, England. In addition, we lease office space in other major cities around the world. Following is a table detailing the facilities we leased as of December 31, 2005, including those that were excess as of that date.

Location	Lease Expiration	Approximate Area Leased (square feet)	Total Excess Area (square feet)	Percent Excess	Excess Area Subleased (square feet)	Percent Excess Subleased
Seattle	2013	180,300	6,500	4%	6,500 1	100%
New York	2006 – 2015	264,000	153,300	58%	145,800 2	95%
London	2008 – 2016	89,500	26,100	29%	—	—
Other	2006 – 2025	207,500	73,400	35%	32,100 3	44%
Total		741,300	259,300	35%	184,400	71%

  ¹ These subleases expire in 2007 and 2008.

  ² This sublease expires in 2007, eight years prior to the end of our respective lease.

  ³ This represents two subleases that expire in 2007 and 2011, coterminous with our respective leases.

Our existing facilities represent general office and storage space and are adequate and appropriate for our operations.

ITEM 3. LEGAL PROCEEDINGS

We have been, and may continue to be, subject to legal claims from time to time in the ordinary course of our business, including those related to alleged infringements of the intellectual property rights of third parties, such as the failure to secure model or property releases for imagery we license. Claims may also include those brought by photographers and filmmakers relating to our handling of images submitted to us or to the companies we have acquired. We have accrued a liability for the anticipated costs of settling claims for which we believe a loss is probable. There are no pending legal proceedings to which we are a party or to which any of our property is subject that, either individually or in the aggregate, are expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our stockholders, through solicitation of proxies or otherwise, during the fourth quarter of 2005.

10 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 5

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol “GYI.” The following table sets forth, for each of the quarterly periods indicated, the high and low sale prices of our common stock as reported on the NYSE:

	High		Low
Year ended December 31, 2005
First quarter	$	75.02	$	64.42
Second quarter		79.77		70.52
Third quarter		87.70		70.58
Fourth quarter		95.43		78.13
Year ended December 31, 2004
First quarter	$	54.26	$	47.15
Second quarter		60.09		51.65
Third quarter		60.48		50.28
Fourth quarter		70.30		52.39

On January 31, 2006, the closing market price of our common stock as reported on the NYSE was $81.65 per share.

HOLDERS

There were approximately 89 holders of record of our common stock on January 31, 2006.

DIVIDENDS

We have not paid or declared any dividends on our common stock since our inception. Our Board of Directors does not expect to declare cash dividends on our common stock in the foreseeable future.

UNREGISTERED SECURITIES

We did not issue any unregistered securities during the fourth quarter of 2005.

11 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 6

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data is qualified by reference to, and should be read in conjunction with, our Consolidated Financial Statements and notes thereto in Part IV, Item 15(A), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, of this Annual Report on Form 10-K. Historical results are not necessarily indicative of results to be expected in the future.

YEARS ENDED DECEMBER 31,	2005		2004		2003		2002		2001
(In thousands, except per share amounts and ratios)
Consolidated Statement of Income Data
Revenue	$	733,729	$	622,427	$	523,196	$	463,011	$	450,985
Income (loss) before income taxes		230,654		174,039		87,716		36,087		(98,662	)
Net income (loss)		149,703		106,650		64,017		21,468		(95,312	)
Net income (loss) per share
Basic	$	2.43	$	1.81	$	1.16	$	0.40	$	(1.84	)
Diluted		2.28		1.72		1.11		0.39		(1.84	)
Shares used in computing per share amounts
Basic		61,567		59,006		55,412		53,084		51,723
Diluted		65,744		62,031		57,514		55,455		51,723
Other Operating Data
Ratio of earnings to fixed charges 1		17.6 3		18.4		6.5		2.7		—
Deficiency of earnings to fixed charges 2	$	—	$	—	$	—	$	—	$	98,662
Consolidated Balance Sheet Data
Total assets	$	1,663,085	$	1,451,584	$	1,224,084	$	1,025,055	$	993,081
Long-term debt, net of current maturities		— 4		265,000		265,011		244,739		256,215

  ¹ Ratio of earnings to fixed charges means the ratio of income before fixed charges and income taxes to fixed charges, where fixed charges are the aggregate of interest expense, including amortization of debt issuance costs, and an allocation of rental charges to approximate equivalent interest.

  ² Due to the net loss incurred in 2001, the ratio of earnings to fixed charges was less than 1:1. We would have had to generate additional earnings in the amount indicated in the table to have achieved a ratio of 1:1.

  ³ Included as a deduction from income before income taxes and as an addition to interest expense in 2005 is accelerated amortization of debt issuance costs in the amount of $5.0 million. Excluding this amortization, the ratio of earnings to fixed charges would have been 27.6 for 2005.

  ⁴ Our debentures, in the amount of $265.0 million, remain outstanding at December 31, 2005; however, they have been reclassified to short-term due to a conversion condition having been met. See Note 5 to the Consolidated Financial Statements for more information.

12 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

The following should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in Part IV, Item 15(A), Part I, Item 1. “Business,” and Part II, Item 6. “Selected Consolidated Financial Data,” of this Annual Report on Form 10-K. Many of the statements in the following “General” section of the MD&A are “forward-looking” and are based on our current expectations, assumptions and projections about Getty Images, Inc. and its industry and are made on the basis of our views as of the date this document is filed with the Securities and Exchange Commission (SEC). These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict and that could cause our actual results to differ materially from our past performance and our current expectations, assumptions and projections. Differences may result from actions taken by us as well as from risks and uncertainties beyond our control. Potential risks and uncertainties include, among others, those specifically set forth in this section and those in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise. Readers should carefully review all documents that we file with, and furnish, to the SEC, as we will periodically update these forward-looking statements through these documents. Therefore, these forward-looking statements should not be considered current beyond the date this document is filed with the SEC unless read in conjunction with all of our documents filed with, and furnished to, the SEC thereafter.

GENERAL

Overview

We are a leading creator and distributor of high quality, relevant imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate marketing departments and other business customers. Our goal is to be the leading image solutions provider in every major market, offering visual communications professionals products and related services at multiple price points on multiple platforms. We intend to do this by providing high quality, relevant imagery and related services that are easily accessed and easily licensed at multiple price points.

We anticipate that the market for still and moving imagery will grow over the next several years allowing us more opportunities to execute on our strategy. We believe that the growth will be led by the continued emergence of new communications platforms, growth in Internet advertising and increased use of imagery as a communication tool globally.

We are seeing growth in the market for new communications platforms, which we believe, over time, will utilize more visually rich content than others before them. Today, these platforms, namely the Internet and mobile devices, have been of limited communication value because of content portability limits. We believe that, over time, technological advances will lessen these limits and that these platforms and our related offerings, including still and moving imagery, will thrive. We intend to meet the needs of the users of these platforms with relevant, high quality imagery appropriate for each platform.

For 2006, we have established four key objectives in support of our goal to be the leading image solutions provider in every major market. These key objectives are to: innovate products, services, platforms and markets; accelerate growth in non-English speaking countries; revitalize our website with new features and search functionality; and continue to develop a world class selling organization.

INNOVATE PRODUCTS, SERVICES, PLATFORMS AND MARKETS

We will continue to offer new and innovative imagery and related services. We will support innovators of new communications platforms by creating or acquiring high quality imagery appropriate for these platforms and by altering licensing models as necessary.

ACCELERATE GROWTH IN NON-ENGLISH SPEAKING COUNTRIES

We plan to accelerate growth in licenses of both editorial and creative imagery in non-English speaking countries by expanding our product and service offerings in markets that we have not fully penetrated, by creating or acquiring locally relevant imagery and by localizing search capability on our website. In 2005, we made a small investment in a joint venture, which is now licensing our imagery through a Chinese language website.

REVITALIZE OUR WEBSITE

We already have what we believe to be the best website in the industry for image professionals. However, we believe that we can improve our customers’ experience and grow our market share by revitalizing our website with new features and search functionality.

13 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

The focus of the revitalization will be localization and personalization and will include customizable search and views, localized search and single search across all content, guided navigation, disambiguation, improved performance and improved digital workflow infrastructure.

CONTINUE TO DEVELOP A WORLD-CLASS SELLING ORGANIZATION

Our objective in 2006 is to continue to develop our selling organization into one that is world-class. Achievement of this objective will require structure and process improvements and training on a number of tools to allow sales people to spend less time on administration and more time interacting with customers. We will also leverage our expertise more, using our creative talent to influence and inspire customers as to the power of imagery.

Our ability to meet our 2006 objectives is subject to many risks and uncertainties. These risks and uncertainties include, but are not limited to, our ability to: provide product offerings that are relevant and desirable in international markets; improve international respect for our copyrights; successfully develop and market new service offerings that complement our existing products and services; and identify and implement new technology. Meeting our 2006 objectives is also subject to the general risks discussed in Part I, Item 1A of this Annual Report on Form 10-K.

Revenue

We generate our revenue from licensing rights to use imagery and from providing related services. Revenue is principally derived from a large number of relatively small transactions involving licensing rights to use single still images, film clips or CDs containing multiple images. We also generate revenue from subscription image licenses and from custom photo shoots.

In addition to being licensed directly by us, our imagery is also licensed through delegates worldwide. Licenses through delegates comprised approximately 6% of our revenue in 2005. Delegates typically earn and retain 35% to 40% of the license fee paid by their customers, and we recognize the remaining 60% to 65% as revenue.

STILL IMAGERY

The still imagery that we license can be broken down into three portfolios: rights-managed, royalty-free, and editorial. Rights-managed images are licensed by customers on a use-by-use basis and generally have higher license fees based on the intended use of the image, including medium, geographical distribution, license duration, circulation and level of exclusivity. Royalty-free images (except for exclusives) can be used by customers for multiple projects over an unlimited time period. License fees for royalty-free CDs are generally the same for each licensee, while license fees for single royalty-free images differ depending on the size of the digital file, from standard resolution (generally one to three megabytes) to high resolution (generally 75 megabytes). Editorial imagery consists of news, sports, entertainment and archival imagery, and is licensed on a single image or subscription basis (except for archival).

FILM

We also maintain a portfolio of film, or moving imagery, clips that we license on a rights-managed or royalty-free basis. License fees for rights-managed and royalty-free film clips vary based on the same factors as license fees for images within the respective still imagery portfolios.

Cost of Revenue

Cost of revenue consists primarily of royalties owed to contributors, comprised of photographers, filmmakers and other imagery partners. These contributors are under contract with us and typically receive royalties of 20% to 50% of the total license fee, depending on the portfolio (as discussed above), where the imagery is licensed (licenses outside a contributor’s home territory result in lower royalties) and the terms of their contract. We own certain of the images in our collections, and these images do not require royalty payments. Cost of revenue excludes depreciation and amortization.

Acquisitions of Businesses

On April 20, 2005, we acquired London-based Digital Vision Limited (Digital Vision), one of the world’s leading royalty-free photography businesses, for a purchase price of $179.6 million ($167.0 million of cash and $12.6 million of direct acquisition costs and liabilities assumed). The majority of the purchase price was allocated to goodwill ($135.3 million) and identifiable intangible assets ($33.2 million). Prior to the acquisition, we had a significant number of Digital Vision’s images available for license through our Image Partner program. We acquired this company in order to obtain more wholly-owned imagery, which provides flexible licensing opportunities at a lower cost, as there are no associated royalties.

14 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

On June 8, 2005, we acquired Amana America, Inc., Amana Europe Limited and Iconica Limited (collectively Photonica) for a purchase price of $58.3 million ($48.1 million of cash and $10.2 million of direct acquisition costs and liabilities assumed). Photonica is a rights-managed stock photography agency with its principal offices in New York and London. The majority of the purchase price was allocated to goodwill ($41.4 million) and identifiable intangible assets ($11.6 million). We acquired this company to obtain access to some of the world’s leading collections of cutting edge, high-end rights-managed imagery and some of the most talented and creative photographers in Europe, the United States and Japan.

On July 30, 2004, we acquired Imagenet Limited, a London-based distributor of digital publicity and marketing materials to media companies, for a purchase price (including liabilities assumed) of £13.9 million (approximately $25.2 million). The portion of the purchase price allocated to goodwill was £10.6 million (approximately $19.2 million).

During 2005, 2004 and 2003, we also completed several other small acquisitions. All acquisitions were accounted for using the purchase method of accounting and, accordingly, the results of operations of the acquired businesses since the respective dates of acquisition are included in our consolidated financial statements. None of the acquisitions were material, individually or in the aggregate, to the company as a whole and, therefore, pro forma financial information is not presented.

RESULTS OF OPERATIONS

Our key objectives for 2005 were to: grow the volume of imagery licensed; accelerate international growth; continue to grow the editorial portion of our business; improve and customize the customer experience and search capabilities on gettyimages.com; and achieve a 31% operating margin. We achieved each of these objectives. In 2005, compared to 2004: we licensed 12% more single still creative images; we grew international revenue 22% (approximately 19% excluding changes in foreign currency exchange rates) and entered into a joint venture in the People’s Republic of China; editorial revenue increased 18% (approximately 17% excluding changes in foreign currency exchange rates); and we achieved a 31% operating margin compared to an operating margin of 27% for 2004. We also completed a process map of how we will, over the next few years, improve the search functionality, localization and personalization of our website. We also began implementing certain of these website improvements.

Effective with this Annual Report on Form 10-K, we have renamed the line previously labeled “cost of sales” as “cost of revenue,” included cost of revenue in the subtotal labeled “operating expenses” and eliminated the subtotal previously labeled “gross margin.” These changes were made to reflect our shift in focus away from gross margin and towards operating margin as a key measure of our financial success. The content of the cost of revenue line has not changed. Cost of revenue excludes depreciation and amortization.

Below are selected financial highlights from our results of operations. All figures in the tables are shown in thousands, except percentages and price per image figures. Income from operations and operating margin should not be considered alternatives to net income as indicators of our operating performance, but should be considered supplemental indicators.

15 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

Comparison of 2005 to 2004 Results of Operations

The following table contains selected key revenue and royalty metrics for 2005 and 2004:

YEARS ENDED DECEMBER 31,	2005		2004
PORTFOLIO REVENUE AS A PERCENTAGE OF TOTAL REVENUE
Rights-managed still imagery		43%		48%
Royalty-free still imagery		37%		33%
Editorial imagery		12%		12%
Film		5%		5%
Other		3%		2%
APPROXIMATE AVERAGE PRICE PER IMAGE BY PORTFOLIO 1,2,3
Rights-managed still imagery	$	585	$	570
Royalty-free still imagery		235		200
Film		580		555
AVERAGE ROYALTY RATE BY PORTFOLIO
Rights-managed still imagery		33%		33%
Royalty-free still imagery		20%		24%
Editorial imagery		22%		18%
Film		29%		28%

  ¹ Prior year price per image figures have been adjusted to reflect the inclusion of data for Asia Pacific, and for Film to include royalty-free film data.

  ² Because many editorial images are licensed on a subscription basis, price per image is not meaningful and therefore price per image is not provided for editorial imagery.

  ³ All price per image figures are rounded to the nearest $5 and represent the approximate prices of single images (including flexible license packs but excluding prepackaged CDs and images licensed through subscriptions) licensed by us directly to our customers, not through delegates.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2005		% of revenue	2004		% of revenue	$ change		% change
Revenue	$	733,729	100.0	$	622,427	100.0	$	111,302	17.8

Excluding the impact of changes in foreign currency exchange rates, revenue increased $103.1 million or 16.6% year over year due mainly to higher volumes of images licensed from our royalty-free portfolio at a higher average price per image. The royalty-free volume increase was particularly significant in Europe, where customers continue to adopt this licensing model. Increases in average price per image arose through a shift in the mix of images licensed within our royalty-free portfolio towards higher priced imagery and through selective price increases. In addition to the success of the royalty-free model, the volume of rights-managed imagery licensed increased modestly year over year. Revenue from licenses of editorial imagery and film also increased year over year. Revenue from licenses of film in the third and fourth quarters of 2005, however, was flat when compared to the same quarters in 2004.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2005		% of revenue	2004		% of revenue	$ change		% change
Selling, general and administrative expenses	$	252,103	34.3	$	225,128	36.1	$	26,975	11.9

16 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

Excluding the impact of changes in foreign currency exchange rates, selling, general and administrative expenses increased $25.0 million or 11% year over year. This increase was due mainly to increased staff costs related to employees who joined the company through business acquisitions during the last year and to annual salary increases effective April of 2005.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2005		operating margin	2004		operating margin	$ change		% change
Income from operations and operating margin	$	225,931	30.7	$	168,267	27.0	$	57,664	34.2

Income from operations and operating margin increased year over year primarily due to increased revenue and a shift in image license mix towards higher margin royalty-free imagery and a shift within our royalty-free portfolio towards wholly-owned imagery. The shift towards wholly-owned imagery occurred as we acquired and created a significant number of wholly-owned images in 2005. These increases in operating income were offset in part by an increase in amortization due to identifiable intangible assets acquired during the year.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2005		% of revenue	2004		% of revenue	$ change		% change
Investment income	$	11,991	1.6	$	9,133	1.5	$	2,858	31.2

Investment income increased in 2005 due to higher cash and cash equivalents balances, even after paying $234.4 million in cash to acquire businesses during the year, as well as due to an increase in interest rates.

	YEARS ENDED DECEMBER 31,										YEAR OVER YEAR
	2005			% of revenue		2004			% of revenue		$ change			% change
Interest expense	$	(7,618	)	(1.0	)	$	(3,828	)	(0.6	)	$	(3,790	)	(99.0	)

Interest expense increased in 2005 as a conversion condition of our convertible subordinated debentures was met during the second quarter, requiring accelerated amortization in June of 2005 of the remaining $5.0 million of unamortized debt issuance costs. The conversion condition was met when the closing price of our common stock exceeded $73.30 for 20 trading days within the last 30 trading days ended June 30, 2005. See discussion of our debentures under “Liquidity” below for more information.

	YEARS ENDED DECEMBER 31,										YEAR OVER YEAR
	2005			effective tax rate		2004			effective tax rate		$ change			% change
Income tax expense	$	(80,951	)	(35.0	)	$	(67,389	)	(38.7	)	$	(13,562	)	(20.1	)

Our effective tax rate for 2005 decreased from 2004 due to: recognition of the benefit of foreign tax credits due to the transition of a portion of our intellectual property offshore; favorable developments in tax audits that resulted in the release of income tax reserves; higher income in jurisdictions with lower tax rates; and reduction in non-deductible compensation expense.

Comparison of 2004 to 2003 Results of Operations

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2004		% of revenue	2003		% of revenue	$ change		% change
Revenue	$	622,427	100.0	$	523,196	100.0	$	99,231	19.0

17 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

Revenue benefited $32.8 million year over year from the impact of changes in foreign currency exchange rates on the translation of revenue generated in foreign countries, mainly the United Kingdom (U.K.) and countries whose currency is the euro. Excluding these changes in exchange rates, revenue increased 12.7% year over year due mainly to pricing, including selective price increases, reduced levels of discounting for certain uses of rights-managed imagery and a shift in the mix of images licensed within our royalty-free portfolio towards higher priced imagery. Our editorial imagery portfolio also contributed significantly to year over year revenue growth, due mainly to increases in the volume of images licensed from this portfolio. We also saw growth in the volume of images licensed from our rights-managed imagery portfolio during the year, partially offset in the first half of the year by decreases in the volume of single royalty-free images licensed by customers who pay with a credit card. Revenue increased year over year in many countries, with the most significant dollar increases seen in the U.S. and the U.K. Japan also showed significant growth on a percentage basis, due primarily to the launch of the Japanese language area of our website.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2004		% of revenue	2003		% of revenue	$ change		% change
Selling, general and administrative expenses	$	225,128	36.1	$	210,011	40.1	$	15,117	7.2

Selling, general and administrative expenses (SG&A) increased $15.1 million year over year primarily due to a net $10.0 million negative impact of changes in foreign currency exchange rates on the translation of SG&A incurred in foreign countries and approximately $1.5 million in fees incurred on the exchange of our convertible subordinated debentures.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2004		operating margin	2003		operating margin	$ change		% change
Income from operations and operating margin	$	168,267	27.0	$	103,269	19.7	$	64,998	62.9

Income from operations and operating margin increased in 2004 primarily due to higher revenue and gross margin, both of which are discussed above, as compared to operating expenses that did not increase proportionally.

	YEARS ENDED DECEMBER 31,						YEAR OVER YEAR
	2004		% of revenue	2003		% of revenue	$ change		% change
Investment income	$	9,133	1.5	$	3,847	0.7	$	5,286	137.4

Investment income increased in 2004 primarily due to higher cash and cash equivalents and short-term investment balances, combined with an increase in interest rates.

	YEARS ENDED DECEMBER 31,										YEAR OVER YEAR
	2004			% of revenue		2003			% of revenue		$ change		% change
Interest expense	$	(3,828	)	(0.6	)	$	(9,765	)	(1.9	)	$	5,937	60.8

18 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

Interest expense decreased from 2003 due principally to the issuance of 0.5% convertible subordinated debentures and repayment of our 5.0% convertible subordinated notes in June and July of 2003, respectively. Interest expense on the new 0.5% convertible subordinated debentures approximates $1.3 million per year, compared to interest expense on the extinguished 5.0% convertible subordinated notes that approximated $12.5 million per year. Interest expense also includes amortization of debt issuance costs and fees on the unused portion of our senior credit facility, which were relatively consistent year over year.

	YEARS ENDED DECEMBER 31,										YEAR OVER YEAR
	2004			effective tax rate		2003			effective tax rate		$ change			% change
Income tax expense	$	(67,389	)	(38.7	)	$	(23,699	)	(27.0	)	$	(43,690	)	(184.4	)

Income tax expense increased over the prior year due to higher income before income taxes and a $10.2 million deferred tax asset valuation allowance that was reversed through income tax expense in 2003. The effective tax rates were 38.7% and 27.0% in 2004 and 2003, respectively. The increase in the effective tax rate for 2004 compared to 2003 was due to the valuation allowance reversal in 2003. Excluding this reversal, the effective rate in 2003 would also have been 38.7%.

Results of Operations Outlook

Many of the statements herein and for the remainder of the MD&A are “forward-looking” and are based on our current expectations, assumptions and projections about Getty Images, Inc. and its industry and are made on the basis of our views as of the date this document is filed with the Securities and Exchange Commission (SEC). These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict and that could cause our actual results to differ materially from our past performance and our current expectations, assumptions and projections. Differences may result from actions taken by us as well as from risks and uncertainties beyond our control. Potential risks and uncertainties include, among others, those specifically set forth in this section and those in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise. Readers should carefully review all documents that we file with, and furnish, to the SEC, as we will periodically update these forward-looking statements through these documents. Therefore, these forward-looking statements should not be considered current beyond the date this document is filed with the SEC unless read in conjunction with all of our documents filed with, and furnished to, the SEC thereafter.

In 2006, we expect to report: double digit revenue growth at a rate slightly lower than in 2005; selling, general and administrative expenses approximately 15% to 20% higher than in 2005; a moderate increase in depreciation; amortization approximately 20% higher than in 2005; an operating margin of 33% to 34%; and an effective income tax rate of approximately 37%. These expectations do not include the impact of stock-based compensation, changes in foreign currency exchange rates or material acquisitions of businesses, if any. The impact of stock-based compensation may vary greatly depending on the number of restricted stock units and stock options issued and the future price of our common stock. However, we currently anticipate that stock-based compensation expense will reduce 2006 diluted earnings per share by approximately $0.14 to $0.20. This estimate is based on a range of estimated prices of our common stock and current expectations of the number of restricted stock units and stock options that may be issued.

During 2005, we began transitioning a portion of our intellectual property offshore to better serve our non-U.S. customers. Although it will not impact the effective tax rate in 2006, we anticipate that the use of our intellectual property in jurisdictions with lower statutory income tax rates will lower our effective tax rate over the next few years.

We are leasing office space in New York through an agreement that expires in March of 2015 and subleasing a portion of that space to a subtenant through an agreement that expires in February of 2007. We are currently evaluating our options with respect to use of the subleased space after the current sublease expires. If we decide to permanently exit some or all of the space, we would recognize a non-cash loss of up to approximately $15 million to $25 million (based on the present value of our lease costs, net of sublease income, for the remaining eight years of our lease at a range of potential market rates currently anticipated). We would record this loss as a charge within operating expenses in our consolidated statement of income at the time we make such a decision.

19 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

FINANCIAL CONDITION

Liquidity

DECEMBER 31,	2005		2004
(In thousands, except current ratio)
Cash and cash equivalents and short-term investments	$	518,275	$	520,710
Working capital	$	249,018	$	518,082
Current ratio		1.63		5.55
Cash flows provided by operating activities	$	257,277	$	202,582
Cash flows provided by financing activities	$	41,614	$	72,569

A reclassification of our debentures from long-term to short-term due to a conversion condition having been met caused the significant decrease in our working capital and current ratio in 2005. Had we not reclassified the debentures, our working capital and current ratio would have been $514.0 million and 4.90, respectively, at December 31, 2005. The remaining decline in working capital is due to the acquisition of businesses during 2005, offset in part by increased cash flows from operations.

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

Operating cash flows increased over the past two years as revenue growth outpaced growth in cash operating expenses, offset in part in 2005 by a modest increase in days sales outstanding (DSOs). We expect to see operating cash flows continue to increase in 2006 but not at a rate as significant as that in 2005 and 2004. The expected slowing in the growth of operating cash flows in 2006 is due primarily to the full utilization of our net operating loss carryforwards in early 2006, which means that we will be paying more income taxes.

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

The primary component of cash provided by financing activities has been proceeds from employee stock option exercises, which can and have fluctuated from year to year. We anticipate that cash flows provided by financing activities in 2006 will continue to consist mainly of proceeds from employee stock option exercises. Stock option exercises typically increase or decrease relative to changes in our stock price. Approximately 3.7 million stock options were outstanding at December 31, 2005, of which 2.9 million were exercisable at a weighted-average exercise price of $42.96. The closing market price of our common stock on January 31, 2006 was $81.65. Our stock-based compensation strategy has shifted away from stock options and towards restricted stock units. Therefore, we anticipate a reduction in proceeds from stock option exercises over the next few years.

We expect that our current cash and cash equivalents and short-term investments plus cash generated through future operating and financing activities will meet our liquidity needs for at least the next 12 months. Our ability to generate cash flows for 2006 in line with our expectations is subject to many risks and uncertainties, including but not limited to: the risks outlined under “General” above for meeting our 2006 objectives; significant unexpected cash expenses; significant changes in interest rates or income tax laws; a significant decline in the market price of our common stock; and the general risks discussed in Part I, Item 1A of this Annual Report on Form 10-K.

Convertible Subordinated Debentures    On June 9, 2003, we issued $265.0 million in 0.5% convertible subordinated debentures (original debentures) in a private placement. On December 16, 2004, we completed an exchange of all but $2.0 million of these original debentures for new 0.5% Series B convertible subordinated debentures (new debentures). The final $2.0 million of the debentures were exchanged for Series B debentures on May 12, 2005.

Key terms and conditions of our convertible subordinated debentures are:

• The principal portion of the debentures is required to be settled in cash, while the increase in value of the debentures beyond the principal, if any, is payable in shares of our common stock. Prior to June 9, 2008, if the applicable stock price is less than or equal to the base conversion price of $61.08, no common shares would be issued upon conversion. If the applicable stock price is greater than the base conversion price, common shares would be issued upon conversion based on a conversion rate calculated in accordance with a pre-determined formula.

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• The debentures may be converted at the holder’s option only under any of the following conditions: 1) the closing price of our common stock during a relevant measurement period as defined in the indenture is more than $73.30; 2) the credit rating assigned to the debentures by Standard & Poor’s Ratings Services is below B- or by Moody’s Investors Service is below B3 (the ratings were B+ and Ba3, respectively, at December 31, 2005); 3) the trading price of the debenture during a relevant measurement period as defined in the indenture is less than 95% of the product of the closing price of our stock and the conversion rate in effect at such time; 4) the debentures are called for redemption; or 5) upon the occurrence of certain corporate transactions as defined in the indenture.

• We may redeem the debentures for cash equal to the principal value plus any accrued and unpaid interest at any time on or after June 13, 2008, except that between June 13, 2008 and June 12, 2009, we may not redeem the debentures unless the closing sale price of our common stock is greater than $76.35 for at least 20 trading days in a 30 consecutive trading day period ending on the trading day prior to the date of mailing our notice of redemption.

• Holders may require us to redeem the debentures for cash equal to the principal value plus any accrued and unpaid interest on June 9, 2008, 2013 and 2018.

• We are required to pay contingent interest beyond the 0.5% coupon rate at the rate of 0.5% per year on the average trading price of the debentures over a five-day trading period immediately preceding the first day of the applicable six-month period, commencing with the six-month period ending December 9, 2008, if such average trading price is greater than or equal to $1,200 per debenture. The market price of our convertible subordinated debentures was approximately $2,041 per debenture at December 31, 2005.

On July 1, 2005, our 0.5% convertible subordinated debentures became convertible by the holders due to a conversion condition having been met. The conversion condition was met when the closing price of our common stock exceeded $73.30 for 20 trading days within the last 30 trading days ended June 30, 2005. The condition was also met in the quarters ended September 30, 2005 and December 31, 2005. As a result, we classified the $265.0 million of debentures as short-term debt on our June 30, September 30 and December 31, 2005 balance sheets.

We believe the likelihood of a significant number of debentures being tendered for conversion prior to the date that we are able to call the debentures is remote; however, should all or some of the holders elect to convert, we would be required to repay the applicable principal in cash up to $265.0 million, which we would likely fund with existing cash and cash equivalents and short-term investments. The ability for the holders to convert will expire on March 31, 2006 unless the conversion condition is met again in the last 30 trading days ending on that date. If the condition is not met during that period, we will reclassify the debt back to long-term. The closing price of our common stock on January 31, 2006 was $81.65.

The conversion contingencies relating to the credit rating assigned to, and the trading price of the debentures compared to the product of the closing price of our common stock and the conversion rate in effect at such time, as well as the contingent interest feature, represent embedded derivatives. A valuation of the fair value of these derivatives is performed each quarter. The fair value of these derivatives was insignificant in all periods presented.

Senior Credit Facility    In February of 2005, we cancelled our senior credit facility that would have expired in July of 2005. It is anticipated that we will be able to satisfy our cash requirements through internally generated cash and therefore we elected not to replace this facility.

Capital Expenditures, Contractual Obligations and Rights, Guarantees and Other Potentially Significant Uses of Cash

CAPITAL EXPENDITURES

We spent $57.8 million, $36.7 million and $35.3 million on capital expenditures in 2005, 2004 and 2003, respectively. The increase in 2005 resulted mainly from the acquisition and creation of wholly-owned imagery. Wholly-owned imagery provides flexible licensing opportunities at a lower cost, as no royalties are required to be paid to contributors. We had no material commitments for capital expenditures at December 31, 2005. However, we plan to spend approximately $50.0 million to $55.0 million on capital expenditures in 2006, mainly related to the creation of imagery and development of computer software. The anticipated sources of funds for these capital expenditures are current cash and cash equivalents and short-term investments and cash flows provided by operating activities, but could include any of the sources discussed under “Liquidity” above.

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CONTRACTUAL OBLIGATIONS AND RIGHTS

The following table illustrates payments and receipts associated with significant, enforceable and legally binding contractual obligations that are non-cancelable without significant penalty. If a contract is cancelable with a penalty, the amount shown in the table below is the full contractual obligation, not the penalty, as we currently intend to fulfill each of these obligations.

YEARS ENDING DECEMBER 31,	2006		2007		2008		2009		2010		THEREAFTER		TOTAL
(In thousands)
Convertible subordinated debentures:
Principal payments 1	$	—	$	—	$	—	$	—	$	—	$	265,000	$	265,000
Interest payments 1		1,343		1,343		1,343		1,343		1,343		16,793		23,508
Operating lease payments on facilities and equipment leases 2		22,773		21,456		20,742		20,189		19,761		67,764		172,685
Minimum royalty guarantee payments to contributors of imagery 3		5,359		2,177		1,453		103		18		—		9,110
Other purchase commitments		2,936		1,503		360		—		—		—		4,799
Total contractual obligations	$	32,411	$	26,479	$	23,898	$	21,635	$	21,122	$	349,557	$	475,102

  ¹ Figures assume that the convertible subordinated debentures are repaid upon maturity in 2023, which may or may not reflect future events. The debentures are currently convertible by the holders of the debentures and therefore, the applicable principal would be required to be paid in cash if some or all of the debentures were converted by the holders. In addition, the holders may require us to redeem the debentures in 2008, 2013 and 2018. See discussion of these circumstances under “Convertible Subordinated Debentures” under “Cash Flows Provided by Financing Activities” above.

  ² Offsetting these operating lease payments will be receipts for subleased facilities in the amounts of (in thousands) $6,443, $2,056, $1,238, $1,258, $1,258 and $150 for the years ending December 31, 2006, 2007, 2008, 2009, 2010 and thereafter, respectively.

  ³ Offsetting these minimum royalty guarantee payments to contributors of imagery will be minimum guaranteed receipts from contributors in the amount of (in thousands) $1,125 for the year ending December 31, 2006.

Payments under purchase orders, certain sponsorships, donations and other commitments that are not enforceable and legally binding contractual obligations are excluded from this table. Payments, guaranteed and contingent, under employment contracts are also excluded from this table because they do not constitute purchase commitments.

GUARANTEES

We indemnify certain customers from claims related to alleged infringements of the intellectual property rights of third parties, such as claims arising from failure to secure model and property releases for images we license. The standard terms of these indemnifications require us to defend those claims and pay related damages, if any. We typically mitigate this risk by securing all necessary model and property releases for imagery for which we hold the copyright, and by contractually requiring our contributing photographers and other imagery partners to do the same prior to submitting any imagery to us. We also require contributing photographers, other imagery partners and sellers of businesses or image collections that we have purchased to indemnify us in certain circumstances in the event a claim arises in relation to an image they have provided or sold to us. Our imagery partners are also typically required to carry insurance policies for losses related to such claims. We do not record any liabilities for these indemnifications until claims are made and we are able to assess the range of possible payments and available recourse from our imagery partners, as applicable. Historically, our exposure to such claims has been immaterial, as were our recorded liabilities for intellectual property infringement at December 31, 2005 and 2004. As such, we believe the estimated fair value of these liabilities is minimal.

In the ordinary course of business, we also enter into certain types of agreements that contingently require us to indemnify counterparties against third-party claims. These may include:

• agreements with vendors and suppliers, under which we may indemnify them against claims arising from our use of their products or services;

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• agreements with customers other than those licensing images, under which we may indemnify them against claims arising from their use of our products or services;

• agreements with delegates, under which we may indemnify them against claims arising from their distribution of our products or services;

• real estate and equipment leases, under which we may indemnify lessors against third-party claims relating to use of their property;

• agreements with directors and officers, under which we indemnify them to the full extent allowed by Delaware law against claims relating to their service to us;

• agreements with purchasers of businesses we have sold, under which we may indemnify the purchasers against claims arising from our operation of the businesses prior to sale; and

• agreements with initial purchasers and underwriters of our securities, under which we indemnify them against claims relating to their participation in the transactions.

The nature and terms of these indemnifications vary from contract to contract, and generally a maximum obligation is not stated. Because we are unable to estimate our potential obligation, and because we do not expect these indemnifications to have a material adverse effect on our consolidated financial position, results of operations or cash flows, no related liabilities were recorded at December 31, 2005 or 2004. We hold insurance policies that mitigate potential losses arising from certain indemnifications, and historically, we have not incurred significant costs related to performance under these obligations.

OTHER POTENTIALLY SIGNIFICANT USES OF CASH

Our Board of Directors has authorized the repurchase of our common stock on the open market from time to time, up to $150.0 million. The number of shares purchased, if any, and the timing of the purchases will be based on the level of cash and cash equivalents and short-term investments, the market price of our common stock, general business conditions and alternative investment opportunities. We have not repurchased any shares pursuant to this authorization.

We will continue to consider selective acquisitions of businesses. During 2005, we paid $234.4 million in cash (not including liabilities assumed) for acquired businesses. Cash paid for business acquisitions can vary significantly from year to year due to the timing of identifying and completing acquisitions that contribute to the achievement of our objectives.

We have not paid or declared any dividends since inception, and our Board of Directors does not anticipate changing this practice in the foreseeable future.

SUBSEQUENT EVENTS

On February 9, 2006, we purchased all of the shares of iStockphoto, Inc. for $50.0 million in cash. iStockphoto, Inc. was a privately held stock photography company located in Calgary, Alberta, Canada that licenses royalty-free imagery exclusively through its websites, www.istockphoto.com and www.istockpro.com. The $50.0 million purchase price was funded from existing cash and cash equivalents and consisted of $45.7 million paid to the sellers upon closing and $4.3 million held in escrow. The amounts held in escrow are to be paid to certain key employees (former shareholders of iStockphoto, Inc.) after they complete one to three years of continued service with the company. A purchase price allocation is in process and is expected to be completed during the first quarter of 2006.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the revenues and expenses reported during the period. Following are accounting policies that we believe are most important to the portrayal of our financial condition and results of operations and that require our most difficult judgments as a result of the need to make estimates and assumptions about the effects of matters that are inherently uncertain. These critical accounting policies have been discussed with our Audit Committee.

Goodwill and Identifiable Intangible Assets

Goodwill is the excess of the purchase price and related costs over the fair value of net assets acquired in business combinations. Goodwill is tested for impairment annually on August 31 and between annual tests in certain circumstances. When assessing impairment, we estimate the implied fair value based on a discounted cash flow model that involves significant assumptions and estimates,

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including our future financial performance, our future weighted average cost of capital and our interpretation of currently enacted tax laws. As circumstances change, it is possible that future goodwill impairment tests could result in a loss on impairment of assets, which would be included in the determination of income from operations. At August 31, 2005, the implied fair value of our goodwill significantly exceeded its carrying value, therefore goodwill was not impaired. The balance of goodwill at December 31, 2005 was $804.8 million.

Identifiable intangible assets are assets that do not have physical representation, but that arise from contractual or other legal rights or are capable of being separated or divided from us and sold, transferred, licensed, rented, or exchanged. Identifiable intangible assets are generally valued based on discounted future cash flows that we estimate will be generated by the assets and are amortized on a straight-line basis over their estimated useful lives (see “Estimated Useful Lives of Certain Long-Lived Assets” below for more information). Identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. Impairment exists when the carrying value of the asset is not recoverable and exceeds its fair value. The discounted cash flow models we use to determine the fair value of identifiable intangible assets involve significant assumptions and estimates, including cash flows expected to be generated by the assets, the estimated useful lives of the assets, and our future weighted average cost of capital. As circumstances change, it is possible that future impairment tests could result in a loss on impairment of assets, which would be included in the determination of income from operations. No identifiable intangible assets were impaired during the periods presented. The majority of the $50.2 million net book value of our identifiable intangible assets at December 31, 2005 consisted of trademarks, trade names and copyrights ($28.7 million) and customer lists, contracts and relationships ($17.3 million).

Estimated Useful Lives of Certain Long-Lived Assets

The estimated useful lives of our most significant property and equipment and identifiable intangible assets are discussed below. Should we determine at some point in the future that the useful lives of these assets are shorter than estimated, it is possible that we would be required to accelerate the amortization, or write off an impaired portion, of these assets.

PROPERTY AND EQUIPMENT

The majority of the $127.5 million net book value of our property and equipment at December 31, 2005 consisted of imagery ($70.7 million), computer hardware and software ($32.1 million) and leasehold improvements ($19.5 million).

The estimated useful lives of imagery are determined based on the number of years over which they generate the majority of their revenue. Periodically, we perform analyses of populations of imagery that are representative of all of our contemporary image collections. These analyses have shown that the average life of contemporary imagery approximates four years. The estimated useful life of archival imagery is approximately 40 years. Historical revenue may not be indicative of future revenue, and therefore, these estimated useful lives are inherently uncertain.

The three-year estimated useful life of computer hardware and software is determined based on prior experience with related technology, the expected future utility of the assets to us based on our operating plans and industry standards. Hardware and software providers’ future support of today’s technology and the future of technology in general are inherently uncertain. These lives are reviewed whenever events or changes in circumstances indicate that revisions may be required, such as significant technological developments, the failure of a vendor to continue to support a particular version of software or changes in operating plans.

Leasehold improvements are amortized over the shorter of the remaining original term of the lease or the estimated useful life of the improvement, ranging from two to 20 years, with the majority of the net book value invested in assets with original estimated useful lives ranging from 10 to 14 years. The estimated useful lives of leasehold improvements are determined based on our prior experience with similar assets and the expected future utility of the assets to us based on our operating plans. Our future operating plans could change and we may choose to, or be required to, terminate our leases and thereby abandon our leasehold improvements prior to the termination of the associated lease or the end of the otherwise estimated useful life. The estimated useful lives of leasehold improvements are reviewed whenever events or changes in circumstances indicate that revisions may be required, such as a planned move to or from, or remodeling of, a leased space.

IDENTIFIABLE INTANGIBLE ASSETS

As discussed above, the majority of the net book value of our identifiable intangible assets at December 31, 2005 consisted of trademarks, trade names and copyrights and customer lists, contracts and relationships. We evaluate the remaining useful lives of our

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identifiable intangible assets each reporting period to determine whether events and circumstances warrant revisions to the remaining periods of amortization. No revisions were determined to be necessary during the periods presented.

The estimated useful lives of trademarks, trade names and copyrights, ranging from two to 10 years, are generally based on contractual or other legal terms, our plans for use of the assets and the cost and difficulty of renewing the lives of the assets. The useful lives of these assets may change or terminate prior to their contractual lives due to changes in operating plans, brand strategy, acquisition or disposition of businesses and legal action, among other circumstances.

The estimated useful lives of customer lists, contracts and relationships, ranging from four to seven years, are determined based on our prior experience with customers in general and revenue we expect to generate through these specific customers in the future. Customers are free to terminate their relationship with us at any time, our past experience with one group of customers may not be indicative of our future experience with another group, and past revenue may not be indicative of future revenue.

Income Taxes

We are subject to income taxes in the U.S. and in numerous foreign jurisdictions. Significant judgments, estimates and assumptions are required in determining what positions to take on our tax returns and in calculating our provisions for income taxes, as they are based on our interpretation of tax regulations and accounting pronouncements. We establish reserves for tax uncertainties when, despite our belief that we have appropriate support for positions we have taken on our returns, it is probable that certain of these positions will be challenged and may not be sustained upon review by taxing authorities. These reserves are established through our income tax provisions and are included in other long-term liabilities on our consolidated balance sheets. We adjust these reserves as governing laws and facts and circumstances change, such as the closing of a tax audit or the expiration of the statute of limitations for a specific exposure. We have never been audited by the U.S. Internal Revenue Service but have been subject to continuous review by the U.K. Inland Revenue and other foreign taxing authorities. Although we believe that our judgments, estimates and assumptions are reasonable, the final determination of tax audits could materially differ from our expectations. If this should occur, our consolidated financial statements could be materially impacted.

The existence and valuation of our deferred income taxes, reflecting the impact of temporary differences between financial and tax reporting and of tax loss carryforwards, are based on tax laws, regulations, accounting principles, and our interpretations thereof. The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income in each applicable tax jurisdiction. We reduce our deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. Deferred U.S. income taxes are not provided for unremitted foreign earnings of our foreign subsidiaries because we expect those earnings will be permanently reinvested. It is not practicable to calculate the unrecognized deferred tax liability for temporary differences related to these investments.

Our effective tax rate was 35.0%, 38.7%, and 27.0% (38.7% excluding reversal of a valuation allowance) for the years ended December 31, 2005, 2004, and 2003, respectively. Our effective tax rate is affected by: our mix of pre-tax earnings in jurisdictions with varying statutory tax rates; changes in tax laws, regulations and accounting principles; changes in valuation allowances provided against our deferred tax assets; and changes in our reserves. During 2005, we began transitioning a portion of our intellectual property offshore to better serve our non-U.S. customers. Although it will not impact the effective tax rate in 2006, we anticipate that the use of our intellectual property in jurisdictions with lower statutory income tax rates will lower our effective tax rate over the next few years.

Foreign Exchange

Foreign exchange gains and losses that arise from changes in the exchange rates underlying foreign-currency denominated assets and liabilities, other than long-term intercompany balances, are included in our consolidated statements of income for the periods in which the exchange rates change. Foreign exchange gains and losses that arise from changes in the exchange rates underlying intercompany balances that are of a long-term investment nature, for which settlement is not planned or anticipated in the foreseeable future, are reported in accumulated other comprehensive income in our consolidated balance sheets. The future cash needs of the parent company and each subsidiary are uncertain. Should we reclassify and settle a portion of these intercompany balances at some time in the future due to domestic cash needs or for other purposes, these intercompany balances would be redesignated as short-term, and all future revaluation gains and losses would be recorded in our consolidated statement of income. In addition, should we dispose of one of the subsidiaries with which we have a long-term intercompany balance, the accumulated other comprehensive income or loss associated with that entity would be included in the calculation of the gain or loss on the disposal of the subsidiary. Foreign exchange losses of $34.4 million and gains of $13.2 million and $26.3 million for the years ended December 31, 2005, 2004

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and 2003, respectively, arose from changes in the exchange rates underlying intercompany balances deemed to be long-term in nature and therefore were included in our consolidated balance sheets as a component of accumulated other comprehensive income. Accumulated net unrealized gains on revaluation of foreign currency denominated long-term intercompany balances were $1.1 million and $35.5 million and December 31, 2005 and 2004, respectively.

Allowance for Doubtful Accounts

We estimate our allowance for doubtful accounts based on historical losses as a percentage of revenue, existing economic conditions, and specific account analysis of at-risk customers and delegates. Historical losses and existing economic conditions may not necessarily be indicative of future losses, and the impact of economic conditions on each of our customers is difficult to estimate. Should future uncollectible amounts not reflect our current estimates, we would be required to change our allowance for doubtful accounts through an entry to bad debt expense included in selling, general and administrative expenses in our consolidated statement of income. Our allowances for doubtful accounts at December 31, 2005 and 2004 were $11.8 million and $11.9 million, respectively. The percentage of our investment in trade receivables, net of allowances for doubtful accounts and sales returns, more than 90 days old as of December 31, 2005 and 2004 was 11% and 8%, respectively. The increase in this percentage from 2004 to 2005 was due to certain balances over 90 days old at December 31, 2005 that we know to be collectible and therefore did not reserve.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 123(R), “Share-Based Payment”

In December of 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123(R), which addresses the accounting for employee services received in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. On April 14, 2005, the SEC delayed the effective date of SFAS No. 123(R) until January 1, 2006 for calendar year companies. SFAS No. 123(R) eliminates our ability to account for employee stock options using the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations, and generally requires instead that we expense them using a fair-value-based method. This statement also requires that we reduce stock-based compensation expense by estimated forfeitures of awards rather than reducing expense as the forfeitures occur.

Our employee stock-based compensation plan provides for the issuance of stock options, restricted stock units (RSUs) and other stock-based compensation. In connection with the adoption of this statement, we have generally shifted from issuing stock options to issuing RSUs. The fair value of RSUs issued to employees is calculated as the market price of our common stock on the date of grant multiplied by the number of units issued. This fair value, less estimated forfeitures, will be expensed to selling, general and administrative expenses on a straight-line basis over the vesting periods of the RSUs. This accounting, with the exception of the estimation of forfeitures, is the same as previously required under APB Opinion No. 25. The fair value of any stock options issued will be calculated using a Black-Scholes option valuation model using the single option approach and will be expensed in the same manner as RSUs. The fair value of unvested options and RSUs outstanding upon adoption of SFAS No. 123(R) will remain as originally calculated for footnote purposes in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation,” will be reduced by estimated forfeitures and will be expensed to selling, general and administrative expenses over the remaining vesting periods.

We will adopt SFAS No. 123(R) using the modified prospective transition method, which means that we will not restate prior period financial statements. The impact of our equity compensation plans on our income statement may vary greatly depending on the number of RSUs and stock options granted and the future price of our common stock. However, we currently anticipate that expense associated with our equity compensation plans will reduce 2006 diluted earnings per share by approximately $0.14 to $0.20. This estimate is based on a range of estimated prices of our common stock and current expectations of the number of RSUs and stock options that may be issued.

FSP FAS 123(R)-2, “Practical Accommodation to the Application of Grant Date as Defined in FASB Statement No. 123(R)”

FSP FAS 123(R)-3, “Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards”

In October and November of 2005, the FASB issued FSPs FAS 123(R)-2 and FAS 123(R)-3, respectively. FSP FAS 123(R)-2 clarifies the definition of the grant date of share-based payments. This FSP does not impact us, as we had already interpreted the grant date to be as clarified in this FSP.

26 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7

FSP 123(R)-3 provides a short-cut method for calculating a company’s pool of windfall tax benefits relating to share-based payments upon adoption of SFAS No. 123(R). This FSP does not impact us, as we have elected not to use the short-cut method provided therein as it provides us with a smaller windfall tax pool than the long method outlined in SFAS No. 123(R). The pool of windfall tax benefits is important, as a company is allowed to take future shortfalls from estimated tax benefits relating to share-based payments against its pool of windfall tax benefits as opposed to taking these shortfalls through income tax expense.

FSP FIN 45-3, “Minimum Revenue Guarantees”

In November of 2005, the FASB issued FSP FIN 45-3, which requires a guarantor to recognize, at the inception of a minimum revenue guarantee granted to a business or its owners, a liability for the fair value of the obligation undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. We guarantee certain contributors minimum levels of revenue from licenses of their imagery. This FSP will require us to record the fair value of minimum revenue guarantees issued or modified on or after January 1, 2006. Based on the types of minimum revenue guarantees we have granted in the past, we expect the fair value of such guarantees to be immaterial.

FSP FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”

In November of 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, which provides guidance for determining when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. This FSP does not impact us, as we were already determining impairment of our investments in the manner prescribed therein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks, primarily changes in: interest rates; the market price of our common stock, into which our debt is convertible (equity price risk); credit ratings of issuers of our short-term investments (credit risk); and foreign currency exchange rates.

INTEREST RATE AND EQUITY PRICE RISK

The table below provides information about our financial instruments for which the fair values are sensitive to changes in interest rates. The table presents cash flows and weighted average interest rates by stated maturity dates, which may or may not be the dates on which cash is actually exchanged, as we may sell investments or convert debt prior to maturity. Fair values are determined through market quotes. All instruments are denominated and presented in U.S. dollars.

	CASH FLOWS BY STATED MATURITY DATE FOR FINANCIAL INSTRUMENTS HELD AT DECEMBER 31, 2005														FAIR VALUE OF FINANCIAL INSTRUMENTS HELD AT DECEMBER 31,
	2006		2007		2008		2009		2010		Thereafter		Total		2005		2004
(In thousands, except interest rates)
Short-term investments
Fixed rate	$	55,677	$	65,735	$	30,656	$	15,995	$	1,490	$	1,033	$	170,586	$	167,476	$	136,470
Weighted average interest rate		3.33%		3.25%		2.93%		3.29%		3.12%		4.46%		3.23%		—		—
Variable rate	$	11,088	$	1,000	$	—	$	1,000	$	—	$	70,544	$	83,632	$	83,637	$	105,252
Weighted average interest rate		4.05%		4.43%		—		4.54%		—		3.14%		3.29%		—		—
Step-up rate	$	—	$	19,997	$	25,000	$	—	$	—	$	—	$	44,997	$	44,078	$	84,236
Weighted average interest rate		—		3.31%		3.00%		—		—		—		3.14%		—		—
Debt
Fixed rate	$	—	$	—	$	—	$	—	$	—	$	265,000 1	$	265,000	$	540,931	$	409,425
Weighted average interest rate		—		—		—		—		—		0.50%		0.50%		—		—

  ¹ As discussed in Part II, Item 7 of this Annual Report on Form 10-K under “Liquidity,” we believe the likelihood of a significant number of debentures being tendered for conversion prior to the date that we are able to call the debentures is remote. Therefore, we have included it

27 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7A

in the table at its stated maturity date; however, should some or all of the holders convert, we would likely fund the required applicable principal cash repayment of up to $265.0 million with existing cash and cash equivalents and short-term investments. The ability for the holders to convert will expire on March 31, 2006 unless the conversion condition is met again in the last 30 trading days ending on that date. The closing price of our common stock on January 31, 2006 was $81.65.

For our investments, the difference between the sum of the cash flows at maturity and the fair value of the investments primarily represents the impact on valuation from changes in interest rates. The debt shown in the table above is our convertible subordinated debentures. The difference between the cash flow at maturity and the fair value of the debentures arises primarily from changes in the market price of our common stock, into which the value of the debentures over the principal amount is convertible, and secondarily from changes in interest rates.

SHORT-TERM INVESTMENTS

Short-term investments at December 31, 2005 consisted of available-for-sale U.S. agency securities ($171.8 million), auction rate securities ($70.4 million), corporate bonds ($39.3 million), U.S. Treasury obligations ($5.9 million) and money market funds ($7.9 million), carried at market value with associated unrealized holding gains and losses recorded in other comprehensive income. Available-for-sale investments with contractual maturities beyond one year are classified as short-term in our consolidated balance sheets because they represent the investment of cash that is available for current operations.

DEBT

Changes in interest rates have a negligible impact on the fair value of our debentures, while changes in the market price of our common stock cause the fair value of the debentures to fluctuate, sometimes significantly. These changes are representative of changes in the value of shares of our common stock that we would have to issue to the holders of the convertible subordinated debentures if they were to tender the debentures for conversion. In periods where the average closing price of our common stock exceeds $61.08 per share for the last five trading days of a reporting period, we would be required to issue shares for the increase in the value of the debentures above their book value of $265.0 million. The following table shows the approximate number of shares we would issue upon conversion at various stock prices, assuming $265.0 million of convertible subordinated debentures outstanding:

Average closing price per share of common stock for the last five trading days of the reporting period	$	62	$	70	$	80	$	90	$	100	$	120	$	150	$	250	$	1,500	$	2,900
Incremental dilutive shares outstanding (in thousands)		129		1,106		2,052		2,788		3,377		4,260		5,144		5,884		6,768		6,853

CREDIT RISK

In addition to interest rate risk, our short-term investments expose us to credit-related losses as they comprise debt instruments issued by third parties. We mitigate this risk by only buying investment grade debt securities.

At December 31, 2005, 90% of our investments were in AAA rated or U.S. Treasury debt instruments, and no investments were rated below A. Significant concentrations of investments at December 31, 2005 were Fannie Mae ($62.1 million fair value), Freddie Mac ($56.8 million fair value) and Federal Home Loan Bank ($52.9 million fair value). Almost all (98%) of these concentrated investments were in AAA rated or U.S. Treasury debt instruments at December 31, 2005.

At December 31, 2004, 88% of our investments were in AAA rated or U.S. Treasury debt instruments, and no investments were rated below A. Significant concentrations of investments at December 31, 2004 were Fannie Mae ($62.6 million fair value), Freddie Mac ($56.8 million fair value) and Federal Home Loan Bank ($54.5 million fair value). Almost all (98%) of these concentrated investments were in AAA rated U.S. Treasury debt instruments at December 31, 2004.

FOREIGN CURRENCY EXCHANGE RATE RISK

We have changed our presentation of foreign currency exchange rate risks from a tabular presentation of our exposures to a discussion of the impact of hypothetical changes in these rates because we believe that this sensitivity analysis provides more meaningful information to investors.

28 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7A

Transaction Gains and Losses

The parent company and many of our subsidiaries enter into transactions that are denominated in currencies other than their functional currency (foreign currencies), primarily euros, British pounds, U.S. dollars, Japanese yen and Canadian dollars. Some of these transactions result in foreign currency denominated assets and liabilities that are revalued each month. Upon revaluation, transaction gains and losses are generated, which, with the exception of those related to long-term intercompany balances, are reported as exchange gains and losses in our consolidated statements of income in the periods in which the exchange rates fluctuate. Transaction gains and losses on foreign currency denominated long-term intercompany balances for which settlement is not planned or anticipated in the foreseeable future, are reported in accumulated other comprehensive income in our consolidated balance sheets.

Transaction gains and losses arising from revaluation of assets and liabilities denominated in the same foreign currencies may offset each other, in part, acting as a natural hedge. Where our assets and liabilities are not naturally hedged, we may enter into forward foreign currency exchange contracts to reduce our exposure to transaction gains and losses. Our forward foreign exchange contracts generally range from one to three months in original maturity and primarily require the sale of euros, British pounds, Japanese yen and Canadian dollars and the purchase of U.S. dollars and British pounds. These contracts have not been designated as hedges as defined by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and therefore gains and losses arising from revaluation of these forward contracts are recorded as exchange gains and losses in our consolidated statements of income in the periods in which the exchange rates fluctuate. These gains and losses generally offset, at least in part, the gains and losses of the underlying exposures that are being hedged.

Based on the forward foreign currency exchange contracts outstanding at December 31, 2005 and 2004, a hypothetical 10% strengthening of the U.S. dollar against the exchange rates for the foreign currencies bought or sold through forward foreign currency exchange contracts would result in exchange losses of approximately $3.1 million and $2.4 million, respectively. A hypothetical 10% weakening of the U.S. dollar would result in gains of the same amounts. However, these hypothetical losses or gains would be offset, at least in part, by gains or losses generated from revaluing the underlying exposures these contracts are hedging.

Based on the forward foreign currency exchange contracts outstanding at December 31, 2005 and 2004, a hypothetical 10% strengthening of the British pound against the exchange rates for the foreign currencies to be bought or sold through forward foreign currency exchange contracts would result in a negligible exchange gain and an exchange loss of approximately $1.1 million, respectively. A hypothetical 10% weakening of the British pound would result in a loss and gain of the same amounts. However, these hypothetical losses or gains would be offset, at least in part, by gains or losses generated from revaluing the underlying exposures these contracts are hedging.

Translation Gains and Losses

The statements of income of foreign subsidiaries are translated into U.S. dollars, our reporting currency, at the prior month’s average daily exchange rate. When these exchange rates change from period to period, they cause fluctuations in reported results of operations that are not indicative of fundamental company operating performance but rather that reflect the performance of currencies. We currently do not hedge against the impact of translation. Changes from 2004 to 2005 in the exchange rates used to translate the results of operations of foreign subsidiaries resulted in increases in U.S. dollar reported revenue, selling, general and administrative expenses and depreciation for 2005 of $8.2 million, $1.9 million and $0.2 million, respectively. Changes from 2003 to 2004 in the exchange rates used to translate the results of operations of foreign subsidiaries resulted in increases in U.S. dollar reported revenue, selling, general and administrative expenses and depreciation for 2004 of $32.8 million, $10.0 million and $1.6 million, respectively.

The following table illustrates the annual change in the foreign currency exchange rates between U.S. dollars and the most commonly hedged associated currencies:

CURRENCY	December 31, 2005	Annual Change	December 31, 2004	Annual Change	December 31, 2003	Annual Change
Australian dollar	1.3620	6%	1.2812	(4)%	1.3298	(25)%
British pound	0.5818	11%	0.5219	(7)%	0.5605	(10)%
Canadian dollar	1.1656	(3)%	1.2034	(7)%	1.2923	(18)%
Euro	0.8445	14%	0.7387	(7)%	0.7938	(17)%
Japanese yen	117.8800	15%	102.6800	(4)%	107.1300	(10)%

29 GETTY IMAGES, INC. 2005 FORM 10-K PART II ITEM 7A

The following table illustrates the annual change in the foreign currency exchange rates between British pounds and the most commonly hedged associated currencies:

CURRENCY	December 31, 2005	Annual Change	December 31, 2004	Annual Change	December 31, 2003	Annual Change
Euro	0.6890	(2)%	0.7066	0%	0.7060	8%
U.S. dollar	0.5818	11%	0.5219	(7)%	0.5605	(11)%

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Part IV, Item 15(A) of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2005. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2005, these disclosure controls and procedures were effective.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

Management’s Annual Report on Internal Control Over Financial Reporting

See Management’s Report on Internal Control Over Financial Reporting on page F-2 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

During the last fiscal quarter of 2005, there were no changes in the company’s internal control over financial reporting identified in connection with management’s evaluation of the effectiveness of the company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

30 GETTY IMAGES, INC. 2005 FORM 10-K PART III ITEM 10

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K and is incorporated by reference herein.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K and is incorporated by reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Under the Getty Images, Inc. 2005 Incentive Plan (the Plan), the Board of Directors has the discretion to grant restricted stock units (RSUs), stock options with exercise prices equal to no less than the market price of our common stock on the grant date and other stock-based awards. In connection with the adoption of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payments,” we have generally shifted from issuing stock options to issuing RSUs.

RSUs generally have a four-year vesting schedule, with 25% vesting on each anniversary of the grant date. Stock options generally have a 10-year term and a four-year vesting schedule, with 25% vesting on the first anniversary of the grant date and a pro rata portion vesting monthly over the remaining three years. On September 15, 2005, we granted 795,000 fully vested stock options to senior management, many of whom had not received equity grants in several years.

A total of 16 million shares are authorized for issuance under the Plan. Shares under RSUs, stock options and other stock-based awards that lapse due to cancellation or expiration are available for re-issuance. Stock options become exercisable when vested and remain exercisable through the remainder of the term except upon termination of employment, in which case the options generally terminate 90 days after the employee’s termination date.

Below is a summary of stock-based awards outstanding and available for future issuance at December 31, 2005:

PLAN CATEGORY	Number of Securities to be Issued Upon Exercise of Stock Options and Vesting of Restricted Stock Units	Weighted Average Exercise Price		Number of Shares Available for Future Issuance
Equity compensation plans approved by security holders	3,762,102	$	45.26	2,524,071
Equity compensation plans not approved by security holders	16,666		15.80	—

The 16,666 shares in the table above represent options remaining under grants made outside of the Plan in 2001 to three non-executive members of our Board of Directors. The terms of these options are substantially identical to those granted under the Plan.

Of the 3,762,102 securities to be issued upon exercise of options outstanding under the Plan, 1,048 shares under options were assumed in connection with business combinations. The weighted average exercise price of these assumed options is $10.67.

The formula used to calculate the 2,524,071 shares under stock-based awards available for future issuance is the total 16 million shares authorized for issuance under the Plan less stock-based awards granted under the Plan, not including those assumed in connection with business combinations, plus stock-based awards that have lapsed.

The remainder of the information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K and is incorporated by reference herein.

31 GETTY IMAGES, INC. 2005 FORM 10-K PART III ITEM 13

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K and is incorporated by reference herein.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K and is incorporated by reference herein.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) DOCUMENTS FILED AS PART OF THIS REPORT

1. Consolidated Financial Statements (See Index to Consolidated Financial Statements on page F-1 of this Report);

2. Index to Financial Statement Schedules:

	Page
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule	S-1
Schedule II	S-2

All other schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in our Consolidated Financial Statements or notes thereto.

32 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(B)

(B) EXHIBITS

Exhibit Number		Description of Exhibit
3.1		Restated Certificate of Incorporation of Getty Images, Inc. (6)
3.2		Bylaws of Getty Images, Inc., as amended (15)
4.1		Specimen Common Stock certificate (7)
4.2		Indenture relating to Getty Images, Inc.’s 0.5% Subordinated Convertible Debentures, Series A, due 2023, dated June 9, 2003 (7)
4.3		First Supplemental Indenture relating to Getty Images, Inc.’s 0.5% Subordinated Convertible Debentures, Series A, due 2023, dated July 30, 2003 (7)
4.4		Indenture relating to Getty Images, Inc.’s 0.5% Subordinated Convertible Debentures, Series B, due 2023, dated December 16, 2004 (16)
4.5		Form of Debenture (7)
10.1	*	Amended and Restated Employment Agreement between Getty Images, Inc. and Jonathan D. Klein, effective August 1, 2005 (11)
10.2	*	Employment Agreement between Getty Images, Inc. and Elizabeth J. Huebner, dated August 1, 2002 (5)
10.3		Credit Agreement, dated July 19, 2002, among Getty Images, Inc. and Bank of America, N.A. (5)
10.4		Restated Option Agreement among Getty Images, Inc., Getty Communications plc and Getty Investments L.L.C. dated February 9, 1998 (14)
10.5		Stockholders’ Agreement among Getty Images, Inc. and certain stockholders of Getty Images, Inc. dated February 9, 1998 (14)
10.6		Registration Rights Agreement among Getty Images, Inc. and Getty Investments L.L.C. (14)
10.7		Restated Shareholders’ Agreement among Getty Images, Inc., Getty Investments L.L.C. and the Investors named therein dated February 9, 1998 (14)
10.8		Registration Rights Agreement dated July 3, 1996 among Getty Communications plc, Crediton Limited and October 1993 Trust and Form of Amendment among Getty Images, Inc., Getty Communications plc, Crediton Limited and October 1993 Trust (14)
10.9		Registration Rights Agreement dated July 3, 1996 among Getty Communications plc, Hambro European Ventures Limited, Hambro Group Investments Limited, RIT Capital Partners plc and Anthony Stone and Form of Amendment among Getty Images, Inc., Getty Communications plc and The Schwartzberg Family L.P. (14)
10.10		Indemnity between Getty Images, Inc. and Getty Investments L.L.C., dated January 1998 (14)
10.11		Indemnity between Getty Images, Inc. and Getty Investments L.L.C., dated November 22, 1999 (2)
10.12		Form of Indemnity among Getty Images, Inc., Getty Communications plc and each of Mark Getty, Mark Torrance, Jonathan Klein, Lawrence Gould, Andrew Garb, Manny Fernandez, Christopher Sporborg, Anthony Stone and James Bailey (14)
10.13		Lease dated October 18, 1995 between Allied Dunbar Assurance plc and Tony Stone Associates Limited (1)
10.14		Lease dated October 22, 2004 between Bantry Investments Limited and Getty Images UK Limited (11)
10.15		Lease dated November 30, 1999 between the Quadrant Corporation and Getty Images, Inc. (2)
10.16		Lease dated April 1, 2000 between PhotoDisc, Inc. and The Rector, Church-Wardens and Vestrymen of Trinity Church in the City of New York (4)
10.17		Sublease dated November 5, 2001 between PhotoDisc, Inc. and Morgan Stanley D.W. Inc. (3)
10.18		Amendment to Sublease dated November 20, 2001 between PhotoDisc, Inc. and Morgan Stanley D.W. Inc. (3)

33 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(B)

Exhibit Number		Description of Exhibit
10.19		First Amendment of Lease dated October 31, 2000 between PhotoDisc, Inc. and The Rector, Church-Wardens and Vestrymen of Trinity Church in the City of New York (3)
10.20		Second Amendment of Lease dated November 20, 2001 between PhotoDisc, Inc. and The Rector, Church-Wardens and Vestrymen of Trinity Church in the City of New York (3)
10.21		Third Amendment of Lease dated January 1, 2006 between PhotoDisc, Inc. and The Rector, Church-Wardens and Vestrymen of Trinity Church in the City of New York (16)
10.22		Getty Images, Inc. 2005 Incentive Plan (9)
10.23	*	Employment Agreement between Getty Images, Inc. and Jeffrey L. Beyle, dated August 1, 2002 (6)
10.24		Registration Rights Agreement dated June 9, 2003 among Getty Images, Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co. (7)
10.25		First Amendment to the Credit Agreement entered into as of June 27, 2003 among Getty Images, Inc. and Bank of America N.A (7)
10.26		Second Amendment to the Credit Agreement entered into as of May 12, 2004 among Getty Images, Inc. and Bank of America N.A. (8)
10.27		Third Amendment to the Stockholders’ Agreement dated February 9, 1998 among Getty Images, Inc. and certain stockholders of Getty Images, Inc. effective May 1, 2003 (7)
10.28	*	Employment Agreement between Getty Images, Inc. and Patrick Flynn, dated August 16, 2004 (16)
10.29	*	Employment Agreement between Getty Images, Inc. and Jack Sansolo, dated November 8, 2004 (16)
10.30	*	Form of Employee Stock Option Agreement (12)
10.31	*	Form of Non-Executive Director Stock Option Agreement (10)
10.32	*	Form of Restricted Stock Unit Agreement (10)
10.33	*	Form of Executive Stock Option Agreement (11)
10.34		Share sale agreement dated April 20, 2005 between Shisheido Anstalt and Getty Images (UK) Limited relating to Digital Vision Limited (13)
10.35		Intellectual property assignment agreement dated April 20, 2005 between Getty images (Cayman) Limited and Digital Holding & Licensing S.A. (13)
10.36		Share purchase agreement between Amana Inc. and Getty Images, Inc. dated as of May 12, 2005 (16)
10.37	*	Form of Executive Restricted Stock Unit Agreement (16)
12.1		Statement regarding computation of ratio of earnings to fixed charges (16)
21.1		Subsidiaries of the Registrant (16)
23.1		Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (16)
31.1		Section 302 Certification by Jonathan D. Klein, CEO (16)
31.2		Section 302 Certification by Elizabeth J. Huebner, CFO (16)
32.1		Section 906 Certification by Jonathan D. Klein, CEO (16)
32.2		Section 906 Certification by Elizabeth J. Huebner, CFO (16)

* Indicates management contracts or compensatory plans or arrangements.

(1) Incorporated by reference from the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

(2) Incorporated by reference from the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

34 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(B)

  (3) Incorporated by reference from the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

  (4) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q, for the period ended March 31, 2000.

  (5) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2002.

  (6) Incorporated by reference from the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.

  (7) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2003.

  (8) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2004.

  (9) Incorporated by reference from the Exhibits to the Registrant’s Current Report on Form 8-K filed May 6, 2005.

(10) Incorporated by reference from the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004.

(11) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2005.

(12) Incorporated by reference from the Exhibits to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2005.

(13) Incorporated by reference from the Exhibits to the Registrant’s Amended Current Report on Form 8-K/A filed April 22, 2005.

(14) Incorporated by reference from the Exhibits to the Registrant’s Registration Statement on Amendment No. 3 to Form S-4 on Form S-4/A filed December 23, 1997.

(15) Incorporated by reference from the Exhibits to the Registrant’s Current Report on Form 8-K filed December 15, 2005.

(16) Filed herewith.

35 GETTY IMAGES, INC. 2005 FORM 10-K SIGNATURES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GETTY IMAGES, INC.
By:	/S/    ELIZABETH J. HUEBNER
	Elizabeth J. Huebner Senior Vice President and Chief Financial Officer

March 9, 2006

We, the undersigned directors and executive officers of the Registrant, hereby severally constitute Jonathan D. Klein and Elizabeth J. Huebner, and each of them singly, our true and lawful attorneys with full power to them and each of them to sign for us, and in our names in the capacities indicated below, any and all amendments to the Annual Report on Form 10-K filed with the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys to any and all amendments to said Annual Report on Form 10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on March 9, 2006, by the following persons on behalf of the Registrant and in the capacities indicated below:

SIGNATURE	TITLE (CAPACITY)
/S/    MARK H. GETTY Mark H. Getty	Chairman and Director
/S/    JONATHAN D. KLEIN Jonathan D. Klein	Chief Executive Officer and Director (Principal Executive Officer)
/S/    ELIZABETH J. HUEBNER Elizabeth J. Huebner	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/S/    JAMES N. BAILEY James N. Bailey	Director
/S/    ANDREW S. GARB Andrew S. Garb	Director
/S/    DAVID LANDAU David Landau	Director
/S/    CHRISTOPHER H. SPORBORG Christopher H. Sporborg	Director
/S/    MICHAEL A. STEIN Michael A. Stein	Director

F-1 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	PAGE
Management’s Report on Internal Control Over Financial Reporting	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Statements of Income	F-4
Consolidated Balance Sheets	F-5
Consolidated Statements of Stockholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8

F-2 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Getty Images, Inc.’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. We assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2005. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on our assessment using those criteria, we determined that as of December 31, 2005, Getty Images, Inc.’s internal control over financial reporting is effective.

Getty Images, Inc.’s independent registered public accounting firm that audited the financial statements included in this Annual Report on Form 10-K has audited management’s assessment of the effectiveness of the company’s internal control over financial reporting as of December 31, 2005 as stated in their report which appears on page F-3 of this Annual Report on Form 10-K.

Seattle, Washington

March 9, 2006

F-3 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Getty Images, Inc.

We have completed an integrated audit of Getty Images, Inc.’s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005 and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of stockholders’ equity and of cash flows present fairly, in all material respects, the financial position of Getty Images, Inc. and its subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Internal control over financial reporting

Also, in our opinion, management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Seattle, Washington

March 9, 2006

F-4 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31,	2005			2004			2003
(In thousands, except per share amounts)
Revenue	$	733,729		$	622,427		$	523,196
Cost of revenue (exclusive of items shown separately below)		196,887			172,684			148,343
Selling, general and administrative expenses		252,103			225,128			210,011
Depreciation		48,572			52,976			57,348
Amortization		9,519			4,559			4,052
Other operating expenses (income)		717			(1,187	)		173
Operating expenses		507,798			454,160			419,927
Income from operations		225,931			168,267			103,269
Investment income		11,991			9,133			3,847
Interest expense		(7,618	)		(3,828	)		(9,765	)
Exchange gains, net		350			467			2,142
Debt extinguishment costs		—			—			(11,777	)
Income before income taxes		230,654			174,039			87,716
Income tax expense		(80,951	)		(67,389	)		(23,699	)
Net income	$	149,703		$	106,650		$	64,017
Earnings per share
Basic		2.43		$	1.81		$	1.16
Diluted		2.28			1.72			1.11
Shares used in computing earnings per share
Basic		61,567			59,006			55,412
Diluted		65,744			62,031			57,514

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,	2005			2004
(In thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	223,084		$	194,752
Short-term investments		295,191			325,958
Accounts receivable, net		107,020			89,272
Prepaid expenses		11,815			10,651
Deferred income taxes, net		—			8,335
Other current assets		8,553			2,894
Total current assets		645,663			631,862
Property and equipment, net		127,497			112,501
Goodwill		804,804			628,717
Identifiable intangible assets, net		50,206			13,874
Deferred income taxes, net		30,704			54,652
Other long-term assets		4,211			9,978
Total assets	$	1,663,085		$	1,451,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	72,344		$	67,362
Accrued expenses		41,624			42,810
Income taxes payable		—			3,608
Deferred income taxes, net		17,677			—
Short-term debt		265,000			—
Total current liabilities		396,645			113,780
Long-term debt		—			265,000
Other long-term liabilities		23,480			9,692
Total liabilities		420,125			388,472
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, no par value, 5,000 shares authorized; no shares issued		—			—
Common stock, $0.01 per share par value, 100,000 shares authorized: 62,265 shares issued at December 31, 2005 and 60,735 shares issued at December 31, 2004		623			607
Additional paid-in capital		1,281,759			1,210,203
Unearned compensation		(3,711	)		—
Accumulated deficit		(18,900	)		(168,603	)
Accumulated other comprehensive (loss) income (Note 7)		(16,811	)		20,905
Total stockholders’ equity		1,242,960			1,063,112
Total liabilities and stockholders’ equity	$	1,663,085		$	1,451,584

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Number of Shares of Common Stock, $0.01 Par Value	Common Stock		Additional Paid-In Capital			Unearned Compensation			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Total
(In thousands)
Balance at December 31, 2002	53,922	$	539	$	1,007,015		$	(906	)	$	(339,270	)	$	575		$	667,953
Net income	—		—		—			—			64,017			—			64,017
Other comprehensive income	—		—		—			—			—			12,110			12,110
Recognition of unearned compensation	—		—		—			458			—			—			458
Stock options exercised	3,406		34		70,832			—			—			—			70,866
Tax benefit from employee stock option exercises and valuation allowance reversal	—		—		20,402			—			—			—			20,402
Restricted stock grants	3		—		—			—			—			—			—
Balance at December 31, 2003	57,331		573		1,098,249			(448	)		(275,253	)		12,685			835,806
Net income	—		—		—			—			106,650			—			106,650
Other comprehensive income	—		—		—			—			—			8,220			8,220
Recognition of unearned compensation	—		—		—			448			—			—			448
Stock options exercised	3,404		34		73,964			—			—			—			73,998
Tax benefit from employee stock option exercises	—		—		37,935			—			—			—			37,935
Restricted stock vesting	—		—		55			—			—			—			55
Balance at December 31, 2004	60,735		607		1,210,203			—			(168,603	)		20,905			1,063,112
Net income	—		—		—			—			149,703			—			149,703
Other comprehensive loss	—		—		—			—			—			(37,716	)		(37,716	)
Restricted stock units granted to employees	—		—		4,913			(4,913	)								—
Restricted stock unit vesting	9		1		—			—			—			—			1
Restricted stock unit cancellations	—		—		(169	)		—			—			—			(169	)
Recognition of unearned compensation	—		—		—			1,202			—			—			1,202
Stock options exercised	1,521		15		42,157			—			—			—			42,172
Tax benefit from employee stock option exercises	—		—		24,594			—			—			—			24,594
Restricted stock vesting	—		—		61			—			—			—			61
Balance at December 31, 2005	62,265	$	623	$	1,281,759		$	(3,711	)	$	(18,900	)	$	(16,811	)	$	1,242,960

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-7 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,	2005			2004			2003
(In thousands)
Cash flows from operating activities
Net income	$	149,703		$	106,650		$	64,017
Adjustments to reconcile net income to net cash provided by operating activities
Reduction of income taxes paid due to the tax benefit from employee stock option exercises		65,034			3,233			—
Depreciation		48,572			52,976			57,348
Amortization of identifiable intangible assets		9,519			4,559			4,052
Amortization of debt issuance and exchange costs		6,060			1,915			1,837
Deferred income taxes		5,898			51,197			20,569
Bad debt expense		2,739			3,239			4,058
Debt extinguishment costs		—			—			11,777
Reversal of deferred tax asset valuation allowance relating to net operating losses		—			—			(10,249	)
Other changes in long-term assets and liabilities and equity		4,032			3,607			1,359
Changes in current assets and liabilities, net of effects of business acquisitions
Accounts receivable		(15,159	)		(16,006	)		(914	)
Accounts payable		(9,783	)		(530	)		2,585
Accrued expenses		(8,776	)		(2,510	)		(6,979	)
Income taxes payable		(2,486	)		(4,039	)		3,314
Changes in other current assets and liabilities		1,924			(1,709	)		5,280
Net cash provided by operating activities		257,277			202,582			158,054
Cash flows from investing activities
Acquisition of businesses, net of cash acquired		(234,432	)		(25,611	)		(5,496	)
Acquisition of available-for-sale investments		(101,575	)		(341,671	)		(274,226	)
Proceeds from available-for-sale investments		129,619			263,398			66,198
Acquisition of property and equipment		(57,766	)		(36,723	)		(35,347	)
Proceeds from held-to-maturity investments		—			—			20,388
Other investing activities		(643	)		46			309
Net cash used in investing activities		(264,797	)		(140,561	)		(228,174	)
Cash flows from financing activities
Proceeds from the issuance of common stock		42,172			73,998			70,866
Debt issuance and exchange costs paid		(558	)		(1,429	)		(7,965	)
Repayment of debt		—			—			(250,000	)
Proceeds from the issuance of long-term debt		—			—			265,000
Payment of debt premium		—			—			(7,142	)
Net cash provided by financing activities		41,614			72,569			70,759
Effects of exchange rate changes		(5,762	)		3,144			3,024
Net increase in cash and cash equivalents		28,332			137,734			3,663
Cash and cash equivalents
beginning of year		194,752			57,018			53,355
end of year	$	223,084		$	194,752		$	57,018
Supplemental disclosures
Interest paid	$	1,343		$	1,912		$	11,402
Income taxes paid, including foreign taxes withheld		18,191			22,189			9,021
Non-cash investing and financing activities
Convertible subordinated debentures exchanged	$	(2,000	)	$	(263,000	)		—
Convertible subordinated debentures, Series B, issued		2,000			263,000			—

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-8 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF THE BUSINESS

Getty Images, Inc. and subsidiaries (“Getty Images,” “the company,” “we”), headquartered in Seattle, Washington, is a leading creator and distributor of high quality, relevant imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD and online publishing; and corporate marketing departments and other business customers. We offer our imagery and related services through our website and a global network of company-owned offices and delegates.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S.) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our consolidated financial statements and revenues and expenses reported during the period. Some of the estimates and assumptions that require our most difficult judgments are: a) the appropriateness of the valuation and useful lives, if applicable, of long-lived assets; b) the appropriateness of the amount of accrued income taxes and deferred tax asset valuation allowances; c) the designation of certain foreign-currency denominated intercompany balances as long-term investments; and d) the sufficiency of the allowance for doubtful accounts. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from our estimates and assumptions.

Principles of Consolidation

Our consolidated financial statements and notes thereto include the accounts of Getty Images, Inc. and its subsidiaries. The results of operations and financial position of acquired companies have been included from the respective dates of acquisition. Intercompany balances and transactions have been eliminated.

Foreign Exchange Gains and Losses and Derivatives

Foreign exchange transaction gains and losses are reported in exchange gains, net in our consolidated statements of income in the period in which the exchange rates change. We utilize derivative financial instruments, namely forward foreign currency exchange contracts, to reduce the impact of foreign currency exchange rate risks where natural hedging strategies cannot be effectively employed. Our forward foreign exchange contracts generally range from one to three months in original maturity and primarily require the sale of euros, British pounds, Japanese yen and Canadian dollars and the purchase of U.S. dollars and British pounds. These contracts are economic hedges of our exposures but have not been designated as hedges, as defined by Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” for financial reporting purposes. These contracts are carried at fair value, as determined by quoted market exchange rates, with gains and losses recognized in exchange gains, net in our consolidated statements of income in the period in which the exchange rates change.

At December 31, 2005, we held forward contracts to sell $17.5 million worth of euros, $11.0 million worth of British pounds, $4.6 million worth of Japanese yen and to buy $3.0 million worth of Brazilian real in U.S. dollar functional currency sets of books. We also held forward contracts to sell $15.0 million worth of euros and to buy $13.9 million worth of U.S. dollars in British pound functional currency sets of books. At December 31, 2004, we held forward contracts to sell $17.5 million worth of euros and $3.5 million worth of British pounds in U.S. dollar functional currency sets of books and forward contracts to sell $10.0 million worth of euros in British pound functional currency sets of books. We also held at both of these dates, contracts to sell other currencies that were less than $3.0 million individually. The fair values of these contracts were insignificant in all periods presented.

We do not hold or issue derivative financial instruments for trading purposes. In general, our derivative activities do not create foreign currency exchange rate risk because fluctuations in the value of the instruments used for economic hedging purposes are offset by fluctuations in the value of the underlying exposures being hedged. Counterparties to derivative financial instruments expose us to credit-related losses in the event of non-performance. However, we have entered into these instruments with creditworthy financial institutions and consider the risk of non-performance to be low. Derivatives outstanding at December 31, 2005 were entered into primarily with Bank of America N.A.

F-9 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Earnings per Share

Basic earnings per share are calculated based on the weighted average number of common shares outstanding during each period. Diluted earnings per share are calculated based on the shares used to calculate basic earnings per share plus the effect of convertible subordinated debentures, dilutive stock options, restricted stock and restricted stock units.

YEARS ENDED DECEMBER 31,	2005		2004		2003
(In thousands, except per share amounts)
Basic Earnings per Share
Income available to common stockholders	$	149,703	$	106,650	$	64,017
Weighted average common shares outstanding		61,567		59,006		55,412
Basic earnings per share	$	2.43	$	1.81	$	1.16
Diluted Earnings per Share
Income available to common stockholders	$	149,703	$	106,656 1	$	64,022 1
Weighted average common shares outstanding		61,567		59,006		55,412
Effect of dilutive securities
Convertible subordinated debentures 2		2,802		987		18
Stock options		1,365		2,028		2,074
Restricted stock and restricted stock units		10		10		10
Total weighted average common shares and dilutive securities		65,744		62,031		57,514
Diluted earnings per share	$	2.28	$	1.72	$	1.11

  ¹ Income available to common stockholders is higher in the diluted earnings per share calculation for 2004 and 2003 due to adding back interest expense (after tax) relating to $2.0 million of the series A convertible subordinated debentures that were outstanding at December 31, 2004. See Note 5 for more information.

  ² Potentially dilutive shares underlying convertible subordinated debentures for 2005 were calculated based on a conversion price of $90.21, which was the average closing price of our common stock for the last five trading days of the year.

Approximately 9,098, 30,455 and 0.6 million other common shares underlying stock options for the years ended December 31, 2005, 2004 and 2003, respectively, are excluded from the computation of diluted earnings per share because they are anti-dilutive. For purposes of calculating diluted earnings per share for all future periods in which our convertible subordinated debentures remain outstanding, we will not include any associated incremental shares in periods where the average closing price of our common stock for the last five trading days of the reporting period is at or below $61.08 per share. In periods where the average closing price of our common stock exceeds $61.08 per share, we will include up to a theoretical maximum of approximately 6.9 million incremental shares. The following table shows the approximate number of incremental shares we would include in diluted weighted average shares outstanding at various stock prices, assuming $265.0 million of convertible subordinated debentures outstanding:

Average closing price per share of common stock for the last five trading days of the reporting period	$	62	$	70	$	80	$	90	$	100	$	120	$	150	$	250	$	1,500	$	2,900
Incremental dilutive shares outstanding (in thousands)		129		1,106		2,052		2,788		3,377		4,260		5,144		5,884		6,768		6,853

Cash Equivalents

Cash equivalents are short-term, highly liquid investments that are both readily convertible to cash and have maturities at the date of acquisition of three months or less. Cash equivalents generally comprise debt instruments subject to credit risk, including certificates of deposit and money market funds.

F-10 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Short-Term Investments

Short-term investments consisted of the following available-for-sale investments held at our consolidated balance sheet dates:

DECEMBER 31, 2005	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Aggregate Fair Value
(In thousands)
U.S. agency securities	$	175,135	$	—	$	(3,369	)	$	171,766
Auction rate securities		70,375		—		—			70,375
Corporate bonds		39,757		8		(512	)		39,253
U.S. Treasury obligations		6,035		—		(150	)		5,885
Money market funds		7,912		—		—			7,912
Total short-term investments	$	299,214	$	8	$	(4,031	)	$	295,191
DECEMBER 31, 2004	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Aggregate Fair Value
(In thousands)
U.S. agency securities	$	176,546	$	3	$	(1,762	)	$	174,787
Auction rate securities and variable rate demand notes		95,600		—		—			95,600
Corporate bonds		46,616		27		(414	)		46,229
U.S. Treasury obligations		6,030		—		(50	)		5,980
Money market funds		3,362		—		—			3,362
Total short-term investments	$	328,154	$	30	$	(2,226	)	$	325,958

Available-for-sale investments are carried at fair value, based on quoted market prices, with associated unrealized holding gains and losses recorded in accumulated other comprehensive income. Investments outstanding at December 31, 2005 mature between 2006 and 2042, with $66.8 million, $86.7 million, $55.7 million, $17.0 million, $1.5 million and $71.6 million maturing in 2006, 2007, 2008, 2009, 2010 and thereafter, respectively. Investments with contractual maturities beyond one year are classified as short-term in our consolidated balance sheets because they represent the investment of cash that is available for current operations. Money market funds and other investments with original maturities of three months or less that are part of an externally managed portfolio are included in short-term investments.

Following is detail of the gross unrealized losses at December 31, 2005. The majority of these unrealized losses were generated as interest rates rose and the rate of return on certain of our investments remained fixed at lower rates. We have determined that these losses are temporary, as we have the ability and intent to hold the investments until we recover at least substantially all of their cost.

DECEMBER 31, 2005	In a loss position for less than 12 months					In a loss position for 12 months or more					Total in a loss position
	Aggregate Fair Value		Gross Unrealized Losses			Aggregate Fair Value		Gross Unrealized Losses			Aggregate Fair Value		Gross Unrealized Losses
(In thousands)
U.S. agency securities	$	28,283	$	(252	)	$	146,852	$	(3,117	)	$	175,135	$	(3,369	)
Corporate bonds		7,789		(86	)		24,965		(426	)		32,754		(512	)
U.S. Treasury obligations		—		—			6,035		(150	)		6,035		(150	)
Totals	$	36,072	$	(338	)	$	177,852	$	(3,693	)	$	213,924	$	(4,031	)

Gains and losses realized on the sale of short-term investments are included in investment income in our consolidated statements of income based on the specific identification method and were insignificant in all periods presented.

F-11 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

The majority of our short-term investments comprise debt instruments issued by third parties and therefore expose us to credit-related losses. We mitigate this risk by only buying investment grade debt securities. At December 31, 2005, 90% of our investments were in AAA rated or U.S. Treasury debt instruments and no investments were rated below A. Significant concentrations of investments at December 31, 2005 were Fannie Mae ($62.1 million fair value), Freddie Mac ($56.8 million fair value) and Federal Home Loan Bank ($52.9 million fair value). Almost all (98%) of these concentrated investments were AAA rated.

Accounts Receivable

Accounts receivable are trade receivables, net of allowances for doubtful accounts and sales returns of $13.7 million and $13.2 million at December 31, 2005 and 2004, respectively.

We estimate our allowance for doubtful accounts based on historical losses as a percentage of revenue, existing economic conditions, and specific account analysis of at-risk customer and delegate balances. Concentration of credit risk with respect to trade receivables is limited due to the large number of our customers and their dispersion across many geographic areas. No single customer represented 10% or more of our total revenue in any of the periods presented. Trade receivables are written off when our internal collection efforts have been exhausted. Our allowance for sales returns is estimated based on historical returns as a percentage of revenue. Estimated sales returns are recorded as a reduction of revenue and were insignificant in all periods presented.

Approximately 11% of our recorded investment in trade receivables, net of allowances for doubtful accounts and sales returns, was more than 90 days old as of December 31, 2005, compared to 8% at December 31, 2004. The increase in this percentage from 2004 to 2005 was due to certain balances over 90 days old at December 31, 2005 that we know to be collectible and therefore did not reserve.

We do not accrue interest on past due trade receivables, but we have the right to do so in certain circumstances.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Contemporary and archival imagery consists of costs to acquire imagery from third parties and internal costs incurred by our creative department in creating imagery, including identification of marketable subject matter, art direction, digitization and the assignment of search terms and other pertinent information to each image. Computer software developed for internal use consists of internal and external costs incurred during the application development stage (except training costs) of software development and costs of upgrades or enhancements that result in additional software functionality. Costs incurred during the web application, infrastructure, graphics and content development stages of website development are also capitalized and included within computer software developed for internal use. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment (except computer software developed for internal use) are capitalized, while expenditures for repairs and maintenance are expensed as incurred.

Depreciation is recognized on a straight-line basis over the estimated useful lives of the assets or for leasehold improvements, over the shorter of the remaining original term of the lease or the estimated life of the related improvement. Depreciation of internal use software was $12.5 million, $17.2 million and $16.7 million in 2005, 2004 and 2003, respectively.

Property and equipment consisted of the following at the reported balance sheet dates:

DECEMBER 31,		2005						2004
	Range of Estimated Useful Lives (in years)	Gross Amount		Accumulated Depreciation		Net Amount		Gross Amount		Accumulated Depreciation		Net Amount
(In thousands, except years)
Contemporary imagery	4	$	266,638	$	211,889	$	54,749	$	237,690	$	200,087	$	37,603
Computer hardware and software purchased	3		96,788		86,160		10,628		94,960		83,280		11,680
Computer software developed for internal use	3		82,586		61,135		21,451		71,407		50,192		21,215
Leasehold improvements	2-20		35,998		16,513		19,485		35,404		14,978		20,426
Furniture, fixtures and studio equipment	5		32,226		27,038		5,188		32,026		25,491		6,535
Archival imagery	40		20,445		4,526		15,919		19,450		4,464		14,986
Other property and equipment	3-4		436		359		77		406		350		56
Totals		$	535,117	$	407,620	$	127,497	$	491,343	$	378,842	$	112,501

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Goodwill

Goodwill is the excess of the purchase price (including liabilities assumed and direct costs) over the fair value of tangible and identifiable intangible assets acquired through acquisitions of businesses. Goodwill is reviewed for impairment annually as of August 31 and between annual tests in certain circumstances. When assessing impairment, we estimate the implied fair value of our goodwill based on a discounted cash flow model that involves significant assumptions and estimates, including our future financial performance, our future weighted average cost of capital and our interpretation of currently enacted tax laws. At August 31, 2005, the implied fair value of our goodwill significantly exceeded its carrying value, therefore goodwill was not impaired. As circumstances change, it is possible that future goodwill impairment tests could result in a loss on impairment of assets, which would be included in the determination of income from operations.

Goodwill changed during 2005 as follows:

(In thousands)
Goodwill at December 31, 2004	$	628,717
Acquisitions of businesses (see Note 13)		193,433
Effects of foreign currency translation		(17,346	)
Goodwill at December 31, 2005	$	804,804

Identifiable Intangible Assets

Identifiable intangible assets are assets that do not have physical representation, but that arise from contractual or other legal rights or are capable of being separated or divided from the company and sold, transferred, licensed, rented or exchanged. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives. We reassess the remaining useful lives of our identifiable intangible assets each reporting period to determine whether events and circumstances warrant revisions to the remaining periods of amortization. No revisions were determined to be necessary during the periods presented.

Identifiable intangible assets consisted of the following at the reported balance sheet dates:

DECEMBER 31,		2005						2004
	Range of Estimated Useful Lives (in years)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
(In thousands, except years)
Trademarks, trade names and copyrights	2-10	$	37,392	$	8,651	$	28,741	$	11,682	$	5,742	$	5,940
Customer lists, contracts and relationships	4-7		32,770		15,497		17,273		16,846		10,550		6,296
Other identifiable intangible assets	2-10		7,179		2,987		4,192		3,382		1,744		1,638
Totals		$	77,341	$	27,135	$	50,206	$	31,910	$	18,036	$	13,874

Based on balances at December 31, 2005, amortization of identifiable intangible assets for the next five years would be as follows:

FISCAL YEAR
(In thousands)
2006	$	11,229
2007		9,222
2008		8,899
2009		5,716
2010		2,754

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. Impairment exists when the carrying value of an asset is not recoverable and exceeds its fair value. The carrying value of an asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The fair value of an asset is the amount at which the asset could be bought or sold in a current transaction

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between willing parties. Fair value is determined based on quoted market prices, if available, or the best alternative information available, including prices for similar assets and the present value of expected future cash flows of the asset. Impairments are included in other operating expenses or, if material, shown separately and included in the calculation of income from operations.

Leases

We lease facilities and equipment through operating leases. Operating lease rentals are charged to selling, general and administrative expenses in our consolidated statements of income on a straight-line basis over the original term of each lease. Our leases typically contain rent escalation clauses whereby the amount paid by us to the lessors increases each year, while some provide rent holidays at the beginning of the lease terms and some provide stated renewal options. None of our leases contain contingent rentals. Rent escalation causes a difference each year between the amount charged to rent expense on a straight-line basis and the amount paid by us to the lessors. This difference is recorded to accrued expenses (the current portion) and other long-term liabilities (the long-term portion) in our consolidated balance sheets. These balances grow during the early portions of the lease terms and are depleted during the later portions. Rent holidays are recognized in rent expense on a straight-line basis over the original term of each lease.

We sublease certain leased facilities that are not currently used for operations. The majority of our sublease income is recorded against lease loss accruals, while the remainder, which is insignificant in all periods presented, is recorded as an offset to rent expense. Net rent expense was $18.8 million, $18.6 million and $18.4 million for 2005, 2004 and 2003, respectively. See Note 6 for future minimum payments under operating leases and future minimum receipts under subleases.

Employee Stock-Based Compensation

We apply the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations in accounting for employee stock-based compensation.

We do not recognize compensation expense when issuing stock options as, according to the terms of our 2005 Incentive Plan, we are not able issue stock options with exercise prices less than the market price of our common stock on the date of the issuance. The only compensation expense we recognize in relation to stock options is upon infrequent modification of certain terms of outstanding options. With respect to the periods presented, there were minor stock option modifications resulting in nominal compensation expense in 2005.

We record unearned compensation and periodic compensation expense for restricted stock and restricted stock units issued to employees. Unearned compensation is calculated as the market price of our common stock on the date of the issuance multiplied by the number of shares issued, and is recognized as compensation expense on a straight-line basis over the vesting period.

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SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended, requires the disclosure of pro forma information as if we had adopted the fair-value method of accounting for employee stock-based compensation. Under this method, compensation cost is measured on all awards based on the fair value of the awards at the grant date. The pro forma effect on our net income and earnings per share of applying the fair-value method of accounting and the accelerated method of expensing stock options provided in Financial Accounting Standards Board (FASB) Interpretation No. 28, “Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans,” utilizing the assumptions described in Note 8. “Stock-Based Compensation,” would have been as follows:

YEARS ENDED DECEMBER 31,	2005			2004			2003
(In thousands, except per share amounts)
Net income
As reported	$	149,703		$	106,650		$	64,017
Add: APB No. 25 employee stock-based compensation, net of income taxes		754			322			302
Interest expense on series A convertible subordinated debentures, net of income taxes 1		—			6			5
Deduct: SFAS No. 123 employee stock-based compensation, net of income taxes		(15,904	)		(8,271	)		(6,994	)
Pro forma net income	$	134,553		$	98,707		$	57,330
Basic earnings per share
As reported	$	2.43		$	1.81		$	1.16
Pro forma		2.19			1.67			1.03
Diluted earnings per share
As reported	$	2.28		$	1.72		$	1.11
Pro forma		2.04			1.59			0.98
Shares used in calculating pro forma earnings per share
Basic		61,567			59,006			55,412
Diluted		65,848			62,238			58,207

  ¹ These amounts represent the adding back of interest expense (after tax) relating to $2.0 million of the series A convertible subordinated debentures outstanding at December 31, 2004. See Note 5 for more information.

The increase in SFAS No. 123 employee stock-based compensation in 2005 resulted from 795,000 fully vested options granted on September 13, 2005 by the Compensation Committee of the Board of Directors under the Getty Images, Inc. 2005 Incentive Plan. These options were granted to senior management, many of whom had not received equity grants in several years. Granting fully vested options results in the total fair value of the options being expensed immediately for purposes of these pro forma disclosures.

Effective January 1, 2006, we will adopt SFAS No. 123(R), “Share-Based Payment,” which eliminates our ability to account for employee stock options using the intrinsic value provisions of APB Opinion No. 25 and generally requires instead that we expense them using a fair-value-based method. See discussion of this statement under “Recent Accounting Pronouncements” below.

Revenue Recognition

We derive revenue principally from licensing rights to use images that are delivered digitally over the Internet (the vast majority of our revenue), on CDs, or in analog form (principally film). In addition, our imagery is licensed through delegates worldwide (approximately 6% of our revenue in 2005). Approximately 3% of our revenue in 2005 was derived from providing imagery related services. Revenue is recognized when the four general revenue recognition criteria are met: persuasive evidence of an arrangement exists, the price is fixed or determinable, collectibility is reasonably assured and delivery has occurred or services have been rendered. Revenue is recorded at invoiced amounts (including discounts, shipping and handling and applicable sales taxes) less an allowance for returns, except in the case of licensing rights through delegates, where revenue is recorded at our share of the delegates’ invoiced amounts. Delegates typically earn and retain 35% to 40% of the license fee, and we recognize the remaining 60% to 65% as revenue.

Persuasive evidence of an arrangement exists and the price is fixed or determinable at the time the customer agrees to the terms and conditions of the license agreement. We maintain a credit department and credit policies that set credit limits and ascertain customer credit worthiness, thus reducing our risk of credit loss. Based on our policies and procedures, as well as our historical experience, we

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are able to determine that collectibility is reasonably assured prior to recognizing revenue. These first three general revenue recognition criteria have been met at or prior to the time of delivery of the imagery, regardless of the format or delivery medium. Delivery occurs upon making digital images available for download by the customer, upon shipment of CD, analog film and transparencies, or evenly over the subscription period. Subscription and service revenue are recorded as deferred revenue within accrued expenses in our consolidated balance sheets and are amortized to revenue evenly over the subscription period or as the services are provided. Deferred revenue was insignificant at December 31, 2005 and 2004.

Cost of revenue

Cost of revenue consists primarily of royalties owed to contributors, comprised of photographers, filmmakers and other imagery partners. These contributors are under contract with us and typically receive royalties of 20% to 50% of the total license fee, depending on the portfolio (e.g. rights-managed) and where the imagery is licensed (licenses outside a contributor’s home territory typically result in lower royalties). We own certain of the images in our collections, which do not require royalty payments. Cost of revenue excludes depreciation and amortization.

Shipping and Handling

Shipping and handling billed to customers is included in revenue, and the associated costs are included in cost of revenue.

Advertising and Marketing

We market our products and services mainly through direct mail and e-mail communications. Costs associated with these communications are recorded in selling, general and administrative expenses when the communications are mailed. Advertising and marketing costs expensed in the years ended December 31, 2005, 2004 and 2003 were $11.3 million, $9.2 million and $14.8 million, respectively. Prepaid marketing materials were insignificant at December 31, 2005 and 2004.

Income Taxes

We file U.S. federal income tax returns and numerous foreign and state income tax returns. Significant judgments, estimates and assumptions are required in determining what positions to take on our tax returns and in calculating our provisions for income taxes, as they are based on our interpretation of tax regulations and accounting pronouncements. We establish reserves for tax uncertainties when, despite our belief that we have appropriate support for positions we have taken on our returns, it is probable that certain of these positions will be challenged and may not be sustained upon review by taxing authorities. These reserves are established through our income tax provisions and are included in other long-term liabilities on our consolidated balance sheets. We adjust these reserves as governing laws and facts and circumstances change, such as the closing of a tax audit or the expiration of the statute of limitations for a specific exposure.

The existence and valuation of our deferred income taxes, reflecting the impact of temporary differences between financial and tax reporting and of tax loss carryforwards, are based on tax laws, regulations, accounting principles, and our interpretations thereof. The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income in each applicable tax jurisdiction. We reduce our deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. Deferred U.S. income taxes are not provided for unremitted foreign earnings of our foreign subsidiaries because we expect those earnings will be permanently reinvested. It is not practicable to calculate the unrecognized deferred tax liability for temporary differences related to these investments. Deferred tax assets and liabilities are classified into net current and net non-current amounts based on the balance sheet classification of the related asset or liability, or if there is no such asset or liability, according to the timing of the expected reversal of the temporary difference that created the deferred tax assets and liabilities.

Recent Accounting Pronouncements

SFAS NO. 123(R), “SHARE-BASED PAYMENT”

In December of 2004, the FASB issued SFAS No. 123(R), which addresses the accounting for employee services received in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. On April 14, 2005, the SEC delayed the effective date of SFAS No. 123(R) until January 1, 2006 for calendar year companies. SFAS No. 123(R) eliminates our ability to account for employee stock options using the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued

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to Employees” and related interpretations, and generally requires instead that we expense them using a fair-value-based method. This statement also requires that we reduce stock-based compensation expense by estimated forfeitures of awards rather than reducing expense as the forfeitures occur.

Our employee stock-based compensation plan provides for the issuance of stock options, restricted stock units (RSUs) and other stock-based compensation. In connection with the adoption of this statement, we have generally shifted from issuing stock options to issuing RSUs. The fair value of RSUs issued to employees is calculated as the market price of our common stock on the date of grant multiplied by the number of units issued. This fair value, less estimated forfeitures, will be expensed to selling, general and administrative expenses on a straight-line basis over the vesting periods of the RSUs. This accounting, with the exception of the estimation of forfeitures, is the same as previously required under APB Opinion No. 25. The fair value of any stock options issued will be calculated using a Black-Scholes option valuation model using the single option approach and will be expensed in the same manner as RSUs. The fair value of unvested options and RSUs outstanding upon adoption of SFAS No. 123(R) will remain as originally calculated for footnote purposes in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation,” will be reduced by estimated forfeitures and will be expensed to selling, general and administrative expenses over the remaining vesting periods.

We will adopt SFAS No. 123(R) using the modified prospective transition method, which means that we will not restate prior period financial statements. The impact of our equity compensation plans on our income statement may vary greatly depending on the number of RSUs and stock options granted and the future price of our common stock. However, we currently anticipate that expense associated with our equity compensation plans will reduce 2006 diluted earnings per share by approximately $0.14 to $0.20. This estimate is based on a range of estimated prices of our common stock and current expectations of the number of RSUs and stock options that may be issued.

FSP FAS 123(R)-2, “PRACTICAL ACCOMMODATION TO THE APPLICATION OF GRANT DATE AS DEFINED IN FASB STATEMENT NO. 123(R)”

FSP FAS 123(R)-3, “TRANSITION ELECTION RELATED TO ACCOUNTING FOR THE TAX EFFECTS OF SHARE-BASED PAYMENT AWARDS”

In October and November of 2005, the FASB issued FSPs FAS 123(R)-2 and FAS 123(R)-3, respectively. FSP FAS 123(R)-2 clarifies the definition of the grant date of share-based payments. This FSP does not impact us, as we had already interpreted the grant date to be as clarified in this FSP.

FSP 123(R)-3 provides a short-cut method for calculating a company’s pool of windfall tax benefits relating to share-based payments upon adoption of SFAS No. 123(R). This FSP does not impact us, as we have elected not to use the short-cut method provided therein as it provides us with a smaller windfall tax pool than the long method outlined in SFAS No. 123(R). The pool of windfall tax benefits is important, as a company is allowed to take future shortfalls from estimated tax benefits relating to share-based payments against its pool of windfall tax benefits as opposed to taking these shortfalls through income tax expense.

FSP FIN 45-3, “MINIMUM REVENUE GUARANTEES”

In November of 2005, the FASB issued FSP FIN 45-3, which requires a guarantor to recognize, at the inception of a minimum revenue guarantee granted to a business or its owners, a liability for the fair value of the obligation undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. We guarantee certain contributors minimum levels of revenue from licenses of their imagery. This FSP will require us to record the fair value of minimum revenue guarantees issued or modified on or after January 1, 2006. Based on the types of minimum revenue guarantees we have granted in the past, we expect the fair value of such guarantees to be immaterial.

FSP FAS 115-1 AND FAS 124-1, “THE MEANING OF OTHER-THAN-TEMPORARY IMPAIRMENT AND ITS APPLICATION TO CERTAIN INVESTMENTS”

In November of 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, which provides guidance for determining when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. This FSP does not impact us, as we were already determining impairment of our investments in the manner prescribed therein.

NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist of cash and cash equivalents, short-term investments, forward foreign currency exchange contracts, accounts receivable, accounts payable and debt. Short-term investments and forward foreign currency exchange contracts are carried at fair value as discussed within Note 2 above under “Short-Term Investments” and “Foreign Exchange Gains and Losses and

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Derivatives.” The fair value of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to their short-term nature. The fair value of our debt, based on quoted market prices, was approximately $540.9 million and $409.4 million at December 31, 2005 and 2004, respectively. These fair values were $275.9 million and $144.4 million, respectively, higher than the carrying value of our debt at those dates.

NOTE 4. ACCRUED EXPENSES

Accrued expenses at the reported balance sheet dates are summarized below, with balances representing 5% or more of total current liabilities at either date shown separately:

DECEMBER 31,	2005		2004
(In thousands)
Accrued payroll and related costs	$	24,095	$	23,542
Accrued rent (mainly straight-line rent (see “Leases” within Note 2))		4,610		4,797
Other		12,919		14,471
Total accrued expenses	$	41,624	$	42,810

NOTE 5. SHORT-TERM AND LONG-TERM DEBT

At both consolidated balance sheet dates, our short-term and long-term debt consisted only of our convertible subordinated debentures. At December 31, 2005, there were $265.0 million of series B debentures outstanding, while at December 31, 2004, there were $263.0 million of series B, and $2.0 million of series A, debentures outstanding.

Key terms and conditions of our series B convertible subordinated debentures are:

• The principal portion of the debentures is required to be settled in cash, while the increase in value of the debentures beyond the principal, if any, is payable in shares of our common stock. Prior to June 9, 2008, if the applicable stock price is less than or equal to the base conversion price of $61.08, no common shares would be issued upon conversion. If the applicable stock price is greater than the base conversion price, common shares would be issued upon conversion based on a conversion rate calculated in accordance with a pre-determined formula.

• The debentures may be converted at the holder’s option only under any of the following conditions: 1) the closing price of our common stock during a relevant measurement period as defined in the indenture is more than $73.30; 2) the credit rating assigned to the debentures by Standard & Poor’s Ratings Services is below B- or by Moody’s Investors Service is below B3 (the ratings were B+ and Ba3, respectively, at December 31, 2005); 3) the trading price of the debenture during a relevant measurement period as defined in the indenture is less than 95% of the product of the closing price of our stock and the conversion rate in effect at such time; 4) the debentures are called for redemption; or 5) upon the occurrence of certain corporate transactions as defined in the indenture.

• We may redeem the debentures for cash equal to the principal value plus any accrued and unpaid interest at any time on or after June 13, 2008, except that between June 13, 2008 and June 12, 2009, we may not redeem the debentures unless the closing sale price of our common stock is greater than $76.35 for at least 20 trading days in a 30 consecutive trading day period ending on the trading day prior to the date of mailing our notice of redemption.

• Holders may require us to redeem the debentures for cash equal to the principal value plus any accrued and unpaid interest on June 9, 2008, 2013 and 2018.

• We are required to pay contingent interest beyond the 0.5% coupon rate at the rate of 0.5% per year on the average trading price of the debentures over a five-day trading period immediately preceding the first day of the applicable six-month period, commencing with the six-month period ending December 9, 2008, if such average trading price is greater than or equal to $1,200 per debenture. The market price of our convertible subordinated debentures was approximately $2,041 per debenture at December 31, 2005.

On July 1, 2005, our 0.5% convertible subordinated debentures became convertible by the holders due to a conversion condition having been met. The conversion condition was met when the closing price of our common stock exceeded $73.30 for 20 trading days within the last 30 trading days ended June 30, 2005. The condition was also met in the quarters ended September 30, 2005 and December 31, 2005. As a result, we classified the $265.0 million of debentures as short-term debt on our June 30, September 30 and December 31, 2005 balance sheets.

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We believe the likelihood of a significant number of debentures being tendered for conversion prior to the date that we are able to call the debentures is remote; however, should all or some of the holders elect to convert, we would be required to repay the applicable principal in cash up to $265.0 million, which we would likely fund with existing cash and cash equivalents and short-term investments. The ability for the holders to convert will expire on March 31, 2006 unless the conversion condition is met again in the last 30 trading days ending on that date. If the condition is not met during that period, we will reclassify the debt back to long-term. The closing price of our common stock on January 31, 2006 was $81.65.

The conversion contingencies relating to the credit rating assigned to, and the trading price of the debentures compared to the product of the closing price of our common stock and the conversion rate in effect at such time, as well as the contingent interest feature, represent embedded derivatives. A valuation of the fair value of these derivatives is performed each quarter. The fair value of these derivatives was insignificant in all periods presented.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Commitments

We have entered into agreements that represent significant, enforceable and legally binding contractual obligations that are non-cancelable without significant penalty. If a contract is cancelable with a penalty, the amount shown in the table below is the full contractual obligation, not the penalty, as we currently intend to fulfill each of these obligations.

YEARS ENDING DECEMBER 31,	2006		2007		2008		2009		2010		THEREAFTER		TOTAL
(In thousands)
Convertible subordinated debentures:
Principal payments 1	$	—	$	—	$	—	$	—	$	—	$	265,000	$	265,000
Interest payments 1		1,343		1,343		1,343		1,343		1,343		16,793		23,508
Operating lease payments on facilities and equipment leases 2		22,773		21,456		20,742		20,189		19,761		67,764		172,685
Minimum royalty guarantee payments to contributors of imagery 3		5,359		2,177		1,453		103		18		—		9,110
Other purchase commitments		2,936		1,503		360		—		—		—		4,799
Total contractual obligations	$	32,411	$	26,479	$	23,898	$	21,635	$	21,122	$	349,557	$	475,102

  ¹ Figures assume that the convertible subordinated debentures are repaid upon maturity in 2023, which may or may not reflect future events. The debentures are currently convertible by the holders of the debentures and therefore, the applicable principal would be required to be paid in cash if some or all of the debentures were converted by the holders. In addition, the holders may require us to redeem the debentures in 2008, 2013 and 2018. See discussion of these circumstances in Note 5.

  ² Offsetting these operating lease payments will be receipts for subleased facilities in the amounts of (in thousands) $6,443, $2,056, $1,238, $1,258, $1,258 and $150 for the years ending December 31, 2006, 2007, 2008, 2009, 2010 and thereafter, respectively.

  ³ Offsetting these minimum royalty guarantee payments to contributors of imagery will be minimum guaranteed receipts from contributors in the amount of (in thousands) $1,125 for the year ending December 31, 2006.

Payments under purchase orders, certain sponsorships, donations and other commitments that are not enforceable and legally binding contractual obligations are excluded from this table. Payments under employment contracts are also excluded from this table because they do not represent purchase commitments.

Contingencies

Included within operating lease payments in the table under “Commitments” above are payments for facilities in New York, which we are leasing through an agreement that expires in March of 2015 and subleasing to another party through an agreement that expires in February of 2007. We are currently evaluating our options with respect to use of the space after the current sublease expires. If we decide to permanently exit some or all of the space, we would recognize a non-cash loss of up to approximately $15 million to $25 million (based on the present value of our lease costs, net of sublease income, for the remaining eight years of our lease at a range of market rates currently anticipated). We would record this loss as a charge within operating expenses in our consolidated statement of income at the time we make such a decision.

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We indemnify certain customers from claims related to alleged infringements of the intellectual property rights of third parties, such as claims arising from failure to secure model and property releases for images we license. The standard terms of these indemnifications require us to defend those claims and pay related damages, if any. We typically mitigate this risk by securing all necessary model and property releases for imagery for which we hold the copyright, and by contractually requiring our contributing photographers and other imagery partners to do the same prior to submitting any imagery to us. We also require contributing photographers, other imagery partners and sellers of businesses or image collections that we have purchased to indemnify us in certain circumstances in the event a claim arises in relation to an image they have provided or sold to us. Our imagery partners are also typically required to carry insurance policies for losses related to such claims. We do not record any liabilities for these indemnifications until claims are made and we are able to assess the range of possible payments and available recourse from our imagery partners, as applicable. Historically, our exposure to such claims has been immaterial, as were our recorded liabilities for intellectual property infringement at December 31, 2005 and 2004. As such, we believe the estimated fair value of these liabilities is minimal.

In the ordinary course of business, we also enter into certain types of agreements that contingently require us to indemnify counterparties against third-party claims. These may include:

• agreements with vendors and suppliers, under which we may indemnify them against claims arising from our use of their products or services;

• agreements with customers other than those licensing images, under which we may indemnify them against claims arising from their use of our products or services;

• agreements with delegates, under which we may indemnify them against claims arising from their distribution of our products or services;

• real estate and equipment leases, under which we may indemnify lessors against third-party claims relating to use of their property;

• agreements with directors and officers, under which we indemnify them to the full extent allowed by Delaware law against claims relating to their service to us;

• agreements with purchasers of businesses we have sold, under which we may indemnify the purchasers against claims arising from our operation of the businesses prior to sale; and

• agreements with initial purchasers and underwriters of our securities, under which we indemnify them against claims relating to their participation in the transactions.

The nature and terms of these indemnifications vary from contract to contract, and generally a maximum obligation is not stated. Because we are unable to estimate our potential obligation, and because we do not expect these indemnifications to have a material adverse effect on our consolidated financial position, results of operations or cash flows, no related liabilities were recorded at December 31, 2005 or 2004. We hold insurance policies that mitigate potential losses arising from certain indemnifications, and historically, we have not incurred significant costs related to performance under these obligations.

NOTE 7. STOCKHOLDERS’ EQUITY

No shares of preferred stock were issued at December 31, 2005 or 2004. However, our Board of Directors is authorized to issue up to 5 million shares of no par value preferred stock. Under the terms of our Articles of Incorporation, the Board of Directors may determine the rights, preferences, and terms of our authorized but unissued shares of preferred stock without further action by stockholders. This authority may have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of our company.

Our Board of Directors has authorized the repurchase of our common stock on the open market from time to time, up to $150 million. The number of shares purchased, if any, and the timing of the purchases will be based on the level of cash and cash equivalents and short-term investments, the market price of our common stock, general business conditions and alternative investment opportunities. We have not repurchased any shares pursuant to this authorization.

F-20 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Comprehensive Income

Comprehensive income consisted of the following during the periods presented:

YEARS ENDED DECEMBER 31,	2005			2004			2003
(In thousands)
Net income	$	149,703		$	106,650		$	64,017
Net unrealized (losses) gains on revaluation of long-term intercompany balances		(34,402	)		13,204			26,334
Net foreign currency translation adjustment losses		(1,487	)		(2,714	)		(14,248	)
Net unrealized (losses) gains on short-term investments		(1,827	)		(2,316	)		39
Deferred taxes on net unrealized gains on short-term investments		—			46			(15	)
Total comprehensive income	$	111,987		$	114,870		$	76,127

In connection with the acquisition of Digital Vision in the second quarter of 2005, a new $155.0 million long-term intercompany loan payable was established on the books of a subsidiary whose functional currency is the British pounds, effectively doubling our U.K. subsidiaries’ exposure to the U.S. dollar through long-term intercompany loans. The revaluation of these loans caused the significant unrealized loss shown in the table above.

Accumulated other comprehensive (loss) income consisted of the following at the reported balance sheet dates:

DECEMBER 31,	2005			2004
(In thousands)
Accumulated net unrealized gains on revaluation of long-term intercompany balances	$	1,068		$	35,470
Accumulated net foreign currency translation adjustment losses		(13,856	)		(12,369	)
Accumulated net unrealized losses on short-term investments		(4,023	)		(2,196	)
Total accumulated other comprehensive (loss) income	$	(16,811	)	$	20,905

Realized gains and losses (on investments sold) transferred out of net unrealized losses on short-term investments and into investment income were insignificant in all periods presented. Deferred taxes are not provided on unrealized foreign exchange gains and losses on foreign currency denominated long-term intercompany balances or on translation adjustments because we expect that these investments in our foreign subsidiaries will be permanent. It is not practicable to calculate the unrecognized deferred tax liability for temporary differences related to these investments.

NOTE 8. STOCK-BASED COMPENSATION

Our stock-based compensation program is a long-term retention program that is intended to attract, retain and motivate talented employees and directors of the company, and to align stockholder and employee interests. We consider this program critical to our operation and productivity. All employees are eligible to receive equity compensation through the program, though not all employees are issued stock-based compensation each year.

In connection with the adoption of SFAS No. 123(R) effective January 1, 2006, we have shifted from issuing stock options to issuing restricted stock units (RSUs).

F-21 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Stock Options

The following table presents stock option activity for the past three years:

	OUTSTANDING				EXERCISABLE
	Number of Shares		Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
	(In thousands)				(In thousands)
December 31, 2002	10,347		$	22.47	7,744	$	22.41
Granted	919			36.28
Exercised	(3,406	)		20.81
Lapsed	(407	)		25.69
December 31, 2003	7,453			24.75	5,734		23.12
Granted	504			55.22
Exercised	(3,404	)		21.72
Lapsed	(212	)		29.95
December 31, 2004	4,341			30.42	3,162		26.44
Granted	1,018			82.01
Exercised	(1,521	)		27.76
Lapsed	(118	)		42.31
December 31, 2005	3,720			45.26	2,914		42.96

The following table summarizes additional information relating to options outstanding and options exercisable at December 31, 2005:

	OPTIONS OUTSTANDING				OPTIONS EXERCISABLE
RANGE OF EXERCISE PRICES	Number of Shares	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
	(In thousands)	(In years)			(In thousands)
$  9.88 – $ 23.32	646	3.93	$	18.31	635	$	18.33
23.33 –    30.00	226	5.28		26.04	210		25.90
30.01 –    30.32	800	4.32		30.32	800		30.32
30.33 –    38.63	633	6.57		35.80	359		35.36
38.64 –    83.10	582	8.52		58.61	152		53.78
83.11 –    92.65	833	9.71		83.57	758		83.12
9.88 –    92.65	3,720	6.56		45.26	2,914		42.96

The weighted average estimated fair values of options granted during 2005, 2004 and 2003 were $20.82, $23.09 and $18.55, respectively. Weighted average estimated fair values were calculated using a Black-Scholes multiple option valuation model with forfeitures recognized as they occurred and the following assumptions:

YEARS ENDED DECEMBER 31,	2005	2004	2003
Expected share price volatility	37%	53%	63%
Risk free rate of return	3.67%	2.75%	3.10%
Expected life of stock options	2 years from vest	1 1/2 -  2 years from vest	1 1/2 years from vest
Expected rate of dividends	None	None	None

F-22 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Restricted Stock Units (RSUs)

The following table presents RSU activity for 2005. There were no RSUs outstanding at December 31, 2004.

	Number of Units		Weighted-Average Grant Date Fair Value
	(In thousands)
Granted	73		$	70.56
Vested	(11	)		68.63
Cancelled	(3	)		72.41
December 31, 2005	59		$	70.83

NOTE 9. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

We operate the company as one business segment. Our revenue is generated through a diverse customer base, and there is no reliance on a single customer or small group of customers; no customer represented 10% or more of our total revenue in the periods presented. Revenue is summarized below based on customers’ billing addresses, with countries experiencing 5% or more of total revenue in a reportable period shown separately. Due to the impact of foreign currency translation, these figures may not reflect the relative performance of the individual countries.

	2005			2004			2003
YEARS ENDED DECEMBER 31,	Revenue		% of Total Revenue	Revenue		% of Total Revenue	Revenue		% of Total Revenue
(In thousands)
United States	$	313,700	43%	$	276,396	44%	$	243,345	46%
United Kingdom		105,291	14%		90,893	15%		69,432	13%
Germany		60,116	8%		48,119	8%		40,483	8%
France		42,419	6%		36,405	6%		30,407	6%
Other		212,203	29%		170,614	27%		139,529	27%
Total revenue	$	733,729	100%	$	622,427	100%	$	523,196	100%

Tangible long-lived assets that may not be readily removed from the countries where they are located are computer hardware, leasehold improvements, furniture, fixtures, studio equipment and archival imagery (as archival imagery is often in analog format). These assets are shown below, net of accumulated depreciation, with countries containing 5% or more of the total of these assets shown separately:

DECEMBER 31,	2005		2004		2003
(In thousands)
United States	$	26,614	$	26,221	$	26,180
United Kingdom		18,714		21,221		20,100
Other		2,162		3,233		3,480
Total	$	47,490	$	50,675	$	49,760

These reported revenues and long-lived assets are subject to risks and uncertainties associated with doing business in foreign countries, including local, regional and global economic conditions, political instability, and changes in applicable tax laws.

F-23 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

NOTE 10. DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLANS

We contribute to defined contribution retirement plans in which the majority of our employees are able to participate.

We sponsor one defined contribution plan in the U.S., a 401(k) plan, in which all U.S. employees over 18 years of age may participate at any time. We match 100% of participant contributions, up to the first 4% of each participant’s eligible compensation (including salary, bonuses and commissions), not to exceed the Internal Revenue Service per person annual limitations. Employees vest immediately in our matching contributions.

With the exception of a limited number of legacy defined contribution plans provided to certain employees in accordance with employment contracts, we sponsor one defined contribution plan in the U.K. Employees may participate in this plan after three months of employment and must contribute a minimum of 2% of their salary to maintain eligibility. We generally contribute 5% of each participant’s salary to the plan.

Our contributions to these plans and other defined contribution plans worldwide totaled $4.8 million, $3.9 million and $3.4 million in 2005, 2004 and 2003, respectively, and were expensed to selling, general and administrative expenses as incurred.

NOTE 11. INCOME TAXES

Income before income taxes is attributable to the following tax jurisdictions:

YEARS ENDED DECEMBER 31,	2005		2004		2003
(In thousands)
United States	$	191,442	$	143,333	$	78,316
Foreign		39,212		30,706		9,400
Income before income taxes	$	230,654	$	174,039	$	87,716

The components of income tax expense were as follows:

YEARS ENDED DECEMBER 31,	2005			2004			2003
(In thousands)
Current tax
U.S. federal and state	$	(2,128	)	$	(3,439	)	$	(1,745	)
Foreign		(7,891	)		(12,753	)		(12,727	)
Total current tax		(10,019	)		(16,192	)		(14,472	)
Deferred tax
U.S. federal and state		(69,449	)		(52,880	)		(18,418	)
Foreign		(1,483	)		1,683			9,191
Total deferred tax		(70,932	)		(51,197	)		(9,227	)
Income tax expense	$	(80,951	)	$	(67,389	)	$	(23,699	)

F-24 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Our recognized income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes. A reconciliation of the difference follows:

YEARS ENDED DECEMBER 31,	2005			Rate		2004			Rate		2003			Rate
(In thousands)
Income tax expense based on the U.S. federal statutory rate	$	(80,729	)	(35.0	)	$	(60,914	)	(35.0	)	$	(30,700	)	(35.0	)
State income tax expense, net of U.S. federal income tax		(5,196	)	(2.1	)		(4,714	)	(2.7	)		(2,807	)	(3.2	)
Release of reserves		4,726		2.1			—		—			—		—
Change in valuation allowance		(525	)	(0.2	)		(838	)	(0.5	)		10,249		11.6
Other, net		773		0.2			(923	)	(0.5	)		(441	)	(0.4	)
Income tax expense	$	(80,951	)	(35.0	)	$	(67,389	)	(38.7	)	$	(23,699	)	(27.0	)

During 2005, we began transitioning a portion of our intellectual property offshore to better serve our non-U.S. customers. This transition enabled us to utilize some of our foreign tax credits. This combined with favorable developments in tax examinations resulted in the release of $4.7 million of tax reserves.

The components of our net deferred tax assets at the reported balance sheet dates are as follows:

YEARS ENDED DECEMBER 31,	2005			2004
(In thousands)
Deferred tax assets related to:
Net operating loss carryforwards	$	23,605		$	49,490
Accrued liabilities and allowances		23,200			17,897
Depreciation		5,790			7,846
Unrealized foreign exchange gains		735			18,102
Other		3,676			5,030
Total deferred tax assets		57,006			98,365
Deferred tax liabilities related to:
Long-term assets		(14,424	)		(15,277	)
Interest on convertible subordinated debentures		(22,860	)		(14,009	)
Total deferred tax liabilities		(37,284	)		(29,286	)
Total deferred taxes		19,722			69,079
Less: Deferred tax assets valuation allowance		(6,695	)		(6,092	)
Net deferred tax assets	$	13,027		$	62,987

Our deferred tax assets at December 31, 2005 with respect to net operating losses expire as follows:

	Deferred Tax Assets		Net Operating Loss Carryforwards
(In thousands)
United States, expiring between 2018 and 2021	$	138	$	360
Foreign, expiring between 2006 and 2010		2,450		5,778
Foreign, indefinite		21,017		69,622
Total	$	23,605	$	75,760

F-25 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

Net tax benefits of $24.6 million, $37.9 million and $20.4 million associated with the exercise of employee stock options were recorded in additional paid-in capital in 2005, 2004 and 2003, respectively.

We had not consistently generated taxable income from our primary U.S. operations prior to 2002, so we recorded a valuation allowance against the deferred tax assets recognized related to employee stock options exercised from the first quarter of 2002 through the third quarter of 2003. However, in the fourth quarter of 2003, we updated our estimates of future taxable income for our U.S. operations and determined that it was more likely than not that we would realize more of the deferred tax asset than the net balance at that date. Therefore, we reduced our valuation allowance by $25.3 million, with $10.2 million related to net operating losses in 2001 and prior, reversed through a credit to income tax expense and $15.1 million related to employee stock option exercises in 2002 and 2003, reversed through a credit to additional paid-in capital. We retained approximately $3.0 million of the valuation allowance relating to deferred tax assets generated from capital loss carryforwards and foreign net operating losses that we will likely not recover. During 2004, we increased the valuation allowance to $6.1 million, mainly due to the acquisition of a foreign company with net operating losses, as well as additional 2004 foreign losses from certain operations and capital losses. During 2005, we increased the valuation allowance to $6.7 million to reflect additional 2005 foreign losses from certain operations.

Deferred U.S. federal income taxes are not provided for unremitted foreign earnings of our foreign subsidiaries because we expect those earnings will be permanently reinvested. It is not practicable to calculate the unrecognized deferred tax liability for temporary differences related to these investments.

NOTE 12. DEBT EXTINGUISHMENT COSTS

On July 10, 2003, the net proceeds from the issuance of our 0.5% convertible subordinated debentures and other funds were used to redeem our 5.0% convertible subordinated notes, for $261.1 million in cash, including $250.0 million of principal, $7.1 million of call premium and $4.0 million of accrued interest. In addition, we wrote off $4.6 million of unamortized debt issuance costs associated with these notes. The call premium and unamortized debt issuance costs comprise the debt extinguishment costs in our consolidated statements of income and cash flows.

NOTE 13. ACQUISITIONS OF BUSINESSES

On April 20, 2005, we acquired London-based Digital Vision Limited (Digital Vision), one of the world’s leading royalty-free photography businesses, for a purchase price of $179.6 million ($167.0 million of cash and $12.6 million of direct acquisition costs and liabilities assumed). The majority of the purchase price was allocated to goodwill ($135.3 million) and identifiable intangible assets ($33.2 million). Prior to the acquisition, we had a significant number of Digital Vision’s images available for license through our Image Partner program. We acquired this company in order to obtain more wholly-owned imagery, which provides flexible licensing opportunities at a lower cost, as there are no associated royalties.

On June 8, 2005, we acquired Amana America, Inc., Amana Europe Limited and Iconica Limited (collectively Photonica) for a purchase price of $58.3 million ($48.1 million of cash and $10.2 million of direct acquisition costs and liabilities assumed). Photonica is a rights-managed stock photography agency with its principal offices in New York and London. The majority of the purchase price was allocated to goodwill ($41.4 million) and identifiable intangible assets ($11.6 million). We acquired this company to obtain access to some of the world’s leading collections of cutting edge, high-end rights-managed imagery and some of the most talented and creative photographers in Europe, the United States and Japan.

On July 30, 2004, we acquired Imagenet Limited, a London-based distributor of digital publicity and marketing materials to media companies, for a purchase price (including liabilities assumed) of £13.9 million (approximately $25.2 million). The portion of the purchase price allocated to goodwill was £10.6 million (approximately $19.2 million).

During 2005, 2004 and 2003, we also completed several other small acquisitions. All acquisitions were accounted for using the purchase method of accounting and, accordingly, the results of operations of the acquired businesses since the respective dates of acquisition are included in our consolidated financial statements. None of the acquisitions were material, individually or in the aggregate, to the company as a whole and, therefore, pro forma financial information is not presented.

F-26 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

NOTE 14. SUBSEQUENT EVENTS

On February 9, 2006, we purchased all of the shares of iStockphoto, Inc. for $50.0 million in cash. iStockphoto, Inc. was a privately held stock photography company located in Calgary, Alberta, Canada that licenses royalty-free imagery exclusively through its websites, www.istockphoto.com and www.istockpro.com. The $50.0 million purchase price was funded from existing cash and cash equivalents and consisted of $45.7 million paid to the sellers upon closing and $4.3 million held in escrow. The amounts held in escrow are to be paid to certain key employees (former shareholders of iStockphoto, Inc.) after they complete one to three years of continued service with the company. A purchase price allocation is in process and is expected to be completed during the first quarter of 2006.

NOTE 15. SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
(In thousands, except per share amounts)
Year ended December 31, 2005
Revenue	$	178,094	$	185,305	$	184,516	$	185,813
Cost of revenue 1		51,254		49,495		47,510		48,627
Income from operations		53,545		55,508		58,717		58,160
Income before income taxes		54,982		52,836		61,535		61,300
Net income		34,108		33,990		39,060		42,545
Basic earnings per share		0.56		0.55		0.63		0.68
Diluted earnings per share		0.54		0.53		0.60		0.64
Year ended December 31, 2004
Revenue	$	156,512	$	150,327	$	153,488	$	162,100
Cost of revenue 1		43,806		41,789		42,344		44,745
Income from operations		42,942		39,843		41,713		43,770
Income before income taxes		42,910		40,927		43,624		46,579
Net income		26,086		25,152		26,732		28,681
Basic earnings per share		0.45		0.43		0.45		0.48
Diluted earnings per share		0.43		0.41		0.44		0.46

  ¹ See discussion of our accounting policy for cost of revenue in Note 2.

S-1 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders of Getty Images, Inc.

Our audits of the consolidated financial statements, of management’s assessment of the effectiveness of internal control over financial reporting and of the effectiveness of internal control over financial reporting referred to in our report dated March 9, 2006 appearing on page F-3 of this Form 10-K also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

Seattle, Washington

March 9, 2006

S-2 GETTY IMAGES, INC. 2005 FORM 10-K PART IV ITEM 15(A)

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

	December 31, 2002		Additions Expensed	Other Additions	Deductions		December 31, 2003		Additions Expensed	Other Additions	Deductions		December 31, 2004		Additions Expensed	Other Additions	Deductions		December 31, 2005
(In thousands)
Allowance for doubtful accounts and sales returns	$	12,603	4,651	—	(5,122	) 1	$	12,132	3,682	688 2	(3,257	) 1	$	13,245	3,788	2,512 2	(5,828	) 1	$	13,717
Deferred tax asset valuation allowance	$	17,474	—	10,818 3	(25,319	) 4	$	2,973	838	2,281 5	—		$	6,092	525	486 6	(408	) 7	$	6,695

  ¹ Amounts represent balances written off, net of amounts recovered that had previously been written off, and foreign currency translation losses.

  ² Amounts represent allowances for doubtful accounts and sales returns of businesses acquired and foreign currency translation gains.

  ³ This amount relates to employee stock option exercises in the U.S. and U.K.

  ⁴ This amount represents a decrease in the valuation allowance relating to employee stock option exercises ($15,070) and net operating losses ($10,249). See Note 11 to our Consolidated Financial Statements, “Income Taxes,” for further information.

  ⁵ This amount relates to net operating loss carryforwards of a company we acquired in 2004 that had not generated profits in years prior to acquisition.

  ⁶ This amount relates to net operating loss carryforwards of a company we acquired in 2005.

  ⁷ This amount relates to foreign tax credits and foreign currency translation losses.

EX-4.4

Exhibit 4.4

INDENTURE

Dated as of December 16, 2004

between

GETTY IMAGES, INC., as Issuer

and

THE BANK OF NEW YORK, as Trustee

0.5% Convertible

Subordinated Debentures, Series B due 2023

GETTY IMAGES, INC.

CROSS REFERENCE SHEET

THIS CROSS REFERENCE SHEET SHOWS THE LOCATION IN THE INDENTURE OF THE PROVISIONS INSERTED PURSUANT TO SECTION 310-318(a), INCLUSIVE, OF THE TIA.

Trust Indenture Act Section		Indenture   Section
§ 310	(a)(1)	6.09
	(a)(2)	6.09
	(a)(3)	N.A.
	(a)(4)	N.A.
	(a)(5)	6.07, 6.09
	(b)	6.07; 6.09; 18.02
	(c)	N.A.
§ 311	(a)	6.10
	(b)	6.10
	(c)	N.A.
§ 312	(a)	2.05
	(b)	18.03
	(c)	18.03
§ 313	(a)	7.03
	(b)(1)	N.A.
	(b)(2)	7.03
	(c)	7.03; 18.02
	(d)	7.03
§ 314	(a)	10.04, 18.01, 18.02
	(b)	N.A.
	(c)(1)	18.04
	(c)(2)	18.04
	(c)(3)	N.A.
	(d)	N.A.
	(e)	18.05
	(f)	N.A.
§ 315	(a)	6.01(b)
	(b)	6.05; 18.02
	(c)	6.01(a)
	(d)	6.01(c)
	(e)	4.11
§ 316	(a)(last sentence)	2.08
	(a)(1)(A)	4.05
	(a)(1)(B)	4.04
	(a)(2)	N.A.
	(b)	4.07
	(c)	9.04
§ 317	(a)(1)	4.08
	(a)(2)	4.09
	(b)	2.04
§ 318	(a)	18.01

N.A. means Not Applicable.

NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.

TABLE OF CONTENTS

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01.	Certain Terms Defined.	1
Section 1.02.	Forms of Documents Delivered to Trustee	14
Section 1.03.	Acts of Holders	14
Section 1.04.	Effect of Headings and Table of Contents	15
Section 1.05.	Benefits of Indenture	15

ARTICLE 2

THE SECURITIES

Section 2.01.	Form and Dating	15
Section 2.02.	Execution and Authentication	16
Section 2.03.	Registrar, Paying Agent, Conversion Agent	17
Section 2.04.	Paying Agent to Hold Assets in Trust	17
Section 2.05.	Holder Lists	18
Section 2.06.	Transfer and Exchange	18
Section 2.07.	Replacement Securities	19
Section 2.08.	Outstanding Securities; Determinations of Holders’ Actions	20
Section 2.09.	Temporary Securities	21
Section 2.10.	Cancellation	21
Section 2.11.	Persons Deemed Owners	21
Section 2.12.	Global Securities.	22
Section 2.13.	Payment of Interest; Interest Rights Preserved	23
Section 2.14.	CUSIP Numbers	25
Section 2.15.	Calculation of Tax Original Issue Discount	25

ARTICLE 3

SATISFACTION AND DISCHARGE

Section 3.01.	Discharge of Liability on Securities	26
Section 3.02.	Repayment of Moneys Held by Trustee	27

ARTICLE 4

DEFAULT AND REMEDIES

Section 4.01.	Events of Default.	27
Section 4.02.	Acceleration.	29
Section 4.03.	Other Remedies	30
Section 4.04.	Waiver of Past Default	30
Section 4.05.	Control by Majority	30
Section 4.06.	Limitation on Suits	31
Section 4.07.	Rights of Holders to Receive Payment	31

Section 4.08.	Collection Suit by Trustee.	31
Section 4.09.	Trustee May File Proofs of Claim	32
Section 4.10.	Priorities	32
Section 4.11.	Undertaking for Costs	33

ARTICLE 5

SUBORDINATION

Section 5.01.	Agreement to Subordinate	33
Section 5.02.	Liquidation, Dissolution, Bankruptcy	33
Section 5.03.	Default on Senior Indebtedness	34
Section 5.04.	Acceleration of Payment of Securities	35
Section 5.05.	When Distribution Must be Paid Over	35
Section 5.06.	Subrogation	36
Section 5.07.	Relative Rights	36
Section 5.08.	Subordination May Not be Impaired by Issuer	36
Section 5.09.	Rights of Trustee and Paying Agent	36
Section 5.10.	Distribution or Notice to Representative	37
Section 5.11.	Article Five Not to Prevent Events of Default or Limit Right to Accelerate	37
Section 5.12.	Trustee Entitled to Rely	37
Section 5.13.	Trustee to Effectuate Subordination	37
Section 5.14.	Trustee Not Fiduciary for Holders of Senior Indebtedness	37
Section 5.15.	Reliance by Holders of Senior Indebtedness on Subordination Provisions	38

ARTICLE 6

THE TRUSTEE

Section 6.01.	Duties of Trustee.	38
Section 6.02.	Rights of Trustee.	39
Section 6.03.	Individual Rights of Trustee	41
Section 6.04.	Trustee’s Disclaimer	41
Section 6.05.	Notice of Defaults	41
Section 6.06.	Compensation and Indemnity	41
Section 6.07.	Replacement of Trustee	42
Section 6.08.	Successor Trustee by Merger, Etc	43
Section 6.09.	Eligibility; Disqualification	44
Section 6.10.	Preferential Collection of Claims Against the Issuer	44

ARTICLE 7

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND ISSUER

Section 7.01.	Issuer to Furnish Trustee Information as to Names and Addresses of Holders	44
Section 7.02.	Preservation of Information; Communications to Holders	44
Section 7.03.	Reports by Trustee	45

ARTICLE 8

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 8.01.	Consolidations and Mergers of Issuer Permitted Subject to Certain Conditions	45
Section 8.02.	Rights and Duties of Successor Entity	46

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01.	Without Consent of Holders	46
Section 9.02.	With Consent of Holders	47
Section 9.03.	Compliance with Trust Indenture Act	48
Section 9.04.	Record Date for Consents and Effect of Consents	48
Section 9.05.	Notation on or Exchange of Securities	48
Section 9.06.	Trustee to Sign Amendments, Etc	48

ARTICLE 10

COVENANTS OF THE ISSUER

Section 10.01.	Payment of Principal, Premium and Interest	49
Section 10.02.	Maintenance of Office or Agency	49
Section 10.03.	Money for Securities Payments to be Held in Trust	50
Section 10.04.	Compliance Certificate	51
Section 10.05.	Calculation of Original Issue Discount	51
Section 10.06.	Further Instruments and Acts.	51
Section 10.07.	Statement by Officers as to Default	51

ARTICLE 11

REDEMPTION OF SECURITIES

Section 11.01.	Right to Redeem; Notices to Trustee	52
Section 11.02.	Selection of Securities to Be Redeemed	52
Section 11.03.	Notice of Redemption	52
Section 11.04.	Effect of Notice of Redemption	53
Section 11.05.	Deposit of Redemption Price	54
Section 11.06.	Securities Redeemed in Part	54
Section 11.07.	Conversion Arrangement on Call for Redemption	54

ARTICLE 12

CONVERSION

Section 12.01.	Conversion Rights	55
Section 12.02.	Conversion Rights Based on Common Stock Price.	55
Section 12.03.	Conversion Rights Upon Credit Rating Events	56
Section 12.04.	Conversion Rights Upon Notice of Redemption	56
Section 12.05.	Conversion Rights Upon Occurrence of Certain Corporate Transactions.	56

Section 12.06.	Conversion Upon Satisfaction of Trading Price Condition.	57
Section 12.07.	Conversion Procedures; Conversion Settlement	58
Section 12.08.	Fractional Shares	60
Section 12.09.	Taxes on Conversion	60
Section 12.10.	Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements; Listing of Common Stock.	60
Section 12.11.	Adjustment of Conversion Rate	61
Section 12.12.	Other Adjustments.	71
Section 12.13.	Notice of Certain Transactions	72
Section 12.14.	Effect of Reclassification, Consolidation, Merger or Sale on Conversion Privilege	72
Section 12.15.	Trustee’s Disclaimer	75
Section 12.16.	Rights Issued in Respect of Common Stock Issued Upon Conversion	75
Section 12.17.	Issuer Determination Final	76

ARTICLE 13

PURCHASE AT OPTION OF HOLDERS

Section 13.01.	Right to Require Purchase.	76
Section 13.02.	Purchase Procedures	76
Section 13.03.	Effect of Purchase Notice	78
Section 13.04.	Deposit of Purchase Price	79
Section 13.05.	Securities Purchased in Part	79
Section 13.06.	Repayment to the Issuer	79

ARTICLE 14

PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

Section 14.01.	Right to Require Purchase.	80
Section 14.02.	Effect of Fundamental Change Purchase Notice.	82
Section 14.03.	Deposit of Fundamental Change Purchase Price	83
Section 14.04.	Securities Purchased in Part	84
Section 14.05.	Repayment to the Issuer	84

ARTICLE 15

CONTINGENT INTEREST

Section 15.01.	Contingent Interest	84
Section 15.02.	Payment of Contingent Interest	85
Section 15.03.	Notice of Contingent Interest.	85

ARTICLE 16

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES

SECTION 16.01 Exemption From Individual Liability 85

ARTICLE 17

MISCELLANEOUS PROVISIONS

Section 17.01.	Trust Indenture Act Controls	86
Section 17.02.	Notices	86
Section 17.03.	Communications by Holders with Other Holders	87
Section 17.04.	Certificate and Opinion as to Conditions Precedent	87
Section 17.05.	Statements Required in Certificate	88
Section 17.06.	Rules by Trustee, Paying Agent, Conversion Agent Registrar	88
Section 17.07.	GOVERNING LAW.	88
Section 17.08.	No Recourse Against Others	88
Section 17.09.	Successors	88
Section 17.10.	Counterpart Originals	88
Section 17.11.	Severability	89
Section 17.12.	No Adverse Interpretation of Other Agreements	89
Section 17.13.	Legal Holidays.	89

EXHIBIT A — Form of Global Security

INDENTURE, dated as of the 16^th day of December, 2004, between GETTY IMAGES, INC., a Delaware corporation (the “Issuer”), and THE BANK OF NEW YORK, a New York banking corporation (the “Trustee”).

WHEREAS, for its lawful corporate purposes, the Issuer deems it necessary to issue its securities and has duly authorized the execution and delivery of this Indenture to provide for the issuance of its 0.5% Convertible Subordinated Debentures, Series B due 2023 (the “Securities”).

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01. Certain Terms Defined.

(a) Definitions.

“Affiliate” of any specified Person means any other Person which, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. For the purposes of this definition, “control” when used with respect to any specified Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agent” means any Registrar, Paying Agent or co-Registrar.

“Applicable Conversion Reference Period” means (i) in respect of a Conversion Date occurring after the date the Securities are called for redemption until (and including) the Redemption Date, the five consecutive Trading Day period beginning on the third Trading Day following the Redemption Date; or (ii) in all other cases, the five consecutive Trading Day period beginning on the third Trading Day following the Conversion Date.

“Applicable Stock Price” means, in respect of a Conversion Date, the average of the Closing Sale Prices per share of Common Stock during the Applicable Conversion Reference Period.

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

“Base Conversion Price” means the dollar amount derived by dividing the Principal Amount by the Base Conversion Rate.

“Base Conversion Rate” means 16.3720 shares of Common Stock, subject to adjustment as set forth in Section 12.11 per $1,000 Principal Amount of Securities.

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

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

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

“Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated) of capital stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person.

“Capitalized Lease Obligation” means, as to any Person, the obligation of such Person to pay rent or other amounts under a lease to which such Person is a party that is required to be classified and accounted for as a capital lease obligation under GAAP, and for purposes of this definition, the amount of such obligation at any date shall be the capitalized amount of such obligation at such date, determined in accordance with GAAP.

“Cash Equivalents” means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year from the date of acquisition

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thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $200,000,000; (v) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above; and (vi) investments in money market funds that invest substantially all their assets in securities of the types described in clauses (i) through (v) above.

“Change of Control” means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Issuer to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”) (whether or not otherwise in compliance with the provisions of this Indenture); or (ii) a majority of the board of directors of the Issuer shall consist of Persons who are not Continuing Directors; or (iii) the acquisition by any Person or Group of the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of the Issuer.

“Closing Sale Price” of the shares of Common Stock on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal United States securities exchange on which shares of Common Stock are traded or, if the shares of Common Stock are not listed on a United States national or regional securities exchange, as reported by NASDAQ or by the National Quotation Bureau Incorporated. In the absence of such quotations, the Issuer shall be entitled to determine the Closing Sale Price on the basis it considers appropriate. The Closing Sale Price shall be determined without reference to extended or after hours trading.

“Commission” means the Securities and Exchange Commission.

“Commodity Agreement” means any commodity futures contract, commodity option or other similar agreement or arrangement.

“Common Stock” shall mean the Getty Common Stock, $0.01 par value, as it exists on the date of this Indenture or any other capital stock of the Issuer into which such Getty Common Stock shall be reclassified or changed.

“Contingent Interest” means such cash interest payable as described in Article 15.

“Continuing Director” means, as of the date of determination, any Person who (i) was a member of the Board of Directors of the Issuer as of the

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date of this Indenture or, (ii) was nominated for election or elected to the Board of Directors of the Issuer with the affirmative vote of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

“Conversion Rate” with respect to any Conversion Date prior to June 9, 2008 means:

(i) if the Applicable Stock Price (including any Applicable Stock Price determined after June 9, 2008 for new debentures tendered for conversion prior to June 9, 2008) is less than or equal to the Base Conversion Price, the Base Conversion Rate; or

(ii) if the Applicable Stock Price (including any Applicable Stock Price determined after June 9, 2008 for new debentures tendered for conversion prior to June 9, 2008) is greater than the Base Conversion Price, the number of shares of Common Stock determined in accordance with the following formula:

Base Conversion Rate +	[	(Applicable Stock Price – Base Conversion Price)	X Incremental Share Factor	]
		Applicable Stock Price

Notwithstanding the foregoing, in no event will the Conversion Rate exceed the Maximum Conversion Rate. From and after June 9, 2008, the Conversion Rate shall be fixed at the Conversion Rate determined as set forth above assuming a Conversion Date that is eight Trading Days prior to June 9, 2008 (the “Fixed Conversion Rate”), subject to adjustment as set forth in Article 12.

“Conversion Value” means, with respect to each $1,000 Principal Amount of Securities tendered for conversion, (a) the Conversion Rate, multiplied by (b) the Applicable Stock Price.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 101 Barclay Street, 8W, New York, NY 10286, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Issuer).

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.

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

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“Daily Share Amount” means, for each $1,000 Principal Amount of Securities on each Trading Day in the Applicable Conversion Reference Period, the greater of (i) zero and (ii) a number of shares of Common Stock determined in accordance with the following formula:

[	(Closing Sale Price on such Trading Day x Conversion Rate) – $1,000	]
	5 x Closing Sale Price on such Trading Day

“Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

“Depositary” means, with respect to the Securities issued in the form of one or more Global Securities, The Depository Trust Company or another Person designated as Depositary by the Issuer, which must be a clearing agency registered under the Exchange Act.

“Depositary Custodian” means any Person appointed by the Trustee to act as custodian of Global Securities for the Depositary.

“Designated Senior Indebtedness” means (i) any Senior Indebtedness under the Senior Credit Facilities and (ii) any other Senior Indebtedness of the Issuer which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $20,000,000 and is specifically designated by the Issuer in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

“Disqualified Capital Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of a Change of Control), in whole or in part, on or prior to the Stated Maturity Date of the Securities; provided that only the portion of Capital Stock which so matures or is mandatorily redeemable or is so redeemable at the sole option of the holder thereof prior to June 9, 2023 shall be deemed Disqualified Capital Stock.

“Effective Conversion Price” means, as of any date of determination, a dollar amount derived by dividing the Principal Amount by the Conversion Rate then in effect (assuming a Conversion Date eight Trading Days prior to the date of determination); provided that from and after June 9, 2008 (or if such day is not a Business Day, the immediately succeeding Business Day), the Effective Conversion Price shall be the Principal Amount as of such date of determination divided by the Fixed Conversion Rate.

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

“Fixed Conversion Rate” has the meaning set forth in the definition of Conversion Rate.

“Fundamental Change” means any transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which all or substantially all of the Common Stock is exchanged for, converted into, acquired for or constitutes solely the right to receive consideration which is not all or substantially all Common Stock that:

(i) is listed on, or immediately after the transaction or event will be listed on, a United States national securities exchange, or

(ii) is approved, or immediately after the transaction or event will be approved, for quotation on NASDAQ or any similar United States system of automated dissemination of quotations of securities prices.

“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 the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or the Commission or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP.

“Global Security” or “Global Securities” means Securities that are in the form of the Securities attached hereto as Exhibit A.

“Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof), of all or any part of any Indebtedness, and when used as a verb has a correlative meaning.

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

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“Holding Company” means a company as to which the Issuer is, directly or indirectly, a Subsidiary.

“Incremental Share Factor” means 16.3720 shares of Common Stock, subject to adjustment as set forth in Article 12.

“Indebtedness” means with respect to any Person, without duplication, any liability of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) constituting Capitalized Lease Obligations, (iv) incurred or assumed as the deferred purchase price of property, or pursuant to conditional sale obligations and title retention agreements (but excluding trade accounts payable arising in the ordinary course of business), (v) for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction, (vi) for Indebtedness of others Guaranteed by such Person, (vii) for Interest Swap Agreements, Commodity Agreements and Currency Agreements and (viii) for Indebtedness of any other Person of the type referred to in clauses (i) through (vii) which is secured by any Lien on any property or asset of such first referred to Person, the amount of such Indebtedness being deemed to be the lesser of the value of such property or asset or the amount of the Indebtedness so secured. The amount of Indebtedness of any Person at any date shall be (i) the outstanding principal amount of all unconditional obligations described above, as such amount would be reflected on a balance sheet prepared in accordance with GAAP, and the maximum liability at such date of such Person for any contingent obligations described above, (ii) the accreted value thereof, in the case of any Indebtedness issued with original issue discount, and (iii) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

“Indenture” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof, including the provisions of the TIA that are deemed to be a part hereof.

“Interest Payment Date” means June 9, and December 9 of each year, subject to Section 17.13, commencing June 9, 2005.

“Interest Period” means the period from and including the most recent Interest Payment Date to which interest has been paid or duly made available for payment (or December 16, 2004 if no interest has been paid or been duly made available for payment) to, but excluding, the next succeeding Interest Payment Date, or any earlier Fundamental Change Purchase Date, Redemption Date or Purchase Date.

“Interest Swap Agreements” means any interest rate protection agreement, interest rate future, interest rate option, interest rate swap, interest rate cap or other interest rate hedge or arrangement.

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

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

“Issuer Request” or “Issuer Order” means a written request or order signed in the name of the Issuer by any Officer and delivered to the Trustee.

“Lien” means, with respect to any asset, any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).

“Maximum Conversion Rate” means 26.2054 shares of Common Stock, subject to adjustment as set forth in Article 12.

“Moody’s” means Moody’s Investors Services and its successors.

“NASDAQ” means the NASDAQ National Market, Inc.

“Obligations” means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing, or otherwise relating to, any Indebtedness.

“Officer” means the Chairman of the Board, a Vice Chairman of the Board, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, any Assistant Controller, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Issuer.

“Officers’ Certificate” means a written certificate containing the information specified in Section 17.04, signed in the name of the Issuer by any two Officers and delivered to the Trustee.

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee and that contains the information specified in Section 17.04. The counsel may be an employee of, or counsel to, the Issuer.

“person” or “Person” means any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such

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particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

“Principal Amount” of a Security means the stated Principal Amount as set forth on the face of such Security.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

“Redemption Date” means the date specified for redemption of the Securities in accordance with the terms of the Securities and this Indenture, unless such day is not a Business Day, in which case the Redemption Date shall be the immediately following Business Day.

“Redemption Price” means, when used with respect to any Security to be redeemed, 100% of the Principal Amount of such Security as of the Redemption Date, plus accrued and unpaid interest, including Contingent Interest, if any, to, but excluding, the Redemption Date.

“Regular Record Date” for the interest payable on any Interest Payment Date means the June 1 or December 1, as the case may be, immediately preceding such Interest Payment Date.

“Representative” means the indenture trustee or other trustee, agent or representative in respect of any Senior Indebtedness; provided, however, that if, and for so long as, any issue of Senior Indebtedness lacks such a representative, then the Representative for such issue of Senior Indebtedness shall at all times constitute the holders of a majority in outstanding principal amount of such issue of Senior Indebtedness.

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

“Restricted Subsidiary” means a Subsidiary of the Issuer other than an Unrestricted Subsidiary and includes all of the Subsidiaries of the Issuer existing as of the date of this Indenture.

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“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies Inc., and its successors.

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

“Security Register” means the register maintained by the Registrar that evidences ownership of the Securities.

“Senior Credit Facilities” means the senior credit facilities evidenced by that certain Credit Agreement dated as of July 19, 2002, among the Issuer, Bank of America, N.A., as Administrative Agent, and the lenders from time to time party to the Credit Agreement, together with all amendments, modifications, replacements and refinancings thereof.

“Senior Indebtedness” means, whether outstanding on the date of this Indenture or thereafter issued, all Indebtedness of the Issuer, including interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceeding) and premium, if any, thereon, and other monetary amounts (including fees, expenses, reimbursement obligations under letters of credit and indemnities) owing in respect thereof unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that the obligations in respect of such Indebtedness rank pari passu with the Securities; provided, however, that Senior Indebtedness will not include (1) any obligation of the Issuer to any majority owned Restricted Subsidiary, (2) any Indebtedness, Guarantee or obligation of the Issuer that is expressly subordinate or junior in right of payment to any other Indebtedness, Guarantee or obligation of the Issuer, including any Subordinated Indebtedness, or (3) obligations in respect of any Capital Stock.

“Significant Restricted Subsidiary” means, at any date of determination, any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article I, Rule 1-02 of Regulation S-X, promulgated under the Securities Act, as such rule is in effect on the date of this Indenture.

“Special Record Date” means, for the payment of any Defaulted Interest, the date fixed by the Trustee pursuant to Section 2.13.

“Stated Maturity Date” means June 9, 2023.

“Subordinated Indebtedness” means the Securities and any other Indebtedness of the Issuer that specifically provides that such Indebtedness is to rank pari passu with, or junior to, the Securities in right of payment and is subordinated by its terms in right of payment to any Indebtedness or other obligation of the Issuer that is Senior Indebtedness.

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“Subsidiary” with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly through one or more intermediaries, by such Person or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly through one or more intermediaries, owned by such Person. Notwithstanding anything in this Indenture to the contrary, all references to the Issuer and its consolidated Subsidiaries or to financial information prepared on a consolidated basis in accordance with GAAP shall be deemed to include the Issuer and its Subsidiaries as to which financial statements are prepared on a combined basis in accordance with GAAP and to financial information prepared on such a combined basis. Notwithstanding anything in this Indenture to the contrary, an Unrestricted Subsidiary shall not be deemed to be a Restricted Subsidiary for purposes of this Indenture.

“Tax Original Issue Discount” means the amount of ordinary interest income on a Security that must be accrued as original issue discount for United States Federal income tax purposes pursuant to Treasury Regulation Section 1.1275-4 or any successor provision.

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

“Trading Day” means a day during which trading in securities generally occurs on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on the principal other national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a national or regional securities exchange, by NASDAQ or, if the Common Stock is not quoted by NASDAQ, on the principal other market on which the Common Stock is then traded.

“Trading Price” means, on any date, the average of the secondary market bid quotations per $1,000 Principal Amount of the Securities obtained by the Issuer or a quotation agent appointed by the Issuer for $5,000,000 Principal Amount of Securities at approximately 3:30 p.m., New York City time, on such date from three independent nationally recognized securities dealers selected by the Issuer; provided that if at least three such bids cannot reasonably be obtained by the Issuer or such agent, but two bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Issuer or such agent, one bid shall be used; and provided further that if the Issuer or such agent cannot reasonably obtain at least one bid for $5,000,000

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Principal Amount of Securities from a nationally recognized securities dealer or in the Issuer’s reasonable judgment, the bid quotations are not indicative of the secondary market value of the Securities, then the Trading Price per $1,000 Principal Amount of Securities on such date shall be deemed to be less than 95% of the product of (a) the Conversion Rate on such date (determined using the Closing Sale Price on such date rather than the Applicable Stock Price) and (b) the Closing Sale Price on such date.

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

“Unrestricted Subsidiary” means a Subsidiary of the Issuer so designated by a resolution adopted by the Board of Directors of the Issuer; provided, however, that (a) neither the Issuer nor any of its other Restricted Subsidiaries (1) provides any credit support for any Indebtedness or other Obligations of such Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) or (2) is directly or indirectly liable for any Indebtedness or other Obligations of such Subsidiary and (b) at the time of designation of such Subsidiary, such Subsidiary has no property or assets (other than de minimis assets resulting from the initial capitalization of such Subsidiary). The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation no Default or Event of Default shall have occurred or be continuing. Any designation pursuant to this definition by the Board of Directors of the Issuer shall be evidenced to the Trustee by the filing with the Trustee of a certified copy of the resolution of the Issuer’s Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

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(b) Other Definitions.

Term	Defined in Section
“Acceleration Notice”	4.02
“Act”	1.03
“Adjustment Event”	12.11(n)
“Agent Members”	2.12(f)
“Blockage Notice”	5.03
“Conversion Agent”	2.03
“Conversion Date”	12.07
“Conversion Notice”	12.07
“Current Market Price”	12.11(j)(i)
“Defaulted Interest”	2.13
“Determination Date”	12.11(n)
“Distributed Property”	12.11(d)
“Ex-Dividend Date”	12.11(g)
“Ex-Dividend Time”	12.05
“Expiration Time”	12.11(f)
“Event of Default”	4.01
“Exchange Property”	12.14(b)
“Exchange Property Value”	12.14(c)
“Exchange Property Weighted Average Price”	12.14(c)
“Fair Market Value”	12.11(j)(ii)
“Fundamental Change Purchase Date”	14.01(a)
“Fundamental Change Purchase Notice”	14.01(c)
“Fundamental Change Purchase Price”	14.01(a)
“Net Exchange Property Amount”	12.14(d)(ii)
“Net Shares”	12.07
“non-electing share”	12.14(b)
“pay the Securities”	5.03
“Paying Agent”	2.03(a)
“Payment Blockage Period”	5.03
“Principal Return”	12.07
“Principal Value Conversion”	12.06(b)
“Purchase Date”	13.01(a)
“Purchased Shares”	12.11(f)(i)
“Purchase Notice”	13.02(a)
“Purchase Price”	13.02
“Record Date”	12.11(j)(iii)
“Registrar”	2.03(a)
‘Reference Market Price	12.11(j)(iv)
“Rights”	12.16
“Rights Agreement”	12.16
“Trigger Event”	12.11(d)

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Section 1.02. Forms of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer actually knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Issuer stating that the information with respect to such factual matters is in the possession of the Issuer, unless such counsel knows, or in the exercise of reasonable care (but without having made an investigation specifically for the purpose of rendering such opinion) should know, that the certificate or opinion or representations with respect to such matters are erroneous.

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

Section 1.03. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee deems sufficient.

(c) The ownership of Securities shall be proved by the Security Register.

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

(e) The Issuer may, but shall not be obligated to, 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. If a record date is fixed, those persons who were Holders of Securities at 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. No action approved by such vote or consent shall be taken more than six months after such record date.

Section 1.04. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.05. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

ARTICLE 2

THE SECURITIES

Section 2.01. Form and Dating. The Securities and the Trustee’s certificate of authentication thereof shall be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. The Issuer and the Trustee shall approve the form of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its issuance and shall show the date of its authentication.

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 Principal Amount of outstanding Securities from time to time endorsed thereon and that the aggregate Principal Amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, redemptions, purchases or conversions of such Securities. Any endorsement of a Global Security to reflect the amount of any

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increase or decrease in the Principal Amount of outstanding Securities represented thereby shall be made by the Trustee or Depositary Custodian in accordance with the standing instructions and procedures existing between the Depositary and the Trustee or Depositary Custodian.

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

Section 2.02. Execution and Authentication. (a) One or more Officers shall sign (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) the Securities for the Issuer by manual or facsimile signature.

(b) If an Officer whose signature is on a Security was an Officer at the time of such execution but no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

(c) 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.

(d) The Trustee shall authenticate Securities for original issue in an aggregate Principal Amount not to exceed such written order as shall specify the amount of Securities to be authenticated and the date on which the Securities are to be authenticated and specifying such other information as the Trustee may reasonably request. The aggregate Principal Amount of Securities outstanding at any time may not exceed $265,000,000; provided, however, that the $2,000,000 aggregate Principal Amount of Securities not outstanding as of the date hereof may only be issued in exchange, in reliance on Section 3(a)(9) of the Securities Act or any other provision under the Securities Act such that the Securities issued shall be fully fungible with the Securities previously issued and authenticated and without any restrictions upon transfer under the Securities Act, for the Issuer’s 0.5% Convertible Subordinated Debentures due 2023.

(e) Notwithstanding the foregoing, all Securities issued under this Indenture shall vote and consent together on all matters (as to which any of such Securities may vote or consent) as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.

(f) The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate Securities. Unless otherwise provided in the appointment, 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 Issuer and Affiliates of the Issuer.

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

Section 2.03. Registrar, Paying Agent, Conversion Agent. (a) The Issuer shall maintain an office or agency, which may be in the Borough of Manhattan, The City of New York, where (i) Securities may be presented or surrendered for registration of transfer or for exchange (the “Registrar”), (ii) Securities may be presented or surrendered for payment (the “Paying Agent”), (iii) Securities may be presented for conversion (the “Conversion Agent”) and (iv) notices and demands in respect of the Securities and this Indenture may be served. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuer, upon notice to the Trustee, may appoint one or more co-Registrars and one or more additional Paying Agents. The term “Paying Agent” includes any additional Paying Agent. Except as provided herein, the Issuer may act as Paying Agent, Registrar or co-Registrar.

(b) The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the Trustee of the name and address of any such Agent. If the Issuer fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 6.06.

(c) The Issuer initially appoints the Trustee as Registrar, Conversion Agent and Paying Agent until such time as the Trustee has resigned or a successor has been appointed.

Section 2.04. Paying Agent to Hold Assets in Trust. (a) The Issuer shall require each Paying Agent other than the Trustee to agree in writing that each Paying Agent shall hold in trust for the benefit of Holders or the Trustee all assets held by the Paying Agent for the payment of principal (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on the Securities, and shall notify the Trustee of any Default by the Issuer in making any such payment. The Issuer at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon distribution to the Trustee of all assets that shall have been delivered by the Issuer to the Paying Agent (if other than the Issuer), the Paying Agent shall have no further liability for such assets. If the Issuer or any of its Affiliates acts as Paying Agent, it shall, on or before each due date of the principal (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to the principal (including

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the Principal Return, the Net Shares, if any, and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Section 2.05. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee before each Interest Record Date and at such other times as the Trustee may request in writing a list as of such date and in such form as the Trustee may reasonably require of the names and addresses of Holders, which list may be conclusively relied upon by the Trustee.

Section 2.06. Transfer and Exchange. (a) Subject to Section 2.12 hereof, upon surrender for registration of transfer of any Security, together with a written instrument of transfer satisfactory to the Registrar duly executed by the Holder or such Holder’s attorney duly authorized in writing, at the office or agency of the Issuer designated as Registrar or co-registrar pursuant to Section 2.03, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denomination or denominations, of a like aggregate Principal Amount. The Issuer shall not charge a service charge for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of the Securities from the Holder requesting such transfer or exchange.

The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities in respect of which a Purchase Notice or Fundamental Change Purchase Notice has been given and not withdrawn by the Holder thereof in accordance with the terms of this Indenture (except, in the case of Securities to be purchased in part, the portion thereof not to be purchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed.

(b) Notwithstanding any provision to the contrary herein, so long as a Global Security remains outstanding and is held by or on behalf of the Depositary, transfers of a Global Security, in whole or in part, shall be made only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a Global Security shall be limited to transfers of such Global Security in whole, or in part, to nominees of the Depositary or to a successor of the Depositary or such successor’s nominee.

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(c) Successive registrations and registrations of transfers and exchanges as aforesaid may be made from time to time as desired, and each such registration shall be noted on the register for the Securities.

(d) Any Registrar appointed pursuant to Section 2.03 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.

(e) No Registrar shall be required to make registrations of transfer or exchange of Securities during any periods designated in the text of the Securities or in this Indenture as periods during which such registration of transfers and exchanges need not be made.

(f) Nothing in this Indenture or in the Securities shall prohibit the sale or other transfer of any Securities (including beneficial interests in Global Securities) to the Issuer or any of its Subsidiaries, which Securities shall thereupon be canceled in accordance with Section 2.10 of this Indenture.

(g) 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 (as defined below) or 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 when expressly required by, the terms of this Indenture (including, without limitation, the obligations and duties of the Trustee set forth in Section 2.06 hereof), and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 2.07. Replacement Securities. If (a) any mutilated Security is surrendered to the Trustee, or (b) the Issuer and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Issuer and the Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Issuer or the Trustee that such Security has been acquired by a bona fide purchaser, the Issuer shall execute and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and Principal Amount, bearing a 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 purchased by the Issuer pursuant to Articles 13 or 14 hereof, the Issuer in its discretion may, instead of issuing a new Security, pay or purchase such Security, as the case may be.

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Upon the issuance of any new Securities under this Section, the Issuer 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 expenses (including the fees and expenses of the Trustee) connected therewith.

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

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

Section 2.08. Outstanding Securities; Determinations of Holders’ Actions. Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those delivered to it pursuant to Section 2.07 and those described in this Section 2.08 as not outstanding. A Security does not cease to be outstanding because the Issuer or an Affiliate thereof holds the Security; provided, however, that in determining whether the Holders of the requisite Principal Amount of Securities have given or concurred in any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Issuer or any other obligor upon the Securities or any Affiliate of the Issuer or such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time of such determination shall be considered in any such determination (including, without limitation, determinations pursuant to Articles 4 and 6).

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.

If the Paying Agent holds, in accordance with this Indenture, on a Redemption Date, or on the Business Day following a Purchase Date or a Fundamental Change Purchase Date, or on the Stated Maturity Date, money or securities, if permitted hereunder, sufficient to pay Securities payable on that date, then immediately after such Redemption Date, Purchase Date, Fundamental Change Purchase Date or Stated Maturity Date, as the case may be, such Securities shall cease to be outstanding and interest, including Contingent Interest, if any, on such Securities shall cease to accrue; provided, that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made.

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If a Security is converted in accordance with Article 12, then from and after the time of conversion on the Conversion Date, such Security shall cease to be outstanding (other than the right to receive the Principal Return and the Net Shares, if any, upon conversion) and interest, including Contingent Interest, if any, shall cease to accrue on such Security.

Section 2.09. Temporary Securities. Pending the preparation of definitive Securities, the Issuer may execute, and upon Issuer Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as conclusively evidenced by their execution of such Securities.

If temporary Securities are issued, the Issuer will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Issuer designated for such purpose pursuant to Section 2.03, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a like Principal Amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

Section 2.10. Cancellation. All Securities surrendered for payment, purchase by the Issuer pursuant to Article 13 or Article 14, conversion pursuant to Article 12, redemption or registration of transfer or exchange shall, if surrendered to any person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Issuer may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. The Issuer may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation or that any Holder has converted pursuant to Article 12. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of by the Trustee in accordance with its customary practice.

Section 2.11. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Issuer, the Trustee and any agent of the

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Issuer or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of any Redemption Price, Purchase Price or Fundamental Change Purchase Price in respect thereof, principal (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion) or interest, including Contingent Interest, if any, for the purpose of conversion and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

Section 2.12. Global Securities.

(a) 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 Section 2.06 and this Section 2.12. 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 this clause (a) 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 unless and until such Security has been registered in the name of such Person.

(b) 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 (i) the Depositary has notified the Issuer that it is unwilling or unable to continue as Depositary for such Global Security and a successor Depositary is not appointed by the Issuer within 90 days, (ii) the Issuer decides to discontinue the use of the system of book-entry transfer through the Depositary (or any successor Depositary) or (iii) an Event of Default has occurred and is continuing with respect to the Securities. Any Global Security exchanged pursuant to clause (i) above shall be so exchanged in whole and not in part, and any Global Security exchanged pursuant to clause (iii) 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.

(c) 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. Any Global Security to be exchanged in whole shall be surrendered by the Depositary

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to the Trustee or the 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.

(d) Subject to the provisions of Section 2.12(f) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members (as defined below) 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.

(e) In the event of the occurrence of any of the events specified in Section 2.12(b) above, the Issuer will promptly make available to the Trustee a reasonable supply of certificated Securities in definitive, fully registered form, without interest coupons.

(f) Neither any members of, or participants in, the Depositary (collectively, the “Agent Members”) nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Security registered in the name of the Depositary or any nominee thereof, or under any such Global Security, and the Depositary or such nominee, as the case may be, may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner and holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer or the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Security.

Section 2.13. Payment of Interest; Interest Rights Preserved. Interest, including Contingent Interest, if any, on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, including Contingent Interest, if any, at the office or agency of the Issuer maintained for such purpose pursuant to Section 10.02. However, the Issuer may make such interest payments by check payable to or upon the written order of the Person entitled thereto pursuant to Section 17.03, to the address of such Person as it appears on the Security Register; provided that payment by wire transfer of immediately available funds will be required with respect to

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principal of (including payment of the Principal Return, upon conversion), or interest, including Contingent Interest, if any, on all Global Securities and all Securities of Holders of more than $25,000,000 aggregate Principal Amount of Securities that have requested such method of payment and provided wire transfer instructions to the Issuer or the Paying Agent.

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

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

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

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On conversion of a Holder’s Securities, such Holder shall not receive any cash payment of interest. Except as set forth in the next succeeding paragraph, the Issuer’s delivery to a Holder of the Principal Return and the full number of shares of Common Stock constituting the Net Shares, if any, together with any cash payment for such Holder’s fractional shares, or cash or a combination of cash and Common Stock in lieu thereof, shall be deemed to satisfy the Issuer’s obligation to pay the Principal Amount of the Security and to satisfy the Issuer’s obligation to pay accrued but unpaid interest, including Contingent Interest, if any, attributable to the period from the most recent Interest Payment Date through the Conversion Date.

Notwithstanding the above, if any Securities are converted during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on the Business Day immediately preceding such Interest Payment Date, such Securities shall be accompanied by payment to the Issuer or its order, in New York Clearing House funds or other funds acceptable to the Issuer, of an amount equal to the interest, including Contingent Interest, if any, payable on such Interest Payment Date with respect to the Principal Amount of Securities or portions thereof being surrendered for conversion; provided that no such payment need be made (1) if the Issuer has specified a Redemption Date under Article 11 that occurs during the period from the close of business on a Regular Record Date to the close of business on the Business Day immediately preceding the Interest Payment Date to which such Regular Record Date relates, (2) if the Issuer has specified a Fundamental Change Purchase Date during such period or (3) to the extent of overdue interest or overdue Contingent Interest, any overdue interest or overdue Contingent Interest exists on the Conversion Date with respect to the Securities converted.

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

Section 2.14. CUSIP Numbers. The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption 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 and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee of any change in the CUSIP numbers.

Section 2.15. Calculation of Tax Original Issue Discount. The Issuer agrees, and by acceptance of a beneficial interest in a Security each Holder and

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any beneficial owner of a Security shall be deemed to agree, for United States federal income tax purposes, (i) to treat the Securities as debt instruments that are subject to Treasury Regulation Section 1.1275-4(b), and to treat the cash and the fair market value of any Common Stock received upon the conversion of a Security as a contingent payment within the meaning of Treasury Regulation Section 1.1275-4(b); (ii) to treat the exchange of the Securities, for the 0.5% Convertible Subordinated Debentures due 2023 that were issued by the Issuer on June 9, 2003 (the “Outstanding Debentures”) as not constituting a “significant modification” of the Outstanding Debentures within the meaning of Treasury Regulation Section 1.1001-3(e); and (iii) to accrue interest with respect to outstanding Securities as original issue discount (i.e., Tax Original Issue Discount) according to the “noncontingent bond method “ set forth in Treasury Regulation Section 1.1275-4(b), in the same manner and amounts as were applicable to the Outstanding Debentures, using the comparable yield of 9.25% compounded semi-annually based on an issue price of $1,000 on June 9, 2003 and using the projected payment schedule determined by the Issuer. Holders or beneficial owners may obtain a copy of the projected payment schedule by contacting the Issuer: Getty Images, Inc., 601 N 34^th Street, Seattle, Washington 98103, Attention: Treasurer.

The Issuer acknowledges and agrees, and by acceptance of a beneficial interest in a Security each Holder and any beneficial owner of a Security shall be deemed to acknowledge and agree, that (i) the comparable yield means the annual yield the Issuer would pay, as of the Issue Date, on a noncontingent, non-convertible, fixed-rate debt instrument with terms and conditions otherwise similar to those of the Securities and (ii) the comparable yield and the schedule of projected payments that a Holder or beneficial owner may obtain as described above do not constitute a representation by the Issuer regarding the actual amounts that will be paid on the Securities or the value of the Common Stock into which the Securities may be converted.

ARTICLE 3

SATISFACTION AND DISCHARGE

Section 3.01. Discharge of Liability on Securities. When (i) the Issuer delivers to the Trustee or any Paying Agent all outstanding Securities (other than Securities replaced pursuant to Section 2.07 of the Indenture) for cancellation or (ii) all outstanding Securities have become due and payable, whether on the Stated Maturity Date, any Redemption Date, any Purchase Date, any Fundamental Change Purchase Date, or upon conversion or otherwise, and the Issuer deposits with the Trustee, any Paying Agent or the Conversion Agent, if applicable, cash or, if expressly permitted by the terms of the Securities, Common Stock sufficient to pay all amounts due and owing on all outstanding Securities (other than Securities replaced pursuant to Section 2.07), and if in either case the Issuer pays all other sums payable hereunder by the Issuer, then

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this Indenture shall, subject to Section 6.06, cease to be of further effect, except for the indemnification of the Trustee, which shall survive such satisfaction and discharge. The Trustee shall join in the execution of a document prepared by the Issuer acknowledging satisfaction and discharge of this Indenture on demand of the Issuer accompanied by an Officers’ Certificate and Opinion of Counsel and at the reasonable cost and expense of the Issuer.

Section 3.02. Repayment of Moneys Held by Trustee. The Trustee and the Paying Agent shall return to the Issuer any cash that remains unclaimed for two years after the date upon which the principal of (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion), or interest, including Contingent Interest, if any, on such Security shall have become due and payable, subject to applicable unclaimed property law, together with interest, if any, thereon held by them for the payment of the principal of (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion), or interest, including Contingent Interest, if any, on such Security, provided, however, that to the extent that the aggregate amount of cash or Common Stock deposited by the Issuer exceeds the aggregate principal (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion), or interest, including Contingent Interest, if any, due on the Securities or portions thereof which the Issuer is obligated to purchase as of the relevant date, then promptly after the Business Day following such date, the Trustee or the Paying Agent, as applicable, shall return any such excess to the Issuer. Thereafter, any Holder entitled to payment must look to the Issuer for payment as general creditors, unless an applicable abandoned property law designates another Person.

ARTICLE 4

DEFAULT AND REMEDIES

Section 4.01. Events of Default. Each of the following shall be an “Event of Default” for purposes of this Indenture:

(a) the failure to pay interest, including Contingent Interest, if any, on any Security when the same becomes due and payable and the Default continues for a period of 30 days (whether or not such payment is prohibited by Article 5);

(b) the failure to pay principal of any Security when such principal becomes due and payable, at maturity, upon redemption, repurchase, a Fundamental Change or otherwise (whether or not such payment is prohibited by Article 5);

(c) the failure to pay the Principal Return or premium, if any, or deliver the Net Shares (and cash in lieu of fractional Shares), in each case when due (whether or not such payment is prohibited by Article 5);

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(d) a default in the observance or performance of any other covenant or agreement contained in the Securities or this Indenture, which default continues for a period of 60 consecutive days after the Issuer receives written notice thereof specifying the default from the Trustee or Holders of at least 25% in aggregate Principal Amount of outstanding Securities;

(e) the failure to pay at the final stated maturity (giving effect to any extensions thereof) the principal amount of any Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer, or the acceleration of the final stated maturity of any such Indebtedness, if the aggregate principal amount of such Indebtedness, together with the aggregate principal amount of any other such Indebtedness in default for failure to pay principal at the final stated maturity (giving effect to any extensions thereof) or which has been accelerated, aggregates $20,000,000 or more at any time, in each case after a 10-day period during which such default shall not have been cured or such acceleration rescinded;

(f) one or more judgments in an aggregate amount in excess of $25,000,000 (which are not covered by insurance as to which the insurer has not disclaimed coverage or which are not, in the good faith judgment of the Board of Directors, subject to third party indemnification) being rendered against the Issuer or any of its Significant Restricted Subsidiaries and such judgment or judgments remain undischarged or unstayed for a period of 60 days after such judgment or judgments become final and nonappealable;

(g) the Issuer or any of its Significant Restricted Subsidiaries (or one or more Restricted Subsidiaries that, taken together would constitute a Significant Restricted Subsidiary) of the Issuer pursuant to or within the meaning of any Bankruptcy Law: (i) admits in writing its inability to pay its debts generally as they become due; (ii) commences a voluntary case or proceeding; (iii) consents to the entry of an order for relief against it in an involuntary case or proceeding; (iv) consents or acquiesces in the institution of a bankruptcy or insolvency proceeding against it; (v) consents to the appointment of a Custodian of it or for all or substantially all of its property; or vi) makes a general assignment for the benefit of its creditors, or any of them takes any action to authorize or effect any of the foregoing; or

(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Issuer or any Significant Restricted Subsidiary (or one or more Restricted Subsidiaries that, taken together would constitute a Significant Restricted Subsidiary) of the Issuer in an involuntary case or proceeding; (ii) appoints a Custodian of the Issuer or any Significant Restricted Subsidiary (or one or more Restricted Subsidiaries that, taken together would constitute a Significant Restricted Subsidiary) of the Issuer for all or substantially all of its property; or (iii) orders the liquidation of the Issuer or any Significant Restricted Subsidiary (or one or more Restricted Subsidiaries that, taken together would constitute a Significant Restricted

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Subsidiary) of the Issuer; and in each case the order or decree remains unstayed and in effect for 60 days; provided, however, that if the entry of such order or decree is appealed and dismissed on appeal, then the Event of Default hereunder by reason of the entry of such order or decree shall be deemed to have been cured.

Section 4.02. Acceleration. If an Event of Default with respect to the Securities (other than an Event of Default specified in Section 4.01(g) or 4.01(h)) occurs and is continuing, the Trustee may, or the Trustee upon the request of Holders of 25% in Principal Amount of the outstanding Securities shall, or the Holders of at least 25% in aggregate Principal Amount of the outstanding Securities may declare the principal of all the Securities, together with all accrued and unpaid interest, including Contingent Interest, if any, and premium, if any, to be due and payable by notice in writing to the Issuer and the Trustee specifying the respective Event of Default and that it is a “notice of acceleration” (the “Acceleration Notice”), and the same shall become immediately due and payable.

If an Event of Default specified in Section 4.01(g) or 4.01(h) occurs, all unpaid principal of and accrued interest, including Contingent Interest, if any, and premium, if any, on all outstanding Securities shall ipso facto become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

At any time after such declaration with respect to the Securities, the Holders of a majority in Principal Amount of Securities then outstanding (by notice to the Trustee) may rescind and cancel such declaration and its consequences if (i) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction, (ii) all existing Defaults and Events of Default have been cured or waived except nonpayment of principal of, or interest, including Contingent Interest, if any, on the Securities that has become due solely by such declaration of acceleration, (iii) to the extent the payment of such interest is lawful, interest (at the same rate specified in the Securities) on overdue installments of interest, including Contingent Interest, if any, and overdue payments of principal, which has become due otherwise than by such declaration of acceleration has been paid, (iv) the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses, disbursements and advances and (v) in the event of the cure or waiver of a Default or Event of Default of the type described in Section 4.01(g) or 4.01(h), the Trustee has received an Officers’ Certificate and Opinion of Counsel that such Default or Event of Default has been cured or waived. The Holders of a majority in Principal Amount of the Securities may waive any existing Default or Event of Default under this Indenture, and its consequences, except a default in the payment of principal of (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion), or interest, including Contingent Interest, if any, on any Securities. No such rescission shall affect any subsequent Default or impair any right consequent thereto.

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Section 4.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion), or interest, including Contingent Interest, if any, on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy maturing 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 4.04. Waiver of Past Default. Subject to Section 4.07, prior to the declaration of acceleration of the Securities, the Holders of not less than a majority in aggregate Principal Amount of the outstanding Securities by written notice to the Trustee may waive an existing Default or Event of Default and its consequences, except a Default in the payment of principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on any Security as specified in Section 4.01(a), (b) and (c) or a Default in respect of any term or provision of this Indenture that may not be amended or modified without the consent of each Holder affected as provided in Section 9.02. The Issuer shall deliver to the Trustee an Officers’ Certificate stating that the requisite percentage of Holders have consented to such waiver and attaching copies of such consents. In case of any such waiver, the Issuer, the Trustee and the Holders shall be restored to their former positions and rights hereunder and under the Securities, respectively. This paragraph of this Section 4.04 shall be in lieu of § 316(a)(1)(B) of the TIA and such § 316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the Securities, as permitted by the TIA.

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Indenture and the Securities, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

Section 4.05. Control by Majority. Subject to Section 2.08, the Holders of a majority in Principal Amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of

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another Holder, it being understood that the Trustee shall have no duty (subject to Section 6.01) to ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. In the event the Trustee takes any action or follows any direction pursuant to this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against any loss or expense caused by taking such action or following such direction. This Section 4.05 shall be in lieu of § 316(a)(1)(A) of the TIA, and such § 316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the Securities, as permitted by the TIA.

Section 4.06. Limitation on Suits. A Holder may not pursue any remedy with respect to this Indenture or the Securities unless:

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

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

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

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e) during such 60-day period the Holders of a majority in Principal Amount of the outstanding Securities do not give the Trustee a direction which, in the opinion of the Trustee, is inconsistent with the request.

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

Section 4.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on a Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 4.08. Collection Suit by Trustee. If an Event of Default in payment of principal of (including payment of the Principal Return, the Net

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Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on a Security specified in Section 4.01(a), (b) or (c) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Securities for the whole amount of principal (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), and interest, including Contingent Interest, if any, remaining unpaid, together with interest overdue on principal and to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate per annum borne by the Securities and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 4.09. 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 Issuer (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same, and any Custodian in any such judicial proceedings 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 agent and counsel, and any other amounts due the Trustee under Section 6.06. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the creditors’ committee.

Section 4.10. Priorities. If the Trustee collects any money or property pursuant to this Article 4, it shall pay out the money or property in the following order:

First: to the Trustee for amounts due under Section 6.06;

Second: to Holders for amounts due and unpaid on the Securities for principal (including payment of Principal Return, Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

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Third: to the Issuer.

The Trustee, upon prior written notice to the Issuer, may fix a record date and payment date for any payment to the Holders pursuant to this Section 4.10.

Section 4.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 4.11 shall not apply to a suit by the Trustee, a suit by a Holder or group of Holders of more than 10% in aggregate Principal Amount of the outstanding Securities, or to any suit instituted by any Holder for the enforcement or the payment of the principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on any Securities on or after the respective due dates expressed in the Security.

ARTICLE 5

SUBORDINATION

Section 5.01. Agreement to Subordinate. The Issuer agrees, and each Holder by accepting any Security agrees, that the Indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article 5, to the payment when due of all Senior Indebtedness of the Issuer and that such subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. The Securities shall in all respects rank pari passu with all other Subordinated Indebtedness of the Issuer, and only Indebtedness of the Issuer which is Senior Indebtedness will rank senior to the Securities in accordance with the provisions set forth herein. Unsecured Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness merely because it is unsecured, nor is any Indebtedness deemed to be subordinate or junior to other Indebtedness merely because it matures after such other Indebtedness. Secured Indebtedness is not deemed to be Senior Indebtedness merely because it is secured.

Section 5.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the assets of the Issuer upon a total or partial liquidation or dissolution or reorganization or bankruptcy of or similar proceeding relating to the Issuer or its property:

(a) holders of Senior Indebtedness of the Issuer shall be entitled to receive payment in full in cash or Cash Equivalents of all Senior Indebtedness of the Issuer before holders of Securities shall be entitled to receive any payment of

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principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), interest, including Contingent Interest, if any, on or other amounts with respect to the Securities from the Issuer; and

(b) until the Senior Indebtedness of the Issuer is paid in full, in cash or Cash Equivalents, any payment or distribution to which Holders would be entitled but for the provisions of this Article 5 shall be made to holders of Senior Indebtedness as their interests may appear.

Section 5.03. Default on Senior Indebtedness. The Issuer may not pay the principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on, and other obligations with respect to, the Securities or repurchase, redeem or otherwise retire any Securities (collectively, “pay the Securities”) if (i) any Senior Indebtedness is not paid when due or (ii) any other default on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms unless, in either case, (x) the default has been cured or waived or is no longer continuing and/or any such acceleration has been rescinded or (y) such Senior Indebtedness has been paid; provided, however, that the Issuer may pay the Securities, subject to the provisions of Section 5.02, without regard to the foregoing if the Issuer and the Trustee receive written notice approving such payment from the Representatives of the Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of this sentence has occurred or is continuing. During the continuance of any default (other than a default described in clause (i) or (ii) of the preceding sentence) with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuer may not pay the Securities (except (i) in Qualified Capital Stock issued by the Issuer to pay interest on the Securities or issued in exchange for the Securities, (ii) in securities substantially identical to the Securities issued by the Issuer in payment of interest accrued thereon or (iii) in securities issued by the Issuer which are subordinated to the Senior Indebtedness at least to the same extent as the Securities and having a Weighted Average Life to Maturity at least equal to the remaining Weighted Average Life to Maturity of the Securities) for a period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to the Issuer) of written notice (a “Blockage Notice”) of such default from the Representative of the holders of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated (i) by written notice to the Trustee and the Issuer from the Person or Persons who gave such Blockage Notice, (ii) because the default giving rise to such Blockage Notice has been cured, waived or is no longer continuing or (iii) because such Designated Senior Indebtedness has been repaid in full). Notwithstanding the provisions of the immediately preceding sentence, but

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subject to the provisions of the first sentence of this Section 5.03 and the provisions of Section 5.02, the Issuer may resume payments on the Securities after the end of such Payment Blockage Period. Not more than one Blockage Notice may be given, and not more than one Payment Blockage Period may occur, in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period. However, if any Blockage Notice within such 360 day period is given by or on behalf of any holders of Designated Senior Indebtedness (other than the agent under the Senior Credit Facilities), the agent under the Senior Credit Facilities may give another Blockage Notice within such period. In no event, however, may the total number of days during which any Payment Blockage Period or Payment Blockage Periods are in effect exceed 179 days in the aggregate during any 360 consecutive day period. No nonpayment default that existed or was continuing on the date of delivery of any Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days.

Section 5.04. Acceleration of Payment of Securities. If payment of the Securities is accelerated because of an Event of Default, the Issuer or the Trustee shall promptly notify the holders of the Representative (if any) of any issue of Designated Senior Indebtedness which is then outstanding; provided, however, that the Issuer and the Trustee shall be obligated to notify such a Representative (other than with respect to the Senior Credit Facilities) only if such Representative has delivered or caused to be delivered an address for the service of such a notice to the Issuer and the Trustee (and the Issuer and the Trustee shall be obligated only to deliver the notice to the address so specified). If a notice is required pursuant to the immediately preceding sentence, the Issuer may not pay the Securities (except payment (i) in Qualified Capital Stock issued by the Issuer to pay interest on the Securities or issued in exchange for the Securities, (ii) in securities substantially identical to the Securities issued by the Issuer in payment of interest accrued thereon or (iii) securities issued by the Issuer which are subordinated to the Senior Indebtedness at least to the same extent as the Securities and have a Weighted Average Life to Maturity at least equal to the remaining Weighted Average Life to Maturity of the Securities), until five Business Days after the respective Representative of the Designated Senior Indebtedness receives notice (at the address specified in the preceding sentence) of such acceleration and thereafter may pay the Securities only if the provisions of this Article 5 otherwise permit payment at that time.

Section 5.05. When Distribution Must be Paid Over. If a distribution is made to the Trustee or to Holders that because of this Article 5 should not have been made to them, the Trustee or the Holders who receive such distribution shall hold it in trust for holders of Senior Indebtedness and promptly pay it over to them as their respective interests may appear; provided, however, that the liabilities of the Trustee under this Section 5.05 are limited by Section 5.14.

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Section 5.06. Subrogation. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Holders shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness. A distribution made under this Article 5 to holders of Senior Indebtedness which otherwise would have been made to Holders is not, as between the Issuer and the Holders, a payment by the Issuer of Senior Indebtedness.

Section 5.07. Relative Rights. This Article 5 defines the relative rights of Holders of the Securities on the one hand and holders of Senior Indebtedness on the other hand. Nothing in this Indenture shall:

(a) impair, as between the Issuer and the Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on the Securities in accordance with their terms; or

(b) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders.

Section 5.08. Subordination May Not be Impaired by Issuer. No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Issuer or by the failure of the Issuer to comply with this Indenture.

Section 5.09. Rights of Trustee and Paying Agent. Notwithstanding Section 5.03, the Trustee or Paying Agent may continue to make payments on the Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Responsible Officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article 5. The Issuer, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness may give the notice; provided, however, that if an issue of Senior Indebtedness has a Representative, only the Representative may give the notice.

The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 5 with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness; and nothing in Article 5 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 5 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06.

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Section 5.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative (if any).

Section 5.11. Article Five Not to Prevent Events of Default or Limit Right to Accelerate. The failure to make a payment in respect of the Securities by reason of any provision in this Article 5 shall not be construed as preventing the occurrence of a Default or Event of Default. Nothing in this Article 5 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Securities in accordance with the terms of this Indenture.

Section 5.12. Trustee Entitled to Rely. Upon any payment or distribution pursuant to this Article 5, the Trustee and the Holders shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 5.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (iii) upon the Representatives for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 5. In the event that the Trustee determines, in good faith, that 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 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. The Trustee shall have the right to seek a declaratory judgment as to any right of such Person to receive such payment. The provisions of Sections 6.01 and 6.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 5.

Section 5.13. Trustee to Effectuate Subordination. Each Holder by accepting a Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holder and the holders of Senior Indebtedness as provided in this Article 5 and appoints the Trustee as attorney-in-fact for any and all such purposes.

Section 5.14. Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Issuer, or any other Person, money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article 5 or otherwise.

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Section 5.15. Reliance by Holders of Senior Indebtedness on Subordination Provisions. Each Holder by accepting a Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

ARTICLE 6

THE TRUSTEE

Section 6.01. 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 their 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:

(i) The Trustee shall not be liable except for the performance of such duties as are specifically set forth herein and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

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

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

(i) This paragraph does not limit the effect of paragraph (b) of this Section 6.01;

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

(iii) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 4.02, 4.04 and 4.05.

(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 to take or omit to take any action under this Indenture or take any action at the request or direction of Holders if it shall have reasonable grounds for believing that repayment of such funds is not assured to it or it does not receive from such Holders an indemnity satisfactory to it in its sole discretion against such risk, liability, loss, fee or expense which might be incurred by it in compliance with such request or direction.

(e) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 6.01.

(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 Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 6.02. Rights of Trustee.

Subject to Section 6.01:

(a) The Trustee may conclusively rely on any document reasonably believed in good faith 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 and/or an Opinion of Counsel, which shall conform to the provisions of Section 17.05. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

(c) The Trustee may act through attorneys and agents of its selection and shall not be responsible for the misconduct or negligence of any agent or attorney (other than an agent who is an employee of the Trustee) 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 reasonably believes to be authorized or within its rights or powers.

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(e) Before the Trustee acts or refrains from acting, it may consult with counsel of its selection and the advice or opinion of such counsel shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by a Issuer Request or Issuer Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

(g) 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 reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

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

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

(j) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(k) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its gross negligence or willful misconduct.

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

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(m) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

Section 6.03. 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 Issuer or its Affiliates 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 6.09 and 6.10.

Section 6.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Issuer’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Issuer in this Indenture or any document issued in connection with the sale of Securities or any statement in the Securities other than the Trustee’s certificate of authentication.

Section 6.05. Notice of Defaults. If a Default or an Event of Default occurs and is continuing and the Trustee has actual knowledge of such Defaults or Events of Default, the Trustee shall mail to each Holder notice of the Default or Event of Default within 30 days after the occurrence thereof. Except in the case of a Default or an Event of Default in payment of principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on any Security or a Default or Event of Default in complying with Section 8.01, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interest of the Holders. This Section 6.05 shall be in lieu of the proviso to § 315(b) of the TIA and such proviso to § 315(b) of the TIA is hereby expressly excluded from this Indenture and the Securities, as permitted by the TIA.

Section 6.06. Compensation and Indemnity. The Issuer shall pay to the Trustee and the Agents from time to time, and the Trustee and the Agents shall be entitled to, such compensation as the Issuer and the Trustee and the Agents shall from time to time agree in writing for their respective services. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee and the Agents upon request for all reasonable disbursements, expenses and advances, including all costs and expenses of collection and reasonable fees, disbursements and expenses of its agents and outside counsel incurred or made by any of them in addition to the compensation for their respective services except any such disbursements, expenses and advances as may be attributable to negligence or willful misconduct of the party to be reimbursed.

The Issuer shall indemnify the Trustee and the Agents for, and hold them harmless against any and all loss, damage, claims, liability or expense, including

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taxes (other than franchise taxes imposed on the indemnified party and taxes based upon, measured by or determined by the income of the indemnified party), arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending themselves against or investigating any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder, except to the extent that such loss, damage, claim, liability or expense is due to negligence or willful misconduct of the indemnified party. The indemnified party shall notify the Issuer promptly of any claim asserted against the indemnified party for which it may seek indemnity. However, the failure by the indemnified party to so notify the Issuer shall not relieve the Issuer of its obligations hereunder unless the Issuer has been prejudiced thereby. The Issuer shall defend the claim and the indemnified party shall cooperate in the defense at the expense of the Issuer; provided that the Issuer shall not be liable in any action or for which it has assumed the defense for the expenses of separate counsel to the indemnified party unless (1) the employment of separate counsel has been authorized by the Issuer, (2) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to the indemnified party that are different from or in addition to those available to the Issuer or (3) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the Issuer; provided further, however, that in any such event the reimbursement obligation of the Issuer with respect to separate counsel of the indemnified party will be limited to the reasonable fees and expenses of such counsel.

The Issuer need not pay for any settlement made without its written consent, which consent shall not be unreasonably withheld. The Issuer need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee or an Agent as a result of its own negligence or willful misconduct.

To secure the payment obligations of the Issuer in this Section 6.06, the Trustee shall have a Lien prior to the Securities against all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on particular Securities.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 4.01(g) or Section 4.01(h) occurs, the expenses (including the reasonable fees and expenses of its agents and counsel) and the compensation for the services shall be preferred over the status of the Holders in a proceeding under any Bankruptcy Law and are intended to constitute expenses of administration under any Bankruptcy Law.

Section 6.07. Replacement of Trustee. The Trustee may resign at any time by so notifying the Issuer in writing. The Holders of a majority in Principal Amount of the outstanding Securities may remove the Trustee by so notifying

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the Trustee and the Issuer in writing and may appoint a successor Trustee with the Issuer’s consent. The Issuer may remove the Trustee if:

(a) the Trustee fails to comply with Section 6.09;

(b) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

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

(d) 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 Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in Principal Amount of the Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. As promptly as practicable after that, the retiring Trustee shall transfer, after payment of all sums then owing to the Trustee pursuant to Section 6.06, all property held by it as Trustee to the successor Trustee, subject to the Lien provided in Section 6.06, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders of at least 10% in Principal Amount of the outstanding Securities may petition, at the expense of the Issuer, any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 6.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding replacement of the Trustee pursuant to this Section 6.07, the Issuer’s obligations under Section 6.06 shall continue for the benefit of the retiring Trustee.

Section 6.08. Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or banking corporation, the

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resulting, surviving or transferee corporation or banking corporation without any further act shall be the successor Trustee; provided, however, that such corporation shall be otherwise qualified and eligible under this Article 6.

Section 6.09. Eligibility; Disqualification. This Indenture shall always have a Trustee which shall be eligible to act as Trustee under TIA §§ 310(a)(1) and 310(a)(2). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. If the Trustee has or shall acquire any “conflicting interest” within the meaning of TIA § 310(b), the Trustee and the Issuer shall comply with the provisions of TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.09, the Trustee shall resign immediately in the manner and with the effect hereinbefore specified in this Article 6. The provisions of TIA § 310 shall apply to the Issuer and any other obligor of the Securities.

Section 6.10. Preferential Collection of Claims Against the Issuer. The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

ARTICLE 7

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND ISSUER

Section 7.01. Issuer to Furnish Trustee Information as to Names and Addresses of Holders. The Issuer covenants and agrees that it will furnish or cause to be furnished to the Trustee:

(a) Semi-annually, not later than June 1 and December 1 in each year, commencing June 1, 2005, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more than 15 days prior to the time such list is furnished and

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

provided, however, that so long as the Trustee is the Registrar, no such list shall be required to be furnished.

Section 7.02. Preservation of Information; Communications to Holders. The Trustee shall preserve, in as current a form as is reasonably practicable, all

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information as to the names and addresses of the Holders of Securities (1) contained in the most recent list furnished to it as provided in Section 7.01 and (2) received by it in the capacity of Paying Agent or Registrar (if so acting) hereunder. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

Section 7.03. Reports by Trustee. Within 60 days after each May 15 beginning with May 15, 2005, the Trustee shall mail to each Holder a brief report dated as of such June 1 that complies with TIA § 313(a), if required by such TIA § 313(a). The Trustee also shall comply with TIA § 313(b).

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

ARTICLE 8

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 8.01. Consolidations and Mergers of Issuer Permitted Subject to Certain Conditions. The Issuer shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

(a) the Issuer is the surviving corporation or the successor is a U.S. domestic corporation, limited liability company, partnership, trust or other entity, and assumes by operation of law or expressly, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment (pursuant to this Indenture) of the Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price or Fundamental Change Purchase Price with respect to any Security and any interest, including Contingent Interest, if any, on all the Securities and the performance of every covenant to be performed by the Issuer or observed hereunder;

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

(c) the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been met.

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Section 8.02. Rights and Duties of Successor Entity. Upon any consolidation with or merger into any other corporation, or any conveyance, transfer or lease of the properties and assets of the Issuer substantially as an entirety in accordance with Section 8.01, the successor entity formed by such consolidation or into which the Issuer 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 Issuer under this Indenture with the same effect as if such successor had been named as the Issuer herein, and thereafter, except in the case of a lease, the Issuer shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01. Without Consent of Holders. The Issuer, when authorized by a resolution of the Board of Directors, and the Trustee may amend or supplement this Indenture or the Securities without notice to or consent of any Holder:

(a) to cure any ambiguity, defect or inconsistency; provided, however, that such amendment or supplement does not adversely affect the rights of any Holder;

(b) to effect the assumption by a successor Person of all obligations of the Issuer under the Securities and this Indenture in connection with any transaction complying with Article 8 of this Indenture;

(c) to provide for uncertificated Securities in addition to or in place of certificated Securities;

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

(e) to make any change that would provide any additional benefit or rights to the Holders;

(f) to make any other change that does not adversely affect the rights of any Holder under this Indenture; or

(g) to add to the covenants of the Issuer for the benefit of the Holders, or to surrender any right or power herein conferred upon the Issuer;

provided, however, that if required by the Trustee, the Issuer has delivered to the Trustee an Opinion of Counsel stating that such amendment or supplement complies with the provisions of this Section 9.01.

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Section 9.02. With Consent of Holders. Subject to Section 4.07, the Issuer, when authorized by a Board Resolution, and the Trustee may modify, amend or supplement, or waive compliance by the Issuer with any provision of, this Indenture or the Securities with the written consent of the Holders of at least a majority in Principal Amount of the outstanding Securities. However, without the consent of each Holder affected, no such modification, amendment, supplement or waiver, including a waiver pursuant to Section 4.04, may:

(a) reduce the Principal Amount of or change the Stated Maturity Date of any Security or alter the provisions with respect to the repurchase or redemption of the Securities;

(b) reduce the rate of or change the time for payment of interest on any Security, including Contingent Interest;

(c) make any Security payable in money other than that stated in the Securities or as otherwise permitted in this Indenture;

(d) make any change in the provisions of this Indenture relating to the rights of Holders of Securities to receive payments of principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on the Securities or to bring suit to enforce such payment;

(e) adversely affect the rights of Holders of the Securities under the conversion provisions of this Indenture;

(f) reduce the percentage of the Principal Amount of outstanding Securities necessary for amendment to or waiver of compliance with any provision of this Indenture or the Securities or for waiver of any Default in respect thereof;

(g) waive a Default or Event of Default in the payment of principal of (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), or interest, including Contingent Interest, if any, on the Securities (except a rescission of acceleration of the Securities by the Holders thereof as provided in Section 4.02 and a waiver of the payment default that resulted from such acceleration); or

(h) after the Issuer’s obligation upon the occurrence of a Fundamental Change to purchase the Securities arises under this Indenture, amend, modify or change its obligation to make or consummate a purchase offer or waive any default in the performance thereof or modify any of the provisions or definitions with respect to any such offers.

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It shall not be necessary for the consent of the Holders under this Section 9.02 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 9.02 becomes effective, the Issuer shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer 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.

Section 9.03. Compliance with Trust Indenture Act. Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as then in effect.

Section 9.04. Record Date for Consents and Effect of Consents. The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Securities entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then those persons who were Holders of Securities at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders of such Securities after such record date. No such consent shall be valid or effective for more than 90 days after such record date. The Trustee is entitled to rely upon any electronic instruction from beneficial owners to the Holders of any Global Security.

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (h) of Section 9.02. 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 9.05. 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 Issuer or the Trustee so determine, the Issuer in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, Etc.. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 9 is authorized or permitted by this Indenture

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and that such amendment, supplement or waiver constitutes the legal, valid and binding obligation of the Issuer, enforceable in accordance with its terms (subject to customary exceptions). The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. In signing any amendment, supplement or waiver, the Trustee shall be entitled to receive an indemnity reasonably satisfactory to it.

ARTICLE 10

COVENANTS OF THE ISSUER

Section 10.01. Payment of Principal, Premium and Interest. The Issuer covenants and agrees that it will duly and punctually pay or cause to be paid all payments in respect of the Securities in accordance with the terms of the Securities and this Indenture. Any amounts to be given to the Trustee or Paying Agent shall be deposited with the Trustee or Paying Agent by 11:00 a.m. New York City time by the Issuer at the latest on the day such payment is due. Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest (including Contingent Interest, if any), shall be considered paid on the applicable date due if on such date (or, in the case of a Purchase Price or Fundamental Change Purchase Price, on the Business Day following the applicable Purchase Date or Fundamental Change Purchase Date, as the case may be) the Trustee or the Paying Agent holds, in accordance with this Indenture, money or securities, if permitted hereunder, sufficient to pay all such amounts then due.

Section 10.02. Maintenance of Office or Agency. The Issuer shall maintain an office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent where the Securities may be presented or surrendered for payment, where the Securities may be surrendered for registration of transfer or exchange, where the Securities may be surrendered for purchase, redemption or conversion and where notices and demands to or upon the Issuer in respect of the Securities and this Indenture may be served. The office of the Paying Agent, at 101 Barclay Street, 8W, New York, NY 10286, Attention: Corporate Trust Administration, shall initially be such office or agency for all of the aforesaid purposes. The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Issuer hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

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The Issuer may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.

Section 10.03. Money for Securities Payments to be Held in Trust. If the Issuer shall at any time act as its own Paying Agent with respect to the Securities, it will, on or before each due date of the Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest, including Contingent Interest, if any, on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such sums so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided. The Issuer will promptly notify the Trustee of any failure by the Issuer to take such action or failure so to act.

Whenever the Issuer shall have one or more Paying Agents for the Securities, it will, on or prior to each due date of the Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest, including Contingent Interest, if any, on any Securities, deposit with a Paying Agent a sum sufficient to pay such amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such amounts, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of its action or failure so to act.

The Issuer will cause each Paying Agent, other than the Trustee or an Affiliate of the Issuer, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 10.03, that such Paying Agent will:

(i) hold all sums held by it for the payment of the Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest, including Contingent Interest, if any, on the Securities (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities) in trust for the benefit of the Persons entitled thereto;

(ii) give the Trustee notice of any failure by the Issuer (or any other obligor upon the Securities) to make any payment of the Principal Amount (including payment of the Principal Return, the Net Shares, if any, premium, if any, upon conversion), Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest, including Contingent Interest, if any, on the Securities when the same shall be due and payable; and

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(iii) at any time during the continuance of any Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

Anything in this Section 10.03 to the contrary notwithstanding, the Issuer may, at any time, for the purpose of obtaining satisfaction and discharge of this Indenture, or for any other reason, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Section 10.04. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the close of each fiscal year an Officers’ Certificate stating that a review of the activities of the Issuer has been made under the supervision of the signing officer with a view to determining whether a Default or Event of Default has occurred and whether or not the signers know of any Default or Event of Default by the Issuer that occurred during such fiscal year and if they do know of such a Default or Event of Default, its status and the action the Issuer is taking or proposes to take with respect thereto. The first certificate to be delivered by the Issuer pursuant to this Section 10.04 shall be for the fiscal year ending December 31, 2004.

Section 10.05. Calculation of Original Issue Discount. The Issuer shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on the Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be reasonably requested by the Trustee and relevant under the Internal Revenue Code of 1986, as amended from time to time.

Section 10.06. Further Instruments and Acts. The Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper or as the Trustee may request to carry out more effectively the purposes of this Indenture.

Section 10.07. Statement by Officers as to Default. The Issuer shall deliver to the Trustee, as soon as possible and in any event within five days after the Issuer becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or default and the action which the Issuer proposes to take with respect thereto.

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ARTICLE 11

REDEMPTION OF SECURITIES

Section 11.01. Right to Redeem; Notices to Trustee. Prior to June 13, 2008, the Securities shall not be redeemable at the option of the Issuer. On and after June 13, 2008 until June 12, 2009, the Securities shall be redeemable for cash as a whole, or from time to time in part, at the option of the Issuer at the Redemption Price, if the Closing Sale Price has exceeded, for at least 20 Trading Days in any 30 consecutive Trading Day period ending on the Trading Day immediately prior to the date the Issuer mails the notice of redemption, 125% of the Base Conversion Price. Beginning on June 13, 2009 and until the Stated Maturity Date, the Securities are redeemable for cash as a whole, or from time to time in part, at the option of the Issuer at the Redemption Price. Notwithstanding the foregoing, if the Redemption Date is any day during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on such Interest Payment Date, accrued and unpaid interest, including Contingent Interest, if any, shall be paid to the Holder of record as of the applicable Regular Record Date, rather than to the Holder presenting the Security for redemption. If the Issuer elects to redeem Securities, it shall notify the Trustee in writing of the Redemption Date, the Principal Amount of Securities to be redeemed and the Redemption Price.

The Issuer shall give the notice to the Trustee provided for in this Section 11.01 by a Issuer Order at least 30 days before the Redemption Date.

Section 11.02. Selection of Securities to Be Redeemed. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot or by any other method the Trustee considers fair and appropriate (so long as such method is not prohibited by the rules of any stock exchange on which the Securities are then listed). The Trustee shall make the selection at least 15 days but not more than 60 days before the Redemption Date from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the Principal Amount of Securities that have denominations equal to or larger than $1,000. Securities and portions of them the Trustee selects shall be in Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Issuer promptly of the Securities or portions of Securities to be redeemed.

Section 11.03. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Issuer shall mail a notice of redemption by first-class mail, postage prepaid, to each Holder of Securities to be redeemed.

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The notice shall identify the Securities to be redeemed and shall at a minimum state:

(a) the Redemption Date;

(b) the Redemption Price;

(c) the Conversion Rate;

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

(e) that Securities called for redemption may be converted at any time before the close of business on the Business Day immediately preceding the Redemption Date;

(f) that Holders who want to convert Securities must satisfy the requirements set forth in the applicable provisions of the Securities;

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

(h) if fewer than all the outstanding Securities are to be redeemed, the certificate number and Principal Amounts of the particular Securities to be redeemed;

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

(j) the CUSIP number of the Securities.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense, provided that the Issuer makes such request at least three Business Days prior to such notice of redemption.

If the Issuer redeems fewer than all of the outstanding Securities, the Trustee may select the Securities by lot, pro rata, or by another method the Trustee considers fair and appropriate. If the Trustee selects a portion of a Holder’s Securities for partial redemption and such Holder converts a portion of such Securities, the converted portion will be deemed, to the extent practicable, to be the portion selected for redemption.

Section 11.04. 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, except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price stated in the notice.

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Section 11.05. Deposit of Redemption Price. Prior to 11:00 a.m., New York City time on the Redemption Date, the Issuer shall deposit with the Paying Agent (or if the Issuer or a Subsidiary or an Affiliate of either of them is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the Redemption Price of all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which on or prior thereto have been delivered by the Issuer to the Trustee for cancellation or have been converted. The Paying Agent shall as promptly as practicable return to the Issuer any money not required for that purpose. If such money is then held by the Issuer in trust and is not required for such purpose it shall be discharged from such trust.

Section 11.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate and deliver to the Holder a new Security in an authorized denomination equal in Principal Amount to the unredeemed portion of the Security surrendered.

Section 11.07. Conversion Arrangement on Call for Redemption. In connection with any redemption of Securities, the Issuer 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 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 Issuer for the redemption of such Securities, is not less than the Redemption Price of such Securities. Notwithstanding anything to the contrary contained in this Article, the obligation of the Issuer to pay the Redemption Price of such Securities 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 11.07 shall relieve the Issuer of its obligation to pay the Redemption Price of the Securities called for redemption. If such an agreement 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 Issuer 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 12) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the Business Day immediately prior to 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 Issuer for the redemption of the Securities. Without the Paying Agent’s prior written consent, no arrangement between the Issuer and such purchasers for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers,

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duties, responsibilities or obligations of the Paying Agent as set forth in this Indenture, and the Issuer agrees to indemnify the Paying Agent from, and hold it harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and conversion of any Securities between the Issuer and such purchasers, including the costs and expenses incurred by the Paying Agent in the defense of any claim or liability reasonably incurred without negligence or bad faith on its part arising out of or in connection with the exercise or performance of any of its powers, duties, responsibilities or obligations under this Indenture, in accordance with the indemnity provisions applicable to the Trustee set forth herein.

ARTICLE 12

CONVERSION

Section 12.01. Conversion Rights. The Securities shall be convertible in accordance with their terms and in accordance with and subject to this Article into cash and shares of Common Stock, if any, per $1,000 Principal Amount of Securities at the Conversion Rate (except in the case of a Principal Value Conversion), as described below in Section 12.07.

A Holder of a Security otherwise entitled to a fractional share upon the conversion thereof shall receive cash in an amount equal to the value of such fractional share based on the Applicable Stock Price with respect to such conversion.

Upon determination by the Issuer that Holders are or will be entitled to convert their Securities pursuant to this Article 12, the Issuer shall notify the Trustee thereof, which notice shall be in the form of an Officers’ Certificate, and the Issuer shall issue a press release and publish such determination on the Issuer’s website on the World Wide Web.

Holders may surrender Securities for conversion only if at least one of the conditions described in Section 12.02 through Section 12.06 is satisfied. In addition, a Security in respect of which a Holder has delivered a Purchase Notice or Fundamental Change Purchase Notice exercising the option of such Holder to require the Issuer to purchase such Security may be converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture.

Section 12.02. Conversion Rights Based on Common Stock Price.

(a) On or prior to December 31, 2007, a Holder may surrender Securities or portions thereof in integral multiples of $1,000 Principal Amount for conversion in any fiscal quarter (and only during such fiscal quarter) commencing after December 31, 2004, if the Closing Sale Price of the Common Stock for at least 20 Trading Days in a period of 30 consecutive Trading Days ending on the last Trading Day of the preceding fiscal quarter is more than 120% of the Base Conversion Price.

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(b) A Holder may surrender Securities or portions thereof in integral multiples of $1,000 Principal Amount for conversion at any time after December 31, 2007, if the Closing Sale Price of the Common Stock for at least 20 Trading Days in a period of 30 consecutive Trading Days ending on the last Trading Day of any fiscal quarter commencing after September 30, 2007 is more than 120% of the Base Conversion Price.

Section 12.03. Conversion Rights Upon Credit Rating Events. Holders may surrender Securities or portions thereof in integral multiples of $1,000 Principal Amount for conversion at any time after the earlier of (1) the date on which the credit rating assigned to the Securities by S&P is below B-, or the credit rating assigned to the Securities by Moody’s is below B3 and (2) January 31, 2005 if either S&P or Moody’s does not assign a rating to the Securities on or prior to such day.

Section 12.04. Conversion Rights Upon Notice of Redemption. Holders may surrender for conversion in integral multiples of $1,000 Principal Amount any Securities called for redemption under Article 11 hereof at any time prior to the close of business on the Business Day immediately preceding the Redemption Date, even if the Securities are not otherwise convertible at such time.

Section 12.05. Conversion Rights Upon Occurrence of Certain Corporate Transactions.

(a) Conversion Upon Specified Events. If the Issuer is a party to a consolidation, merger or binding share exchange pursuant to which shares of Common Stock would be converted into cash, securities or other property, any Security may be surrendered for conversion in integral multiples of $1,000 Principal Amount at any time from and after the date that is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of such transaction (or, if such consolidation, merger or share exchange also constitutes a Fundamental Change, until the Fundamental Change Purchase Date). After the effective time of the transaction, the settlement of the Securities upon conversion, the Conversion Value and the Net Shares will be based on the kind and amount of cash, securities or other property of the Issuer or another Person that the Holder would have received if the Holder had converted such Security immediately prior to the transaction.

(b) Conversion Upon Certain Distributions. If the Issuer distributes to all holders of Common Stock (1) rights or warrants entitling them to purchase, for a period expiring within 45 days of the record date for such distribution, Common Stock at less than the average Closing Sale Price for the 10 Trading Days preceding the declaration date for such distribution, or (2) cash, assets, debt

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securities or rights to purchase the Issuer’s securities, which distribution has a per share value exceeding 5% of the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the declaration date for such distribution, the Securities may be surrendered for conversion in integral multiples of $1,000 Principal Amount beginning on the date that the Issuer gives notice to the Holders of such right, which shall not be less than 20 days prior to the time (“Ex-Dividend Time”) immediately prior to the commencement of “ex-dividend” trading for such distribution on the New York Stock Exchange or such other principal national or regional exchange or market on which the Common Stock is then listed or quoted for such dividend or distribution, and Securities may be surrendered for conversion at any time thereafter until the earlier of close of business on the Business Day prior to the Ex-Dividend Time and the date the Issuer announces that such dividend or distribution will not take place. Notwithstanding the foregoing, Holders shall not have the right to surrender Securities for conversion pursuant to this Section 12.05 if they will otherwise participate in the distribution described above without first converting Securities.

Section 12.06. Conversion Upon Satisfaction of Trading Price Condition.

(a) Securities may be surrendered for conversion, in integral multiples of $1,000 Principal Amount any time during the five Business Day period after any five consecutive Trading Day period in which the Trading Price per $1,000 Principal Amount of the Securities for each day of such five Trading Day period was less than 95% of the product of the Closing Sale Price and the Conversion Rate as of such Trading Day (determined based on such Closing Sale Price rather than the Applicable Stock Price).

(b) Notwithstanding the foregoing, if, on the date of any conversion pursuant to Section 12.06(a) that is on or after June 9, 2018, the Closing Sale Price of the Common Stock is greater than the Effective Conversion Price, the Holders of Securities surrendered for conversion shall receive, in lieu of the Principal Return and Net Shares, if any, based on the Conversion Value as set forth in Section 12.07, cash equal to the Principal Amount of such Securities plus accrued and unpaid interest, including Contingent Interest, if any, to the Conversion Date (“Principal Value Conversion”).

(c) In connection with any conversion pursuant to this Section 12.06, the Trustee shall not have any obligation to determine the Trading Price of the Securities. If a Holder provides the Issuer with reasonable evidence that the Trading Price per Security would be less than 95% of the product of the Closing Sale Price of the Common Stock and the Conversion Rate then in effect (determined based on such Closing Sale Price rather than the Applicable Stock Price), the Issuer shall determine the Trading Price of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price per such Security is greater than or equal to 95% of the product of the Closing Sale Price of the Common Stock and the Conversion Rate as of such Trading Day (determined based on such Closing Sale Price rather than the Applicable Stock Price).

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Section 12.07. Conversion Procedures; Conversion Settlement. To convert a Security, a Holder must (a) complete and manually sign the Conversion Notice or a facsimile of the conversion notice on the back of the Security (the “Conversion Notice”) and deliver such notice to the Conversion Agent, (b) surrender the Security to a Conversion Agent, (c) furnish appropriate endorsements and transfer documents if required by the Registrar or the Conversion Agent, (d) pay any transfer or similar tax, if required and (e) if required, pay funds equal to the interest, including Contingent Interest, if any, payable on the next Interest Payment Date. The date on which the Holder satisfies all of those requirements is the “Conversion Date.” The Issuer shall deliver to the Holder through the Conversion Agent, no later than the third Business Day following the date on which the Applicable Stock Price is determined by the Issuer in respect of such Conversion Date, the Principal Return and the Net Shares (in the form of a certificate for the number of whole shares of Common Stock issuable upon the conversion), if any, as set forth in this Section 12.07 and, if applicable, cash in lieu of any fractional shares pursuant to Section 12.08. 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 of the Depositary as in effect from time to time. The Person in whose name the Common Stock certificate, if any, is registered shall be deemed to be a shareholder of record at the close of business on the date on which the Applicable Stock Price is determined by the Issuer with respect to the applicable Conversion Date; provided, however, that if any such date is a date when the stock transfer books of the Issuer are closed, such Person shall be deemed a shareholder of record as of the next date on which the stock transfer books of the Issuer are open.

No payment or adjustment shall be made for dividends on, or other distributions with respect to, any Common Stock except as provided in this Article. Upon conversion of a Security, a Holder will not receive any cash payment of interest, including Contingent Interest, if any (unless such conversion occurs between a Regular Record Date and the Interest Payment Date to which it relates). The delivery by the Issuer to the Holder of the Principal Return and Common Stock, if any, for which the Security is convertible, together with any cash payment for such holder’s fractional shares, will be deemed:

(i) to satisfy the Issuer’s obligation to pay the Principal Amount of the Security being converted pursuant to the provisions hereof; and

(ii) to satisfy the Issuer’s obligation to pay accrued but unpaid interest, including Contingent Interest, if any, attributable to the period from the most recent Interest Payment Date through the Conversion Date.

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As a result, the Principal Amount and unpaid interest, including Contingent Interest, if any, through the Conversion Date are deemed to be paid in full rather than cancelled, extinguished or forfeited.

Notwithstanding the foregoing, if Securities are converted after a Record Date but prior to the corresponding Interest Payment Date, Holders at the close of business on the Record Date will receive the interest, including Contingent Interest, if any, payable on such Securities on the corresponding Interest Payment Date notwithstanding the conversion. Such Securities, upon surrender for conversion, must be accompanied by funds equal to the amount of interest, including Contingent Interest, if any, payable on the Securities so converted; provided that no such payment need be made (1) if the Issuer has specified a Redemption Date that is after a Record Date and on or prior to the next Interest Payment Date, (2) if the Issuer has specified a Fundamental Change Purchase Date that is after a Record Date and on or prior to the next Interest Payment Date or (3) to the extent of overdue interest or overdue Contingent Interest, if any, if overdue interest or overdue Contingent Interest exists at the time of conversion with respect to such Security.

Subject to Section 12.05 and subject to a Principal Value Conversion as set forth in Section 12.06, if a Holder surrenders its Securities for conversion, such Holder shall receive, in respect of each $1,000 Principal Amount of Securities:

(i) cash in an amount (the “Principal Return”) equal to the lesser of (a) the Principal Amount of such Security and (b) the Conversion Value;

(ii) if the Conversion Value is greater than such Principal Amount, a number of shares of Common Stock (the “Net Shares”) equal to the sum of the Daily Share Amounts for each Trading Day during the Applicable Conversion Reference Period; and

(iii) cash in lieu of any fractional shares as set forth in Section 12.08.

The Conversion Value, the Principal Return and Net Shares will be determined by the Issuer promptly after the end of the Applicable Conversion Reference Period.

The Issuer agrees, and by acceptance of a beneficial interest in a Security each Holder and any beneficial owner of a Security shall be deemed to agree, to treat, for United States federal income tax purposes, the fair market value of the Common Stock received upon the conversion of a Security (together with any cash payment in lieu of fractional shares) as a contingent payment on the Security for purposes of Treasury Regulation Section 1.1275-4(b).

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If a Holder converts more than one Security at the same time, the Principal Return and the Net Shares, if any, shall be based on the aggregate Principal Amount of Securities converted.

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

Section 12.08. Fractional Shares. The Issuer shall not deliver a fractional share of Common Stock upon conversion of a Security. Instead, the Issuer will deliver cash for the current market value of the fractional share. The current market value of a fractional share of Common Stock shall be determined, to the nearest 1/1,000th of a share, by multiplying the Applicable Stock Price in effect with respect to the applicable Conversion Date of a full share of Common Stock by the fractional amount and rounding the product to the nearest whole cent.

Section 12.09. Taxes on Conversion. If a Holder converts a Security, the Issuer shall pay any documentary, stamp or similar issue or transfer tax due on the delivery of shares of Common Stock, if any, upon such conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be delivered in a name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificate representing the Common Stock, if any, being delivered 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 delivered in a name other than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or regulation.

Section 12.10. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements; Listing of Common Stock.

(a) Before taking any action which would cause an adjustment increasing the Conversion Rate to an amount that would cause the Conversion Price to be reduced below the then par value, if any, of the shares of Common Stock deliverable upon conversion of the Securities, the Issuer will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Issuer may validly and legally deliver shares of such Common Stock at such adjusted Conversion Rate.

(b) (i) The Issuer covenants that all shares of Common Stock which may be delivered upon conversion of Securities shall have been duly authorized and upon issue and delivery in accordance with the terms of this Indenture shall be validly issued, fully paid and non-assessable by the Issuer and free from all taxes, Liens, preemptive or similar rights and charges with respect to the issue thereof.

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(ii) The Issuer covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Securities hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, it will in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the Securities and Exchange Commission (or any successor thereto), endeavor to secure such registration or approval, as the case may be.

(c) The Issuer further covenants that, if at any time the Common Stock shall be listed on the NYSE or any other national securities exchange or automated quotation system, the Issuer will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Security; provided, however, that, if the rules of such exchange or automated quotation system permit the Issuer to defer the listing of such Common Stock until the first conversion of the Securities into Common Stock in accordance with the provisions of this Indenture, the Issuer covenants to list such Common Stock issuable upon conversion of the Securities in accordance with the requirements of such exchange or automated quotation system at such time.

Section 12.11. Adjustment of Conversion Rate. The Base Conversion Rate shall be adjusted from time to time by the Issuer as follows:

(a) In case the Issuer shall hereafter pay a dividend or make a distribution to all holders of the outstanding Common Stock in shares of Common Stock, the Base Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Base Conversion Rate in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution by a fraction,

(i) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the close of business on the date fixed for the determination of stockholders entitled to receive such dividend or other distribution plus the total number of shares of Common Stock constituting such dividend or other distribution; and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination,

such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. If any dividend or distribution of the type described in this Section 12.11(a) is declared but not so paid or made, the Base Conversion Rate shall again be adjusted to the Base Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

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(b) In case the Issuer shall issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them (for a period expiring within forty-five (45) days after the date fixed for determination of stockholders entitled to receive such rights or warrants) to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Closing Sale Prices of the Common Stock for the 10 Trading Days preceding the declaration date for such distribution, the Base Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Base Conversion Rate in effect immediately prior to the date fixed for determination of stockholders entitled to receive such rights or warrants by a fraction,

(i) the numerator of which shall be the number of shares of Common Stock outstanding on the date fixed for determination of stockholders entitled to receive such rights or warrants plus the total number of additional shares of Common Stock offered for subscription or purchase, and

(ii) the denominator of which shall be the sum of the number of shares of Common Stock outstanding at the close of business on the date fixed for determination of stockholders entitled to receive such rights or warrants plus the number of shares that the aggregate offering price of the total number of shares so offered would purchase at a price equal to the average of the Closing Sale Prices of the Common Stock for the 10 Trading Days preceding the declaration date for such distribution.

Such adjustment shall be successively made whenever any such rights or warrants are issued, and shall become effective immediately after the opening of business on the day following the date fixed for determination of stockholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Base Conversion Rate shall be readjusted to the Base Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Base Conversion Rate shall again be adjusted to be the Base Conversion Rate that would then be in effect if such date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at a price less than the average of the Closing Sale Prices of the Common Stock for the 10 Trading Days preceding the declaration date for such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Issuer for such rights or warrants and any amount payable on exercise or exchange thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

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(c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Base Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Base Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(d) In case the Issuer shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of its capital stock or evidences of its indebtedness or assets (including securities, but excluding (x) any rights or warrants referred to in Section 12.11(b), (y) any dividend or distribution (I) paid exclusively in cash or (II) referred to in Section 12.11(a) and (z) any distribution referred to in Section 12.11(g)) (any of the foregoing hereinafter in this Section 12.11(d) called the “Distributed Property”)), then, in each such case, the Base Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Base Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,

(i) the numerator of which shall be the Current Market Price on such Record Date; and

(ii) the denominator of which shall be the Current Market Price on such Record Date less the Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors) on the Record Date of the portion of the Distributed Property so distributed applicable to one share of Common Stock,

such adjustment to become effective immediately prior to the opening of business on the day following such Record Date; provided that if the then Fair Market Value (as so determined) of the portion of the Distributed Property so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive upon conversion the amount of Distributed Property such Holder would have received had such holder converted each Security on the Record Date. If such dividend or distribution is not so paid or made, the Base Conversion Rate shall again be adjusted to be the Base Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If

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the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 12.11(d) 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 on the applicable Record Date.

Rights or warrants distributed by the Issuer to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Issuer’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 12.11 (and no adjustment to the Base Conversion Rate under this Section 12.11 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 Base Conversion Rate shall be made under this Section 12.11(d). 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 Base Conversion Rate under this Section 12.11 was made, (1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Base Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or 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 that shall have expired or been terminated without exercise thereof, the Base Conversion Rate shall be readjusted as if such expired or terminated rights and warrants had not been issued.

For purposes of this Section 12.11(d) and Section 12.11(a) and (b), any dividend or distribution to which this Section 12.11(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be (1) a

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dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Common Stock or rights or warrants (and any Base Conversion Rate adjustment required by this Section 12.11(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Base Conversion Rate adjustment required by Sections 12.11(a) and 12.11(b) with respect to such dividend or distribution shall then be made), except (A) the Record Date of such dividend or distribution shall be substituted as “the date fixed for the determination of stockholders entitled to receive such dividend or other distribution”, “the date fixed for the determination of stockholders entitled to receive such rights or warrants” and “the date fixed for such determination” within the meaning of Section 12.11(a) and 12.11(b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding at the close of business on the date fixed for such determination” within the meaning of Section 12.11(a).

(e) In case the Issuer shall, by dividend or otherwise, distribute to all holders of its Common Stock cash, excluding any dividend or distribution in connection with the liquidation, dissolution or winding up of the Issuer, whether voluntary or involuntary, the Base Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Base Conversion Rate in effect immediately prior to the close of business on such record date by a fraction,

(i) the numerator of which shall be the Reference Market Price on such record date; and

(ii) the denominator of which shall be the Reference Market Price on such record date less the amount of cash so distributed applicable to one share of Common Stock,

such adjustment to be effective immediately prior to the opening of business on the day following the record date; provided that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than the Reference Market Price on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive upon conversion the amount of cash such holder would have received had such holder converted each Security on the Record Date. If such dividend or distribution is not so paid or made, the Base Conversion Rate shall again be adjusted to be the Base Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(f) In case a tender or exchange offer made by the Issuer or any Subsidiary for all or any portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration per share of Common Stock having

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a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) that as of the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) exceeds the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, the Base Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Base Conversion Rate in effect immediately prior to the Expiration Time by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or converted 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) at the Expiration Time and the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or converted shares) at the Expiration Time multiplied by the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Issuer is obligated to purchase shares pursuant to any such tender or exchange offer, but the Issuer is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Base Conversion Rate shall again be adjusted to be the Base Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

(g) If the Issuer pays a dividend or makes a distribution to all holders of its Common Stock consisting of capital stock of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Issuer, the Base Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Base Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,

(i) the numerator of which shall be the sum of (A) the average of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the date on which “ex-dividend trading” commences for such dividend or

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distribution on The New York Stock Exchange or such other national or regional exchange or market which such securities are then listed or quoted (the “Ex-Dividend Date”) plus (B) the fair market value of the securities distributed in respect of each share of Common Stock for which this Section 12.11(g) applies and shall equal the number of securities distributed in respect of each share of Common Stock multiplied by the average of the closing sale prices of those securities distributed for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date; and

(ii) the denominator of which shall be the average of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date,

such adjustment to become effective immediately prior to the opening of business on the day following fifteenth Trading Day after the Ex-Dividend Date; provided that if (x) the average of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date minus (y) the fair market value of the securities distributed in respect of each share of Common Stock for which this Section 12.11(g) applies (as calculated in Section 12.11(g)(i)(B) above) is less than $1.00, then the adjustment provided by for by this Section 12.11(g) shall not be made and in lieu thereof the provisions of Section 12.14 shall apply to such distribution.

(h) In case of a tender or exchange offer made by a Person other than the Issuer or any Subsidiary for an amount that increases the offeror’s ownership of Common Stock to more than twenty-five percent (25%) of the Common Stock outstanding and shall involve the payment by such Person of consideration per share of Common Stock having a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors) that as of the last time (the “Offer Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it shall have been amended) that exceeds the Current Market Price of the Common Stock on the Trading Day next succeeding the Offer Expiration Time, and in which, as of the Offer Expiration Time the Board of Directors is not recommending rejection of the offer, the Base Conversion Rate shall be adjusted so that the same shall equal the rate determined by multiplying the Base Conversion Rate in effect immediately prior to the Offer Expiration Time by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Offer Expiration Time (the shares deemed so

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accepted, up to any such maximum, being referred to as the “Accepted Purchased Shares”) and (y) the product of the number of shares of Common Stock outstanding (less any Accepted Purchased Shares) at the Offer Expiration Time and the Closing Sale Price of the Common Stock on the Trading Day next succeeding the Offer Expiration Time, and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Offer Expiration Time multiplied by the Closing Sale Price of the Common Stock on the Trading Day next succeeding the Offer Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day following the Offer Expiration Time. In the event that such Person is obligated to purchase shares pursuant to any such tender or exchange offer, but such Person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Base Conversion Rate shall again be adjusted to be the Base Conversion Rate that would then be in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section shall not be made if, as of the Offer Expiration Time, the offering documents with respect to such offer disclose a plan or intention to cause the Issuer to engage in any transaction described in Section 12.04.

(i) If any adjustment or readjustment is made to the Base Conversion Rate pursuant to this Section 12.11, the same proportional adjustment shall be made to the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate.

(j) For purposes of this Section 12.11, the following terms shall have the meaning indicated:

(i) “Current Market Price” shall mean the average of the daily Closing Sale Prices per share of Common Stock for the ten consecutive Trading Days selected by the Issuer commencing no more than 30 Trading Days before and ending not later than the earlier of such date of determination and the Trading Day before the “ex” date with respect to the issuance, distribution, subdivision or combination requiring such computation immediately prior to the date in question. For purpose of this paragraph, the term “ex” date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, and (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades, regular way, on such

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exchange or in such market after the time at which such subdivision or combination becomes effective.

If another issuance, distribution, subdivision or combination to which Section 12.11 applies occurs during the period applicable for calculating “Current Market Price” pursuant to the definition in the preceding paragraph, “Current Market Price” shall be calculated for such period in a manner determined by the Board of Directors to reflect the impact of such issuance, distribution, subdivision or combination on the Closing Sale Price of the Common Stock during such period.

(ii) “Fair Market Value” shall mean the amount which a willing buyer would pay a willing seller in an arm’s-length transaction.

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

(iv) “Reference Market Price” shall mean the average of the daily Closing Sale Prices per share of Common Stock for the ten consecutive Trading Days ending on the Trading Day before the “ex” date with respect to the issuance, distribution, subdivision or combination requiring such computation immediately prior to the date in question. For purpose of this paragraph, the term “ex” date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, and (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades, regular way, on such exchange or in such market after the time at which such subdivision or combination becomes effective.

(k) The Issuer may make such increases in the Base Conversion Rate in addition to those required by Section 12.11(a), (b), (c), (d), (e), (f), (g) or (i) as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.

To the extent permitted by applicable law, the Issuer from time to time may increase the Base Conversion Rate by any amount for any period of time if

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the period is at least twenty (20) days, the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the best interests of the Issuer, which determination shall be conclusive. Whenever the Base Conversion Rate is increased pursuant to the preceding sentence, the Issuer shall mail to Holders and file with the Trustee a notice of the increase at least fifteen (15) days prior to the date the increased Base Conversion Rate takes effect, and such notice shall state the increased Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) and the period during which they will be in effect.

(l) All calculations under this Article 12 shall be made by the Issuer and shall be made to the nearest cent or to the nearest one ten thousandth (1/10,000) of a share, as the case may be. No adjustment need be made for rights to purchase Common Stock pursuant to an Issuer plan for reinvestment of dividends or interest or, except as set forth in this Article 12, for any issuance of Common Stock or convertible securities or rights to purchase Common Stock or convertible securities. To the extent the Securities become convertible into cash, assets, property or securities (other than capital stock of the Issuer), subject to Section 12.14, no adjustment need be made thereafter as to the cash, assets, property or such securities. Interest will not accrue on any cash into which the Securities are convertible.

(m) Whenever the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) is adjusted as herein provided, the Issuer shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee or Conversion Agent shall have received such Officers’ Certificate, the Trustee or Conversion Agent, as the case may be, shall not be deemed to have knowledge of any adjustment of the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) and may assume that the last Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Issuer shall prepare a notice of such adjustment of the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) setting forth the adjusted Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum

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Conversion Rate and any Fixed Conversion Rate) to the Holder of each Security at his last address appearing on the Security Register within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(n) In any case in which this Section 12.11 provides that an adjustment shall become effective immediately after (1) a record date or Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 12.11(a), (3) a date fixed for the determination of stockholders entitled to receive rights or warrants pursuant to Section 12.11(b), or (4) the Expiration Time for any tender or exchange offer pursuant to Section 12.11(f) (each a “Determination Date”), the Issuer may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Security converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 12.08. For purposes of this Section 12.11(n), the term “Adjustment Event” shall mean:

(ii) in any case referred to in clause (1) hereof, the occurrence of such event,

(iii) in any case referred to in clause (2) hereof, the date any such dividend or distribution is paid or made,

(iv) in any case referred to in clause (3) hereof, the date of expiration of such rights or warrants, and

(v) in any case referred to in clause (4) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

(o) For purposes of this Section 12.11, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Issuer, unless such treasury shares participate in any distribution or dividend that requires an adjustment pursuant to this Section 12.11, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

Section 12.12. Other Adjustments.

(a) The Issuer shall be entitled to make such increases in the Base Conversion Rate (and, as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate), in addition to those

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required by Section 12.11, as 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 Issuer to its stockholders shall not be taxable.

(b) To the extent permitted by applicable law, the Issuer from time to time may increase the regular interest rate on the Securities by any amount for any period of time so long as such increase (i) is effective as of the beginning of an Interest Period, (ii) ceases to be effective as of the end of an Interest Period, (iii) is irrevocable during such period and (iv) the Board of Directors shall have made a determination that such increase would be in the best interests of the Issuer, which determination shall be conclusive. Whenever the regular interest rate is increased pursuant to the preceding sentence, the Issuer shall provide notice to Holders of the Securities of such increase at least twenty (20) days prior to the Interest Payment Date on which such increase takes effect, and such notice shall state (x) the increased regular interest rate and (y) the period during which it will be in effect.

Section 12.13. Notice of Certain Transactions. In the event that:

(i) the Issuer takes any action which would require an adjustment in the Conversion Rate;

(ii) the Issuer takes any action that requires a supplemental indenture pursuant to Section 12.14; or

(iii) there is a dissolution or liquidation of the Issuer;

the Issuer shall mail to Holders and file with the Trustee a notice stating the proposed record or effective date, as the case may be. The Issuer shall mail the notice at least fifteen 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 (i), (ii) or (iii) of this Section 12.13.

Section 12.14. Effect of Reclassification, Consolidation, Merger or Sale on Conversion Privilege. If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 12.11(c) applies), (ii) any consolidation, merger or combination of the Issuer with another Person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Issuer to any other Person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then:

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(a) the Issuer or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture if such supplemental indenture is then required to so comply) providing for the conversion and settlement of the Securities as set forth in this Indenture. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article. If, in the case of any such reclassification, change, consolidation, merger, combination, sale or conveyance, the Exchange Property (as defined below) includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation 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, including to the extent required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Article 14 herein.

(b) Notwithstanding the provisions of Section 12.07, the Conversion Value with respect to each $1,000 Principal Amount of Securities converted following the effective date of any such transaction, shall be calculated (as provided in clause (d) below) based on the kind and amount of shares of stock and other securities or property or assets (including cash) received upon such reclassification, change, consolidation, merger, combination sale or conveyance by a holder of Common Stock holding, immediately prior to the transaction, a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction (the “Exchange Property”), assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised (“non-electing share”), then for the purposes of this Section 12.14 the kind and amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares).

(c) The Conversion Value in respect of any Securities converted following the effective date of any such transaction shall be equal to the average of the daily values of the Exchange Property pertaining to such Securities as determined in the next sentence (the “Exchange Property Value”) for each of the five consecutive Trading Days (appropriately adjusted to take into account the occurrence during such period of stock splits and similar events) beginning

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on the later of (A) the second Trading Day immediately following the day the Securities are tendered for conversion and (B) the effective date of such transaction (the “Exchange Property Weighted Average Price”). For the purpose of determining the value of any Exchange Property:

(i) Any shares of common stock of the successor or purchasing corporation or any other corporation that are included in the Exchange Property shall be valued as set forth in Section 12.07 as if such shares were “Common Stock” using the procedures set forth in the definition of “Closing Sale Price” in Section 1.01; and

(ii) Any other property (other than cash) included in the Exchange Property shall be valued in good faith by the Board of Directors or by a New York Stock Exchange member firm selected by the Board of Directors.

(d) The Issuer shall deliver such Conversion Value to holders of Securities so converted as follows:

(i) An amount equal to the Principal Return, determined as set forth in Section 12.07; and

(ii) If the Conversion Value of the Securities so converted is greater than the Principal Return, an amount of Exchange Property, determined as set forth below, equal to such aggregate Conversion Value less the Principal Return (the “Net Exchange Property Amount”).

The amount of Exchange Property to be delivered shall be determined by dividing the Net Exchange Property Amount by the Exchange Property Weighted Average Price. If the Exchange Property includes more than one kind of property, the amount of Exchange Property of each kind to be delivered shall be in the proportion that the Exchange Property Value of such kind of Exchange Property bears to the Exchange Property Value of all the Exchange Property. If the foregoing calculations would require the Issuer to deliver a fractional share or unit of Exchange Property to a holder of Securities being converted, the Issuer shall deliver cash in lieu of such fractional share or unit based on its Exchange Property Weighted Average Price.

Notwithstanding clauses (b), (c) and (d) above, if the Securities are tendered for conversion prior to the effective date of any such transaction pursuant to Section 12.07 above, and the Principal Return and Net Shares, if any, have been determined as of the Effective Date of such transaction, then the Issuer shall (i) pay the Principal Return in cash and (ii) instead of delivering Net Shares, if applicable, deliver an amount of Exchange Property that a holder of Common Stock, holding, immediately prior to the transaction, a number of shares of Common Stock equal to the Net Shares, would receive, assuming such holder of Common Stock did not exercise his rights of election, if any, as to the

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kind or amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance is not the same for each non-electing share, then for the purposes of this Section 12.13 the kind and amount of securities, cash or other property receivable upon such consolidation, merger, statutory exchange, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). If the foregoing calculations would require the Company to deliver a fractional share or unit of Exchange Property to a holder of Securities being converted, the Issuer shall deliver cash in lieu of such fractional share or unit based on the Exchange Property Value (as so determined).

The Issuer shall cause notice of the execution of such supplemental indenture to be mailed to each Holder of Securities, at its address appearing on the Security register, within twenty (20) days after execution thereof and shall issue a press release containing such information and publish such information on its website on the World Wide Web. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

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

If this Section 12.14 applies to any event or occurrence, Section 12.11 shall not apply.

Section 12.15. Trustee’s Disclaimer. The Trustee shall have no duty to determine when an adjustment under this Article 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 Issuer is obligated to file with the Trustee pursuant to Section 12.11(l). 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 Issuer’s failure to comply with any provisions of this Article.

The Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed pursuant to Section 12.14, 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 Issuer is obligated to file with the Trustee pursuant to Section 12.11(l).

Section 12.16. Rights Issued in Respect of Common Stock Issued Upon Conversion. Each share of Common Stock issued upon conversion of Securities

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pursuant to this Article 12, if any, shall be entitled to receive the appropriate number of common stock or preferred stock purchase rights, as the case may be (the “Rights”), if any, that shares of Common Stock are entitled to receive and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any shareholder rights agreement adopted by the Issuer, as the same may be amended from time to time (in each case, a “Rights Agreement”). Provided that such Rights Agreement requires that each share of Common Stock issued upon conversion of Securities at any time prior to the distribution of separate certificates representing the Rights be entitled to receive such Rights, then, notwithstanding anything else to the contrary in this Article 12, there shall not be any adjustment to the conversion privilege or Base Conversion Rate (and as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) as a result of the issuance of Rights, but an adjustment to the Base Conversion Rate (and as applicable, the Incremental Share Factor, the Maximum Conversion Rate and any Fixed Conversion Rate) shall be made pursuant to Section 12.11(d) upon the separation of the Rights from the Common Stock.

Section 12.17. Issuer Determination Final. Any determination that the Issuer or the Board of Directors must make pursuant to Sections 12.06, 12.07, 12.08, 12.11, 12.12 or 12.14 shall be conclusive.

ARTICLE 13

PURCHASE AT OPTION OF HOLDERS

Section 13.01. Right to Require Purchase.

(a) Each Holder has the right to require the Issuer to purchase all or a portion of the Securities held by such Holder on June 9, 2008, 2013, and 2018, or if any such day is not a Business Day, on the immediately succeeding Business Day (each, a “Purchase Date”).

(b) The Issuer shall give notice of each Purchase Date and of the procedures set forth in Section 13.02 that each Holder must follow to exercise its purchase right to each Holder at its address set forth in the Security Register and to the Depositary, not later than 21 Business Days prior to each Purchase Date.

Section 13.02. Purchase Procedures. If the Holders have the right to require the purchase of Securities pursuant to Section 13.01, the Issuer shall purchase such Securities for cash at a Purchase Price equal to 100% of the Principal Amount thereof, plus accrued and unpaid interest, including Contingent Interest, if any, to, but excluding, the Purchase Date (the “Purchase Price”) (provided that if the Purchase Date is any day during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on such Interest Payment Date,

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any accrued and unpaid interest, Contingent Interest, shall be paid to the Holder of record as of the applicable Regular Record Date, rather than to the Holder presenting the Security for purchase), at the option of the Holder thereof, upon:

(a) delivery to the Paying Agent by the Holder of a written notice of purchase (a “Purchase Notice”) at any time from the opening of business on the date that is 21 Business Days prior to a Purchase Date until the close of business on such Purchase Date stating:

(i) if a certificated Security has been issued, the certificate number of the Security which the Holder will deliver to be purchased or if not, such information as may be required under applicable procedures of the Depositary,

(ii) the portion of the Principal Amount of the Security which the Holder will deliver to be purchased, which portion must be $1,000 or an integral multiple thereof, and

(iii) that such Security shall be purchased as of the applicable Purchase Date pursuant to this Article 13; and

(b) delivery of such Security to the Paying Agent prior to, on or after the 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 Purchase Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to this Article only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice.

The Issuer shall purchase from the Holder thereof, pursuant to this Article, 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 Issuer contemplated pursuant to the provisions of this Article shall be consummated by the payment of the Purchase Price to be received by the Holder in cash promptly following the later of the Purchase Date and the time of delivery of the Security as set forth in Section 13.04.

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Purchase Notice contemplated by this Section 13.02 shall have the right to withdraw such Purchase Notice at any time prior to the close of business on the Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 13.03.

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

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

The Issuer may, at its option, specify additional dates on which Holders will have the right to require it to purchase Securities upon written notice to the Paying Agent, the Trustee and the Holders. Such notice shall specify the additional dates upon which the Issuer shall be required to purchase the Securities at the option of the Holders and shall be delivered to the Paying Agent, the Trustee and the Holders no less than 25 Business Days prior to the earliest purchase date specified in such notice.

Section 13.03. Effect of Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice specified in Section 13.02(a), the Holder of the Security in respect of which such Purchase Notice was given shall (unless such Purchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Purchase Price with respect to such Security. Such Purchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, promptly following the later of (x) the Purchase Date with respect to such Security (provided the conditions in Section 13.02 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 13.02. Securities in respect of which a Purchase Notice has been given by the Holder thereof may not be converted pursuant to Article 12 hereof on or after the date of the delivery of such Purchase Notice unless such Purchase Notice has first been validly withdrawn as specified in the following two paragraphs.

A 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 Purchase Notice at any time prior to the close of business on the applicable Purchase Date specifying:

(i) if certificated Securities have been issued, the certificate number of the Security in respect of which such notice of withdrawal is being submitted, or if not, such information as may be required under appropriate procedures of the Depositary;

(ii) the Principal Amount of the Security with respect to which such notice of withdrawal is being submitted; and

(iii) the Principal Amount, if any, of such Security that remain subject to the original Purchase Notice and have been or will be delivered for purchase by the Issuer.

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There shall be no purchase of any Securities pursuant to this Article 13 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 Purchase Notice) and is continuing an Event of Default (other than a default in the payment of the 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 Purchase Notice has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment of the Purchase Price with respect to such Securities) in which case, upon such return, the Purchase Notice with respect thereto shall be deemed to have been withdrawn.

Section 13.04. Deposit of Purchase Price. Prior to 11:00 a.m. (New York City time) on the Business Day immediately following the Purchase Date, the Issuer shall deposit with the Trustee or with the Paying Agent an amount of cash (in immediately available funds if deposited on such Business Day) sufficient to pay the aggregate Purchase Price of all of 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 13.04 is made by the Issuer shall be at the option of the Issuer, provided, however, that such deposit shall be made in a manner such that the Trustee or a Paying Agent shall have immediately available funds on the date of deposit.

If a Paying Agent holds, in accordance with the terms hereof, cash sufficient to pay the Purchase Price of any Security for which a Purchase Notice has been tendered and not withdrawn in accordance with this Indenture on the Business Day following the Purchase Date then, immediately following such Purchase Date, such Security will cease to be outstanding, interest, including Contingent Interest, if any, will cease to accrue and the rights of the Holder in respect thereof shall terminate (other than the right to receive the Purchase Price as aforesaid).

Section 13.05. Securities Purchased in Part. Any Security which is to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Issuer, the Paying Agent or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer, the Paying Agent or the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Issuer shall execute and the Trustee, or any Authenticating Agent, shall authenticate and deliver to the Holder of such Security, without service charge except for any taxes to be paid by the Holder in the event a Security is registered under a new name, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate Principal Amount equal to, and in exchange for, the portion of the Principal Amount of the Security so surrendered which is not purchased.

Section 13.06. Repayment to the Issuer. The Trustee and the Paying Agent shall return to the Issuer any cash that remains unclaimed for two years,

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subject to applicable unclaimed property law, together with interest, if any, thereon held by them for the payment of the Purchase Price, provided, however, that to the extent that the aggregate amount of cash or Common Stock deposited by the Issuer pursuant to Section 13.04 exceeds the aggregate Purchase Price of the Securities or portions thereof which the Issuer is obligated to purchase as of the Purchase Date, then promptly after the Business Day following the Purchase Date, the Trustee or the Paying Agent, as applicable, shall return any such excess to the Issuer. Thereafter, any Holder entitled to payment must look to the Issuer for payment as general creditors, unless an applicable abandoned property law designates another Person.

ARTICLE 14

PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

Section 14.01. Right to Require Purchase.

(a) If at any time prior to Stated Maturity Date that Securities remain outstanding there shall occur a Fundamental Change, Securities shall be purchased by the Issuer in integral multiples of $1,000 Principal Amount at the option of the Holders thereof as of the date specified by the Issuer that is not less than 20 Business Days nor more than 35 Business Days after the occurrence of the Fundamental Change (the “Fundamental Change Purchase Date”) subject to satisfaction by or on behalf of any Holder of the requirements set forth in subsection (c) of this Section 14.01. The purchase price of such Securities (the “Fundamental Change Purchase Price”) shall be equal to 100% of the Principal Amount of the Securities to be purchased plus accrued and unpaid interest, including Contingent Interest, if any, to, but excluding, the Fundamental Change Purchase Date, unless such Fundamental Change Purchase Date falls after a Regular Record Date and on or prior to the corresponding Interest Payment Date, in which case the Issuer shall pay the full amount of accrued and unpaid interest, including Contingent Interest, if any, payable on such Interest Payment Date to the holder of record at the close of business on such Regular Record Date.

(b) Within 15 Business Days after the occurrence of a Fundamental Change, the Issuer shall mail a written notice of the Fundamental Change to the Trustee and any Paying Agent and to each Holder.

The notice shall include the form of a Fundamental Change Purchase Notice to be completed by the Holder and shall state:

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

(ii) the date by which the Fundamental Change Purchase Notice pursuant to this Section 14.01 must be given;

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(iii) the Fundamental Change Purchase Date;

(iv) the Fundamental Change Purchase Price that will be accrued and payable with respect to the Securities as of the Fundamental Change Purchase Date;

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

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

(vii) the Base Conversion Rate, the Maximum Conversion Rate and the current Conversion Rate (using the Applicable Stock Price as determined as of the Business Day prior to the date on which the notice pursuant to this Section 14.01(b) is mailed by the Issuer to the Trustee or Paying Agent and assuming a Conversion Date eight Trading Days prior to such date), and any adjustments thereto;

(viii) that Securities as to which a Fundamental Change Purchase Notice has been given may be converted pursuant to Article 12 only to the extent that the Fundamental Change Purchase Notice has been withdrawn in accordance with the terms of this Indenture;

(ix) the procedures that the Holder must follow to exercise rights under this Section 14.01;

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

(xi) that the Holder must satisfy the requirements set forth in the Securities in order to convert the Securities; and

(xii) the last date on which the purchase right may be exercised.

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

(c) A Holder may exercise its rights specified in subsection (a) of this Section 14.01 upon delivery of a written notice (which shall be in substantially the form included as an attachment to the Securities and which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary’s customary procedures) of the exercise of such rights (a “Fundamental Change Purchase Notice”) to any Paying Agent at any time prior to the close of business on the Fundamental Change Purchase Date.

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

The Issuer shall purchase from the Holder thereof, pursuant to this Section 14.01, 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 pursuant to Section 14.01 through Section 14.05 also apply to the purchase of such portion of such Security.

Any purchase by the Issuer contemplated pursuant to the provisions of this Section 14.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Fundamental Change Purchase Date and the time of delivery of the Security to the Paying Agent in accordance with this Section 14.01 as set forth in Section 14.02.

Notwithstanding anything herein to the contrary, any Holder delivering to a Paying Agent the Fundamental Change Purchase Notice contemplated by this subsection (c) shall have the right to withdraw such Fundamental Change Purchase Notice in whole or as to a portion thereof that is a Principal Amount of $1,000 or an integral multiple thereof at any time prior to the close of business on the Fundamental Change Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 14.02.

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

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

Section 14.02. Effect of Fundamental Change Purchase Notice.

Upon receipt by any Paying Agent of the Fundamental Change Purchase Notice specified in Section 14.01(c), the Holder of the Security in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified below) thereafter be entitled to receive the Fundamental Change Purchase Price with respect to such Security. Such Fundamental Change Purchase Price shall be paid to such Holder promptly following the later of (a) the Fundamental Change Purchase Date with respect to such Security (provided the conditions in Section 14.01(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 14.01(c). Securities in respect of which a Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted into Common Stock on or

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

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

(i) if certificated Securities have been issued, the certificate numbers for Securities in respect of which such notice of withdrawal is being submitted, or if not, such information as required by the Depositary;

(ii) the Principal Amount, in integral multiples of $1,000, of the Securities with respect to which such notice of withdrawal is being submitted; and

(iii) the Principal Amount, if any, of such Securities that remain subject to the original Fundamental Change Purchase Notice and have been or will be delivered for purchase by the Issuer.

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

Section 14.03. Deposit of Fundamental Change Purchase Price. On or before 11:00 a.m. New York City time on the Business Day immediately following the Fundamental Change Purchase Date, the Issuer shall deposit with the Trustee or with a Paying Agent an amount of cash (in immediately available funds if deposited on such Business Day) sufficient to pay the aggregate Fundamental Change Purchase Price of all the Securities or portions thereof that are to be purchased as of such Fundamental Change Purchase Date. The manner in which the deposit required by this Section 14.03 is made by the Issuer shall be at the option of the Issuer, provided, however, that such deposit shall be made in a manner such that the Trustee or a Paying Agent shall have immediately available funds on the date of such deposit.

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If a Paying Agent holds, in accordance with the terms hereof, money sufficient to pay the Fundamental Change Purchase Price of any Security for which a Fundamental Change Purchase Notice has been tendered (and not withdrawn in accordance with this Indenture) on the Business Day following the Fundamental Change Purchase Date then, immediately following the Fundamental Change Purchase Date, such Security will cease to be outstanding, interest, including Contingent Interest, if any, will cease to accrue and the rights of the Holder in respect thereof shall terminate (other than the right to receive the Fundamental Change Purchase Price). The Issuer shall publicly announce the Principal Amount of Securities purchased as a result of such Fundamental Change on or as soon as practicable after the Fundamental Change Purchase Date.

Section 14.04. Securities Purchased in Part. Any Security that is to be purchased only in part shall be surrendered at the office of a Paying Agent and promptly after the Fundamental Change Purchase Date the Issuer shall execute and the Trustee, or any Authenticating Agent, shall authenticate and deliver to the Holder of such Security, without service charge (other than amounts to be paid in respect of applicable transfer taxes), a new Security or Securities, of such authorized denomination or denominations in integral multiples of $1,000 Principal Amount as may be requested by such Holder, in aggregate Principal Amount equal to, and in exchange for, the portion of the Principal Amount of the Security so surrendered that is not purchased.

Section 14.05. Repayment to the Issuer. The Trustee and the Paying Agent shall return to the Issuer any cash that remains unclaimed for two years, subject to applicable unclaimed property law, together with interest, if any, thereon held by them for the payment of the Fundamental Change Purchase Price; provided, however, that to the extent that the aggregate amount of cash deposited by the Issuer pursuant to Section 14.03 exceeds the aggregate Fundamental Change Purchase Price of the Securities or portions thereof which the Issuer is obligated to purchase as of the Fundamental Change Purchase Date, then on the Business Day following the Purchase Date, the Trustee or Paying Agent, as applicable, shall return any such excess to the Issuer. Thereafter, any Holder entitled to payment must look to the Issuer for payment as general creditors, unless an applicable abandoned property law designates another Person.

ARTICLE 15

CONTINGENT INTEREST

Section 15.01. Contingent Interest. The Issuer will pay Contingent Interest to Holders during any Interest Period commencing with the Interest Period ending December 9, 2008, if the average Trading Price of the Securities for the five Trading Day measurement period immediately preceding the first

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day of the applicable Interest Period (the “Measurement Period”) equals 120% or more of $1,000 Principal Amount of the Securities as of the first day of such Measurement Period. The amount of Contingent Interest payable per $1,000 Principal Amount of Securities in any Interest Period pursuant to this Section 15.01 will be equal to 0.50% per annum of the average Trading Price of $1,000 Principal Amount of Securities during the Measurement Period.

Section 15.02. Payment of Contingent Interest. The Issuer shall pay Contingent Interest owed pursuant to Section 15.01 for any Interest Period on the Interest Payment Date immediately succeeding the applicable Interest Period to Holders of Securities as of the Regular Record Date relating to such Interest Payment Date.

Section 15.03. Notice of Contingent Interest.

(a) As soon as practicable following the first Business Day of an Interest Period for which Contingent Interest will be payable pursuant to Section 15.01, the Issuer shall issue a press release containing this information and publish the information on its website on the World Wide Web.

(b) On any Interest Payment Date on which Contingent Interest is payable pursuant to this Article 15, the Issuer shall deliver notice thereof to the Trustee and issue a press release stating the amount of such Contingent Interest and setting forth the manner in which such amount was calculated, and publish such information on its website.

ARTICLE 16

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND

EMPLOYEES

Section 16.01. Exemption From Individual Liability. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Issuer or of any successor corporation, either directly or through the Issuer, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations of the Issuer, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, directors or employees, as such, of the Issuer or of any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and

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claims against, every such incorporator, stockholders, officer, director or employee, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of such Securities.

ARTICLE 17

MISCELLANEOUS PROVISIONS

Section 17.01. Trust Indenture Act Controls. This Indenture is subject to the provisions of the TIA that are required to be a part of this Indenture, and shall, to the extent applicable, be governed by such provisions. If any provision of this Indenture modifies any TIA provision that may be so modified, such TIA provision shall be deemed to apply to this Indenture as so modified. If any provision of this Indenture excludes any TIA provision that may be so excluded, such TIA provision shall be excluded from this Indenture.

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

Section 17.02. Notices. Any notice or communication shall be sufficiently given if in writing and delivered in person, by facsimile and confirmed by overnight courier, or mailed by first-class mail addressed as follows:

if to the Issuer:

Getty Images, Inc.

601 N 34^th Street

Seattle, Washington 98103

Attention:  Treasurer

Facsimile:  (206) 925-5621

Telephone: (206) 925-5000

with a copy to:

Weil, Gotshal & Manges LLP

201 Redwood Shores Parkway, 5th Floor

Redwood Shores, California 94065

Attention:  Craig W. Adas

Facsimile:  (650) 802-3100

Telephone: (650) 802-3000

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if to the Trustee:

The Bank of New York

101 Barclay Street, 8W

New York, NY 10286

Attention: Corporate Trust Administration

Facsimile: (212) 815-5707

Telephone: (212) 815-5733

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

Any notice or communication mailed, first-class, postage prepaid, to a Holder including any notice delivered in connection with TIA § 310(b), TIA § 313(c), TIA § 314(a) and TIA § 315(b), shall be mailed to him at his address as set forth on the Security register and shall be sufficiently given to him if so mailed within the time prescribed. To the extent required by the TIA, any notice or communication shall also be mailed to any Person described in TIA § 313(c).

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except for a notice to the Trustee, which is deemed given only when received, if a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

Section 17.03. Communications by Holders with Other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Issuer, the Trustee, the Registrar and any other person shall have the protection of TIA § 312(c).

Section 17.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee:

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

(b) an Opinion of Counsel in form and substance satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have 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.

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Section 17.05. Statements Required in Certificate. Each certificate with respect to compliance with a condition or covenant provided for in this Indenture shall include:

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

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

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

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

Section 17.06. Rules by Trustee, Paying Agent, Conversion Agent Registrar. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent, Conversion Agent or Registrar may make reasonable rules for its functions.

Section 17.07. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 17.08. No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Issuer, as such, shall have any liability for any obligations of the Issuer under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Security, waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities.

Section 17.09. Successors. All agreements of the Issuer in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor.

Section 17.10. Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

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Section 17.11. Severability. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and a Holder shall have no claim therefor against any party hereto.

Section 17.12. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuer or a Subsidiary of the Issuer. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 17.13. Legal Holidays. If any Interest Payment Date falls on a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day. If the Stated Maturity Date, Redemption Date, Fundamental Change Purchase Date or Purchase Date of a Security would fall on a day that is not a Business Day, the required payment of interest, if any, and principal will be made on the next succeeding Business Day and no interest on such payment will accrue for the period from and after the Stated Maturity Date, Redemption Date, Fundamental Change Purchase Date or Purchase Date to such next succeeding Business Day.

[Remainder of page intentionally left blank]

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

GETTY IMAGES, INC.
By:	/s/    Elizabeth J. Huebner
	Name:	Elizabeth J. Huebner
	Title:	Senior Vice President and Chief Financial Officer

THE BANK OF NEW YORK
By:	/s/    Daren DiNicola
	Name:	Daren DiNicola
	Title:	Authorized Signatory

EXHIBIT A

[FORM OF FACE OF GLOBAL SECURITY]

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS DECEMBER 16, 2004. IN ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS SECURITY IS 9.25%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR UNITED STATES FEDERAL INCOME TAX PURPOSES).

GETTY IMAGES, INC. (THE “ISSUER”) AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS SECURITY EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS SECURITY WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS SECURITY AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREASURY REGULATION SECTION 1.1275-4 (THE “CONTINGENT PAYMENT REGULATIONS”), (2) TO TREAT THE CASH AND FAIR MARKET VALUE OF ANY STOCK RECEIVED UPON ANY CONVERSION OF THIS SECURITY OR UPON A PURCHASE OF THIS SECURITY AT THE HOLDER’S OPTION AS A CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, (3) TO TREAT THE EXCHANGE OF THE SECURITY FOR THE 0.5% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2023 ISSUED BY ISSUER ON JUNE 9, 2003 (“OUTSTANDING DEBENTURE”) AS NOT CONSTITUTING A “SIGNIFICANT MODIFICATION” OF THE SECURITY WITHIN THE MEANING OF TREASURY REGULATION SECTION 1.1001-3(e), AND (4) TO ACCRUE INTEREST WITH RESPECT TO THE SECURITY AS ORIGINAL ISSUE DISCOUNT ACCORDING TO THE “NONCONTINGENT BOND METHOD” SET FORTH IN THE CONTINGENT PAYMENT REGULATIONS IN THE SAME MANNER AND AMOUNTS AS WAS APPLICABLE TO THE OUTSTANDING DEBENTURE, AND TO BE BOUND BY THE ISSUER’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,” WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS SECURITY. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT

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SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: GETTY IMAGES, INC. 601 N. 34TH STREET, SEATTLE, WASHINGTON 98103 ATTENTION: TREASURER.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITORY,” WHICH INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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 IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY, 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.

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GETTY IMAGES, INC.

0.5% Convertible Subordinated Debentures, Series B due 2023

No. R-1	Principal Amount: $263,000,000 (or such lesser amount as shown on Schedule I hereto)
Issue Date: December 16, 2004	CUSIP: 374276 AH6

GETTY IMAGES, INC, a Delaware corporation (the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Principal Amount (as defined in the Indenture referred to on the reverse side of this Security) on June 9, 2023.

This Security shall bear interest as specified on the reverse side of this Security and in the Indenture. Contingent Interest (as defined in the Indenture referred to on the reverse side of this Security), if any, on this Security, will be payable as specified on the reverse side of this Security and in the Indenture. This Security is convertible and is subject to redemption at the option of the Issuer or purchase at the option of the Holder hereof, all as specified on the reverse side of this Security and in the Indenture.

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

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

GETTY IMAGES, INC.
By:
	Name:
	Title:

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This is one of the 0.5% Convertible Subordinated Debentures, Series B due 2023 described in the within-mentioned Indenture.

Dated: December 16, 2004

THE BANK OF NEW YORK, as Trustee
By:
	Name:
	Title:

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[FORM OF REVERSE SIDE OF SECURITY]

0.5% Convertible Subordinated Debentures, Series B due 2023

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”) limited in aggregate Principal Amount to $263,000,000, issued under an Indenture, dated as of December 16, 2004 (the “Indenture”), between the Issuer and The Bank of New York, as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Capitalized terms used and not otherwise defined in this Security are used as defined in the Indenture.

1. Interest.

This Security will bear interest from December 16, 2004 or from the most recent date to which interest has been paid or duly provided for, semi-annually in arrears on June 9 and December 9 of each year (each, an “Interest Payment Date”), subject to Section 17.13 of the Indenture, commencing June 9, 2005, at the rate per annum equal to 0.5%. Interest on this Security shall be calculated on the basis of a 360-day year and the actual number of days elapsed during the related Interest Period. Interest payable on this Security on any Interest Payment Date will include interest for the immediately preceding Interest Period. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the June 1 or December 1, as the case may be, immediately preceding the relevant Interest Payment Date. Any interest that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the registered Holder hereof on the relevant Regular Record Date by virtue of having been such Holder, and may be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Issuer, notice whereof shall be given to the Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

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2. Ranking and Subordination

The Issuer agrees, and each Holder by accepting any Security agrees, that the Indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in Article 5 of the Indenture, to the payment when due of all Senior Indebtedness of the Issuer and that such subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. The Securities shall in all respects rank pari passu with all other Subordinated Indebtedness of the Issuer, and only Indebtedness of the Issuer that is Senior Indebtedness will rank senior to the Securities in accordance with the provisions set forth herein.

3. Contingent Interest.

From and after the Interest Period ending December 9, 2008, the Issuer will pay Contingent Interest on this Security under the circumstances and in the amounts described in Article 14 of the Indenture. Such Contingent Interest, if any, shall be payable semi-annually in arrears on each Interest Payment Date to the Holder of this Security as of the close of business on the Regular Record Date relating to such Interest Payment Date.

4. Interest on Overdue Amounts.

If the Principal Amount hereof or any portion of such Principal Amount is not paid when due (whether upon acceleration pursuant to Section 4.02 of the Indenture, upon the dates set for payment of the Redemption Price, Purchase Price or Fundamental Change Purchase Price, upon the Stated Maturity Date or upon Conversion of this Security) or if interest due hereon, including Contingent Interest, if any (or any portion of such interest), is not paid when due, then in each such case the overdue amount shall, to the extent permitted by law, bear interest at the rate then borne by this Security, which interest shall accrue from the date such overdue amount was originally due to the date payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable as set forth in the Indenture.

5. Method of Payment.

Subject to the terms and conditions of the Indenture, the Issuer will make payments in respect of Redemption Price, Purchase Price, Fundamental Change Purchase Price and at Stated Maturity Date to Holders who surrender Securities to a Paying Agent to collect such payments in respect of the Securities; provided that if any Redemption Date, Purchase Date or Fundamental Change Purchase Date is any day during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on such Interest Payment Date, accrued and unpaid interest, including Contingent Interest, if any, shall be paid to the Holder of record as of the applicable Regular Record Date. The Issuer will pay cash amounts in money of

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the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may make such cash payments by check payable in such money; provided that payment by wire transfer of immediately available funds will be required with respect to principal (including Principal Return and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on all Global Securities and all Securities of Holders of more than $25,000,000 aggregate Principal Amount of Securities that have requested such method of payment and provided wire transfer instructions to the Issuer or the Paying Agent. If any Interest Payment Date (other than an Interest Payment Date coinciding with the Stated Maturity Date or earlier Redemption Date, Purchase Date or Fundamental Change Purchase Date) falls on a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day and no interest on such payment will accrue for the period from and after the Interest Payment Date to such next succeeding Business Day. If the Stated Maturity Date, Redemption Date, Purchase Date or Fundamental Change Purchase Date of this Security would fall on a day that is not a Business Day, the required payment of interest, including Contingent Interest, if any, and principal will be made on the next succeeding Business Day and no interest, including Contingent Interest, if any, on such payment will accrue for the period from and after the Stated Maturity Date, Redemption Date, Purchase Date or Fundamental Change Purchase Date to such next succeeding Business Day.

6. Paying Agent, Conversion Agent and Registrar.

Initially, the Trustee will act as Paying Agent, Conversion Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice, other than notice to the Trustee. The Issuer or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Registrar or co-registrar.

7. Indenture.

The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect from time to time (the “TIA”). The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of those terms.

8. Redemption at the Option of the Issuer.

No sinking fund is provided for the Securities. Prior to June 13, 2008, the Securities shall not be redeemable at the option of the Issuer. On and after June 13, 2008 until June 12, 2009, the Securities shall be redeemable for cash as a whole, or from time to time in part, at the option of the Issuer at the Redemption Price, if the Closing Sale Price has exceeded, for at least 20 Trading Days in any 30 consecutive Trading Day period ending on the Trading Day

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immediately prior to the date the Issuer mails the notice of redemption, 125% of the Base Conversion Price. Beginning on June 13, 2009 and until the Stated Maturity Date, the Securities are redeemable for cash as a whole, or from time to time in part, at the option of the Issuer at the Redemption Price, as provided in Article 11 of the Indenture.

If the Issuer redeems less than all of the outstanding Securities, the Trustee shall select the Securities to be redeemed (i) by lot; (ii) pro rata; or (iii) by another method the Trustee considers fair and appropriate. If the Trustee selects a portion of a Holder’s Securities for partial redemption and the Holder converts a portion of the same Securities, the converted portion shall be deemed, to the extent practicable, to be from the portion selected for redemption.

9. Notice of Redemption.

Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder’s registered address. If money sufficient to pay the Redemption Price of all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent prior to or on the Redemption Date, immediately after such Redemption Date interest, including Contingent Interest, if any, shall cease to accrue on such Securities or portions thereof. Securities in denominations larger than $1,000 Principal Amount may be redeemed in part but only in integral multiples of $1,000.

10. Purchase By the Issuer at the Option of the Holder.

Each Holder has the right to require the Issuer to purchase all or a portion of the Securities held by such Holder on June 9, 2008, 2013, and 2018, or if any such day is not a Business Day, the next succeeding Business Day (each, a “Purchase Date”). If required by any Holder, the Issuer shall purchase Securities for cash at a Purchase Price equal to 100% of the Principal Amount thereof, plus accrued and unpaid interest, including Contingent Interest, if any, to, but excluding, the Purchase Date, upon delivery of a Purchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 21 Business Days prior to such Purchase Date until the close of business on such Purchase Date and upon delivery of the Securities to the Paying Agent by the Holder as set forth in the Indenture.

At the option of the Holder and subject to the terms and conditions of the Indenture, the Issuer shall purchase all or a portion of the Securities held by such Holder as of the date that is not less than 20 nor more than 35 Business Days after the occurrence of a Fundamental Change occurring prior to Stated Maturity Date for a Fundamental Change Purchase Price equal to 100% of the Principal Amount thereof, plus accrued and unpaid interest, including Contingent Interest, if any, to, but excluding, the Fundamental Change Purchase Date, unless such Fundamental Change Purchase Date falls after a Regular Record Date and on or

A-9

prior to the corresponding Interest Payment Date, in which case the Issuer shall pay the full amount of accrued and unpaid interest, including Contingent Interest, if any, payable on such Interest Payment Date to the Holder at the close of business on such Regular Record Date.

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

As provided in the Indenture, if cash sufficient to pay the Purchase Price or Fundamental Change Purchase Price, as the case may be, of all Securities or portions thereof to be purchased as of the Purchase Date or the Fundamental Change Purchase Date, as the case may be, is deposited with the Paying Agent on the Business Day following the Purchase Date or the Fundamental Change Purchase Date, as the case may be, all interest, including Contingent Interest, if any, ceases to accrue on such Securities (or portions thereof) immediately after such Purchase Date or Fundamental Change Purchase Date, as the case may be, and the Holder thereof shall have no other rights as such (other than the right to receive the Purchase Price or Fundamental Change Purchase Price, as the case may be, upon surrender of such Security).

11. Conversion.

Subject to the terms of the Indenture, the Holder of a Security may convert the Security at the Conversion Rate under the circumstances set forth in Sections 12.02, 12.03, 12.04, 12.05 and 12.06 of the Indenture. A Security in respect of which a Holder has delivered a Purchase Notice or a Fundamental Change Purchase Notice exercising the option of such Holder to require the Issuer to purchase such Security may be converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture. The Conversion Rate for the Securities on any Conversion Date shall be determined as set forth in the Indenture.

The Issuer shall deliver to the Holder through the Paying Agent, no later than the third Business Day following the date on which the Applicable Stock Price is determined, cash and a certificate for the number of whole shares of Common Stock issuable upon the conversion, if any, and, if applicable, cash in lieu of any fractional shares.

A Holder may convert a portion of a Security if the Principal Amount of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment shall be made for dividends on the Common Stock except as provided in the Indenture. On conversion of a Security, except for conversions during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on the Business Day immediately preceding such Interest Payment Date, in which case the Holder on such Regular Record Date shall receive the interest, including

A-10

Contingent Interest, if any, payable on such Interest Payment Date, that portion of accrued and unpaid interest, including Contingent Interest, if any, on the converted Security attributable to the period from the most recent Interest Payment Date (or, if no Interest Payment Date has occurred, from the Issue Date) through the Conversion Date shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of cash or the Common Stock, if any, (together with the cash payment, if any, in lieu of fractional shares) in exchange for the Security being converted pursuant to the provisions hereof.

Securities or portions thereof surrendered for conversion during the period from the close of business on any Regular Record Date immediately preceding any Interest Payment Date to the close of business on the Business Day immediately preceding such Interest Payment Date shall be accompanied by payment to the Issuer or its order, in New York Clearing House funds or other funds acceptable to the Issuer, of an amount equal to the interest, including Contingent Interest, if any, payable on such Interest Payment Date with respect to the Principal Amount of Securities or portions thereof being surrendered for conversion; provided that no such payment need be made (1) if the Issuer has specified a Redemption Date that occurs during the period from the close of business on a Regular Record Date to the close of business on the Business Day immediately preceding the Interest Payment Date to which such Regular Record Date relates, (2) if the Issuer has specified a Fundamental Change Purchase Date during such period or (3) to the extent of overdue interest or overdue Contingent Interest, any overdue interest or overdue Contingent Interest exists on the Conversion Date with respect to the Securities converted.

No fractional shares will be issued upon conversion; in lieu thereof, an amount will be paid in cash based upon the Applicable Stock Price.

The Issuer agrees, and each Holder and any beneficial owner of a Security by its purchase thereof shall be deemed to agree, to treat, for United States federal income tax purposes, the fair market value of the Common Stock received upon the conversion of a Security (together with any cash payment in lieu of fractional shares) as a contingent payment on the Security for purposes of Treasury Regulation Section 1.1275-4(b).

To convert a Security, a Holder must (a) complete and manually sign the Conversion Notice set forth below or a facsimile thereof and deliver such notice to the Conversion Agent, (b) surrender the Security to the Conversion Agent, (c) furnish appropriate endorsements and transfer documents (including any certification that may be required under applicable law) if required by the Conversion Agent, (d) pay any transfer or similar tax, if required and (e) if required, pay funds equal to the interest, include Contingent Interest, if any, payable on the next Interest Payment Date.

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The Conversion Rate will be adjusted as set forth in Article 12 of the Indenture

12. Conversion Arrangement on Call for Redemption.

Any Securities 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 Securities at an amount not less than the Redemption Price, by one or more investment bankers or other purchasers who may agree with the Issuer to purchase such Securities from the Holders, to convert them into Common Stock of the Issuer and to make payment for such Securities to the Trustee in trust for such Holders.

13. Denominations; Transfer; Exchange.

The Securities are in fully registered form, without coupons, in denominations of $1,000 of Principal Amount and integral multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities in respect of which a Purchase Notice or Fundamental Change Purchase Notice has been given and not withdrawn (except, in the case of a Security to be purchased in part, the portion of the Security not to be purchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed.

14. Persons Deemed Owners.

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

15. Unclaimed Money or Securities.

The Trustee and the Paying Agent shall return to the Issuer any cash that remains unclaimed for two years after the date upon which the principal (including the Principal Return and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on such Security shall have become due and payable, subject to applicable unclaimed property law, together with interest, if any, thereon held by them for the payment of the principal (including the Principal Return and premium, if any, upon conversion) or interest, including Contingent Interest, if any, on such Security, provided, however, that to the extent that the aggregate amount of cash or Common Stock, if any, deposited by the Issuer pursuant to Section 3.01, 11.05, or 13.04 exceeds

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the aggregate principal (including the Principal Return, the Net Shares, if any, and premium, if any, upon conversion) or interest, including Contingent Interest, if any, due on the Securities or portions thereof which the Issuer is obligated to purchase as of the applicable date, then promptly after the Business Day following the such date, the Trustee or the Paying Agent, as applicable, shall return any such excess to the Issuer. Thereafter, any Holder entitled to payment must look to the Issuer for payment as general creditors, unless an applicable abandoned property law designates another Person.

16. Amendment; Waiver.

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate Principal Amount of the Securities at the time outstanding and (ii) certain Defaults may be waived with the written consent of the Holders of a majority in aggregate Principal Amount of the Securities at the time outstanding. The Issuer and the Trustee may amend the Indenture under certain circumstances without the consent of the Holders, as described in the Indenture.

17. Defaults and Remedies.

If an Event of Default occurs and is continuing, the Trustee, or the Holders of at least 25% in aggregate Principal Amount of the Securities at the time outstanding, may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default that will result in the Securities becoming due and payable immediately upon the occurrence of such Events of Default.

Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in aggregate Principal Amount of the Securities at the time 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 amounts specified in Section 4.01(a) or (b) of the Indenture) if it determines that withholding notice is in their interests.

18. Trustee Dealings with the Issuer.

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

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19. No Recourse Against Others.

A director, officer, employee or stockholder, as such, of the Issuer shall not have any liability for any obligations of the Issuer under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

20. Authentication.

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

21. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

22. GOVERNING LAW.

THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture.

Getty Images, Inc.

601 N. 34^th Street

Seattle, WA 98103

Attention: Kevin Roberts

Telecopy No.: (206) 925-5623

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Schedule I

[Include Schedule I only for a Global Security]

GETTY IMAGES INC.

0.5% Convertible Subordinated Debenture, Series B Due 2023

No. R-1

Date     Principal Amount Notation Explaining Principal Amount Recorded Authorized Signature
of Trustee or Depositary Custodian

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ASSIGNMENT FORM

To assign this Security, fill in the form below:

For value received                                                               hereby sell(s), assign(s) and transfer(s) unto                                                                           (Please insert social security or other Taxpayer Identification Number of assignee) the within Security, and hereby irrevocably constitutes and appoints                                                                                            attorney to transfer said Security on the books of the Issuer, with full power of substitution in the premises.

Dated:
	Signature(s)

Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Signature Guarantee

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CONVERSION NOTICE

TO:       GETTY IMAGES, INC.

     THE BANK OF NEW YORK

The undersigned registered owner of this Security hereby requests and instructs the Issuer pursuant to Article 12 of the Indenture to convert the entire Principal Amount of this Security, or portion thereof (which is $1,000 Principal Amount or an integral multiple thereof) designated below, into cash in an amount equal to the Principal Return and shares of Common Stock of the Issuer, par value $0.01, in an amount equal to the Net Shares, if any, in accordance with the terms of the Indenture. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. The Securities shall be converted as of the Conversion Date pursuant to the terms and conditions specified in the Indenture.

To convert this Security, check the box:

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

__________________________________________

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

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

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

Your
Signature:	__________________________________________

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

Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

__________________________________________

Signature Guarantee

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PURCHASE NOTICE

TO:    GETTY IMAGES, INC.

THE BANK OF NEW YORK

The undersigned registered owner of this Security hereby irrevocably acknowledges receipt of a notice from Getty Images, Inc. (the “Issuer”) regarding the right of holders to elect to require the Issuer to purchase the Securities and requests and instructs the Issuer to purchase the entire Principal Amount of this Security, or portion thereof (which is $1,000 Principal Amount or an integral multiple thereof) designated below, in accordance with the terms of the Indenture at the price of 100% of the Principal Amount or proportional portion thereof, together with accrued interest, including Contingent Interest, if any, to, but excluding, the Purchase Date, to the registered holder hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. The Securities shall be purchased by the Issuer as of the applicable Purchase Date pursuant to the terms and conditions specified in the Indenture. This election is made pursuant to Article 13, Purchase at Option of Holders at June 9, 2008, 2013 and 2018.

Dated: _______________________________

Signature(s): ____________________________________

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatever.

Security Certificate Number (if applicable): ________________________________

Principal Amount to be purchased (if less than all): __________________________

Social Security or Other Taxpayer Identification Number: _____________________

Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

___________________________

Signature Guarantee

A-18

OPTION OF HOLDER TO ELECT PURCHASE UPON

FUNDAMENTAL CHANGE

TO:    GETTY IMAGES INC.

THE BANK OF NEW YORK

The undersigned registered owner of this Security hereby irrevocably acknowledges receipt of a notice from Getty Images, Inc. (the “Issuer”) regarding the right of holders to elect to require the Issuer to purchase the Securities upon a Fundamental Change and requests and instructs the Issuer pursuant to Section 14.01 to purchase the entire Principal Amount of this Security, or portion thereof (which is $1,000 Principal Amount or an integral multiple thereof) designated below, in accordance with the terms of the Indenture at the price of 100% of the Principal Amount or proportional portion thereof, together with accrued interest, including Contingent Interest, if any, to, but excluding, the Fundamental Change Purchase Date, to the registered holder hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture. The Securities shall be repurchased by the Issuer as of the Fundamental Change Purchase Date pursuant to the terms and conditions specified in the Indenture.

Dated: _________________________

Signature(s): ________________________________

NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatever.

Security Certificate Number (if applicable): __________________________

Principal Amount to be purchased (if less than all): ____________________

Social Security or Other Taxpayer Identification Number: _______________

Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

________________________________

Signature Guarantee

A-19

EX-10.21

Exhibit 10.21

THIRD AMENDMENT OF LEASE

REGARDING MASON TENDER SPACE

This THIRD AMENDMENT OF LEASE, made as of this 1st day of January, 2006, between THE RECTOR, CHURCH WARDENS AND VESTRYMEN OF TRINITY CHURCH IN THE CITY OF NEW YORK, having its office and address at 74 Trinity Place in the Borough of Manhattan, City, County and State of New York (hereinafter referred to as the “Landlord”), PHOTODISC, INC., a corporation organized under the laws of the State of Washington, having an address at 601 North 34th Street, Seattle, Washington 98103 (hereinafter referred to as the “Tenant”) and GETTY IMAGES, INC., a corporation organized under the laws of the State of Washington, having an address at 710 North 34^th Street, Seattle, Washington 98103 (hereinafter “Getty Images”).

W  I  T  N  E  S  S  T  H:

WHEREAS, the Landlord and Tenant entered into an agreement of lease, dated as of April 1, 2000, as amended and supplemented by the First Amendment of Lease, dated as of October 31, 2000 and the Agreement Regarding Sixth Floor Premises dated as of June 19, 2001, the Second Amendment of Lease dated as of May 31, 2002, and various letter agreements (as so amended the “Lease”), wherein the Landlord leased to the Tenant the entire 4th and 6th floors and a portion of the 5th floor as described in the lease (the “Original Premises”), in the building of the Landlord known as 75 Varick Street (a/k/a One Hudson Square), New York, New York for a term to commence April 1, 2000 and expire (unless sooner terminated in accordance with the provisions of the lease) on March 31, 2015 at the rentals and upon the other terms, covenants and conditions in such lease set forth; and

WHEREAS, pursuant to the terms of the Lease, commencing as of October 1, 2007, a portion of the 5^th floor of the building as shown on Exhibit A-10 to the Lease and designated and defined as the “Mason Tender Space” will be leased by the Tenant and become part of the premises leased pursuant to the Lease; and

WHEREAS, the Landlord has arranged for the early termination of the lease relating to the Mason Tender Space and the early surrender of the Mason Tender Space, and the Landlord

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and the Tenant wish to enter into this amendment of the Lease for the purposes of (i) confirming their agreement that the Tenant will commence to lease the Mason Tender Space as of January 1, 2006, and (ii) to set forth the terms applicable to the Tenant’s leasing of the Mason Tender Space.

NOW, THEREFORE, it is hereby mutually covenanted and agreed between the parties hereto as follows:

1. Lease Amendments. The Lease shall be and it hereby is modified in the following respects effective on January 1, 2006:

(a) Addition of Mason Tender. Effective as of January 1, 2006, the Mason Tender Space shall be part of the premises demised under the Lease which the Landlord lets and leases to the Tenant and, the Tenant takes and hires from the Landlord, for the remainder of the term of the Lease and upon all of the terms, covenants and conditions set forth herein.

(b) Fixed Rent. In order to reflect the leasing of the Mason Tender Space:

(i) for the period commencing January 1, 2006 and ending September 30, 2007, the fixed annual rent payable under the Lease is hereby increased by $269,308.00 per annum (which amount represents the fixed rent for the Mason Tender Space), which shall be payable in equal monthly installments of $22,442.33 per month, in advance on the first day of each calendar month and otherwise as provided in the Lease, with the effect that during such period, the total annual fixed rent payable pursuant to the Lease shall be $7,817,164.00 per annum, which shall be payable in equal monthly installments of $651,430.33 per month, payable in advance on the first day of each calendar month and otherwise as provided in the Lease; and

(ii) for the period commencing October 1, 2007 and ending March 31, 2010, the fixed annual rent payable under the Lease is hereby increased by $356,833.00 per annum (which amount represents the fixed rent for the Mason Tender Space), which shall be payable in equal monthly installments of $29,736.08 per month, in advance on the first day of each calendar month and otherwise as provided in the Lease, with the effect that during such period, the total annual fixed rent payable pursuant to the Lease shall be $7,904,689.00 per annum, which shall be payable in equal monthly installments of $658,724.08 per month, payable in advance on the first day of each calendar month and otherwise as provided in the Lease; and

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(iii) for the period commencing April 1, 2010 and ending March 31, 2015, the fixed annual rent payable under the Lease is hereby increased by $383,246 per annum (which amount represents the fixed rent for the Mason Tender Space), which shall be payable in equal monthly installments of $31,937.17 per month, in advance on the first day of each calendar month and otherwise as provided in the Lease, with the effect that during such period, the total annual fixed rent payable pursuant to the Lease shall be $8,502,803.00 per annum, which shall be payable in equal monthly installments of $708,566.91 per month, payable in advance on the first day of each calendar month and otherwise as provided in the Lease.

(c) Additional Rent. With respect to the Mason Tender Space, (i) during the period commencing on January 1, 2006 and ending September 30, 2007, the Tenant shall not pay any real estate tax escalation or operating expense escalation, and (ii) during the period commencing October 1, 2007 and ending March 31, 2015, the Tenant shall pay real estate tax escalation and percentage escalation in accordance with the provisions of Article THIRTY of the lease.

(d) Free Rent period. The landlord and the Tenant confirm their agreement that, as contemplated by paragraph (g) of Article ONE of the Lease, and subject to the conditions set forth therein, the Tenant shall not be required to pay fixed rent with respect to the Mason Tender Space ($29,736.08 per month) (i) for the period commencing October 1, 2007 and ending January 31, 2008 and (ii) for the period commencing February 1, 2009 and ending May 31, 2009.

2. Landlord’s Work. (a) The Tenant is leasing the Mason Tender Space in “as is” condition, and the Landlord is not, either at this time, prior to October 1, 2007, or at any other time, required to make, install or construct any changes or improvements in the Mason Tender Space to prepare such space for occupancy by the Tenant. The Tenant confirms that the Landlord has no further obligations with respect to the work specified in the Work Letter attached as Exhibit C to the Lease.

(b) Article FORTY-SIX of the Lease provides, subject to the terms and conditions set forth therein, that the Landlord shall reimburse the Tenant up to a maximum of $103,580 for

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Improvements made in the Mason Tender Space. The Landlord (i) agrees that such amount shall be increased by $20,716.00, so that the total reimbursement amount applicable to the Mason Tender Space is $124,296 and (ii) confirms that such total reimbursement is available effective as of January 1, 2006.

(c) Pursuant to item no. 1 under the caption “Landlord’s Additional Work” of the Work Letter attached as Exhibit “C” to the Lease, the Landlord is required to supply 190 tons of condenser-water cooled air conditioning to the 5^th floor of the building. The Tenant confirms that the Landlord has performed, and discharged from, this obligation.

2. Brokerage Commission. The Tenant agrees to indemnify and hold harmless the Landlord from and against all demands, liabilities, losses, causes of action, damages, costs and expenses (including, without limitation, attorneys’ fees and disbursements) suffered or incurred in connection with any claim for a brokerage commission, finder’s fee, consultation fees or other compensation arising out of the leasing of the Mason Tender Space, pursuant hereto and/or the Lease, including without limitation any such claim asserted by either CB Richard Ellis, Inc. or Plymouth Partners, Ltd.

3. Confirmation of Guaranty. Getty Images, Inc. (“Getty”) joins in this agreement to confirm that (a) the Lease Guaranty Agreement dated April 6, 2000 (the “Guaranty”), pursuant to which Getty guaranteed the obligations of the Tenant under the Lease, as amended, remains in full force and effect, (b) Getty consents to the Tenant’s entering into this Third Amendment of Lease, (c) Getty agrees that the obligations of Tenant guaranteed by Getty pursuant to the Guaranty include any additional obligations agreed to and undertaken by the Tenant under this Third Amendment of Lease, and (d) that the reference in the Guaranty to the “Lease” shall mean the Lease, as amended and supplemented to date, and as further amended and supplemented by this Third Amendment of Lease.

4. Lease Ratification. The Lease is hereby ratified and the parties confirm that, except as modified hereby, the Lease remains unmodified and in full force and effect.

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IN WITNESS WHEREOF, the parties have caused these presents to be duly executed as of the day and year first above written.

THE RECTOR, CHURCH-WARDENS AND VESTRYMEN OF TRINITY CHURCH IN THE CITY OF NEW YORK
By:	/s/ Jason Pizer
	Director of Leasing
By:	/s/ Carl Weisbrod
	Executive Vice President of Real Estate
By:	/s/ Stephan Duggan
	Chief Financial Officer
PHOTODISC, INC.
By:	/s/ Elizabeth J. Huebner	(L.S.)
	Name: Elizabeth J. Huebner
	Title: SVP & CFO
GETTY IMAGES, INC.
By:	/s/ Elizabeth J. Huebner
	Name: Elizabeth J. Huebner
	Title: SVP & CFO

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EX-10.28

Exhibit 10.28

EXECUTION

EMPLOYMENT AGREEMENT

THIS AGREEMENT, effective as of the July 12, 2004, by and between GETTY IMAGES, INC., a Delaware corporation (the “Company”), whose principal executive offices are located at 601 N. 34^th Street, Seattle, WA 98103, and Patrick Flynn, an individual (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Executive has been hired into the position of Senior Vice President, Technology, of the Company; and

WHEREAS, both parties desire that the terms and conditions of the Executive’s employment with the Company be governed by the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Employment and Duties.

(a) General. With effect from the date set forth above (the “Effective Date”), Executive agrees upon the terms and conditions herein set forth to serve as Senior Vice President, Technology, of the Company and shall perform all duties customarily appurtenant to such position. In such capacity, the Executive shall report directly and only to the Chief Executive Officer of the Company. The Executive’s principal place of business shall be 601 N. 34^th Street, Seattle, Washington 98103.

(b) Services and Duties. For so long as the Executive is employed by the Company hereunder, and except as otherwise expressly provided in Section 1(c) below, the Executive shall devote Executive’s full business time to the performance of Executive’s duties hereunder; shall faithfully serve the Company; shall in all material respects conform to and comply with the lawful and good faith directions and instructions given to Executive by Executive’s direct supervisor and shall use Executive’s best efforts to promote and serve the interests of the Company.

(c) No Other Employment. For so long as Executive is employed by the Company, Executive shall not, directly or indirectly, render services to any other person or organization for which he receives compensation without the prior approval of the Executive’s direct supervisor. No such approval will be required if the Executive seeks to perform inconsequential services without direct compensation therefore in

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connection with the management of personal investments or in connection with the performance of charitable and civic activities, provided that such activities do not contravene the provisions of Section 6 hereof.

(d) Payment for Services to be Performed; Obligations. Compensation to be paid under this Agreement shall be made with regard to all the Executive’s services to be provided to the Company globally.

2. Term of Employment. The term of the Executive’s employment under this Agreement (the “Term”) shall commence on the Effective Date and continue until it is terminated by either party giving the other written notice of termination. All severance obligations of the Company on the termination of this Agreement, if any, are set forth in Section 4 below.

3. Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive during the Term as compensation for all services rendered hereunder:

(a) Salary. The Company shall pay to the Executive an annual salary (the “Salary”) at the initial rate of Two Hundred Seventy Five Thousand Dollars ($275,000), payable to the Executive in accordance with the normal payroll practices of the Company for its executive officers as are in effect from time to time. The amount of the Executive’s Salary shall be increased to the rate of Three Hundred Thousand Dollars ($300,000) at such time as he assumes responsibility for the Content Operations function, which the Company believes shall be no later than December 31, 2004. The amount of the Executive’s Salary shall be reviewed annually by Executive’s supervisor on or about April 1 of each year during the Term beginning in the 2005 calendar year.

(b) Annual Bonus. The Executive shall be eligible for each calendar year thereafter that begins with the Term to participate in an annual incentive bonus program established by the Company in accordance with the policies of the Company and subject to such terms, conditions and performance targets as may be recommended by the Chief Executive Officer (“CEO”) and approved annually by the Compensation Committee of the Board (the “Compensation Committee”). Under the terms of the annual bonus program, the Executive shall be eligible to earn a target bonus of forty percent (40%) of Executive’s Salary (the “Bonus”) in effect for the applicable calendar year.

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(c) Expenses. The Company acknowledges that the successful operation of its business may require Executive to incur reasonable business expenses while rendering services to the Company for such things as business travel, lodging, meals and other business expenses. Executive shall be reimbursed by the Company for such expenses after presentation of appropriate receipts and statements, according to the procedures established by the Company.

(d) Vacation. The Company shall provide Executive with twenty (20) days of vacation with pay during each year of Executive’s employment under this Agreement. In the event Executive ceases to be an employee of the Company for any reason, Executive shall not be paid for accrued but untaken vacation days.

(e) Other Specific Benefits and Perquisites. Executive and the CEO shall agree to any benefits to be provided to Executive pursuant to this Section 3(e), subject to approval by the Compensation Committee. Any such benefits will be comparable to those provided to other SVPs residing in the U.S. For the avoidance of doubt, Executive will be covered by the Company’s Directors’ & Officers’ insurance program.

(f) Medical and Other Related Benefits. The Company shall provide Executive with Company disability and health insurance benefits consistent with those granted to other senior executives of the Company. Executive will be eligible to participate in any deferred compensation plan adopted by the Company for its senior executives.

(g) Restricted Stock. The CEO will recommend that the Board of Directors grant Executive 15,000 restricted shares of the Company’s common stock, with an anticipated award date of January 12, 2005, such shares to vest over a three and one-half year period, one fourth on the 6-month anniversary of the anticipated grant date of the award and monthly vesting on a pro-rata basis thereafter. A separate agreement will be provided under separate cover.

4. Termination of Employment. Subject to the notice and other provisions of this Section 4, the Company shall have the right to terminate Executive’s employment hereunder, and Executive shall have the right to resign, at any time for any reason or for no stated reason.

(a) Termination for Cause; Resignation Without Good Reason.

(i) If the Executive’s employment is terminated by the Company for Cause (as defined in Section 4(a)(ii) below) or if the Executive resigns from

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Executive’s employment hereunder other than for Good Reason (as defined in Section 4(b)(ii) below), Executive shall be entitled to payment of Executive’s Salary through and including the date of termination or resignation as well as any un-reimbursed expenses. Except to the extent required by the terms of any applicable compensation or benefit plan or program or as otherwise required by applicable law, the Executive shall have no rights under this Agreement or otherwise to receive any other compensation or to participate in any other plan, program or arrangement after such termination or resignation of employment with respect to the year of such termination or resignation and later years.

(ii) Termination for “Cause” shall mean termination of the Executive’s employment with the Company because of (A) willful, material or repeated non-performance of the Executive’s duties to the Company (other than by reason of the incapacity of the Executive due to physical or mental disability) after notice of such failure and the Executive’s non-performance and continued, willful, material or repeated non-performance after such notice, (B) the indictment of the Executive for a felony offense, (C) the commission by the Executive of fraud against the Company or any willful misconduct that brings the reputation of the Company into serious disrepute or causes the Executive to cease to be able to perform Executive’s duties, or (D) any other material breach by the Executive of any material term of this Agreement.

(iii) Termination of the Executive’s employment for Cause shall be communicated by delivery to the Executive of a written notice from the Company stating that the Executive has been terminated for Cause, specifying the particulars thereof and the effective date of such termination. The date of a resignation by the Executive without Good Reason shall be the date specified in a written notice of resignation from the Executive to the Company. The Executive shall provide at least 30 days’ advance written notice of resignation without Good Reason.

(b) Involuntary Termination.

(i) If the Company terminates the Executive’s employment for any reason other than Disability or Cause or Executive resigns from Executive’s employment hereunder for Good Reason (collectively hereinafter referred to as an “Involuntary Termination”), the Company shall pay to the Executive Executive’s Salary and Accrued Bonus through and including the date of termination or resignation as well as any un-reimbursed expenses. For purposes of this Agreement, “Accrued Bonus” shall be determined based on the target amount for which the Executive is eligible as described in Section 3(b) above using the number of days in the applicable calendar year that the Executive was employed by the Company (through the date of termination or resignation). In addition, the Company shall pay to the Executive as severance (the

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“Severance Payments”) within thirty (30) days after the date of termination a lump-sum payment in an amount equal to the sum of Executive’s Salary at the rate in effect immediately prior to such Involuntary Termination plus fifty percent (50%) of the Executive’s Bonus based on the target amount for which the Executive is eligible as described in Section 3(b) above.

(ii) Resignation for “Good Reason” shall mean resignation by Executive because of (A) an adverse and material change in the Executive’s duties, (B) a material breach by the Company of a material term of this Agreement, (C) the failure of the Company to pay the Executive any material amount of compensation when due, (D) a change in control, or (E) a relocation of the Executive’s principal place of business that exceeds 35 miles, without Executive’s prior written consent. The Company shall have 30 business days from the date of receipt of such notice to effect a cure of the material breach described therein and, upon cure thereof by the Company to the reasonable satisfaction of the Executive, such material breach shall no longer constitute Good Reason for purposes of this Agreement.

(iii) The date of termination of employment without Cause shall be the date specified in a written notice of termination to the Executive. The date of resignation for Good Reason shall be the date specified in a written notice of resignation from the Executive to the Company; provided, however, that no such written notice shall be effective unless the cure period specified in Section 4(b)(ii) above has expired without the Company having corrected, to the reasonable satisfaction of the Executive, the event or events subject to cure.

(c) Termination following a Change in Control. Within thirty (30) calendar days following a Change of Control (as the term “Change of Control” is defined in the Getty Images, Inc. 1998 Stock Incentive Plan, as amended from time to time), the Executive shall have the right to resign Executive’s employment with the Company. In such an event, the Company shall pay to the Executive Executive’s Salary and Accrued Bonus through and including the date of resignation as well as any un-reimbursed expenses. Executive also will be entitled to receive within thirty (30) days of the resignation date a lump-sum payment in an amount equal to two times Executive’s Salary at the rate in effect immediately prior to the Change of Control, plus one times the Executive’s Bonus based on the target amount for which the Executive is eligible as described in Section 3(b) above. As per the terms of the Company’s Stock Option Plan, in the event of a Change in Control, (i) all Stock Options or Stock Appreciation Rights then outstanding shall become fully exercisable as of the date of the Change in Control, whether or not then exercisable, (ii) all restrictions and conditions of all Stock Awards then outstanding shall lapse as of the date of the Change in Control, and (iii) all Performance Share Awards shall be deemed to have been fully earned as of the date of

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the Change in Control. In each instance, no award shall be exercisable after the expiration of ten (10) years after the date the award was granted (or any earlier expiration period as stated in the applicable award agreement).

(d) Termination Due to Disability. In the event of the Executive’s Disability (as hereinafter defined), the Company shall be entitled to terminate Executive’s employment on providing the Executive with six months’ prior written notice. In addition to payment of Salary through and including the date of termination and any un-reimbursed business expenses, Executive will be entitled to receive within thirty (30) days of the termination date a lump-sum payment in an amount equal to Executive’s Salary at the rate in effect immediately prior to the Disability, less any amounts paid to the Executive under any disability plan of the Company. As used in this Agreement, the term “Disability” shall mean a physical or mental incapacity that substantially prevents the Executive from performing Executive’s duties hereunder and that has continued for at least six of the last twelve months and that can reasonably be expected to continue indefinitely. Any dispute as to whether or not the Executive is disabled within the meaning of the preceding sentence shall be resolved by a physician reasonably satisfactory to the Executive and the Company, and the determination of such physician shall be final and binding upon both the Executive and the Company.

(e) Beneficiary. For purposes of this Agreement, “Beneficiary” shall mean the person or persons designated in writing by the Executive to receive benefits under a plan, program or arrangement or to receive the balance of the Severance Payments, if any, in the event of the Executive’s death, or, if no such person or persons are designated by the Executive, the Executive’s estate. No beneficiary designation shall be effective unless it is in writing and received by the Company prior to the date of the Executive’s death.

5. Limitation on Payments.

Notwithstanding any other provisions of this Agreement, if either the Company or the Executive receives confirmation from the Company’s independent tax counsel or its certified public accounting firm (the “Tax Advisor”), that any termination benefit granted by the Company to the Executive under this Agreement or otherwise would be considered to be an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, or any successor statute then in effect (the “Code”), then the following rules shall apply:

(a) The Company shall compute the net value to the Executive of all such termination benefits after reduction of the excise taxes imposed by Section 4999 of

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the Code and for any income taxes that would be imposed on Executive if such termination benefits constituted Executive’s sole taxable income.

(b) The Company shall next compute the maximum amount of termination benefits that can be provided without any benefits being characterized as Excess Parachute Payments and reduce the result by the amount of any income taxes that would be imposed on Executive if such reduced termination benefits constituted Executive’s sole taxable income.

If the result derived in subparagraph (i) is greater than the result derived in subparagraph (ii), then the Company shall provide Executive the full amount of termination benefits without reduction. If the result derived from subparagraph (i) is not greater than the result derived in subparagraph (ii), then the Company shall provide the Executive the maximum amount of termination benefits that can be provided without any termination benefits being characterized as “excess parachute payments.”

6. Protection of the Company’s Interests.

(a) No Competing Employment. For so long as the Executive is employed by the Company and continuing for six (6) months following the date on which the Executive’s employment is terminated (such period being referred to hereinafter as the “Restricted Period”), the Executive shall not, without the prior written consent of the CEO, directly or indirectly, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, executive, partner, stockholder, consultant or otherwise, any individual, partnership, firm, corporation or other business organization or entity that competes with the Company by providing any goods or services provided or under development by the Company at the effective date of the Executive’s termination of employment under this Agreement; provided, however, that this Section 6(a) shall not proscribe the Executive’s ownership, either directly or indirectly, of either less than five percent of any class of securities which are listed on a national securities exchange or quoted on the automated quotation system of the National Association of Securities Dealers, Inc. or any limited partnership investment over which the Executive has no control. For the avoidance of doubt, as at the effective date of this Agreement, the following categories of companies are not considered to be competitors of the Company: (i) companies which may sell images off of the Company’s platform or through partnership deals, such as MLBAM, GM or Amazon (although image partners whose companies are primarily in the business of producing or licensing imagery, such as Digital Vision and Agence France Presse, are considered competitors), (ii) companies that offer images as part of search for free, non-commercial uses, such as Google or Yahoo!, or (iii) companies which provide marketplace services such as Ebay which may have image and film

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products for sale as a limited and secondary part of their business. If the Company were to expand into these categories (i) – (iii) at any time while Executive is employed by the Company or during the Restricted Period, then companies within these categories would be considered competitors of the Company for purposes of this Agreement. If any companies in the above categories change their product or service offerings, then the Company at its sole and reasonable discretion will determine whether those companies would then be considered competitors of the Company.

(b) No Interference. During the Restricted Period, the Executive shall not, whether for his own account or for the account of any other individual, partnership, firm, corporation or other business organization (other than the Company), intentionally solicit, endeavor to entice away from the Company or otherwise interfere with the relationship of the Company with, any key person or team who is employed by or otherwise engaged to perform services for the Company or any key person or team or entity who is, or was within the then most recent twelve-month period, a customer, client or supplier of the Company.

(c) Secrecy. The Executive recognizes that the services to be performed by him hereunder are special, unique and extraordinary in that, by reason of Executive’s employment hereunder, Executive may acquire Confidential Information concerning the operation of the Company, the use or disclosure of which could cause the Company substantial losses and damages which could not be readily calculated and for which no remedy at law would be adequate. Accordingly, the Executive covenants and agrees with the Company that Executive will not at any time, except in performance of the Executive’s obligations to the Company hereunder or with the prior written consent of the CEO, directly or indirectly disclose to any person any Confidential Information that Executive may learn or has learned by reason of Executive’s association with the Company. The term “Confidential Information” means any information not previously disclosed to the public or to the trade by the Company with respect to the Company’s, or any of its affiliates’ or subsidiaries’, products, services, facilities and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, financial information (including the revenues, costs or profits associated with any of the Company’s services or products), and business results, plans, prospects or opportunities.

(d) Exclusive Property. The Executive confirms that all Confidential Information is and shall remain the exclusive property of the Company. All business records, papers and documents kept or made by the Executive relating to the business of the Company shall be and remain the property of the Company. Upon the termination of his employment with the Company or upon the request of the Company

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at any time, the Executive shall promptly deliver to the Company, and shall not without the written consent of the CEO retain copies of, any written materials not previously made available to the public, or records and documents made by the Executive or coming into Executive’s possession concerning the business or affairs of the Company; provided, however, that subsequent to any such termination, the Company shall provide the Executive with copies (the cost of which shall be borne by the Executive) of any documents which are requested by the Executive and which the Executive has determined in good faith are (i) required to establish a defense to a claim that the Executive has not complied with his duties hereunder or (ii) necessary to the Executive in order to comply with applicable law.

(e) Assignment of Developments. All Developments (as defined hereinafter) that were or are at any time made, conceived or suggested by Executive, whether acting alone or in conjunction with others, during Executive’s employment with the Company shall be the sole and absolute property of the Company, free of any reserved or other rights of any kind on the part of Executive. During Executive’s employment and, if such Developments were made, conceived or suggested by Executive during Executive’s employment with the Company, thereafter, Executive shall promptly make full disclosure of any such Developments to the Company and, at the Company’s cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of assignment) deemed by the Company to be necessary or desirable at any time in order to effect the full assignment to the Company of Executive’s right and title, if any, to such Developments. For purposes of this Agreement, the term “Developments” shall mean all data, discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the activities of the Company of which Executive is as of the date of this Agreement aware or of which Executive becomes aware at any time during the Term, excluding any Development for which no equipment, supplies, facilities or Confidential Information of the Company was used and which was developed entirely on Executive’s own time, unless (i) the Development relates directly to the business of the Company, (ii) the Development relates to actual or demonstrably anticipated research or development of the Company, or (iii) the Development results from any work performed by Executive for the Company (the foregoing is agreed to satisfy the written notice and other requirements of Section 49.44.140 of the Revised Code of Washington).

(f) Injunctive Relief. Without intending to limit the remedies available to the Company, the Executive acknowledges that a breach of any of the covenants contained in this Section 6 may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure

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damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by this Section 6 or such other relief as may be required to specifically enforce any of the covenants in this Section 6. Without intending to limit the remedies available to the Company, the Company shall be entitled to seek specific performance of the Executive’s obligations under this Agreement.

(g) Compliance with Applicable Securities Laws. The Executive shall during the continuance of Executive’s employment (and shall procure that Executive’s spouse or partner and Executive’s minor children shall comply) with all applicable rules of law, stock exchange regulations and codes of conduct applicable to employees, officers and directors of the Company and the Company for the time being in force in relation to dealings in the shares, debentures and other securities of the Company or any unpublished share price sensitive information affecting the securities of any other company with which the Company has dealings.

(h) Compliance with Company Policy. During the continuance of Executive’s employment, Executive shall observe the terms of any policy issued by the Company in relation to payments, rebates, discounts, gifts, entertainment or other benefits from any third party in respect of any business transacted or proposed to be transacted (whether or not by Executive) by or on behalf of the Company or any member of the Company.

7. General Provisions.

(a) Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. Executive shall have no right, title or interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company; provided, however, that this provision shall not be deemed to waive or abrogate any preferential or other rights to payment accruing to the Executive under applicable bankruptcy laws by virtue of the Executive’s status as an executive of the Company.

(b) No Other Severance Benefits. Except as specifically set forth in this Agreement, the Executive covenants and agrees that Executive shall not be entitled to any other form of severance benefits from the Company, including, without limitation, benefits otherwise payable under any of the Company’s regular severance policies, in the event Executive’s employment hereunder ends for any reason and, except with respect to obligations of the Company expressly provided for herein, the Executive unconditionally releases the Company and its subsidiaries and affiliates, and their

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respective directors, officers, executives and stockholders, or any of them, from any and all claims, liabilities or obligations under this Agreement or under any severance or termination arrangements of the Company or any of its subsidiaries or affiliates for compensation or benefits in connection with Executive’s employment or the termination thereof.

(c) Tax Withholding and Gross-Up. Payments to the Executive of all compensation contemplated under this Agreement shall be subject to all applicable tax withholding. If it is determined that any payment made or benefit provided to Executive pursuant to Section 3(c) or 3(f) is subject to any income tax payable under any United States federal, state, local or other law, then Executive may receive a tax gross-up payment with respect to such taxes. The tax gross-up payment, if any, will be an amount such that, after payment of taxes on such payment, there remains a balance sufficient to pay the taxes being reimbursed. Any such tax gross-up payments will be made at the time Executive’s US federal income tax return for the applicable calendar year is filed.

(d) Notices. Any notice hereunder by either party to the other shall be given in writing by personal delivery, or certified mail, return receipt requested, or (if to the Company) by facsimile, in any case delivered to the applicable address set forth below:

(i) To the Company:	Getty Images, Inc.
	Attn: Chief Executive Officer
	601 N. 34th Street
	Seattle, Washington 98103
	Facsimile 1-206-925-5623
(ii) To the Executive:	Patrick Flynn

or to such other persons or other addresses as either party may specify to the other in writing.

(e) Representation by Executive. Executive represents and warrants that Executive’s entering into this Agreement does not, and that Executive’s

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performance under this Agreement and consummation of the transactions contemplated hereby will not, violate the provisions of any agreement or instrument to which the Executive is a party, or any decree, judgment or order to which the Executive is subject, and that this Agreement constitutes a valid and binding obligation of the Executive in accordance with its terms. Breach of this representation will render all of the Company’s obligations under this Agreement void ab initio.

(f) Limited Waiver. The waiver by the Company or Executive of a violation of any of the provisions of this Agreement, whether express or implied, shall not operate or be construed as a waiver of any subsequent violation of any such provision.

(g) Assignment; Assumption of Agreement. No right, benefit or interest hereunder shall be subject to assignment, encumbrance, charge, pledge, hypothecation or setoff by Executive in respect of any claim, debt, obligation or similar process. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to assume expressly and to agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

(h) Amendment; Actions by the Company. This Agreement may not be amended, modified or canceled except by written agreement of Executive and the Company. Any and all determinations, judgments, reviews, verifications, adjustments, approvals, consents, waivers or other actions of the Company required or permitted under this Agreement shall be effective only if undertaken by the CEO.

(i) Severability. If any term or provision hereof is determined to be invalid or unenforceable in a final court or arbitration proceeding, (i) the remaining terms and provisions hereof shall be unimpaired and (ii) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

(j) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington (determined without regard to the choice of law provisions thereof).

(k) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and

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supersedes all prior agreements and understandings of the parties with respect to the subject matter hereof.

(l) Headings. The headings and captions of the sections of this Agreement are included solely for convenience of reference and shall not control the meaning or interpretation of any provisions of this Agreement.

(m) Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed an original, but both such counterparts shall together constitute one and the same document.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first written above.

GETTY IMAGES, INC.
By:	/s/    JONATHAN D. KLEIN
Name:	Jonathan D. Klein
Title:	Chief Executive Officer

EXECUTIVE
By:	/S/    PATRICK FLYNN
Name:	Patrick Flynn
Title:	SVP, Technology

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EX-10.29

Exhibit 10.29

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EMPLOYMENT AGREEMENT

THIS AGREEMENT, effective as of the November 8, 2004, by and between GETTY IMAGES, INC., a Delaware corporation (the “Company”), whose principal executive offices are located at 601 N. 34^th Street, Seattle, WA 98103, and Jack Sansolo, an individual (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Executive has been hired into the position of Senior Vice President, Chief Marketing Officer of the Company; and

WHEREAS, both parties desire that the terms and conditions of the Executive’s employment with the Company be governed by the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Employment and Duties.

(a) General. With effect from the date set forth above (the “Effective Date”), Executive agrees upon the terms and conditions herein set forth to serve as Senior Vice President, Chief Marketing Officer of the Company and shall perform all duties customarily appurtenant to such position. In such capacity, the Executive shall report directly and only to the Chief Executive Officer of the Company. The Executive’s principal place of business shall be 601 N. 34^th Street, Seattle, Washington 98103.

(b) Services and Duties. For so long as the Executive is employed by the Company hereunder, and except as otherwise expressly provided in Section 1(c) below, the Executive shall devote Executive’s full business time to the performance of Executive’s duties hereunder; shall faithfully serve the Company; shall in all material respects conform to and comply with the lawful and good faith directions and instructions given to Executive by Executive’s direct supervisor and shall use Executive’s best efforts to promote and serve the interests of the Company.

(c) No Other Employment. For so long as Executive is employed by the Company, Executive shall not, directly or indirectly, render services to any other person or organization for which he receives compensation without the prior approval of the Executive’s direct supervisor. No such approval will be required if the Executive seeks to perform inconsequential services without direct compensation therefore in

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connection with the management of personal investments or in connection with the performance of charitable and civic activities, provided that such activities do not contravene the provisions of Section 6 hereof.

(d) Payment for Services to be Performed; Obligations. Compensation to be paid under this Agreement shall be made with regard to all the Executive’s services to be provided to the Company globally.

2. Term of Employment. The term of the Executive’s employment under this Agreement (the “Term”) shall commence on the Effective Date and continue until it is terminated by either party giving the other written notice of termination. All severance obligations of the Company on the termination of this Agreement, if any, are set forth in Section 4 below.

3. Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive during the Term as compensation for all services rendered hereunder:

(a) Salary. The Company shall pay to the Executive an annual salary (the “Salary”) at the initial rate of Three Hundred Thousand Dollars ($300,000), payable to the Executive in accordance with the normal payroll practices of the Company for its executive officers as are in effect from time to time. The amount of the Executive’s Salary shall be reviewed annually by Executive’s supervisor on or about April 1 of each year during the Term beginning in the 2005 calendar year.

(b) Annual Bonus. The Executive shall be eligible for each calendar year thereafter that begins with the Term to participate in an annual incentive bonus program established by the Company in accordance with the policies of the Company and subject to such terms, conditions and performance targets as may be recommended by the Chief Executive Officer (“CEO”) and approved annually by the Compensation Committee of the Board (the “Compensation Committee”). Under the terms of the annual bonus program, the Executive shall be eligible to earn a target bonus of forty percent (40%) of Executive’s Salary (the “Bonus”) in effect for the applicable calendar year.

(c) Expenses. The Company acknowledges that the successful operation of its business may require Executive to incur reasonable business expenses while rendering services to the Company for such things as business travel, lodging, meals and other business expenses. Executive shall be reimbursed by the Company

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for such expenses after presentation of appropriate receipts and statements, according to the procedures established by the Company.

(d) Vacation. The Company shall provide Executive with twenty (20) days of vacation with pay during each year of Executive’s employment under this Agreement. In the event Executive ceases to be an employee of the Company for any reason, Executive shall not be paid for accrued but untaken vacation days.

(e) Other Specific Benefits and Perquisites. Executive and the CEO shall agree to any benefits to be provided to Executive pursuant to this Section 3(e), subject to approval by the Compensation Committee. Any such benefits will be comparable to those provided to other SVPs residing in the U.S. For the avoidance of doubt, Executive will be covered by the Company’s Directors’ & Officers’ insurance program.

(f) Medical and Other Related Benefits. The Company shall provide Executive with Company disability and health insurance benefits consistent with those granted to other senior executives of the Company. Executive will be eligible to participate in any deferred compensation plan adopted by the Company for its senior executives.

(g) Restricted Stock. The CEO will recommend that the Board of Directors grant Executive 15,000 restricted shares of the Company’s common stock, , such shares to vest over a four year period, one fourth on the 1-year anniversary of the grant date of the award and monthly vesting on a pro-rata basis thereafter. A separate agreement will be provided under separate cover.

4. Termination of Employment. Subject to the notice and other provisions of this Section 4, the Company shall have the right to terminate Executive’s employment hereunder, and Executive shall have the right to resign, at any time for any reason or for no stated reason.

(a) Termination for Cause; Resignation Without Good Reason.

(i) If the Executive’s employment is terminated by the Company for Cause (as defined in Section 4(a)(ii) below) or if the Executive resigns from Executive’s employment hereunder other than for Good Reason (as defined in Section 4(b)(ii) below), Executive shall be entitled to payment of Executive’s Salary through and including the date of termination or resignation as well as any un-reimbursed expenses. Except to the extent required by the terms of any applicable compensation or benefit plan or program or as otherwise required by applicable law, the Executive shall have no

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rights under this Agreement or otherwise to receive any other compensation or to participate in any other plan, program or arrangement after such termination or resignation of employment with respect to the year of such termination or resignation and later years.

(ii) Termination for “Cause” shall mean termination of the Executive’s employment with the Company because of (A) willful, material or repeated non-performance of the Executive’s duties to the Company (other than by reason of the incapacity of the Executive due to physical or mental disability) after notice of such failure and the Executive’s non-performance and continued, willful, material or repeated non-performance after such notice, (B) the indictment of the Executive for a felony offense, (C) the commission by the Executive of fraud against the Company or any willful misconduct that brings the reputation of the Company into serious disrepute or causes the Executive to cease to be able to perform Executive’s duties, or (D) any other material breach by the Executive of any material term of this Agreement.

(iii) Termination of the Executive’s employment for Cause shall be communicated by delivery to the Executive of a written notice from the Company stating that the Executive has been terminated for Cause, specifying the particulars thereof and the effective date of such termination. The date of a resignation by the Executive without Good Reason shall be the date specified in a written notice of resignation from the Executive to the Company. The Executive shall provide at least 30 days’ advance written notice of resignation without Good Reason.

(b) Involuntary Termination.

(i) If the Company terminates the Executive’s employment for any reason other than Disability or Cause or Executive resigns from Executive’s employment hereunder for Good Reason (collectively hereinafter referred to as an “Involuntary Termination”), the Company shall pay to the Executive Executive’s Salary and Accrued Bonus through and including the date of termination or resignation as well as any un-reimbursed expenses. For purposes of this Agreement, “Accrued Bonus” shall be determined based on the target amount for which the Executive is eligible as described in Section 3(b) above using the number of days in the applicable calendar year that the Executive was employed by the Company (through the date of termination or resignation). In addition, the Company shall pay to the Executive as severance (the “Severance Payments”) within thirty (30) days after the date of termination a lump-sum payment in an amount equal to the sum of Executive’s Salary at the rate in effect immediately prior to such Involuntary Termination plus fifty percent (50%) of the Executive’s Bonus based on the target amount for which the Executive is eligible as described in Section 3(b) above.

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(ii) Resignation for “Good Reason” shall mean resignation by Executive because of (A) an adverse and material change in the Executive’s duties, (B) a material breach by the Company of a material term of this Agreement, (C) the failure of the Company to pay the Executive any material amount of compensation when due, (D) a change in control, or (E) a relocation of the Executive’s principal place of business that exceeds 35 miles, without Executive’s prior written consent. The Company shall have 30 business days from the date of receipt of such notice to effect a cure of the material breach described therein and, upon cure thereof by the Company to the reasonable satisfaction of the Executive, such material breach shall no longer constitute Good Reason for purposes of this Agreement.

(iii) The date of termination of employment without Cause shall be the date specified in a written notice of termination to the Executive. The date of resignation for Good Reason shall be the date specified in a written notice of resignation from the Executive to the Company; provided, however, that no such written notice shall be effective unless the cure period specified in Section 4(b)(ii) above has expired without the Company having corrected, to the reasonable satisfaction of the Executive, the event or events subject to cure.

(c) Termination following a Change in Control. Within thirty (30) calendar days following a Change of Control (as the term “Change of Control” is defined in the Getty Images, Inc. 1998 Stock Incentive Plan, as amended from time to time), the Executive shall have the right to resign Executive’s employment with the Company. In such an event, the Company shall pay to the Executive Executive’s Salary and Accrued Bonus through and including the date of resignation as well as any un-reimbursed expenses. Executive also will be entitled to receive within thirty (30) days of the resignation date a lump-sum payment in an amount equal to two times Executive’s Salary at the rate in effect immediately prior to the Change of Control, plus one times the Executive’s Bonus based on the target amount for which the Executive is eligible as described in Section 3(b) above. As per the terms of the Company’s Stock Option Plan, in the event of a Change in Control, (i) all Stock Options or Stock Appreciation Rights then outstanding shall become fully exercisable as of the date of the Change in Control, whether or not then exercisable, (ii) all restrictions and conditions of all Stock Awards then outstanding shall lapse as of the date of the Change in Control, and (iii) all Performance Share Awards shall be deemed to have been fully earned as of the date of the Change in Control. In each instance, no award shall be exercisable after the expiration of ten (10) years after the date the award was granted (or any earlier expiration period as stated in the applicable award agreement).

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(d) Termination Due to Disability. In the event of the Executive’s Disability (as hereinafter defined), the Company shall be entitled to terminate Executive’s employment on providing the Executive with six months’ prior written notice. In addition to payment of Salary through and including the date of termination and any un-reimbursed business expenses, Executive will be entitled to receive within thirty (30) days of the termination date a lump-sum payment in an amount equal to Executive’s Salary at the rate in effect immediately prior to the Disability, less any amounts paid to the Executive under any disability plan of the Company. As used in this Agreement, the term “Disability” shall mean a physical or mental incapacity that substantially prevents the Executive from performing Executive’s duties hereunder and that has continued for at least six of the last twelve months and that can reasonably be expected to continue indefinitely. Any dispute as to whether or not the Executive is disabled within the meaning of the preceding sentence shall be resolved by a physician reasonably satisfactory to the Executive and the Company, and the determination of such physician shall be final and binding upon both the Executive and the Company.

(e) Beneficiary. For purposes of this Agreement, “Beneficiary” shall mean the person or persons designated in writing by the Executive to receive benefits under a plan, program or arrangement or to receive the balance of the Severance Payments, if any, in the event of the Executive’s death, or, if no such person or persons are designated by the Executive, the Executive’s estate. No beneficiary designation shall be effective unless it is in writing and received by the Company prior to the date of the Executive’s death.

5. Limitation on Payments.

Notwithstanding any other provisions of this Agreement, if either the Company or the Executive receives confirmation from the Company’s independent tax counsel or its certified public accounting firm (the “Tax Advisor”), that any termination benefit granted by the Company to the Executive under this Agreement or otherwise would be considered to be an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, or any successor statute then in effect (the “Code”), then the following rules shall apply:

(a) The Company shall compute the net value to the Executive of all such termination benefits after reduction of the excise taxes imposed by Section 4999 of the Code and for any income taxes that would be imposed on Executive if such termination benefits constituted Executive’s sole taxable income.

(b) The Company shall next compute the maximum amount of termination benefits that can be provided without any benefits being characterized as

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Excess Parachute Payments and reduce the result by the amount of any income taxes that would be imposed on Executive if such reduced termination benefits constituted Executive’s sole taxable income.

If the result derived in subparagraph (i) is greater than the result derived in subparagraph (ii), then the Company shall provide Executive the full amount of termination benefits without reduction. If the result derived from subparagraph (i) is not greater than the result derived in subparagraph (ii), then the Company shall provide the Executive the maximum amount of termination benefits that can be provided without any termination benefits being characterized as “excess parachute payments.”

6. Protection of the Company’s Interests.

(a) No Competing Employment. For so long as the Executive is employed by the Company and continuing for six (6) months following the date on which the Executive’s employment is terminated (such period being referred to hereinafter as the “Restricted Period”), the Executive shall not, without the prior written consent of the CEO, directly or indirectly, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, executive, partner, stockholder, consultant or otherwise, any individual, partnership, firm, corporation or other business organization or entity that competes with the Company by providing any goods or services provided or under development by the Company at the effective date of the Executive’s termination of employment under this Agreement; provided, however, that this Section 6(a) shall not proscribe the Executive’s ownership, either directly or indirectly, of either less than five percent of any class of securities which are listed on a national securities exchange or quoted on the automated quotation system of the National Association of Securities Dealers, Inc. or any limited partnership investment over which the Executive has no control. For the avoidance of doubt, as at the effective date of this Agreement, the following categories of companies are not considered to be competitors of the Company: (i) companies which may sell images off of the Company’s platform or through partnership deals, such as MLBAM, GM or Amazon (although image partners whose companies are primarily in the business of producing or licensing imagery, such as Digital Vision and Agence France Presse, are considered competitors), (ii) companies that offer images as part of search for free, non-commercial uses, such as Google or Yahoo!, or (iii) companies which provide marketplace services such as Ebay which may have image and film products for sale as a limited and secondary part of their business. If the Company were to expand into these categories (i) – (iii) at any time while Executive is employed by the Company or during the Restricted Period, then companies within these categories would be considered competitors of the Company for purposes of this Agreement. If any companies in the above categories change their product or service

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offerings, then the Company at its sole and reasonable discretion will determine whether those companies would then be considered competitors of the Company.

(b) No Interference. During the Restricted Period, the Executive shall not, whether for his own account or for the account of any other individual, partnership, firm, corporation or other business organization (other than the Company), intentionally solicit, endeavor to entice away from the Company or otherwise interfere with the relationship of the Company with, any key person or team who is employed by or otherwise engaged to perform services for the Company or any key person or team or entity who is, or was within the then most recent twelve-month period, a customer, client or supplier of the Company.

(c) Secrecy. The Executive recognizes that the services to be performed by him hereunder are special, unique and extraordinary in that, by reason of Executive’s employment hereunder, Executive may acquire Confidential Information concerning the operation of the Company, the use or disclosure of which could cause the Company substantial losses and damages which could not be readily calculated and for which no remedy at law would be adequate. Accordingly, the Executive covenants and agrees with the Company that Executive will not at any time, except in performance of the Executive’s obligations to the Company hereunder or with the prior written consent of the CEO, directly or indirectly disclose to any person any Confidential Information that Executive may learn or has learned by reason of Executive’s association with the Company. The term “Confidential Information” means any information not previously disclosed to the public or to the trade by the Company with respect to the Company’s, or any of its affiliates’ or subsidiaries’, products, services, facilities and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, financial information (including the revenues, costs or profits associated with any of the Company’s services or products), and business results, plans, prospects or opportunities.

(d) Exclusive Property. The Executive confirms that all Confidential Information is and shall remain the exclusive property of the Company. All business records, papers and documents kept or made by the Executive relating to the business of the Company shall be and remain the property of the Company. Upon the termination of his employment with the Company or upon the request of the Company at any time, the Executive shall promptly deliver to the Company, and shall not without the written consent of the CEO retain copies of, any written materials not previously made available to the public, or records and documents made by the Executive or coming into Executive’s possession concerning the business or affairs of the Company; provided, however, that subsequent to any such termination, the Company shall provide

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the Executive with copies (the cost of which shall be borne by the Executive) of any documents which are requested by the Executive and which the Executive has determined in good faith are (i) required to establish a defense to a claim that the Executive has not complied with his duties hereunder or (ii) necessary to the Executive in order to comply with applicable law.

(e) Assignment of Developments. All Developments (as defined hereinafter) that were or are at any time made, conceived or suggested by Executive, whether acting alone or in conjunction with others, during Executive’s employment with the Company shall be the sole and absolute property of the Company, free of any reserved or other rights of any kind on the part of Executive. During Executive’s employment and, if such Developments were made, conceived or suggested by Executive during Executive’s employment with the Company, thereafter, Executive shall promptly make full disclosure of any such Developments to the Company and, at the Company’s cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of assignment) deemed by the Company to be necessary or desirable at any time in order to effect the full assignment to the Company of Executive’s right and title, if any, to such Developments. For purposes of this Agreement, the term “Developments” shall mean all data, discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the activities of the Company of which Executive is as of the date of this Agreement aware or of which Executive becomes aware at any time during the Term, excluding any Development for which no equipment, supplies, facilities or Confidential Information of the Company was used and which was developed entirely on Executive’s own time, unless (i) the Development relates directly to the business of the Company, (ii) the Development relates to actual or demonstrably anticipated research or development of the Company, or (iii) the Development results from any work performed by Executive for the Company (the foregoing is agreed to satisfy the written notice and other requirements of Section 49.44.140 of the Revised Code of Washington).

(f) Injunctive Relief. Without intending to limit the remedies available to the Company, the Executive acknowledges that a breach of any of the covenants contained in this Section 6 may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by this Section 6 or such other relief as may be required to specifically enforce any of the covenants in this Section 6. Without intending to limit the remedies available to the Company, the Company shall be entitled to seek specific performance of the Executive’s obligations under this Agreement.

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(g) Compliance with Applicable Securities Laws. The Executive shall during the continuance of Executive’s employment (and shall procure that Executive’s spouse or partner and Executive’s minor children shall comply) with all applicable rules of law, stock exchange regulations and codes of conduct applicable to employees, officers and directors of the Company and the Company for the time being in force in relation to dealings in the shares, debentures and other securities of the Company or any unpublished share price sensitive information affecting the securities of any other company with which the Company has dealings.

(h) Compliance with Company Policy. During the continuance of Executive’s employment, Executive shall observe the terms of any policy issued by the Company in relation to payments, rebates, discounts, gifts, entertainment or other benefits from any third party in respect of any business transacted or proposed to be transacted (whether or not by Executive) by or on behalf of the Company or any member of the Company.

7. General Provisions.

(a) Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. Executive shall have no right, title or interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company; provided, however, that this provision shall not be deemed to waive or abrogate any preferential or other rights to payment accruing to the Executive under applicable bankruptcy laws by virtue of the Executive’s status as an executive of the Company.

(b) No Other Severance Benefits. Except as specifically set forth in this Agreement, the Executive covenants and agrees that Executive shall not be entitled to any other form of severance benefits from the Company, including, without limitation, benefits otherwise payable under any of the Company’s regular severance policies, in the event Executive’s employment hereunder ends for any reason and, except with respect to obligations of the Company expressly provided for herein, the Executive unconditionally releases the Company and its subsidiaries and affiliates, and their

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respective directors, officers, executives and stockholders, or any of them, from any and all claims, liabilities or obligations under this Agreement or under any severance or termination arrangements of the Company or any of its subsidiaries or affiliates for compensation or benefits in connection with Executive’s employment or the termination thereof.

(c) Tax Withholding and Gross-Up. Payments to the Executive of all compensation contemplated under this Agreement shall be subject to all applicable tax withholding. If it is determined that any payment made or benefit provided to Executive pursuant to Section 3(c) or 3(f) is subject to any income tax payable under any United States federal, state, local or other law, then Executive may receive a tax gross-up payment with respect to such taxes. The tax gross-up payment, if any, will be an amount such that, after payment of taxes on such payment, there remains a balance sufficient to pay the taxes being reimbursed. Any such tax gross-up payments will be made at the time Executive’s US federal income tax return for the applicable calendar year is filed.

(d) Notices. Any notice hereunder by either party to the other shall be given in writing by personal delivery, or certified mail, return receipt requested, or (if to the Company) by facsimile, in any case delivered to the applicable address set forth below:

(i) To the Company:	Getty Images, Inc.
	Attn: Chief Executive Officer
	601 N. 34th Street
	Seattle, Washington 98103
	Facsimile 1-206-925-5623
(ii) To the Executive:	Jack Sansolo

or to such other persons or other addresses as either party may specify to the other in writing.

(e) Representation by Executive. Executive represents and warrants that Executive’s entering into this Agreement does not, and that Executive’s performance under this Agreement and consummation of the transactions contemplated hereby will not, violate the provisions of any agreement or instrument to which the Executive is a party, or any decree, judgment or order to which the Executive is subject, and that this Agreement constitutes a valid and binding obligation of the Executive in accordance with its terms. Breach of this representation will render all of the Company’s obligations under this Agreement void ab initio.

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(f) Limited Waiver. The waiver by the Company or Executive of a violation of any of the provisions of this Agreement, whether express or implied, shall not operate or be construed as a waiver of any subsequent violation of any such provision.

(g) Assignment; Assumption of Agreement. No right, benefit or interest hereunder shall be subject to assignment, encumbrance, charge, pledge, hypothecation or setoff by Executive in respect of any claim, debt, obligation or similar process. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to assume expressly and to agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

(h) Amendment; Actions by the Company. This Agreement may not be amended, modified or canceled except by written agreement of Executive and the Company. Any and all determinations, judgments, reviews, verifications, adjustments, approvals, consents, waivers or other actions of the Company required or permitted under this Agreement shall be effective only if undertaken by the CEO.

(i) Severability. If any term or provision hereof is determined to be invalid or unenforceable in a final court or arbitration proceeding, (i) the remaining terms and provisions hereof shall be unimpaired and (ii) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

(j) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington (determined without regard to the choice of law provisions thereof).

(k) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and supersedes all prior agreements and understandings of the parties with respect to the subject matter hereof.

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(l) Headings. The headings and captions of the sections of this Agreement are included solely for convenience of reference and shall not control the meaning or interpretation of any provisions of this Agreement.

(m) Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed an original, but both such counterparts shall together constitute one and the same document.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first written above.

GETTY IMAGES, INC.
By:	/s/    JONATHAN D. KLEIN
Name:	Jonathan D. Klein
Title:	Chief Executive Officer

EXECUTIVE
By:	/S/    JACK SANSOLO
Name:	Jack Sansolo
Title:	SVP, Chief Marketing Officer

Page 13 of 13

EX-10.36

Exhibit 10.36

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[CONFIDENTIAL]

SHARE PURCHASE AGREEMENT

by and between

AMANA INC.

and

GETTY IMAGES, INC.

Dated as of May 12, 2005

TABLE OF CONTENTS

		Page
ARTICLE I	SALE AND PURCHASE OF SHARES	1
1.1	Sale and Purchase of Shares	1
ARTICLE II	PURCHASE PRICE AND CLOSING	1
2.1	Purchase Price	1
2.2	Payment of Intracompany Debts	2
2.3	Closing	2
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLER	3
3.1	Organization of Seller	3
3.2	No Seller Conflict or Default	3
3.3	Organization of the Companies	3
3.4	Capitalization	4
3.5	Subsidiaries	4
3.6	Financial Statements	5
3.7	Accounts Receivable	5
3.8	Absence of Certain Changes or Events	5
3.9	Personal Property	7
3.10	Real Property	8
3.11	Intellectual Property (other than Images)	9
3.12	Intellectual Property - Images	10
3.13	Litigation	11
3.14	Taxes	12
3.15	Contracts and Commitments	15
3.16	Compliance with Laws	16
3.17	Labor Matters	17
3.18	Environmental Matters	18
3.19	Employee Plans	18
3.20	Insurance	20
3.21	Certain Relationships and Interests	20
3.22	Books and Records	20
3.23	Insolvency	21
3.24	Brokers’ or Finders’ Fees	21
3.25	Exclusivity of Representations	21

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TABLE OF CONTENTS

(continued)

		Page
3.26	Separate and Independent	21
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF BUYER	21
4.1	Organization; Authority	21
4.2	No Buyer Conflict or Default	22
4.3	Litigation	22
4.4	Funding	22
4.5	Investigation	22
4.6	No Reliance	22
ARTICLE V	COVENANTS OF THE PARTIES	23
5.1	Conduct of the Company’s Business	23
5.2	Reasonable Commercial Efforts	25
5.3	Consents	25
5.4	Public Announcements; Confidentiality	25
5.5	Prompt Notice	25
5.6	Access	26
5.7	Exclusivity; Acquisition Proposals	26
5.8	Tax Covenants	26
5.9	Supply Agreements	27
5.10	Seller Trademarks	28
5.11	Post-Closing Cooperation	28
5.12	Seller Guaranties	28
5.13	Transition Services Agreement	28
5.14	Transfer of Illustrator Contracts	28
5.15	Analog Archive	29
5.16	Photonica Mark	29
5.17	Getty Litigation	29
5.18	US 401(k) Plan	29
5.19	Agreements with Seller	29
ARTICLE VI	CONDITIONS TO CLOSING	29
6.1	Conditions to Seller’s Obligations	29
6.2	Conditions to Buyer’s Obligations	30
6.3	Reliance	31

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TABLE OF CONTENTS

(continued)

		Page
ARTICLE VII	TERMINATION	31
7.1	Termination	31
7.2	Procedure and Effect of Termination	32
ARTICLE VIII	INDEMNIFICATION	32
8.1	Survival	32
8.2	Indemnification by Buyer	32
8.3	Indemnification by Seller	33
8.4	Notification of Claims	33
8.5	Exclusive Remedies	35
ARTICLE IX	MISCELLANEOUS	35
9.1	Further Assurances	35
9.2	Notices	35
9.3	Exhibits and Schedules	36
9.4	Amendment, Modification and Waiver	36
9.5	Entire Agreement	36
9.6	Severability	36
9.7	Binding Effect; Assignment	36
9.8	No Third-Party Beneficiaries	37
9.9	Fees and Expenses/Transfer Taxes	37
9.10	Counterparts	37
9.11	Interpretation	37
9.12	Enforcement of Agreement	37
9.13	Forum; Service of Process	38
9.14	Governing Law	38
9.15	WAIVER OF JURY TRIAL	38
ARTICLE X	DEFINITIONS	39

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SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT (this “Agreement”), dated as of May 12 , 2005 (“Effective Date”), by and among Getty Images, Inc., a Delaware corporation (“Buyer”), and Amana Inc., a corporation organized under the laws of Japan (“Seller”).

RECITALS

A. Seller owns all of the issued and outstanding shares (the “Shares”) of the common stock of Amana America, Inc. (“Amana US”), a Delaware corporation, Amana Europe Limited, a company organized and existing under the laws of England and Wales (“Amana EU”), and Iconica Limited, a company organized and existing under the laws of England and Wales (“Iconica”) (collectively, “Companies” and each a “Company”).

B. Amana EU owns all of the issued and outstanding shares of the common stock of Amana Germany GmbH, a company established and existing under the laws of Germany (“Amana-Germany”), Amana France S.A.S., a French société par actions simplifiée (“Amana-France”) and Amana Italy S.a.r.l., a company organized and existing under the laws of Italy (“Amana-Italy”).

C. Buyer wishes to purchase the Shares from Seller and Seller wishes to sell the Shares to Buyer, in each case on terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and subject to the terms and conditions set forth herein, the parties hereby agree as follows:

ARTICLE I

SALE AND PURCHASE OF SHARES

1.1 Sale and Purchase of Shares. Subject to the terms and conditions of this Agreement, at the Closing on the Closing Date, Seller shall sell, transfer, assign, convey and deliver to Buyer, and Buyer will purchase from Seller, the Shares. Buyer may (upon written consent of Seller, which shall not unreasonably be withheld) assign to one or more Affiliates of Buyer, all or part of its rights to purchase the Shares of any of the Companies or Subsidiaries. A failure of Buyer to provide Seller with a full indemnity for reasonably quantifiable additional costs and liabilities arising from any such assignment shall be reasonable grounds for Seller to withhold consent.

ARTICLE II

PURCHASE PRICE AND CLOSING

2.1 Purchase Price. In consideration of the sale and transfer of the Shares and the representations, warranties and covenants set forth herein, at the Closing, Buyer shall pay Seller the following:

(a) The aggregate purchase price (the “Purchase Price”) of Fifty One Million United States Dollars ($51,000,000), payable by wire transfer of immediately available funds to an account designated by Seller in writing, reduced by:

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(b) the amount of Third Party Debt and Intracompany Debt outstanding as of Closing.

(c) The parties agree that the allocation of the Purchase Price shall be as follows: $24,000,000 for the Shares of Amana US, $18,000,000 for the Shares of Amana EU (including the value of the shares of Amana-Italy, but excluding the value of the shares of Amana-Germany and Amana-Italy), $5,000,000 for the Shares of Iconica, $2,000,000 for the Shares of Amana-Germany, and $2,000,000 for the Shares of Amana-France. Each party agrees to report the Tax consequences of the transactions contemplated by this Agreement in a manner consistent with such allocation and shall not take any position inconsistent therewith upon any examination of any Tax Return, in any refund claim, or any Action or otherwise unless otherwise required by a “determination” as defined in Section 1313(a) of the Code.

2.2 Payment of Intracompany Debts. At the Closing, Buyer shall, in purchase of the Intracompany Debts, pay to Seller in full an amount equal to the aggregate amount of the Intracompany Debts outstanding as of Closing by wire transfer of immediately available funds to an account designated by Seller in writing and Seller shall simultaneously herewith assign to Buyer all rights it has to such Intracompany Debts by executing such instruments as Buyer may reasonably request.

2.3 Closing.

(a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated hereby (the “Closing”) will take place at the offices of Getty Images, 601 North 34^th Street, Seattle, Washington, USA, on the Business Day following the satisfaction or waiver of each of the conditions set forth in Article VI (other than those conditions that are to be satisfied at the Closing), or on such other date or at such other time and place as the parties mutually agree in writing (the “Closing Date”).

(b) At the Closing, Seller shall deliver to Buyer the following:

(i) Closing Certificate. A certificate, dated as of the Closing Date, executed on Seller’s behalf by an executive officer or director, certifying the fulfillment of the conditions specified in Sections 6.2(a) and 6.2(b) (the “Seller Closing Certificate”);

(ii) Share Certificates. The share certificates representing all of the Shares, all duly endorsed by Seller to Buyer;

(iii) Transaction Agreements. Counterparts executed by Seller and the relevant Companies and Subsidiaries, as appropriate, to the Transaction Agreements to which Seller and the Companies or Subsidiaries are parties; and

(iv) Other Deliveries. All other documents, certificates, instruments and writings required to be delivered by Seller on or prior to the Closing Date pursuant to this Agreement or otherwise required in connection therewith.

(c) At the Closing, Buyer shall pay the Purchase Price in accordance with Section 2.1 and shall deliver to Seller the following:

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(i) Closing Certificate. A certificate, dated as of the Closing Date, executed on Buyer’s behalf by an executive officer or director, certifying the fulfillment of the conditions specified in Sections 6.1(a) and 6.1(b) (the “Buyer Closing Certificate”);

(ii) Transaction Agreements. Counterparts executed by Buyer to the Transaction Agreements to which Buyer is a party; and

(iii) Other Deliveries. All other documents, certificates, instruments, releases and writings required to be delivered by Buyer on or prior to the Closing Date pursuant to this Agreement or otherwise required in connection therewith.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in a correspondingly numbered disclosure schedule delivered by Seller to Buyer dated as of the date hereof and arranged in paragraphs corresponding to numbered and lettered sections contained in this ARTICLE III (the “Disclosure Schedule”), Seller represents and warrants to Buyer as follows:

3.1 Organization of Seller. Seller is a corporation duly incorporated, validly existing and in good standing under the laws of Japan and has all requisite power and authority to enter into this Agreement and each Transaction Agreement to which it is a party and any other agreements contemplated by this Agreement to be entered into by Seller and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and each such Transaction Agreement and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of Seller. This Agreement has been, and at the Closing each such Transaction Agreement will be, duly executed and delivered by Seller. This Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.2 No Seller Conflict or Default. Except as described on Section 3.2 of the Disclosure Schedule, neither the execution and delivery of this Agreement or the Transaction Agreements by any of Seller, the Companies or Subsidiaries, nor the consummation by Seller, the Companies or Subsidiaries of any of the transactions contemplated herein and the Transaction Agreements, will result in a violation of, or a default under, or conflict with, or require any consent, approval or notice under, any contract, trust, commitment, agreement, obligation, understanding, arrangement or restriction of any kind to which any of Seller, the Companies or Subsidiaries is a party or by which any of Seller, the Companies or Subsidiaries is bound or to which the Shares are subject. Consummation by Seller of the transactions contemplated herein will not violate, or require any consent, approval or notice under, or filing or registration with, any Person or under any provision of any judgment, order, decree, statute, law, rule or regulation applicable to Seller, the Companies, Subsidiaries, or the Shares except (a) as described in Section 3.2 of the Disclosure Schedule, (b) any filing required under U.S., U.K., Italian, French, German or European merger or equivalent laws or regulations, or (c) as may be necessary as a result of any facts or circumstances relating solely to Buyer.

3.3 Organization of the Companies. Each Company and Subsidiary, as applicable, is duly organized, validly existing, duly incorporated and subsistent and in good standing under the laws of the

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jurisdiction of its incorporation, and has all requisite power and authority to enter into the Transaction Agreements and the other agreements contemplated by this Agreement to be entered into by such Company or Subsidiary, as appropriate, prior to or at Closing and to consummate the transactions contemplated hereby, to own, lease and operate its properties and to conduct its business. The execution and delivery by the Companies and Subsidiaries of each Transaction Agreement, as applicable, and the consummation by the Companies and Subsidiaries of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Companies and Subsidiaries. Each Company and Subsidiary is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary.

3.4 Capitalization.

(a) Section 3.4(a) of the Disclosure Schedule sets forth the authorized, issued and outstanding Equity Securities of each Company. Except as set forth in Section 3.4(a) of the Disclosure Schedule, there are no shares of Equity Securities of any Company issued, reserved for issuance or outstanding and no outstanding options, warrants, convertible or exchangeable securities, subscriptions, rights (including any preemptive rights), stock appreciation rights, calls or commitments of any character whatsoever to which any of the Companies is a party or may be bound requiring the issuance or sale of shares of any Equity Securities.

(b) All of the allotted, issued and outstanding shares of Equity Securities, of the Companies are duly authorized, validly issued, fully paid and non-assessable and free of any preemptive rights in respect thereto, and are owned by Seller free and clear of any Liens other than as set forth in Section 3.4(b) of the Disclosure Schedule.

(c) None of the Companies or the Subsidiaries has at any time provided any “financial assistance”, whether directly or indirectly, for the purpose of the acquisition of its shares or any holding company or for the purpose of reducing or discharging any liability incurred in such an acquisition in breach of section 151 of the UK Companies Act 1985 (as amended) in relation to the UK Companies or under equivalent Applicable Laws in relation to the other Companies or Subsidiaries.

(d) Each of the Companies and the Subsidiaries has at all times carried out its business and affairs within the powers and in accordance with the provisions of its organizational documents, which set out fully the rights and restrictions attaching to each class of Equity Securities of the Companies and the Subsidiaries.

(e) Except as set forth in Section 3.4(e) of the Disclosure Schedule and except for Seller’s interest in the Companies, none of the Companies has since its incorporation been a subsidiary of any Person.

3.5 Subsidiaries. Section 3.5 of the Disclosure Schedule lists all subsidiaries (the “Subsidiaries”) of each Company and the authorized, issued and outstanding Equity Securities of each such Subsidiary. The outstanding shares of Equity Securities of each Subsidiary are duly authorized, validly issued, fully paid and non-assessable and are wholly owned by Seller or the Company indicated in Section 3.5 of the Disclosure Schedule, directly or through one or more Subsidiaries, free and clear of any Liens other than such Liens as set forth on Section 3.5 of the Disclosure Schedule. There are no other holders of any Equity Securities of the Subsidiaries other than the Companies, Subsidiaries or Seller. Except as set forth in Section 3.5 of the Disclosure Schedule, there are no shares of Equity Securities of any Subsidiary issued, reserved for issuance or outstanding and no outstanding options, warrants, convertible or exchangeable securities, subscriptions, rights (including any preemptive

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rights), stock appreciation rights, calls or commitments of any character whatsoever to which the Subsidiaries are a party or may be bound requiring the issuance or sale of shares of any Equity Securities of the Subsidiaries. Except for the Subsidiaries set forth in Section 3.5 of the Disclosure Schedule, no Company owns or, since December 31, 2003, has owned, directly or indirectly, any ownership, equity, profits or voting interest in, or otherwise control, any corporation, partnership, joint venture or other entity, and has no agreement or commitment to purchase any such interest.

3.6 Financial Statements. For each Company, Seller has heretofore delivered to Buyer copies of (a) the audited consolidated balance sheets as of December 31, 2003 and 2004 and the related audited consolidated statements of operations, changes in stockholders equity and, with respect to Amana US only, cash flows for the fiscal years then ended, (b) the unaudited statements of cash flows for Amana EU and Iconica for the fiscal years ended December 31, 2003 and 2004 (together with (a), the “Annual Financial Statements”), (c) an unaudited balance sheet as of March 31, 2005, and (d) an unaudited statement of cash flows as of March 31, 2005 (together with (c), the “Interim Financial Statements”) (the Annual Financial Statements and Interim Financial Statements are collectively referred to as the “Financial Statements”). The Financial Statements (i) have been prepared from the books and records of each Company and its Subsidiaries, as applicable, for which the Financial Statements relate, (ii) fairly present in all material respects the consolidated financial condition and the results of operations and cash flows of each Company and its Subsidiaries, as applicable, as of the dates and for the periods indicated and (iii) have been prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States in the case of Amana US and the United Kingdom in the case of Amana EU and Iconica, in each case, applied consistently throughout and among the periods covered thereby; provided, however, that the Interim Financial Statements are subject to normal year-end adjustments, and do not contain all footnotes required under the applicable GAAP. No Company or Subsidiary is a guarantor, indemnitor, surety or other obligor of any indebtedness of any other Person.

3.7 Accounts Receivable. All accounts receivable of the Companies and Subsidiaries at the time of Closing (“Accounts”) represent amounts due for services performed or sales actually made in the ordinary course of business and properly reflect the amounts due. The bad debt reserves and allowances reflected against such accounts receivable were made consistent with past practices and in accordance with applicable GAAP consistently applied.

3.8 Absence of Certain Changes or Events. Except as set forth in Section 3.8 of the Disclosure Schedule or as otherwise contemplated by this Agreement, during the period from March 31, 2005 to the date of this Agreement, there has not been any:

(a) capital expenditure by any of the Companies or Subsidiaries exceeding $50,000 in the aggregate (for all purposes relevant to ARTICLES III and V, (i) expenditures or costs of any of the Companies or Subsidiaries in a currency other than Dollars shall be converted into Dollars at the prevailing inter-bank exchange rate on a spot basis in New York, New York (such exchange rate mechanism, the “Designated Exchange Rate”) on the last Business Day before the execution of this Agreement) and (ii) ”in the aggregate” shall mean for all Companies and Subsidiaries considered collectively as a whole;

(b) entering into, assumption, amendment or termination of any Material Contract by any of the Companies or Subsidiaries, except in the ordinary course of business consistent with past practice, or notice received that there will be a loss of, alteration or contract cancellation of, any Material Contract, except as specifically contemplated by this Agreement;

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(c) change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by any of the Companies or Subsidiaries;

(d) any election or change in any election concerning Taxes, any adoption or change in any Tax accounting method or practice, or any change in any Tax accounting period;

(e) revaluation by any of the Companies or Subsidiaries of any of their assets for book or Tax purposes or for any fluctuations in exchange rates with respect to foreign currencies;

(f) increase in the salary or other compensation or benefits payable or to become payable by any of the Companies or Subsidiaries to any of its officers, directors, employees, consultants, or contractors (including photographers), or the declaration, payment or commitment or obligation of any kind for the payment of a bonus or other additional salary or compensation to any such person, except increases in compensation granted as part of the annual staff reviews and bonuses awarded to employees in connection with 2004 work performance consistent with past practices;

(g) except for any sale or disposal of used Equipment, the net book value of which is $50,000 or less in the aggregate, any sale, lease or other disposition or transfer of any property of any of the Companies or Subsidiaries, except for nonexclusive licenses of Images in the ordinary course of business consistent with past practice for fair consideration;

(h) loan by any of the Companies or Subsidiaries to any Person, or assumption of or guarantee by any of the Companies or Subsidiaries of any Debt or other obligation of any Person;

(i) any increase or decrease in the level of Debt of the Companies or the Subsidiaries, on a consolidated basis, or any new borrowings, loans or guarantees of Debt by any of the Companies or Subsidiaries, other than in the ordinary course of business consistent with past practice and in an aggregate amount not exceeding $50,000;

(j) waiver, release of or any commitment to settle any right, claim or defense of any of the Companies or Subsidiaries, except in the ordinary course of business consistent with past practice and in an aggregate amount not exceeding $50,000;

(k) any dividend, distribution or other payment in respect of its Equity Securities to Seller or any directors, officers, employees or Affiliates or shareholders of Seller by any of the Companies or Subsidiaries, in each case in any form, or any accrual in respect of the same;

(l) any fee, payment or reimbursement to Seller or any directors, officers, employees, Affiliates or shareholders of Seller by any of the Companies or Subsidiaries, in each case in any form, or any accrual in respect of the same, except for fees, payments or reimbursements on an arm’s length basis that are consistent with past practice and in the ordinary course of business;

(m) any issuance, sale or delivery, redemption or purchase, by any of the Companies or Subsidiaries of any of their respective Equity Securities, or the grant, issuance or entering into of any options, warrants, rights, agreements or commitments with respect to the issuance of any of their respective Equity Securities, or the amendment of any terms of any such Equity Securities or agreements;

(n) imposition of any Lien (other than a Permitted Lien and any non-exclusive licenses or sublicenses relating to the Images entered into in the ordinary course of business consistent with past practice) on any property of any of the Companies or Subsidiaries;

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(o) any change in the timing for payment, practices or procedures of any of the Companies or Subsidiaries with respect to the payment of trade payables or other obligations of any of the Companies or Subsidiaries or the collection of accounts receivable and revenues (whether by way of acceleration of collections or otherwise);

(p) transaction of business by any of the Companies or the Subsidiaries other than in the ordinary course consistent with past practice;

(q) failure by any of the Companies or Subsidiaries to pay its creditors within the times agreed with such creditors and no Debt has become overdue for payment;

(r) prepayment by any Company or Subsidiary, or event giving rise to a liability to repay any indebtedness, with a value of $50,000 or more in the aggregate in advance of its stated maturity;

(s) acquisition or agreement to acquire by merging or consolidating with, or by purchasing the Equity Securities or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets with a value in excess of $50,000 in the aggregate;

(t) entering into any exclusive license or other license or arrangement with respect to Images or other Intellectual Property rights outside the ordinary course of business consistent with past practice;

(u) disposition by any Company or Subsidiary or lapse of any rights to the use of any Intellectual Property, or disposition of or disclosure to any Person any Intellectual Property not theretofore a matter of public knowledge, other than in the ordinary course of business;

(v) disposal or other transaction by Amana EU or Iconica which will or may have the effect of crystallising a liability to Tax which should have been included in the provision for deferred Tax provided by Amana EU or Iconica to the extent allowed as contained in the Financial Statements if such a disposal or other Event had been planned or predicted at the date on which the Financial Statements were drawn up; or

(w) other than expenses incurred up to and including fiscal year 2004, neither Amana EU nor Iconica have incurred any expense in excess of GBP10,000 individually or GBP50,000 in the aggregate, which will not be deductible either in computing the taxable profits of, or in computing the Tax chargeable on Amana EU or Iconica , nor is there any obligation to make any such payment in future.

3.9 Personal Property.

(a) All tangible personal property assets that are used for the ordinary operation of the business by any Company or Subsidiary during the 12 month period preceding the Closing are owned by the Companies or the Subsidiaries, or subject to a right of use in favor of the Companies or the Subsidiaries, and all such assets are in the possession or under the control of the Companies or the Subsidiaries. The Companies or the Subsidiaries have legal and beneficial title to all such assets which were included in the Interim Financial Statements as owned by the Companies or the Subsidiaries except as disposed of in the ordinary course of business consistent with past practice, and all such assets are in the possession and control of the Companies or the Subsidiaries. No Person (such as Seller or any of its directors, officers, employees or Affiliates) other than Companies or the Subsidiaries can claim rightful

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title to any of the tangible personal property assets claimed as being owned on the Interim Financial Statements.

(b) Except as set forth in Section 3.9 of the Disclosure Schedule, the Companies and the Subsidiaries have good and valid title to all items of personal property, whether tangible or intangible, owned by them, and a valid and enforceable right to use all tangible items of personal property leased by or licensed to them, in each case, free and clear of all Liens, other than Permitted Liens. Section 3.9(b) of the Disclosure Schedule sets forth a complete and accurate list of each lease pursuant to which any of the Companies or Subsidiaries leases any items of Equipment and under which the monthly rental payment exceeds $25,000 in the aggregate. None of the Companies or Subsidiaries or, to Seller’s Knowledge, any other party to any of the leases set forth on Section 3.9(b) of the Disclosure Schedule is in breach thereof or default thereunder and, to Seller’s Knowledge, there does not exist under any such leases any event that, with the giving of notice or the lapse of time, would constitute such a breach or default.

3.10 Real Property.

(a) None of the Companies nor any of the Subsidiaries owns real property or in the past has owned real property.

(b) Seller has delivered to Buyer copies of all leases and subleases in effect on the date hereof pursuant to which any of the Companies or Subsidiaries lease, use or occupy real property (the “Real Property”) (as either a tenant, subtenant or otherwise) (the “Real Property Leases”). Each Real Property Lease is listed in Section 3.10 of the Company Disclosure Schedule. Except as set forth in Section 3.10 of the Disclosure Schedule, the Companies and Subsidiaries have valid leasehold interests in to the Real Property under each Real Property Lease. None of the Companies or Subsidiaries or, to Seller’s Knowledge, any other party to the Real Property Leases is in breach thereof or default thereunder and there does not exist under the Real Property Leases any event that, with the giving of notice or the lapse of time, would constitute such a breach or default.

(c) All documents relating to the lease of any of the Real Properties located in the United Kingdom have where required been duly stamped and are in the possession or under the control of one of the Companies or the Subsidiaries.

(d) Where it is required, the leases with respect to any of the Real Properties located in the United Kingdom are registered at H. M. Land Registry.

(e) There are no expenses or anticipated expenses affecting the Real Properties which are of an unusual or onerous nature.

(f) The present use of the Real Properties is a permitted or lawful use.

(g) To Seller’s Knowledge, there are no notices, negotiations or proceedings pending (or anticipated) in relation to rent reviews in respect of any Real Property Lease.

(h) To Seller’s Knowledge, none of the Companies nor any of the Subsidiaries has received a notice that a lessor, grantor, licenser or optionor (as applicable) under any Real Property Lease intends to cancel or terminate any of the same or to exercise or not to exercise any option thereunder.

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(i) To Seller’s Knowledge, none of the Companies nor any of the Subsidiaries has received any notice of any foreclosure, forcible entry, detainer, ejectment or other suit or action brought with respect to any parcel of the Real Property by any Third Party which could, if successful, result in the loss of possessory rights to such Real Property by any Company, Subsidiary or any Person by or through which any Company or Subsidiary holds an interest in such parcel of the Real Property.

(j) To Seller’s Knowledge, no claims have been made or are anticipated against the Companies or the Subsidiaries in respect of repairs, dilapidations or any other monetary claim relating to the Real Properties.

3.11 Intellectual Property (other than Images). The following representations relate to Intellectual Property other than the Intellectual Property rights specifically related to Images:

(a) Section 3.11(a) of the Disclosure Schedule lists: (i) all United States, international, and foreign: patents and patent applications (including provisional applications); registered trademarks and service marks, applications to register trademarks and service marks, intent-to-use applications, or other registrations or applications related to trademarks and service marks, and any domain name registrations; registered copyrights and applications for copyright registration; registered mask works and applications to register mask works; and any other Company Owned Intellectual Property that is or, since December 31, 2003, has been the subject of a registration or application to register, relating directly to the ownership and/or enforcement of rights relating to such Company Owned Intellectual Property, issued by, filed with, or recorded by, the applicable foreign, federal, state, government or other public legal authority at any time; (ii) all written licenses, sublicenses, and other agreements to which any of the Companies or Subsidiaries is a party and pursuant to which any other Person is authorized to have access to, or use of, Company Owned Intellectual Property or to exercise any other right with regard thereto; (iii) all written agreements and licenses pursuant to which any of the Companies or Subsidiaries have been granted a license to any Company Licensed Intellectual Property (other than license agreements for standard “shrink wrapped, off-the-shelf” third party Intellectual Property, or third party Intellectual Property that is publicly available for license and/or use); and (iv) all written or unwritten agreements, licenses or sublicenses described in Section 3.11(a)(ii) or (a)(iii) that involve Seller (or any of its directors, officers, employees or Affiliates).

(b) As used in this Section 3.11(b) “Intellectual Property” shall mean (i) patents and patent applications and all reissues, divisions, renewals, provisionals, continuations and continuations-in-part thereof; (ii) trademarks, service marks, Internet domain names, trade dress, logos, trade names and other source identifiers, including registrations and applications therefor, and the goodwill associated therewith; (iii) copyrights, including registrations and applications therefor; and (iv) confidential and proprietary information, including trade secrets and know-how. “Company Owned Intellectual Property” shall mean all Intellectual Property owned in whole or in part by any of the Companies or Subsidiaries. “Company Licensed Intellectual Property” shall mean all Intellectual Property owned by Third Parties or Seller and licensed to any of the Companies or Subsidiaries in each case as set forth in Section 3.11(a) of the Disclosure Schedule; all references to “Company Intellectual Property” shall refer to both Company Owned Intellectual Property and Company Licensed Intellectual Property. The parties acknowledge and agree that neither “Company Owned Intellectual Property” nor “Company Licensed Intellectual Property” shall include any Seller Trademarks or any Images. The Company Intellectual Property is all of the Intellectual Property used in the business during the 12 months prior to the Closing Date. Except as set forth in Section 3.11(b) of the Disclosure Schedule, (i) the consummation of the transactions contemplated by this Agreement will not impair the ownership of or any right to use any Company Owned Intellectual Property, (ii) all Company Owned Intellectual Property is owned by the Companies and Subsidiaries free and clear of all Liens, other than Permitted

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Liens, (iii) the Companies and Subsidiaries have taken all reasonably necessary action to maintain and protect the Company Owned Intellectual Property, (iv) to Seller’s Knowledge, no claims have been asserted by any Person challenging the validity, effectiveness or ownership of or use by any of the Companies or Subsidiaries of the Company Owned Intellectual Property, (v) to Seller’s Knowledge, no Third Party is engaging in any activity that infringes, misappropriates or otherwise violates the Company Owned Intellectual Property, (vi) all of the Company Licensed Intellectual Property is the subject of valid and appropriate written licensing agreements under which the use of such Intellectual Property by the Companies and Subsidiaries is permitted as of the Closing Date in the manner and to the extent as used by the Companies and Subsidiaries during the 12 months preceding the Closing Date.

(c) To Seller’s Knowledge, except as set forth in Section 3.11(c) of the Disclosure Schedule neither the (i) use, reproduction, modification, manufacturing, distribution, licensing, sublicensing, sale, or any other exercise of rights in any Company Owned Intellectual Property by any of the Companies or Subsidiaries or use of the Seller Trademarks by any of the Companies or Subsidiaries, (ii) operation of any of the Companies’ or Subsidiaries’ businesses as conducted as of the Effective Date or during the 12 months preceding the Closing Date, nor (iii) Exploitation of any of the Companies’ or Subsidiaries’ products or services by the Companies or Subsidiaries as such Exploitation occurred as of the Effective Date or during the 12 months preceding the Closing Date, infringes in any respect any Intellectual Property rights, or any other intellectual property, proprietary, or personal right of any Person, or constitutes unfair competition or unfair trade practice under the laws of the applicable jurisdiction.

(d) Neither Seller nor any of its directors, officers, employees or Affiliates (excepting the Companies and Subsidiaries) has any right, title or interest in or to any of the Company Intellectual Property (including all AIMS, NAIMS and ARMS databases and the websites operated by the Companies). This provision shall not impact Seller’s incidental use of confidential and proprietary information known as a result of its ownership of the Companies and Subsidiaries, and shall specifically exclude the Seller Trademarks, including the “Amana” name and trademark, which is owned by Seller.

3.12 Intellectual Property—Images. The following representations relate only to Intellectual Property related to Images, and no representation or warranty is made in this Section 3.11 with respect to any other Intellectual Property:

(a) All Images that, as of the Closing Date and during the 12 months preceding the Closing Date, are or were used in the business of any of the Companies or Subsidiaries are or were at all relevant times validly licensed to and/or represented by the Companies or Subsidiaries.

(b) None of the Companies or Subsidiaries has granted any exclusive licenses or exclusive sublicenses or other exclusive rights with respect to the Images, except in the ordinary course of business.

(c) To Seller’s Knowledge, as of the Closing Date and during the 12 months preceding the Closing Date, the rights of the Companies and Subsidiaries in or to any Images and the Exploitation of any of the Images for the continued operation of the business of any of the Companies and Subsidiaries, as conducted as of the Effective Date and during the 12 months preceding the Closing Date, have not misappropriated, or infringed upon, and do not misappropriate, or infringe upon any Intellectual Property rights of any third parties.

(d) No claims have at any time from December 31, 2003 until the Closing Date been made, asserted, or, to Seller’s Knowledge, threatened against any of the Companies or Subsidiaries, and no claims are presently pending or, to Seller’s Knowledge, threatened, against any of

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the Companies or Subsidiaries and, to Seller’s Knowledge, no claims are presently pending against any customers of the Companies or any of the Subsidiaries: (A) based upon or challenging or seeking to deny or restrict the Exploitation by any of the Companies or Subsidiaries of any of the Images, (B) alleging that the Exploitation of the Images does or may conflict with, misappropriate or infringe upon any Intellectual Property rights of any third party, (C) that any of the Companies or Subsidiaries have failed to comply with the terms and conditions of any Material Contracts governing Exploitation of any Images, or (D) that the electronic distribution in digital form of Images via the Internet or other electronic medium breaches any Material Contract with any distribution agents of any of the Companies or Subsidiaries.

(e) Except as set forth on Section 3.12(e) of the Disclosure Schedule, the consummation of the transactions contemplated by this Agreement and the Transaction Agreements will not cause the termination or impair or result in alteration of the rights of any of the Companies or Subsidiaries to Exploit any of the Images, it being understood that many of the Contracts relating thereto are terminable at will.

(f) To Seller’s Knowledge, no Person is engaging in any activity that infringes upon the Intellectual Property rights of any of the Companies or Subsidiaries in the Images.

(g) All Images in tangible form not wholly owned by any Company or Subsidiary but for which any of them is or was responsible under the terms of any legally binding agreement during the 12 months preceding the Closing (i) are in proper storage on the premises of such Company or Subsidiary, (ii) have been returned to the owner, or (iii) are the subject of proper bailment arrangements.

(h) In respect of all Images owned or sub-licensed by a Company or Subsidiary, all photographer or contributor agreements and arrangements to which a Company or Subsidiary is party have been fully documented and, for those which have been identified as having model and/or property releases in the various AIMS, NAIMS or ARMS databases or the Companies’ websites, are the subject of model and/or property releases as indicated. All such documents and releases are in the possession of such Company or Subsidiary. No such Image, agreement or arrangement is the subject of any verbal understanding inconsistent with the documented position.

(i) Each Company and Subsidiary is readily able to verify, by reference to each of the Images which it owns or licences, the person to whom royalties (if any) in respect of that Image should be paid and the appropriate amount of royalty to be paid in respect of that Image; and each Company’s and Subsidiary’s records include, irrespective of whether the Image is owned or licensed, the name of the photographer and, in respect of Images which are licensed to a Company or Subsidiary, the date and parties to the licence agreement, and the royalty payment obligations of such Company or Subsidiary.

(j) Other than those contained in the various AIMS, NAIMS or ARMS databases, or the Companies’ websites, in the photographers and contributors agreements with any of the Companies or Subsidiaries and in any ancillary documentation thereto (including model releases and image restrictions), or in the terms and conditions of the standard end user license agreements of the Companies and Subsidiaries, there are no agreements or arrangements which restrict the Exploitation by the Companies or Subsidiaries of such Images by the Companies and Subsidiaries in the normal course of business.

3.13 Litigation. Except as set forth in Section 3.13 of the Disclosure Schedule, there are, and during the 12 months preceding the Closing Date have been, no claims, actions, suits or proceedings pending, or, to Seller’s Knowledge, claims, actions, suits, proceedings or investigations

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threatened against or affecting any of the Companies, Subsidiaries or their respective assets, at law or in equity, by or before any Governmental Authority, or by or on behalf of any Third Party, nor to Seller’s Knowledge, is there any reasonable basis for any of the foregoing. Except as set forth in Section 3.13 of the Disclosure Schedule, to the Seller’s Knowledge, none of the Companies or Subsidiaries has received any notice that such Company or Subsidiary or any of their respective assets is subject to any Order.

3.14 Taxes. Except as set forth in Section 3.14 of the Disclosure Schedule:

(a) Each of the Companies and the Subsidiaries has timely filed (after giving effect to applicable extensions) with the appropriate Governmental Authorities all material Tax Returns required to be filed by or with respect to it, either separately or as part of an affiliated, combined, unitary, consolidated, fiscal unity or similar group of corporations, and such Tax Returns were correct and complete in all material respects. Seller has provided or made available to Buyer true and complete copies of (i) relevant portions of audit reports, statements of deficiencies, closing or other agreements received by the Companies or Subsidiaries or on behalf of the Companies or the Subsidiaries relating to Taxes, and (ii) all income or franchise Tax Returns for the Companies and the Subsidiaries for all periods ending on or after December 31, 2000;

(b) Each of the Companies and the Subsidiaries has timely paid all Taxes shown as due on any Tax Returns (or on subsequent assessments with respect thereto) of such Company or Subsidiary;

(c) there are no Liens, other than Permitted Liens, with respect to Taxes upon any assets of any of the Companies or the Subsidiaries. Each of the Companies and the Subsidiaries has withheld all Taxes required to be withheld in respect of wages, salaries and other payments to all employees, officers and directors and any Taxes required to be withheld from any other person and has timely paid all such amounts withheld to the proper Governmental Authority;

(d) no audit by a Governmental Authority of any material Tax Return of any of the Companies or the Subsidiaries is in process, pending or threatened (either in writing or verbally, formally or informally), and none of the Companies or the Subsidiaries is a party to any Action for the assessment or collection of Taxes;

(e) none of the Companies nor the Subsidiaries has agreed to any extension of time still in effect with respect to any Tax assessment or deficiency, and no waiver or extension of any statute of limitations is in effect with respect to Taxes or Tax Returns of any of the Companies or the Subsidiaries;

(f) none of the Companies nor the Subsidiaries conducts business in or derives income from any jurisdiction other than jurisdictions for which Tax Returns have been filed by or with respect to it, and no claim has ever been made by any Governmental Authority in a jurisdiction where such Company or Subsidiary does not file Tax Returns that it is or may be subject to Tax by such jurisdiction;

(g) none of the Companies nor the Subsidiaries will be required to take into account any income or gain in a taxable period beginning after the Closing Date that is attributable to a transaction or event that occurred prior to the Closing Date (including by reason of any change in method of accounting, closing agreement entered into with any Governmental Authority, installment sale, open transaction or prepaid amount);

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(h) each of the Companies and the Subsidiaries is in full compliance with all terms and conditions of any Tax exemption, Tax holiday or other Tax reduction agreement or order and the consummation of the transactions contemplated by this Agreement will not have any adverse effect on the continued validity and effectiveness of any such Tax exemption, Tax holiday or other Tax reduction agreement or order;

(i) each of the Companies and the Subsidiaries is and has at all times been resident for Tax purposes in its place of incorporation or formation and is not and has not at any time been treated as resident in any other jurisdiction for any Tax purpose (including any double taxation arrangement);

(j) none of the Companies nor any of the Subsidiaries (i) has been a United States real property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of the Code (or any similar state, local or foreign laws); (ii) has made any payment or payments, is obligated to make any payment or payments, or is a party to any Contract (or participating employer in any Plan) that, individually or collectively, could give rise to the payment of any amount (whether in cash or property) as a result of the purchase and sale of the Shares that would not be deductible pursuant to Section 280G of the Code (or any similar state, local or foreign laws); or (iii) has been either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code, or any similar state, local or foreign laws);

(k) none of the Companies nor any of the Subsidiaries (i) is a party to or bound by any Tax allocation or sharing agreement; (ii) is or has been a member of any affiliated group, within the meaning of Section 1504(a) of the Code (or any similar state, local or foreign laws, including any arrangement for group Tax relief within a jurisdiction or similar arrangement) that filed or was required to file a consolidated, combined, unitary or similar Tax Return (other than the affiliated group, the common parent of which is Seller, or any of the Companies or the Subsidiaries); or (iii) has any liability for the Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar state, local or foreign laws, including any arrangement for group Tax relief within a jurisdiction or similar arrangement), as a transferee or successor, by contract, or otherwise;

(l) Other than a withholding Tax liability arising from interest payments to Seller of GBP5,000, the Companies and Subsidiaries (other than Amana US) (1) have deducted and properly accounted for all amounts which they have been obliged to deduct or otherwise account in respect of Tax (whether under the Pay as You Earn system or otherwise) to the appropriate Tax or other authority (whether within or outside the United Kingdom) competent to impose or which otherwise seeks to determine liability for, and/or administers or collects Tax (“Taxation Authority”) which term shall include without limitation, any person holding any power of sale over any property for the purpose of raising the amount of such Tax and any person having the benefit of the indemnity or right to recovery, (2) have complied fully with all reporting requirements relating to all such amounts and, (3) have (where required by the applicable law) duly provided certificates of deduction of Tax to the recipients of payments from which deductions have been made;

(m) other than amounts arising in the normal course of filing of Tax Returns pertaining to prepayments of Tax by Amana EU and Iconica, neither the Companies nor the Subsidiaries (other than Amana US) nor any director or officer of any of them has paid within the past seven years ending on the date of this Agreement or will become liable to pay any penalty, fine, surcharge or interest charged by virtue of the provisions of the Taxes Management Act 1970 (“TMA”) or any other directive, statute, enactment, law or regulation, wheresoever enacted or issued, coming into force or entered into providing for or imposing any Tax and shall include orders, regulations, instruments, by-laws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute,

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enactment, law, order, regulation or provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same (“Taxation Statute”);

(n) other than a closed UK Inland Revenue Tax enquiry relating to the 2001 fiscal year of Amana EU’s Tax affairs, neither the Companies nor any Subsidiary (other than Amana US) have not, within the past 7 years, been the subject of any dispute, investigation, enquiry or discovery by or with any Tax Authority, and the Seller is not aware of any circumstance which made it likely that any of their Tax affairs are likely to be the subject of any such dispute, investigation, enquiry or discovery;

(o) other than an expense dispensation and an Inland Revenue Tax ruling which exempts the deduction of withholding taxes from Amana EU commissions of trade, the amount of Tax chargeable on the Companies and the Subsidiaries (other than Amana US) during any Tax period ending on or within the six years before Closing has not depended on any concession, agreements or other formal or informal arrangement with any Taxation Authority, and no such concession, agreement or arrangement is likely to be withdrawn;

(p) other than those reliefs already claimed in the normal course of business, neither Amana EU nor Iconica are, or at the Closing will be entitled to: (i) make any claim (including a supplementary claim), disclaimer or election for relief under any Taxation Statute or provision; and/or (ii) appeal against any assessment or determination relating to Tax; and/or (iii) apply for a postponement of Tax;

(q) the book value shown or adopted for the purposes of the Financial Statements as the value of each of the assets of the Companies and the Subsidiaries (other than Amana US) on the disposal of which a chargeable gain or allowable loss could arise does not exceed the amount which on a disposal of such asset at the date of this Agreement would be deductible under section 38 of Taxation of Chargeable Gains Act 1992 (“TCGA”) (the book value of the assets has not been revalued upwards);

(r) no liability to Tax would arise on the disposal of any asset, other than trading stock, acquired since the date of the Financial Statements for a consideration equal to the consideration actually given for the acquisition (the acquisition of the assets has not delayed Tax until their subsequent sale);

(s) neither the Companies nor the Subsidiaries (other than Amana US) have disposed of any asset for a deferred or contingent consideration an amount of which is still outstanding;

(t) except for those assets or liabilities already subject to computation for Tax purposes and disclosed at the date of the Financial Statements, if each of the Companies and Subsidiaries (other than Amana US) capital assets owned at the date of the Financial Statements was disposed of for a consideration equal to the book value of that asset in, or adopted for the purpose of, the balance sheet comprised in the Financial Statements or, in the case of assets acquired since the date of the Financial Statements, equal to the consideration given on acquisition, no balancing charge under the Capital Allowances Act 2001 or any other legislation relating to capital allowances would arise (the assets have been written down in the accounts at the same rate as for Tax);

(u) neither the Companies nor the Subsidiaries (other than Amana US) have at any time entered into any transaction, series of transactions, scheme or arrangement of which the main purpose, or one of the main purposes, was the avoidance of a liability to Tax nor have they at any time entered into a transaction the main purpose of which was a commercial purpose but into which a step or a series of steps for which there was no bona fide commercial purpose have been inserted with a view to the avoidance of a liability to Tax;

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(v) Amana EU and Iconica are taxable persons and duly registered for the purposes of Value Added Tax (“VAT”) under the Value Added Tax Act 1994 (“VATA”), with quarterly prescribed accounting periods, such registration not being subject to any conditions imposed by or agreed with HM Customs & Excise and neither Amana EU nor Iconica are (or are there any circumstances by virtue of which any of them may become) under a duty to make monthly payments on account under the Value Added Tax (Payments on Account) Order 1993. Amana EU and Iconica have never formed part of any other group of companies for the purposes of Section 43 VATA nor a group of companies for any other Tax purpose;

(w) Amana EU does hold an interest in buildings of land in respect of which neither they nor any other person has made an election to waive the exemption to VAT in accordance with the provisions of paragraph 2 of Schedule 10 VATA. Amana EU is contractually committed to receive supplies in respect of which such an election has not been made;

(x) All documents which are liable to be stamped and which are in the possession or under the control of the Companies or the Subsidiaries (other than Amana US) or to which the Companies or the Subsidiaries (other than Amana US) is a party have been properly stamped and the appropriate stamp duty has been paid and there is no liability for any penalty in respect of such duty and no such documents which are outside the United Kingdom would attract stamp duty if they were brought into the United Kingdom. No circumstances exist or might exist which would require the Companies or the Subsidiaries (other than Amana US) to re-present for stamping any document which has already been stamped;

(y) in the last five years neither the Companies nor the Subsidiaries (other than Amana US) have made any claim for relief from stamp duty under section 42 Finance Act 1930, section 151 Finance Act 1995 or section 75, 76 or 77 Finance Act 1986, nor do they hold an estate or interest in land that is derived from an estate or interest in respect of which such a claim for relief was made;

(z) neither the Companies nor the Subsidiaries (other than Amana US) have had transferred to it or agreed to acquire any chargeable securities (as defined in section 99 Finance Act 1986) in circumstances which have given rise to or which may give rise to a liability for stamp duty reserve Tax nor are there any other circumstances in which they may have a liability for stamp duty reserve Tax; and

(aa) Stamp duty land Tax has been paid in full in respect of all estates or interests in land acquired on or after 1 December 2003 by the Companies or the Subsidiaries (other than Amana US) and there are no contingent liabilities or requirements to submit a further land transaction and no arrangements capable of giving rise to a further land transaction and no arrangements capable of giving rise to a further charge to stamp duty land Tax.

3.15 Contracts and Commitments. Section 3.15 of the Disclosure Schedule sets forth a list of all of the Contracts to which any of the Companies or Subsidiaries are a party or by which any of the Companies, Subsidiaries or their respective assets are bound and which fall into one of the following categories (each such contract, a “Material Contract”):

(a) any Contracts containing any covenant limiting the ability of any of the Companies or Subsidiaries to engage in any line of business or to compete with any Person;

(b) any agreements under which any of the Companies or Subsidiaries has borrowed or loaned money, or any note, bond, indenture, mortgage, installment obligation or other evidence of indebtedness for borrowed or loaned money or any guarantee of such indebtedness;

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(c) powers of attorney from any of the Companies or Subsidiaries;

(d) any Contract relating to expenditures with respect to any of the Companies or Subsidiaries and involving committed future payments which exceed $25,000 in any 12 month period, excepting photographer or contributor agreements and contracts of employment;

(e) any Contract relating to the acquisition or disposition of assets (other than in the ordinary course of business consistent with past practice) or any Equity Securities of any business enterprise;

(f) any Contract with respect to Company Intellectual Property and which is listed on Section 3.11(a) of the Disclosure Schedule;

(g) all agency, distribution and other such Contracts pursuant to which any of the Companies or Subsidiaries supply Images to third parties or otherwise authorize third parties to supply or distribute Images, as attached to Section 3.15(g) of the Disclosure Schedule;

(h) all Contracts that provide for the payment of benefits or the acceleration of benefits to personnel as a result of the consummation of the transactions contemplated by this Agreement;

(i) all agreements between Seller (including its directors, officers, employees and Affiliates (excepting the Companies and Subsidiaries)), on the one hand, and any of the Companies and/or Subsidiaries, on the other hand;

(j) all photographer agreements with regard to royalty payments and financial reporting (these agreements will not be listed on Section 3.15 of the Disclosure Schedule, but are included within the definition of Material Contract), and agreements for (i) the twenty photographers contracted to Amana EU whose Images generated the greatest amount of revenue for the Companies and Subsidiaries in 2004, (ii) the twenty photographers contracted to Amana US whose Images generated the greatest amount of revenue for the Companies and Subsidiaries in 2004, and (iii) the ten photographers contracted to Iconica whose Images generated the greatest amount of revenue for Iconica in 2004;

(k) any other agreements entered into or committed to by any Company or Subsidiary which contain provisions providing for: photographer advances; minimum royalty obligations; special ongoing pricing arrangements or commitments with customers or licensees; agreements that Images appear in a particular order in website search order results; or commitments to a minimum number of search slots for an Image provider or photographer.

None of the Companies, Subsidiaries or, to Seller’s Knowledge, any other party to any such Material Contract is in breach thereof or default thereunder and, to Seller’s Knowledge, there does not exist under any such Material Contract any event which, with the giving of notice or the lapse of time, would constitute such a breach or default. No notice has been received that there will be a loss of, alteration or contract cancellation of, any Material Contract.

3.16 Compliance with Laws. To the Seller’s Knowledge, the Companies and Subsidiaries are in compliance in all respects with all Applicable Laws and all Orders of, and agreements with, any Governmental Authority applicable to such Companies and Subsidiaries. Neither the Companies nor any of the Subsidiaries have received (i) any notice, claim or assertion, formal or informal, of any such violation by any of the Companies or the Subsidiaries from any Person or (ii) any request from any Governmental Authority that any of the Companies or Subsidiaries modify or terminate any of its

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operations or modify or dispose of any of its Properties. To the Seller’s Knowledge, the Companies and Subsidiaries have all permits, certificates, licenses, approvals and other authorizations required under Applicable Laws or necessary in connection with the conduct of their respective businesses.

3.17 Labor Matters.

(a) Except as set forth in Section 3.17 of the Disclosure Schedule, there are, and during the 12 months prior to the Closing Date have been, no claims, disputes or controversies pending or, to Seller’s Knowledge, threatened involving any employee or group of employees of any of the Companies or Subsidiaries. During the 12 months prior to the Closing Date, none of the Companies nor any of the Subsidiaries has suffered or sustained any work stoppage and no such work stoppage is threatened.

(b) The Companies and Subsidiaries have complied in all respects, and are presently in compliance in all respects, with all Applicable Laws related to the employment of its employees, including provisions related to wages, hours, leaves of absence, equal opportunity, occupational health and safety, workers’ compensation, severance, employee handbooks or manuals, collective bargaining and the payment and withholding of social security and other Taxes. Neither the Companies nor the Subsidiaries has any liability under any Applicable Law related to employment and attributable to an event occurring or a state of facts existing prior to the Closing Date, except as otherwise set forth in Section 3.17 of the Disclosure Schedule or reflected on the Financial Statements.

(c) There is, and in the 12 months prior to the Closing Date has been, no formal labor union or other formal employee representative body installed at any of the Companies or Subsidiaries. Neither the Companies nor the Subsidiaries have or since 31 December 2003 has had any collective bargaining agreements with any of its employees or any employee representative body. There is, and in the 12 months prior to the Closing Date have been, no labor union or other collective organizing or election activity pending or, to Seller’s Knowledge, threatened with respect to any of the Companies or the Subsidiaries.

(d) Those persons named as such in Section 3.17(d) of the Disclosure Schedule are the only Directors of the Companies and the Subsidiaries.

(e) Seller has provided to Buyer a list of all the employees employed on and/or since May 9, 2005, by the Companies and the Subsidiaries which shows on an anonymous basis in relation to each Employee his age, the hire date, period of continuous employment, date of termination (as applicable), and current salary or wages and which is true, complete and accurate in all respects.

(f) True copies of the standard employment agreements of the Companies and Subsidiaries, and of the U.S. and U.K. staff handbooks have been provided to Buyer. All non-standard or unique employment agreements have been provided to Buyer and are listed in Section 3.17(f) of the Disclosure Schedule.

(g) There are no outstanding loans made by any Company or Subsidiary to any director, officer or employee or former director, officer or employee.

(h) No Company or Subsidiary has had or has in existence or participates in and is proposing to introduce or participate in any share incentive scheme, share option scheme or profit-sharing scheme for all or any part of their directors, officers or employees.

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(i) No Company or Subsidiary has been the transferee in any transfer of employment to which the U.K. Transfer of Undertakings (Protection of Employment) Regulations 1981 apply.

(j) Except for possible claims by those persons identified as being independent contractors in Section 3.17(j) of the Disclosure Schedule, no independent contractor (an independent contractor for this purpose being any person who, whether personally or through a company owned by them or which they control, provides services to any Company or Subsidiary) has any rights as or in any way holds the status of an employee under a contract of service, and each Company and Subsidiary has complied with its obligations under Applicable Law in relation to and in respect of each current and former independent contractor, including any obligation to make any payment to any such independent contractor.

3.18 Environmental Matters. Except as set forth in Section 3.18 of the Disclosure Schedule, (a) none of the Companies nor any of the Subsidiaries has, as of the Effective Date, received any notice alleging any violation of, or any liability relating to, any Applicable Law or Order, related to the protection of human health or the environment, or the use, treatment, storage, disposal, release or transportation of Hazardous Waste, including, the Comprehensive Environmental Response, Compensation and Liability Act, the Emergency Planning and Community Right-To-Know Act, the Solid Waste Disposal Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Water Pollution Control Act, the Toxic Substances Control Act, the Hazardous Materials Transportation Act, and the Occupational Safety and Health Act, each as amended and supplemented, and any regulations promulgated pursuant to such laws, and any analogous national, state or local statutes or regulations in any relevant jurisdiction (“Environmental Laws”), which violation has not been resolved, and as of the Effective Date, to the Seller’s Knowledge, no such notice is threatened, (b) the Companies and the Subsidiaries are and have been at all times in the past five years in compliance with all applicable Environmental Laws, (c) the Companies and Subsidiaries have obtained and are and have been at all times in the past five years in compliance with all governmental environmental permits, registrations and authorizations required under Environment Laws for the operation of the businesses of such Companies and Subsidiaries and (d) none of the Companies nor any of the Subsidiaries have entered into, agreed to, or is subject to any judgment, decree or Order in any relevant jurisdiction under any Environmental Laws.

3.19 Employee Plans.

(a) Section 3.19 of the Disclosure Schedule lists each employee benefit plan (including but not limited to incentive, bonus, cafeteria, medical, dental, vision, life insurance, dependent care assistance, tuition reimbursement, disability, sick pay, holiday, change of control, leave, vacation, severance, pension, profit sharing, retirement, stock option, stock purchase, restricted stock, phantom stock or stock appreciation or other benefit plans but excluding any required plan under mandatory statutory law), whether subject to the laws of the United States or other Applicable Law, (i) covering active, former or retired employees, directors or independent contractors of any Company or Subsidiary or any dependents thereof, (ii) sponsored, maintained or contributed to by any Company or Subsidiary, or (iii) with respect to which any Company or Subsidiary has (or could reasonably be expected to have) any obligation or liability (each a “ Employee Plan”). Excepting the regular employer contributions to the Amana US 401(k) plan, no Company or Subsidiary has any agreement, arrangement or obligation to create, enter into or contribute to any additional Employee Plan, or to modify or amend any existing Employee Plan. No Company or Subsidiary is under any obligation to provide any benefits or make any payments except as required by and specified in the Employee Plan.

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(b) Seller has provided or caused to be provided to Buyer a copy of each Employee Plan, and where applicable, (i) any related trust agreement, annuity or insurance contract, (ii) the most recent annual report (including Form 5500) relating to such Employee Plan, and (iii) any other related contracts or agreements (and any amendments thereto).

(c) With respect to each Employee Plan: (i) such Employee Plan has been administered in all material respects with its terms and with the requirements prescribed by any Applicable Laws, including the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code; (ii) no material “prohibited transaction” as defined in Section 406 of ERISA or Section 4975 of the Code has occurred with respect to such Employee Plan for which an exemption is not available; (iii) to Seller’s Knowledge, all “fiduciaries,” as defined in ERISA Section 3(21), with respect to the Employees Plans, have complied with the requirements of ERISA Section 404; and (iv) except pursuant to Section 5.17, no steps have been taken to wind-up or commence the winding-up of any of the Employee Plans.

(d) Except as provided on Section 3.19(d) of the Disclosure Schedule, to the extent applicable, a favorable determination letter, opinion or notification has been issued by any Governmental Authority (including the Internal Revenue Service) with respect to each Employee Plan (including regarding those intended to be qualified under Section 401(a) of the Code, as amended by that legislation commonly referred to as “GUST”) and, to Seller’s Knowledge, no condition exists that could reasonably be expected to result in the revocation of any such letter, opinion or notification.

(e) No Employee Plan is (i) covered by Title IV of ERISA or Section 412 of the Code, (ii) a “multiemployer plan,” as defined in Section 3(37) or 4001(a)(3) of ERISA, (iii) a multiple employer plan within the meaning of Section 4063 or 4064 of ERISA or Section 413 of the Code, or (iv) a “multiple employer welfare arrangement,” as defined in Section 3(40) of ERISA.

(f) There are no pending or anticipated (by Seller or any of the Companies or Subsidiaries) claims or governmental investigations or audits against or otherwise involving any of the Employee Plans and no suit, Action or other litigation (excluding claims for benefits incurred in the ordinary course) has been brought against or with respect to any Employee Plan that could reasonably be expected to result in a liability to any of Seller, the Companies or Subsidiaries.

(g) All contributions, reserves or premium payments to any Employee Plan have been made or provided for on the financial books and records of the Companies and Subsidiaries, to the extent required by the Employee Plans, Applicable Law or applicable GAAP. All Taxes that are required by law to be withheld from or assessed against benefits derived under the Employee Plans have been properly withheld, if applicable, and have been remitted to the proper depository. All actuarial, consultancy, legal and other fees, charges or expenses in respect of each Employee Plan have been paid and no services have been rendered in respect of any Employee Plan in respect of which an account or other invoice has not been rendered.

(i) Without limiting Sections 3.19(a) through 3.19(g), each Employee Plan mandated by a government other than the United States or subject to the laws of a jurisdiction outside of the United States (a “Foreign Company Plan”), has been administered and is in material compliance with its terms and Applicable Laws, rules and regulation, and if intended to qualify for special Tax treatment, meets and has complied at all times with all requirements for such treatment and has obtained all necessary approvals of all Governmental Authorities. All contributions required to be made under the terms of any Foreign Company Plan or Applicable Law as of the Closing Date have been made or will be timely made on or prior to the Closing Date. With respect to any unfunded retirement plan which is a Foreign Company Plan for which applicable GAAP or Applicable Law

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requires that reserves be recorded on a statement of financial position, reserves have been recorded on the Financial Statements in a manner which is consistent with applicable GAAP and Applicable Law. With respect to funded pension or retirement plans which are Foreign Company Plans, such plans have been funded in accordance with their terms, applicable GAAP and Applicable Law. There are no actions, suits or claims (other than routine claims for benefits) pending or threatened with respect to any Foreign Company Plan. Seller has provided to Buyer copies, summaries or written descriptions of each Foreign Company Plan.

3.20 Insurance. Seller has delivered to Buyer true copies of all policies of liability, theft, fire, title, workers’ compensation, property, errors and omissions and other forms of insurance and surety bonds insuring any of the Companies and Subsidiaries and their directors, officers, employees, properties, assets and businesses. All such insurance policies are in full force and effect and all premiums have been timely paid by the Companies and Subsidiaries. None of the Companies or Subsidiaries has failed to give any notice or to present any claim under any such policy or binder in a due or timely fashion. There have not been any claims under any such policies against any insurers in relation to the operation of any of the Companies or Subsidiaries from December 31, 2003 until the date of this Agreement.

3.21 Certain Relationships and Interests. Except as set forth in Section 3.21 of the Disclosure Schedule, none of the Companies or Subsidiaries presently has, and since December 31, 2003, none of the Companies or Subsidiaries has had, any Contract with, any outstanding loans to or from, any outstanding liabilities to, or any sharing arrangements (whether for compensation or otherwise) with, any officer, director, employee, stockholder, member or Affiliate (other than the Companies and Subsidiaries themselves) of Seller, the Companies or any of the Subsidiaries or any relative of any such Person or any Person in which any such individual is an officer, director or partner or has a financial interest, direct or indirect. Except Seller’s ownership interest in the Companies and the Subsidiaries and except as set forth in Section 3.21 of the Disclosure Schedule, neither Seller nor any officer, director, employee, stockholder, member or Affiliate (other than the Companies and Subsidiaries themselves) of Seller, the Companies or Subsidiaries, nor any relative of any of such individual, owns or has any direct or indirect interest in any property owned or used by or leased to the Companies or the Subsidiaries or any Intellectual Property right licensed to or by or used by the Company or any of its Subsidiaries. Except Seller’s ownership interest in the Companies and the Subsidiaries and except as set forth in Section 3.21 of the Disclosure Schedule, to the Seller’s Knowledge, neither Seller nor any officer, director, stockholder, member or Affiliate (other than the Companies and Subsidiaries themselves) of Seller, the Companies or Subsidiaries, nor any relative of any such individual, owns or has any direct or indirect interest in any business which is a competitor, supplier or customer of the Companies or the Subsidiaries or in any Person with whom the Company or any of the Subsidiaries is doing business in any way (other than holdings solely for passive investment purposes of securities of publicly held and traded entities constituting less than 5% of the equity of any such entity).

3.22 Books and Records.

(a) Taking into account the size and complexity of the operations of each of the Companies and Subsidiaries, each Company and Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles applicable to such entity and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for

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assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(b) The Companies and the Subsidiaries have in their power or possession all records required to determine their liability to Tax, including the Tax consequence which would arise on any disposal or realization of any asset in the future.

3.23 Insolvency.

(a) No receiver or administrative receiver has ever been appointed of the whole or any part of the assets or undertaking of Seller, any Company or any Subsidiary.

(b) No petition has been presented during the 12 months preceding the Closing and no order has ever been made and no resolution has ever been passed for the winding-up of Seller, any Company or any Subsidiary, or for the appointment of a provisional liquidator to Seller, any Company or any Subsidiary.

(c) Neither Seller nor any Company or any Subsidiary is insolvent or unable to pay its debts as and when they fall due (within the meaning of any Applicable Law).

(d) Neither Seller nor any Company or any Subsidiary has stopped or suspended payment of its Debts, except in cases of a bona fide dispute regarding the Debt.

(e) No unsatisfied judgment, order or award is outstanding against Seller, any Company or any Subsidiary.

3.24 Brokers’ or Finders’ Fees. Neither Seller nor any Company or Subsidiary has authorized any person to act as broker, finder or in any other similar capacity in connection with the transactions contemplated by this Agreement, except for Mizuho Securities and Bridgeford Group, whose fee will be the responsibility of Seller.

3.25 Exclusivity of Representations. The representations and warranties made by Seller in this Agreement are the exclusive representations and warranties made by Seller. Seller hereby disclaims any other express or implied representations or warranties, including without limitation, regarding the pro forma financial information, financial projections or other forward-looking statements of any of the Companies, Subsidiaries or Seller.

3.26 Separate and Independent. Each of the warranties, representations and undertakings set out in this Agreement shall be separate and independent and, save as expressly provided, shall not be limited by reference to any other clause or anything in this Agreement or the schedules hereto.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

4.1 Organization; Authority. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority to enter into this Agreement and the Transaction Agreements to which it is a party and any other agreements contemplated by this Agreement to be entered into by Buyer at Closing, and to

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consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and each such Transaction Agreement, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of Buyer. This Agreement has been, and at the Closing each such Transaction Agreement will be, duly executed and delivered by Buyer. This Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity.

4.2 No Buyer Conflict or Default. Neither the execution and delivery of this Agreement nor the consummation by Buyer of any of the transactions contemplated herein will result in a violation of, or a default under, or conflict with, or require any consent, approval or notice under, any contract, trust, commitment, agreement, obligation, understanding, arrangement or restriction of any kind to which Buyer is a party or by which Buyer is bound. Consummation by Buyer of the transactions contemplated herein will not violate, or require any consent, approval or notice under, any provision of any judgment, order, decree, statute, law, rule or regulation applicable to Buyer, except (a) any filing required under U.S., U.K., Italian, French, German or European merger or equivalent laws or regulations, or (b) as may be necessary as a result of any facts or circumstances relating solely to Seller or its Affiliates.

4.3 Litigation. Except as set forth on Schedule 4.3, there are no claims, actions, suits, investigations or proceedings pending or, to the knowledge of Buyer, threatened against or affecting Buyer, at law or in equity, by or before any Governmental Authority, or by or on behalf of any third party, which, if adversely determined, would materially impair Buyer’s ability to consummate the transactions contemplated hereby, and there are no outstanding Orders of any Governmental Authority, affecting Buyer or its assets, at law or in equity, which would materially impair Buyer’s ability to consummate the transactions contemplated hereby.

4.4 Funding. Buyer has the necessary funding to meet all of its obligations under this Agreement and the Transaction Agreements, including the payment of the Purchase Price, and all of its fees and expenses in order to consummate the transactions contemplated by this Agreement.

4.5 Investigation. Buyer acknowledges and agrees that, except in the case of fraud or willful misconduct, it will not assert any claim against any of the respective officers, directors, employees, shareholders, affiliates or other representatives (or any agent of or advisor to any thereof) of Seller, the Companies or Subsidiaries, or hold any of such persons liable, for any inaccuracies, misstatements or omissions with respect to information furnished by Seller, such persons concerning Seller, or any of the Companies or Subsidiaries in connection with the transactions contemplated by this Agreement. Buyer acknowledges and agrees that none of the respective officers, directors, employees, shareholders, affiliates or other representatives (or any agent of or advisor to any thereof) of any of the Companies or Subsidiaries have made, or are making, any representations or warranties in their respective individual capacities with respect to any Company, Subsidiary, this Agreement, any other agreements or certificates delivered hereunder or any of the transactions contemplated hereby.

4.6 No Reliance. Buyer and its representatives have inspected and conducted such reasonable review and analysis (financial and otherwise) of the Companies and Subsidiaries as desired by Buyer. The consummation of the sale and purchase of the Shares by Buyer is not done in reliance upon any warranty or representation by, or information from, the Seller or any of the Companies or the Subsidiaries, of any sort, oral or written, except the warranties and representations specifically set forth in this Agreement (including the Disclosure Schedule or the Transaction Agreements) and in any

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certificates required to be delivered to Buyer by the Seller hereunder. Such consummation is instead done entirely on the basis of Buyer’s own investigation, analysis, judgment and assessment of the present and potential value and earning power of the Companies and the Subsidiaries as well as those representations and warranties by the Seller specifically set forth in this Agreement (including the Disclosure Schedule hereto) and in any certificates required to be delivered to Buyer by the Seller hereunder. As of the Effective Date, Buyer’s Acquisition Team does not have any actual knowledge of the existence or nonexistence or occurrence or nonoccurrence of any event, condition or circumstance the existence, nonexistence, occurrence or nonoccurrence of which would cause any representation or warranty of the Seller contained in this Agreement to be untrue or inaccurate in any material respect.

ARTICLE V

COVENANTS OF THE PARTIES

5.1 Conduct of the Company’s Business. Except as expressly provided for by this Agreement, during the period from the Effective Date to the Closing Date, Seller will cause each of the Companies and the Subsidiaries to, and each of the Companies and the Subsidiaries will conduct their business and operations solely in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except as expressly provided by this Agreement, during the period from the date of this Agreement to the Closing Date, without the prior written consent of Buyer, Seller will cause each Company and Subsidiary not to, and each of the Companies and Subsidiaries will not:

(a) make any capital expenditure exceeding $50,000 in the aggregate;

(b) enter into or assume any Material Contract except in the ordinary course of business consistent with past practice, and amend or terminate any Material Contract to which any of the Companies or Subsidiaries is a party or by which any of the Companies or Subsidiaries or any of the property of any of the Companies or Subsidiaries is or may be bound;

(c) change any of its accounting methods or practices (including any change in depreciation or amortization policies or rates);

(d) make any election or change any election concerning Taxes, adopt or change any Tax accounting method or practice, or change any Tax accounting period;

(e) make any revaluation any of its assets for book or Tax purposes or for any fluctuations in exchange rates with respect to foreign currencies;

(f) increase the salary or other compensation or benefits of, or pay or agree to pay any bonus or other additional salary or other compensation or benefit to (including severance or termination pay), present or former directors, officers, employees, consultants or contractors (including photographers), except increases in compensation granted as part of the annual staff reviews consistent with past practices;

(g) except for any sale or disposal of used Equipment, the net book value of which is $50,000 or less in the aggregate, sell, lease or otherwise dispose or transfer any property, except for nonexclusive licenses of Images in the ordinary course of business consistent with past practice for fair consideration;

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(h) create, incur, satisfy, extinguish, assume or guarantee any Debt, or make or take out any loans to or from any Person, or guaranty any Debt or other obligations of any Person, other than in the ordinary course of business and consistent with past practice;

(i) waive or release any right, claim or defense except in the ordinary course of business consistent with past practice and in an aggregate amount not exceeding $50,000;

(j) make any dividend, distribution or other payment in respect of its Equity Securities to Seller or any directors, officers, employees, Affiliates or shareholders of Seller, in each case in any form, or any accrual in respect of the same,

(k) make any other fee, payment or reimbursement to Seller or any director, officer, employee, Affiliate or shareholder of Seller by any of the Companies or Subsidiaries, in each case in any form, or any accrual in respect of the same, except for fees, payments or reimbursements on an arm’s length basis that are consistent with past practice and in the ordinary course of business;

(l) issue, sell or deliver, redeem or purchase, any of its Equity Securities, or grant, issue or enter into any options, warrants, rights, agreements or commitments with respect to the issuance of its Equity Securities, or amend any terms of any such Equity Securities or agreements;

(m) allow the imposition of any Lien (other than a Permitted Lien and any non-exclusive licenses or sublicenses relating to the Images entered into in the ordinary course of business consistent with past practice) on any property of any of the Companies or Subsidiaries;

(n) change the timing for payment, practices or procedures with respect to the payment of trade payables or other obligations of any of the Companies or Subsidiaries or the collection of accounts receivable and revenues (whether by way of acceleration of collections or otherwise);

(o) transact business other than in the ordinary course consistent with past practice;

(p) fail to pay its creditors within the times agreed with such creditors or allow any Debt to become overdue for payment;

(q) prepay, or allow any event to occur that would give rise to a liability to repay, any indebtedness with a value of $50,000 or more in the aggregate in advance of its stated maturity;

(r) acquire or agree to acquire by merging or consolidating with, or by purchasing the Equity Securities or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets with a value in excess of $50,000 in the aggregate;

(s) enter into any exclusive license or other license or arrangement with respect to Images or other Intellectual Property rights outside the ordinary course of business consistent with past practice;

(t) dispose or allow to lapse any rights to the use of any Intellectual Property, or dispose or disclose to any Person any Intellectual Property not theretofore a matter of public knowledge, other than in the ordinary course of business; or

(u) agree, whether in writing or otherwise, to do any of the foregoing.

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5.2 Reasonable Commercial Efforts. Subject to the terms and conditions of this Agreement, each of the parties hereto will use its reasonable commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under Applicable Laws and regulations to consummate the transactions contemplated by this Agreement at the earliest practicable date. Whenever this Agreement requires the Companies or Subsidiaries to take or desist from taking action during periods prior to Closing, Seller agrees to cause the Companies and Subsidiaries to act or desist from such action, as applicable.

5.3 Consents. Without limiting the generality of Section 5.2, each of the parties hereto will use its reasonable commercial efforts to obtain all licenses, permits, authorizations, consents and approvals of all third parties and Governmental Authorities necessary in connection with the consummation of the transactions contemplated by this Agreement prior to the Closing. Each of the parties hereto will make or cause to be made all filings and submissions under laws and regulations applicable to it as may be required for the consummation of the transactions contemplated by this Agreement. The parties hereto will coordinate and cooperate with each other in exchanging such information and assistance as any of the parties hereto may reasonably request in connection with the foregoing.

5.4 Public Announcements; Confidentiality. The parties hereto shall not issue (and shall cause their respective directors, officers, employees, representatives and Affiliates not to issue) any report, statement or press release or otherwise make any public statement with respect to this Agreement and the transactions contemplated hereby without prior consultation with and approval of the other party, except as may be required by Applicable Law, including, Japanese or U.S. securities regulations and laws, in which case such party shall endeavor to advise the other parties and discuss the contents of the disclosure a reasonable period before issuing any such report, statement or press release. Furthermore, the parties hereto shall keep confidential and not disclose, and shall cause their respective Affiliates and directors, officers, employees and representatives of such party and their respective Affiliates to keep confidential and not disclose, any of the terms and conditions of this Agreement or any Transaction Agreement to any Third Party or any information in whatever form, tangible or intangible, that is not generally known to the public and that was provided to Seller by Buyer or to Buyer by Seller, as the case may be, in connection with negotiations, dealings and other discussions between the parties hereto relating to this Agreement or any Transaction Agreement, in each case except as and to the extent that any such party shall be so obligated by Applicable Law, including, Japanese or U.S. securities regulations and laws, in which case the other party shall be so advised and the parties shall use their reasonable commercial efforts to cause a mutually agreeable release or announcement to be issued and except that the parties may disclose the terms and conditions of this Agreement or any Transaction Agreement to their respective accountants, auditors, lawyers, other advisors or actual or prospective parties to a business combination or loan or investment, but shall instruct the foregoing parties (other than counsel or auditors who are bound by an ethical obligation of confidentiality) to keep confidential and not disclose the terms and conditions of this Agreement or the Transaction Documents; provided, however, that Buyer’s non-disclosure obligation is limited to information received from Seller related only to Seller. Buyer shall not be prohibited after the Closing from disclosing any information provided by Seller related to any Company or Subsidiary.

5.5 Prompt Notice. Seller shall give prompt written notice to Buyer, and Buyer shall give prompt written notice to Seller, of (a) the occurrence or nonoccurrence of any event which would be likely to (i) cause any representation or warranty of either Seller or Buyer contained in this Agreement to be untrue or inaccurate (provided, however, that a party is only required to provide such notice with respect to the other party’s representations and warranties to the extent such party has actual knowledge that the occurrence or nonoccurrence of such event would be likely to cause the other party’s representation or warranty to be untrue or inaccurate) or (ii) result in the failure to satisfy a

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closing condition in ARTICLE VI; (b) any failure by Seller or Buyer, respectively, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it; and (c) any written communication from any Person alleging that the consent of such Person may be required in connection with the transactions contemplated by this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

5.6 Access. Buyer and its representatives shall be given reasonable access during business hours after reasonable notice to the books, records, facilities and senior management and financial personnel of the Companies and the Subsidiaries and such Persons having to do with the business or Real Properties of the Companies or the Subsidiaries, as Buyer may reasonably request and will be permitted to make copies and retain other documentation with respect to the Companies and the Subsidiaries and their business operations, financial position, prospects and Real Properties, provided, however, that if the transactions contemplated hereby and in the Transaction Agreements are not consummated, Buyer shall promptly return all such documentation to Seller.

5.7 Exclusivity; Acquisition Proposals. Unless and until this Agreement shall have been terminated by a party pursuant to Section 7.1 hereof, neither Seller nor any of the Companies or Subsidiaries shall (and Seller shall ensure that none of the officers, directors, employees, representatives or Affiliates of Seller or any of the Companies or Subsidiaries) take or cause or permit any Person to take, directly or indirectly, any of the following actions with any party other than Buyer and its designees: (i) solicit, encourage, initiate, or engage in any negotiations, inquiries or discussions or provide information with respect to any offer or proposal to acquire all or any significant part of the business, assets or Equity Securities, whether by merger, consolidation, other business combination, purchase of assets or otherwise of any of the Companies or the Subsidiaries (each of the foregoing, an “Acquisition Transaction”); or (ii) enter into or execute any agreement relating to an Acquisition Transaction.

5.8 Tax Covenants.

(a) All Tax Returns of the Companies and Subsidiaries not required to be filed on or before the date hereof will, to the extent required to be filed on or before the Closing Date, (i) be filed when due in accordance with all Applicable Laws and shall be prepared consistent with past practice, and (ii) as of the time of filing, be correct and complete in all material respects. A copy of all Tax Returns described in this Section 5.8(a) shall be provided to Buyer for Buyer’s review and approval (not to be unreasonably withheld or delayed).

(b) The Companies and Subsidiaries shall timely pay the amount of Taxes shown as due on the Tax Returns that are filed pursuant to Section 5.8(a).

(c) Buyer shall prepare and file, or shall cause to be prepared and filed, all Tax Returns required to be filed by or with respect to the Companies or Subsidiaries other than the Tax Returns described in Section 5.8(a). Any such Tax Returns that relate to a taxable period that began prior to the Closing Date shall be prepared on a basis consistent with past practice and shall be provided to Seller for its approval at least thirty (30) days prior to filing.

(d) During the period from the date hereof to the Closing Date, Seller shall notify Buyer promptly if it receives notice of any material Tax audit, the assessment of any Tax, or the assertion of any Tax Lien with respect to the Companies or Subsidiaries.

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(e) Without the prior written consent of Seller, which consent shall not be unreasonably withheld, after the Closing, none of the Companies or Subsidiaries shall file any amended Tax Return with respect to any period that ends on or before the Closing Date.

(f) Seller, the Companies and Subsidiaries shall, as of the Closing Date, terminate all Tax allocation agreements or Tax sharing agreements with respect to the Companies and Subsidiaries, and shall ensure that such agreements are of no further force or effect as to the Companies or Subsidiaries on and after the Closing Date and there shall be no further liability of the Companies or Subsidiaries under any such agreement.

(g) The amount of any refunds of Taxes payable to the Companies or Subsidiaries following the Closing Date and attributable to Taxes of the Companies or the Subsidiaries for any Pre-Closing Period shall be for the account of Seller, and shall be paid over to Seller when actually received by the Companies or Subsidiaries, except for refunds of Taxes incurred by the Companies or Subsidiaries in the ordinary course of business after December 31, 2004. Buyer shall, if Seller so requests and at Seller’s expense, cause the Companies or Subsidiaries to file for and obtain any refunds to which Seller is entitled pursuant to this Section 5.8(g).

(h) Buyer will not make an election under Section 338 of the Code with respect to the purchase of stock of Amana US or, if applicable, any other Company or Subsidiary that is a “domestic corporation” as defined in Sections 7701(a)(3) and (4) of the Code. Buyer may make an election under Section 338 of the Code with respect to the purchase of stock of any other Company or Subsidiary.

(i) For purposes of this Agreement, in order appropriately to apportion any Taxes relating to a period that includes (but that would not, but for this section, close on) the Closing Date, the parties hereto will, to the extent permitted by Applicable Law, elect with the relevant taxing authorities to treat for all purposes the Closing Date as the last day of a taxable period of the Companies and Subsidiaries, and such period shall be treated as a “Short Period” and a “Pre-Closing Period” for purposes of this Agreement. In any case where applicable law does not permit the Companies or Subsidiaries to treat the Closing Date as the last day of a Short Period, then for purposes of this Agreement, the portion of such Taxes that is attributable to the operations of the Companies and Subsidiaries for such Interim Period (as defined below) shall be (i) in the case of Taxes that are not based on income or gross receipts, the total amount of such Taxes for the period in question multiplied by a fraction, the numerator of which is the number of days in the Interim Period, and the denominator of which is the total number of days in the entire period in question, and (ii) in the case of Taxes that are based on income or gross receipts, the Taxes that would be due with respect to the Interim Period, if such Interim Period were a Short Period (for the avoidance of doubt, the portion of any such Tax that is allocable to the portion of the period ending on the Closing Date shall be deemed equal to the amount which would be payable if the taxable year ended with the Closing Date). “Interim Period” means with respect to any Taxes imposed on the Companies or Subsidiaries on a periodic basis for which the Closing Date is not the last day of a Short Period, the period of time beginning on the first day of the actual taxable period that includes (but does not end on) the Closing Date and ending on and including the Closing Date.

5.9 Supply Agreements. Commencing upon notice from Seller to Buyer, unless otherwise agreed to by the parties, after the Closing, the parties will enter into (i) content supply agreements pursuant to which each of Buyer, the Companies and the Subsidiaries, on the one hand, and Seller, on the other hand, will supply the other with Images, and (ii) agreements providing for the establishment of production centers, each of these agreements referred to in (i) and (ii) above shall be in form and substance reasonably acceptable to the parties, provided such agreements shall be consistent with the

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terms of the Letter of Intent between Seller and Buyer dated May 2, 2005 regarding these agreements. In regard to the obligations under this Section 5.9, the parties agree to proceed in good faith and to use commercially reasonable efforts to conclude these agreements as soon as reasonably possible.

5.10 Seller Trademarks. Notwithstanding anything to the contrary contained in this Agreement, it is expressly agreed that (i) Buyer is not purchasing, acquiring or otherwise obtaining, and neither the Companies nor the Subsidiaries will be entitled to retain following the Closing Date, any right, title or interest in any Seller Trademarks or any part or variation or anything confusingly similar thereto; and (ii) neither the Companies, Subsidiaries nor Buyer and its Affiliates shall make use of Seller Trademarks from and after the Closing, except that the Companies and Subsidiaries shall have a reasonable transition period for phasing out use of Seller Trademarks on websites, company names, Image metadata, stationary, business cards, letterheads and other such consumable materials in stock at the Closing, which transition period shall not last longer than 90 days. Furthermore, promptly following Closing, Buyer shall cause the Companies and the Subsidiaries to cease using any Seller Trademarks in the Companies’ and Subsidiaries’ corporate names.

5.11 Post-Closing Cooperation. After the Closing, upon reasonable written notice and subject to such conditions as may be reasonably required, the parties shall furnish or cause to be furnished to each other and their employees, counsel, auditors and other representatives, physical access, during normal business hours, such information and assistance relating to the Companies and the Subsidiaries as is reasonably necessary for each party’s financial reporting, consolidation and accounting matters, the preparation and filing of any Tax Returns, reports or forms or the defense of any Tax audit, claim or assessment. Each party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other party pursuant to this Section 5.11. Neither party shall be required by this Section 5.11 to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations. The parties shall cooperate in connection with any filings required to be made by any party with Governmental Authorities after the Closing.

5.12 Seller Guaranties. Buyer shall have each Seller Guaranty set forth on Schedule 5.12 released and cancelled at the Closing, provided, however, to the extent that any Seller Guaranty cannot be so released and cancelled, Buyer shall (a) cause itself to be substituted at the Closing for Seller and each of Seller’s Affiliates directly affected thereby in respect of such Seller Guaranty and (b) assume all of Seller’s and each of Seller’s Affiliates’, as applicable, rights and obligations with respect to any such non-released and non-cancelled Seller Guaranties; provided, further, that, Seller shall not have any obligation or liability with respect to such non-released and non-cancelled Seller Guaranties after the Closing Date.

5.13 Transition Services Agreement. In connection with Closing, Seller and Amana EU shall enter into a Transition Services Agreement (the “Transition Services Agreement”) in substantially the form attached hereto as Exhibit 5.13.

5.14 Transfer of Illustrator Contracts; Right to Use the “Photonica” Mark in “Blue Mountain” URL. Prior to Closing, Seller may enter into an arrangement with the relevant Companies pursuant to which (i) Amana US transfers to Seller those contracts contained in and assets specified at Schedule 5.14 and (ii) the Companies allow Seller to use the “Photonica” name in the Adobe “Blue Mountain” URL known as “amanapbm.photonica.com” for a period of no more than one (1) year following Closing, on a royalty-free basis, but only so long as such URL does not hold or link to an HTML website that can be viewed using a web browser via the Internet. Seller shall be responsible for and shall indemnify and hold Buyer harmless from and against all Taxes, costs and expenses associated with such arrangements and such arrangements shall be pursuant to agreements reasonably acceptable to Buyer.

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5.15 Analogue Archive. Seller holds in Tokyo an analogue archive of approximately 30,000 Images that belong to the Companies and Subsidiaries. Promptly following Closing, Seller shall transfer, at Seller’s cost, its analogue archive of such Images to Amana US at such location in the U.S. as is reasonably required by Buyer.

5.16 Photonica Mark. Promptly following Closing, Seller shall, at Seller’s cost, transfer to the Companies through appropriate steps, instruments and documentation all right, title and interest it may have in the mark “Photonica” (and all translations and transliterations thereof) and in all registrations and applications for such mark in any locations around the world, all of which steps, instruments and documentation shall be reasonably acceptable to Buyer.

5.17 Getty Litigation. Within 5 days after the Closing, Buyer shall seek dismissal with prejudice of the Getty Litigation, with each party to bear its own costs in connection therewith, pursuant to the Settlement Agreement to be agreed between the parties thereto. Such agreement shall provide a full and complete release to Seller and its Affiliates and their respective shareholders, directors, officers, employees and agents for any and all claims raised in the Getty Litigation. Buyer and Seller shall work together to avoid or minimize any action required to be taken in the Getty Litigation prior to such date.

5.18 US 401(k) Plan. Seller shall cause Amana US to terminate each Employee Plan that constitutes a “401(k) plan” prior to the Closing Date, unless Buyer, in its sole and absolute discretion, agrees to sponsor and maintain such 401(k) plan by providing Seller with written notice of such election not less than three business days prior to the Closing Date. Prior to the Closing Date, Seller shall provide Buyer with evidence reasonably satisfactory to Buyer that each such 401(k) plan with respect to which Buyer has not provided the notice specified in the immediately preceding sentence has been terminated pursuant to resolutions of the Board of Directors of Amana US (the form and substance of such resolutions shall be subject to advance review and approval by Buyer, which approval shall not be unreasonably withheld), effective not later than the day immediately preceding the Closing Date.

5.19 Agreements with Seller. Except as agreed by the Buyer, Seller will terminate prior to the Closing all agreements between Seller (or any of its directors, officers, employees or Affiliates), on the one hand, and any of the Companies or Subsidiaries, on the other hand. Except for trade payables owing by Seller to any of the Companies or Subsidiaries and for trade payables owing by any of the Companies or Subsidiaries to Seller, each arising in the ordinary course of business consistent with past practice, all amounts owed by any party to any of those agreements will be settled in full prior to the Closing.

ARTICLE VI

CONDITIONS TO CLOSING

6.1 Conditions to Seller’s Obligations. The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment at or prior to the Closing of each of the following conditions (any or all of which may be waived in whole or in part by Seller).

(a) Representations and Warranties. The representations and warranties of Buyer in this Agreement shall be true and correct in all material respects as at the date when made and at and

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as of the Closing Date as though such representations and warranties were made at and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific date, in which case such representation and warranties shall be true and correct as of such earlier date).

(b) Performance. Buyer shall have, in all material respects, performed and complied with all agreements, obligations, covenants and conditions required by this Agreement to be so performed or complied with by Buyer at or prior to the Closing.

(c) Officer’s Certificate. Buyer shall have delivered to Seller the Buyer Closing Certificate.

(d) Transaction Agreements. Buyer shall have executed and delivered to Seller its counterparts of the Transaction Agreements to which it is a party.

(e) Board Resolution. Seller shall have received from Buyer certified copies of the resolutions duly adopted by the board of directors of Buyer approving the execution and delivery of this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby.

(f) Payment for Intracompany Debts. Buyer shall have purchased all Intracompany Debts pursuant to Section 2.2.

(g) Consents; Approvals. The consents, approvals and actions of, filings with and notices to any Governmental Authority necessary to permit Buyer and Seller to perform their obligations under this Agreement and the Transaction Agreements and to consummate the transactions contemplated hereby and thereby listed on Schedule 6.1(g) shall have been obtained and shall be in full force and effect.

6.2 Conditions to Buyer’s Obligations. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the fulfillment at or prior to the Closing of each of the following conditions (any or all of which may be waived in whole or in part by Buyer):

(a) Representations and Warranties. The representations and warranties of Seller in this Agreement shall be true and correct in all material respects on and as of the Closing Date as though such representations and warranties were made at and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific date, in which case such representation and warranties shall be true and correct as of such earlier date).

(b) Performance. Seller shall have, in all material respects, performed and complied with all agreements, obligations, covenants and conditions required by this Agreement to be so performed or complied with by Seller, the Companies and the Subsidiaries at or prior to the Closing.

(c) Officer’s Certificate. Seller shall have delivered to Buyer the Seller Closing Certificate.

(d) Consents; Approvals. Consents, approvals and actions of, filings with and notices to any Governmental Authority necessary to permit Buyer and Seller to perform their obligations under this Agreement and the Transaction Agreements and to consummate the transactions contemplated hereby and thereby, and consents (or in lieu thereof waivers) listed on Schedule 6.2(d), shall have been obtained and shall be in full force and effect.

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(e) Litigation. There shall be no investigation, notice, litigation, arbitration or proceeding pending or threatened for the purpose of enjoining or preventing the consummation of this Agreement or the Transaction Agreements or otherwise claiming that the consummation of this Agreement or the Transaction Agreements is illegal or improper or which, if decided adversely, would have a Material Adverse Effect, or that would cause any of the transactions contemplated by this Agreement or the Transaction Agreements to be rescinded following consummation (and no such judgment, order, decree, stipulation, injunction or change shall be in effect).

(f) Transaction Agreements. Seller, the Companies and Subsidiaries, as appropriate, shall have executed and delivered to Buyer their applicable counterparts of the Transaction Agreements.

(g) Board Resolution. Buyer shall have received from Seller certified copies of the resolutions duly adopted by the board of directors of Seller approving the execution and delivery of this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby.

(h) Resignations. Buyer shall have received the letters of resignation of all of the directors of the Companies and Subsidiaries in form and substance reasonably satisfactory to Buyer (which resignations, other than the right to serve as an officer or director, shall not affect or otherwise impair the rights of any officer or director as an employee of any of the Companies or Subsidiaries).

(i) Termination of Intracompany Agreements. All agreements set forth in Schedule 6.2(i) shall have been terminated by the parties thereto, with no further liability to the Companies or Subsidiaries under such agreements.

(j) Certain Employees. As of immediately prior to the Closing, each of David Neilson and Terence Talerman shall have accepted and not revoked either an offer of employment by Buyer, or an offer of continued employment by the Companies or Subsidiaries, as appropriate, each on terms and conditions no less favorable that currently being provided, and shall not have taken any action to terminate such offer letter or employment agreement.

(k) FIRPTA Certificate. Buyer shall have received from Amana US, pursuant to Section 1445 of the Code, a certificate as of the Closing Date in substantially the form attached hereto as Exhibit 6.2(k).

6.3 Reliance. Each party acknowledges that the other party in entering into this Agreement is relying on the representations, warranties and undertakings contained herein.

ARTICLE VII

TERMINATION

7.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned:

(a) at any time, by mutual written agreement of Seller and Buyer;

(b) at any time after June 30, 2005 (the “Outside Date”), by Seller upon written notice to Buyer, if the Closing shall not have occurred for any reason other than a breach of this Agreement by Seller; or

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(c) at any time after the Outside Date, by Buyer upon written notice to the Company, if the Closing shall not have occurred for any reason other than a breach of this Agreement by Buyer.

7.2 Procedure and Effect of Termination. In the event of the termination of this Agreement and the abandonment of the transactions contemplated hereby pursuant to Section 7.1, this Agreement shall become void and there shall be no liability on the part of any party hereto except (a) the obligations provided for in Sections 7.2, 5.4 and Article IX shall survive any such termination of this Agreement and (b) nothing herein shall relieve any party from liability for breach of this Agreement.

ARTICLE VIII

INDEMNIFICATION

8.1 Survival. The representations and warranties of Seller in Article III and Buyer in Article IV, and the indemnification obligations of Seller and Buyer in respect of the same and under Sections 8.2 and 8.3 shall continue in full force and effect notwithstanding the Closing and shall survive until two (2) years from the Closing Date (“Survival Period”), provided, however, that (a) rights to indemnification in respect of Tax Losses and for breach of Seller’s representations and warranties at Sections 3.14 shall survive for the applicable statute of limitations period for the underlying claim plus ninety (90) days, (b) rights to indemnification for breach of Seller’s representations and warranties at Section 3.1, 3.3, 3.4, and 3.5, and for any Losses incurred by Buyer, the Companies or Subsidiaries related to the matters set forth in Sections 3.11(b)(vi) (note 1), 3.13 (note 3) or 3.17 (note 1) of the Disclosure Schedule shall survive indefinitely, (c) rights to indemnification in respect of breaches of Sections 5.4 and 5.10 shall survive until five (5) years from the Closing Date, (d) rights to indemnification in respect of breaches of Section 3.12 shall survive until three (3) years from the Closing Date, and (e) rights to indemnification for breach of a party’s representations and warranties that was notified in writing by the other party prior to the end of the applicable Survival Period shall survive until the matter is resolved. The foregoing survival provisions shall not affect or apply to the parties’ rights, obligations and liabilities under the Transaction Agreements. The survival of representations and warranties shall not be affected by any investigation made by the person to whom such representations and warranties were made or by any knowledge or belief by the recipient of such representations and warranties that they are or might be inaccurate, wrong or incomplete.

8.2 Indemnification by Buyer. Buyer shall indemnify and hold Seller, its Affiliates and their respective employees, officers and directors (the “Seller Indemnified Parties”) harmless from and against, and agrees to promptly defend any Seller Indemnified Party from and reimburse any Seller Indemnified Party for, any and all losses, damages, costs, expenses, liabilities, fines, penalties, obligations and claims of any kind (including any Action brought by any Third Party and including reasonable attorneys’ fees and other legal costs and expenses reasonably incurred) (collectively, “Losses”), which such Seller Indemnified Party may at any time suffer or incur, or become subject to, as a result of or in connection with (i) the inaccuracy as of the date of this Agreement or the Closing Date of any representations and warranties made by the Buyer in this Agreement, or (ii) any failure by the Buyer to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement; provided, however, that, in each case, Buyer shall have no such obligation for any such Losses to the extent arising as a result of or in connection with any gross negligence or willful misconduct of any Seller Indemnified Party. Buyer shall indemnify and hold the Seller Indemnified Parties harmless from and against, and agrees to promptly defend any Seller Indemnified Party from and reimburse such Seller Indemnified Party for any Losses arising from

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any Action brought by a Third Party, which such Seller Indemnified Party may at any time suffer or incur, or become subject to, as a result of, in connection with, or relating to, any act or omission of any Company or Subsidiary after the Closing Date, except to the extent that (x) Seller has an obligation to indemnify with respect to any such Losses under Section 8.3 and (y) any such Losses arise as a result of or in connection with any gross negligence or willful misconduct of any Seller Indemnified Party.

8.3 Indemnification by Seller.

(a) Seller shall indemnify and hold Buyer, the Companies and the Subsidiaries (collectively, the “Buyer Indemnified Parties”) harmless from and against, and agrees to promptly defend any Buyer Indemnified Party from and reimburse any Buyer Indemnified Party for, any and all Losses which such Buyer Indemnified Party may at any time suffer or incur, or become subject to, as a result of or in connection with (i) the inaccuracy as of the date of this Agreement or the Closing Date of any representations and warranties made by Seller in this Agreement, (ii) any failure by Seller to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement, or (iii) any Tax liability of any of the Companies or Subsidiaries for any Pre-Closing Period, except for Taxes incurred after December 31, 2004 in the ordinary course of business (all such Losses in this clause (a)(iii) with respect to Tax matters are referred to herein as “Tax Losses”), or (iv) any Losses incurred by Buyer, the Companies or Subsidiaries related to the matters set forth in Sections 3.11(b)(vi) (note 1), 3.13 (note 3) or 3.17 (note 1) of the Disclosure Schedule. Notwithstanding the foregoing, Seller shall have no such obligation for any such Losses to the extent arising as a result of or in connection with any gross negligence or willful misconduct of any Buyer Indemnified Party.

(b) The amounts for which Seller shall be liable under Section 8.3(a) shall be net of any insurance payable to the Buyer Indemnified Parties from the insurance policies of the Companies and Subsidiaries in place as at the Effective Date in connection with the facts giving rise to the right of indemnification, provided, however, that Seller shall bear all costs associated with maintaining such policies after the Closing Date.

(c) Notwithstanding any other provision to the contrary, Seller shall not be required to indemnify and hold harmless any Buyer Indemnified Party pursuant to Section 8.3(a) unless the aggregate amount of the Buyer Indemnified Parties’ Losses in respect of Section 8.3(a) exceed $600,000, after which point Seller shall be obligated for all such Losses of the Buyer Indemnified Parties in excess of the $600,000. The cumulative indemnification obligation of Seller under Section 8.3(a) shall in no event exceed $10,000,000. The foregoing threshold on indemnification liability shall not apply to Tax Losses, Seller’s indemnification obligations for breaches of Section 3.1, 3.3, 3.4, 3.5, or 3.14 or Seller’s obligations pursuant to the provisions of Section 9.9. The foregoing cap shall not apply to Tax Losses or Seller’s indemnification obligation for breaches of Section 3.1, 3.3, 3.4, 3.5, or 3.14, but amounts payable under such Sections shall count towards the cap for other claims.

8.4 Notification of Claims.

(a) A party entitled to be indemnified pursuant to Section 8.2 or 8.3 (the “Indemnified Party”) shall promptly notify the party liable for such indemnification (the “Indemnifying Party”) in writing of any claim or demand which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement; provided that the Indemnifying Party will have no liability hereunder (for indemnification or otherwise) with respect to any representation or warranty, unless before the expiration of the applicable Survival Period the Indemnified Party notifies the Indemnifying Party of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by the Indemnified Party in accordance with this Section 8.4(a).

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(b) If the Indemnified Party shall notify the Indemnifying Party of any claim or demand pursuant to Section 8.4(a) (other than a claim or demand that relates to Tax Losses or a potential breach of the representations and warranties at Section 3.14, the procedure for which shall be governed exclusively by Section 8.4(c)), and if such claim or demand relates to a claim or demand asserted by a Third Party against the Indemnified Party, the Indemnifying Party shall have the right to undertake, conduct and control the defense thereof, and to employ counsel reasonably acceptable to the Indemnified Party to defend any such claim or demand asserted against the Indemnified Party, at the Indemnifying Party’s sole expense; provided, however, that the Indemnified Party may elect to assume the defense and handle any such Third Party claim if it determines in good faith that the resolution of such Third Party claim could result in a material adverse impact on the business, operations, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or prospects of the Indemnified Party beyond the scope of the indemnified event. The Indemnified Party shall have the right to participate in the defense of any such claim or demand at its own expense. The Indemnifying Party shall defend or handle the same in consultation with the Indemnified Party and shall keep the Indemnified Party timely apprised of the status of such Third Party claim. The Indemnifying Party shall notify the Indemnified Party in writing, as promptly as possible (but in any case before the due date for the answer or response to a claim) after the date of the notice of claim given by the Indemnified Party to the Indemnifying Party under Section 8.4(a), of its election to defend in good faith any such Third Party claim or demand. So long as the Indemnifying Party is defending in good faith any such claim or demand asserted by a Third Party against the Indemnified Party, the Indemnified Party shall not settle or compromise such claim or demand without the prior written consent of the Indemnifying Party. The Indemnified Party shall make available to the Indemnifying Party or its agents, at the Indemnifying Party’s cost, all records and other material in the Indemnified Party’s possession reasonably required by it for its use in contesting any Third Party claim or demand. Neither the Indemnifying Party nor the Indemnified Party shall settle or compromise any such claim or demand unless the Indemnifying Party or the Indemnified Party, as the case may be, is given a full and complete release of any and all liability by all relevant parties relating thereto. No non-monetary settlement of any claim or demand may be entered into without the written consent of the Indemnified Party.

(c) If the Indemnified Party shall notify the Indemnifying Party pursuant to Section 8.4(a) of any claim or demand that relates to Tax Losses or a potential breach of the representations and warranties at Section 3.14 (a “Tax Contest”), the procedures relating to such claim shall be governed by this Section 8.4(c).

(i) If such Tax Contest relates to a claim or demand asserted by a Third Party against the Indemnified Party, the Indemnifying Party may, at its own expense, participate in and, upon notice to the Indemnified Party, assume the defense of any such claim, demand, suit, action or proceeding (including any Tax audit).

(ii) If the Indemnifying Party shall control the defense of such Tax Contest, the Indemnified Party shall be entitled to participate, at its own expense, in the defense of such Tax Contest, and to employ counsel of its choice for such purpose. The Indemnifying Party shall have the right to either pay the Tax claimed and sue for refund, where permitted by law, or to contest the Tax Contest in any permissible manner, provided, however, that the Indemnifying Party shall obtain the prior written consent of the Indemnified Party before entering into any settlement of, or ceasing to defend, a Tax Contest if the resolution or settlement relating to such Tax Contest could have the effect of increasing the Tax liability of the Indemnified Party for a Post-Closing Period.

(iii) The Indemnified Party shall not settle or cease to defend a Tax Contest without the written consent of the Indemnifying Party. Whether or not the Indemnifying Party

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chooses to defend or prosecute any Tax Contest, the parties hereto shall cooperate in the defense or prosecution of such Tax Contest, including, without limitation, consultation in good faith regarding proposed actions, and making employees and records available on a mutually convenient basis to the extent relevant to such Tax Contest

8.5 Exclusive Remedies. The indemnification provisions of Sections 8.2 and 8.3 shall be the sole and exclusive remedies of Buyer and Seller, respectively, for any breach of the representations, warranties, covenants, agreements, undertakings or obligations herein, or any Losses addressed herein. Nothing in the foregoing or in other provisions of this Agreement shall affect rights and remedies in respect of fraud. Neither party shall be liable to the other party for any indirect, special, punitive, exemplary or consequential loss or damage (including any lost revenue or profit) arising out of this Agreement. Both parties shall mitigate their damages. Any indemnification payment hereunder shall be deemed an adjustment to the Purchase Price.

ARTICLE IX

MISCELLANEOUS

9.1 Further Assurances. From time to time after the Closing Date, at the request of the other party hereto and at the expense of the party so requesting, the parties hereto shall execute and deliver to such requesting party such documents and take such other action as such requesting party may reasonably request in order to consummate the transactions contemplated hereby.

9.2 Notices. All notices, requests, demands, waivers and communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered (i) by hand (including by reputable overnight courier), (ii) by mail (certified or registered mail, return receipt requested) or (iii) by telecopy facsimile transmission (receipt of which is confirmed):

(a) If to Buyer, to:

Getty Images, Inc.

601 N. 34^th Street

Seattle, Washington 98103

USA

Telephone: 1.206.925.5000

Telecopy: 1.206.925.5623

Attention: Legal Counsel

with a copy to:

Ms. Amy Weaver, Esq.

Perkins Coie LLP

1201 Third Avenue, 40^th Floor

Seattle, Washington 98101-3099

Telephone: 1.206.359.3319

Telecopy: 1.206.359.9000

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(b) If to Seller, to:

Amana inc.

2-2-43, T-33 Higashishinagawa,

Shinagawa-ku, Tokyo, 140-0002, Japan

Telephone: (81)3-3740-2099

Attn: Mr. Masatoshi Fujii, Director

with a copy to:

Morrison & Foerster

AIG Building, 11th Floor

1-1-3 Marunouchi, Chiyoda-ku Tokyo, Japan 100-0005

Telephone: (81)3-3214-6836

Attn: Mr. Steve DeCosse

or to such other person or address as any party shall specify by notice in writing to the other party. All such notices, requests, demands, waivers and communications shall be deemed to have been given (i) on the date on which so hand-delivered, (ii) on the third business day following the date on which so mailed and (iii) on the date on which telecopied and confirmed, except for a notice of change of address, which shall be effective only upon receipt thereof.

9.3 Exhibits and Schedules. Any matter, information or item disclosed in the schedules delivered by Seller or in any of the Exhibits attached hereto, under any specific representation or warranty or schedule number hereof, shall be deemed to have been disclosed for all purposes of this Agreement in response to every representation or warranty in this Agreement in respect of which such disclosure is reasonably apparent. The inclusion of any matter, information or item in any schedule to this Agreement shall not be deemed to constitute an admission of any liability by any Company to any third party or otherwise imply, that any such matter, information or item is material or creates a measure for materiality for the purposes of this Agreement.

9.4 Amendment, Modification and Waiver. This Agreement may be amended, modified or supplemented at any time by written agreement of the parties hereto. Any failure of Seller to comply with any term or provision of this Agreement may be waived by Buyer, and any failure of Buyer to comply with any term or provision of this Agreement may be waived by Seller, at any time by an instrument in writing signed by or on behalf of such other party, but such waiver shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure to comply.

9.5 Entire Agreement. This Agreement, the Disclosure Schedule and the exhibits, schedules and other documents referred to herein which form a part hereof between the parties, contain the entire understanding of the parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior agreements and understandings, oral and written, with respect to its subject matter.

9.6 Severability. Should any provision of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Agreement, which other provisions shall remain in full force and effect and the application of such invalid or unenforceable provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and be enforced to the fullest extent permitted by law.

9.7 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors,

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successors and permitted assigns, but except as contemplated herein, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, directly or indirectly, by any party without the prior written consent of the other parties hereto, except that Buyer may assign all or any portion of its rights hereunder to one or more of its Affiliates without the consent of Seller, provided that no such assignment shall relieve Buyer of its obligations hereunder.

9.8 No Third-Party Beneficiaries. Except as provided in ARTICLE VIII, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein is intended to or shall confer upon any other Person not a party or a permitted assign of a party to this Agreement any legal or equitable right, benefit or remedy or any nature whatsoever under or by reason of this Agreement.

9.9 Fees and Expenses/Transfer Taxes.

(a) Whether or not the transactions contemplated hereby are consummated pursuant hereto, each party hereto shall pay all fees and expenses incurred by it or on its behalf in connection with this Agreement, the Transaction Agreements, and the consummation of the transactions contemplated hereby and thereby.

(b) Buyer shall be liable for and shall pay all applicable sales, transfer, recording, deed, stamp and other similar taxes, including any real property transfer or gains taxes (if any), resulting from the consummation of the transactions contemplated by this Agreement.

9.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.11 Interpretation. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. As used in this Agreement:

(a) the term “Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof;

(b) the words “include,” “includes,” and “including” shall be deemed in each case to be followed by the words “without limitation;”

(c) the term “consistent with past practice” shall mean the practice in the 24 months preceding the relevant date;

(d) the term “legally binding agreement” shall mean any agreement, arrangement, understanding, obligation, commitment, benefit or liability, as the case may be, which is or is intended to be legally binding on the parties thereto; and

(e) any U.S. legal term for any action, right, obligation, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than the U.S., be deemed to include a reference to what most nearly approximates in that jurisdiction to the U.S. legal term.

9.12 Enforcement of Agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed in accordance with

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its specific terms or was otherwise breached. It is accordingly agreed that the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

9.13 Forum; Service of Process. Unless otherwise agreed in writing by the parties, any legal suit, action or proceeding brought by any party or any of its affiliates arising out of or based upon this Agreement shall only be instituted in the United States District Court for the Southern District of New York, unless federal jurisdiction does not exist, in which case any such action, suit or proceeding shall be brought in the Supreme Court of the State of New York, New York County. Each party hereto waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the jurisdiction of such court in any such suit, action or proceeding. For 7 years following the Closing Date, Seller authorizes and appoints National Registered Agents, located at                                                              , as its agent for service of notices, process and/or proceedings in relation to any matter arising out of or in connection with this Agreement and service on such agent in accordance with this section shall be deemed to be effective service on Seller.

9.14 Governing Law. This Agreement shall be governed by, construed and interpreted in accordance with the internal laws of the State of New York, without regard to its rules regarding conflicts of laws.

9.15 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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ARTICLE X

DEFINITIONS

“Accounts” - as defined in Section 3.7.

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation.

“Affiliate” means, with respect to any party a corporation or other entity controlled by such party, controls such party or is under common control with such party, for so long as such control continues to exist. For purposes of this paragraph, “control” means ownership, directly or indirectly, of at least fifty percent (50%) of the equity or voting rights (or, in the case of a non-corporate entity, equivalent right) in such corporation or entity.

“Agreement” - as defined in the preamble of this Agreement.

“Amana EU” - as defined in the recitals to this Agreement.

“Amana-France” - as defined in the recitals to this Agreement.

“Amana-Germany” - as defined in the recitals to this Agreement.

“Amana-Italy” - as defined in the recitals to this Agreement.

“Amana US” - as defined in the preamble to this Agreement.

“Annual Financial Statements” - as defined in Section 3.6.

“Applicable Law” means any statute, law, ordinance, rule or regulation of a Governmental Authority applicable to the Companies, Subsidiaries, Seller, Buyer or any of their respective assets, as the case may be.

“Business Day” means any day other than a Saturday, Sunday or a day on which banks in Japan or in Seattle, Washington are authorized or obligated by Applicable Law or executive order to close.

“Buyer” - as defined in the preamble of this Agreement.

“Buyer Closing Certificate” - as defined in Section 2.3(c)(i).

“Buyer Indemnified Parties” - - as defined in Section 8.3(a).

“Buyer’s Acquisition Team” means Jonathan Klein, Liz Huebner, Jeff Beyle, John Lapham, Simon Quirk, Carrie McCabe, Steve Cristallo, John Hults, Mike Harris, Mark King, Jim Gurke, Ralph Tribe, Lisa Calvert, Deb Trevino, Bridget Russell, Nick Evans-Lombe, Richard Ellis, Robert Gubas and Anthony Harris.

“Closing” - as defined in Section 2.3(a).

“Closing Date” - as defined in Section 2.3(a).

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

“Company” or “Companies” - as defined in the recital to this Agreement.

“Company Intellectual Property” - as defined in Section 3.11(b).

“Company Licensed Intellectual Property” as defined in Section 3.11(b).

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“Company Owned Intellectual Property” as defined in Section 3.11(b).

“Content Supply and Production Facility Agreement” - as defined in Section 5.9.

“Contract” means except as specifically provided in this Agreement, any written agreement, contract, lease, license, promissory note, conditional sales contract, indenture, mortgage, deed of trust, commitment, undertaking, instrument or arrangement of any kind.

“Debt” means any borrowed money indebtedness or any guarantee of indebtedness.

“Designated Exchange Rate” - as defined in Section 3.7.

“Disclosure Schedule” - as defined in the introductory paragraph to Article III.

“Dollar” or “$” means United States dollars.

“Effective Date” - as defined in the preamble of this Agreement.

“Employee Plan” - as defined in Section 3.19.

“Environmental Laws” - as defined in Section 3.18.

“Equipment” means any machinery, tools, appliances, vehicles, furniture, fixtures, equipment, computers (and related software systems), parts or similar tangible personal Property.

“Equity Security” means any class of capital stock, share capital, equity share capital or other equity securities of the relevant corporation, company, limited liability company, partnership, trust, organization or other legal entity.

“ERISA” - as defined in Section 3.18.

“Exploitation” means the use, display, reproduction, manufacturing, distribution, licensing, sublicensing, sale, representation or any other exercise of any Intellectual Property rights, or any rights relating thereto, in any product, work, technology, process or other form or manner, including but not limited to any online use or transmission via internet or other electronic medium, whether now known or hereafter devised. “Exploit” means to so use, display, reproduce, manufacture, distribute, license, sublicense, sell, represent or otherwise exercise any Intellectual Property rights, or any rights relating thereto.

“Financial Statements” - as defined in Section 3.6.

“GAAP” - as defined in Section 3.6.

“Getty Litigation” means Getty Images, Inc. v. Amana America, Inc., pending in the U.S. District Court for the Western District of Washington.

“Governmental Authority” means any government or political subdivision, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision, or any federal, state, local or foreign court or arbitrator.

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“Hazardous Waste” means hazardous waste, substance, material, or chemical pollutant or contaminant, including petroleum and petroleum products, asbestos and any other material regulated under, or that can result in liability under, applicable Environmental Laws.

“Iconica” - as defined in the recitals to this Agreement.

“Image” means a photographic image, whether digital, analog or other form, that has been Exploited by any of the Companies or Subsidiaries or is held for Exploitation by any of such entities. The term “Image” includes both the tangible medium in which a particular photographic image is fixed or recorded as well as all right, title, and interest, including all worldwide copyrights and other intellectual property rights, related to such Image.

“Indemnified Party” - as defined in Section 8.4(a).

“Indemnifying Party” - as defined in Section 8.4(a).

“Intellectual Property” - as defined in Section 3.11(b).

“Interim Financial Statements” - as defined in Section 3.6.

“Interim Period” - as defined in Section 5.8(g).

“Intracompany Debts” means the net amount of Debt owing from any of the Companies or Subsidiaries, on the one hand, to Seller, on the other hand, after allowing for set off of the amount of any Debt owing from Seller to any of the Companies or Subsidiaries.

“Liens” means, with respect to any specified asset, any and all liens, claims, encumbrances, options, pledges, restrictions and security interests thereon except for Permitted Liens.

“Losses” - as defined in Section 8.2.

“Material Adverse Effect” means such event, change or effect that is materially adverse to the financial condition, results of operations or prospects of the Companies and Subsidiaries taken as a whole, other than events, changes or effects: (i) resulting from general economic conditions or the financial or securities markets generally; (ii) occurring generally in the industries in which any of the Companies or Subsidiaries does business; (iii) resulting from the transactions contemplated by this Agreement or the announcement to third-parties and the public of the transactions contemplated by this Agreement; or (iv) resulting from changes in laws or GAAP after the date hereof.

“Material Contract” - as defined in Section 3.15.

“Order” means any award, decision, judgment, injunction, order, ruling subpoena, or verdict entered, issued, made or rendered by any Governmental Authority.

“Outside Date” - as defined in Section 7.1(b).

“Permit” - as defined in Section 3.21.

“Permitted Liens” means (i) mechanics’, carriers’, or workmen’s, repairmen’s or similar Liens arising or incurred in the ordinary course of business consistent with past practice that are not overdue; (ii) Liens for taxes, assessments and any other governmental charges which are not due and payable or which may hereafter be paid without penalty or which are being contested in good faith by appropriate

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proceedings and for which the relevant party has reserved an appropriate amount on its books and records in accordance with GAAP; (iii) other imperfections of title or encumbrances, if any, which imperfections of title or other encumbrances, individually or in the aggregate, do not materially impair the use or value of the property to which they relate; (iv) Liens relating to the operating leases of equipment set forth on Section 3.9(b) of the Disclosure Schedule; (v) the Real Property Leases; (vi) any matters to which a Real Property Lease is subject or subordinate; and (vii) any other Liens that will be terminated at or prior to Closing in accordance with this Agreement.

“Person” - as defined in Section 9.11.

“Post-Closing Period” means any Tax period (or portion thereof) ending after the Closing Date.

“Pre-Closing Period” - means any Tax period (or portion thereof) ending on or before the Closing Date.

“Purchase Price” - as defined in Section 2.1(a).

“Real Property” - as defined in Section 3.10(b).

“Real Property Lease” - as defined in Section 3.10(a).

“Seller” - as defined in the preamble of this Agreement.

“Seller Closing Certificate” - as defined in Section 2.3(b)(i).

“Seller Guaranty” means any guaranty, letter of credit, letter of comfort, indemnity or contribution agreement or other similar agreement entered into by Seller or any of its Affiliates in favor of any third party with respect to any actual or potential liability or obligation of the Companies or Subsidiaries to such third party.

“Seller Indemnified Parties” - as defined in Section 8.2.

“Seller Trademarks” means those U.S. and foreign registered and unregistered trademarks, trade dress, service marks, logos, trade names, corporate names of Seller including, but not limited to, “Amana,” and all registrations and applications to register the same, each as listed on Schedule 10.1.

“Seller’s Knowledge” means the actual knowledge of any of the officers of the Seller who have, as of the date hereof, primary responsibility for overseeing the business of any Company or Subsidiary (including Hironobu Shindo), or David Neilson, Kinya Horikoshi or Terry Talerman.

“Shares” - as defined in the recitals to this Agreement.

“Short Period” - as defined in Section 5.8(h).

“Subsidiary” or “Subsidiaries” - as defined in Section 3.5.

“Survival Period” - as defined in Section 8.1.

“Tax” (including “Taxes”) means any and all (i) domestic or foreign federal, state, provincial, regional, local, or other governmental taxes, duties, tariffs, assessments or fees in the nature of a tax, including net income, gross income, gross receipts, sales, use, value added, goods and services, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp,

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occupation, premium, property, windfall profits, customs, duties or other taxes of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (ii) liability in respect of any items described in clause (i) payable by reason of being a member of an affiliated, combined, unitary, consolidated, fiscal unity or similar group for any period, and (iii) liability in respect of any items described in clause (i) or (ii) payable as a result of any express or implied obligation to indemnify any other Person with respect to such amount by reason of contract, assumption, transferee liability, operation of law or otherwise, including any liability for Taxes of a predecessor or transferor entity.

“Tax Contest” - as defined in Section 8.4(c).

“Tax Losses” - as defined in Section 8.3(a).

“Tax Return” means any return, declaration, report, statement, information return or statement or other document required to be filed with respect to Taxes including any schedule thereto, and including any amendment thereof.

“Taxation Authority” - as defined in Section 3.14(l).

“Taxation Statute” - as defined in Section 3.14(m).

“TCGA” - as defined in Section 3.14(q).

“Third Party” means Governmental Authority or Person other than Seller, Buyer and their respective Affiliates.

“Third Party Debt” means Debt of the Companies and Subsidiaries, determined on a consolidated basis, which is not due to Seller.

“TMA” - as defined in Section 3.14(m).

“Transaction Agreements” means the Content Supply and Production Facility Agreement; [•]; and [•].

“Transition Services Agreement” as defined in Section 5.13.

“UK Companies” means any of the Companies or Subsidiaries organized and existing under the laws of England or Wales, including Amana Europe Limited and Iconica Limited.

“UK Shares” means the Shares of the UK Companies.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

GETTY IMAGES, INC.
By:	/s/ Jonathan Klein
Name:	Jonathan Klein
Title:	Chief Executive Officer
AMANA INC.
By:	/s/ Hironobu Shindo
Name:	Hironobu Shindo
Title:	President & CEO

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EX-10.37

Exhibit 10.37

GETTY IMAGES, INC. 2005 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (this “Agreement”) is made and entered into effective January 3, 2006 (the “Effective Date”) by and between Getty Images, Inc., a Delaware corporation (the “Company”), and Sample Employee.

The terms of the Restricted Stock Unit Award (this “Restricted Stock Unit Award”) are as set forth in this Agreement and in the Company’s 2005 Incentive Plan (the “Plan”), a copy of which is attached. The Plan is incorporated into this Agreement by reference, which means that this Agreement is limited by and subject to the express terms and provisions of the Plan. In the event of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. Capitalized terms that are not defined in this Agreement have the meanings given to them in the Plan. The basic terms of the Restricted Stock Unit Award are summarized as follows:

1.      Grant Date:	January 3, 2006
2.      Number of Restricted Stock Units:	1,000
3.      Vesting Schedule	The award shall vest in four equal increments as follows: Units           Vest Date 250         January 1, 2007 250         January 1, 2008 250         January 1, 2009 250         January 1, 2010 This award shall continue to vest so long as you continue employment with the Company or one of its Subsidiaries.

4. Vesting

(a) One share of Common Stock shall be issuable for each restricted stock unit that vests (the “Shares”), subject to the terms and provisions of the Plan and this Agreement. Upon vesting, the Company will transfer such Shares to you upon and subject to the terms of this Agreement. No fractional Shares shall be issued under this Agreement.

(b) The Restricted Stock Unit Award is subject to forfeiture upon your termination of employment with the Company and its Subsidiaries pursuant to Section 5 of this Agreement. The Restricted Stock Unit Award will vest and no longer be subject to forfeiture according to the vesting schedule set forth in Section 3 above. No Shares shall be issued or issuable with respect to any portion of the Restricted Stock Unit Award that is forfeited.

(c) Units that have vested and are no longer subject to forfeiture according to the vesting schedule set forth above are referred to herein as “Vested Units”. Units that are not vested and remain subject to forfeiture under the vesting schedule set forth above are referred to

herein as “Unvested Units”. The Unvested Units will vest (and to the extent so vested cease to be Unvested Units remaining subject to forfeiture) in accordance with the above schedule. Collectively, the Unvested and Vested Units are referred to herein as the “Units”.

(d) Early lapse of the forfeiture restrictions may occur as described below in connection with a Change in Control.

5. Termination of Employment

If your employment with the Company and its Subsidiaries terminates for any reason, any portion of this Restricted Stock Unit Award that has not vested as provided above will immediately terminate. You will forfeit all Unvested Units upon such occurrence without the payment of any further consideration to you.

6. Change of Control

Upon a Change of Control of the Company, the vesting of your Restricted Stock Unit Award will accelerate and all Units under this Agreement shall become Vested Units.

7. Conversion of Units into Shares of Common Stock

Vested Units shall be converted into shares of Common Stock and distributed to you when Unvested Units become Vested Units.

8. Dividends

At the sole discretion of the Compensation Committee of the Board of Directors, you may be credited with dividend equivalents with respect to your Unvested Units under this Agreement if the Company declares dividends on its Common Stock. If dividends are declared and if the Compensation Committee determines that dividend equivalents will be credited with respect to your Unvested Units, then the Compensation Committee, in its sole discretion, may determine the form of payment of dividend equivalents, including cash, shares of Common Stock or additional Units.

9. No Rights as Shareholder

You shall not have voting or any other rights as a shareholder of the Common Stock with respect to the Units. Upon conversion of the Vested Units into shares of Common Stock, you will obtain full voting and other rights as a shareholder of the Company.

10. Securities Law Compliance

Notwithstanding any other provision of this Agreement, you may not sell the Shares acquired upon the conversion of Vested Units unless such Shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such Shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such Shares must also comply with other applicable laws and regulations governing the Shares, and you may not sell the Shares if the Company determines that such sale would not be in material compliance with such laws and regulations.

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11. Transfer Restrictions

Any sale, transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, whether voluntarily or by operation of law, directly or indirectly, of Units shall be strictly prohibited and void.

12. Independent Tax Advice

You acknowledge that determining the actual tax consequences of receiving or disposing of the Units and Shares may be complicated. These tax consequences will depend, in part, on your specific situation and also may depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You are aware that you should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving or disposing of Units and Shares. Prior to executing this Agreement, you either have consulted with a competent tax advisor independent of the Company to obtain tax advice concerning the receipt, vesting or disposition of the Units or Shares in light of your specific situation or have had the opportunity to consult with such a tax advisor but chose not to do so.

13. Taxes and Withholding

You are ultimately liable and responsible for all taxes owed in connection with this Restricted Stock Unit Award, including federal, state, local, FICA, or foreign taxes of any kind required by law, regardless of any action the Company or any of its Subsidiaries takes with respect to any tax withholding obligations that arise in connection therewith. The Committee has authorized the Company to satisfy all of your tax withholding obligations by your (a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to you, or (c) having the Company withhold and/or sell the number of whole Shares that the Company determines necessary to satisfy the minimum tax withholding obligations arising with respect to this Restricted Stock Unit Award from those Shares issuable to you under this Restricted Stock Unit Award upon the conversion of Vested Units. The obligations of the Company under this Agreement are conditioned on your compliance with this Section 13. The Company reserves the right not to deliver any of the Shares issuable upon conversion of Vested Units until the proper provision for required withholding has been made.

Notwithstanding the foregoing, unless waived by the Committee, by accepting this agreement and in order to satisfy your obligations set forth in this Section 13, you understand and agree that you shall during the next open trading window after the Effective Date when you are not aware of material nonpublic information be required to enter into a trading plan with a brokerage firm acceptable to the Company for such purpose (the “Agent”) as your Agent, and to authorize the Agent, to:

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(a) Sell on the open market at the then prevailing market price(s), on your behalf, as soon as practicable on or after the vesting date, the number of shares of Common Stock (rounded up to the next whole number) sufficient to generate proceeds to cover the withholding taxes that you are required to pay pursuant to this Section 13 upon the vesting of a Restricted Stock Unit Award and all applicable fees and commissions due to, or required to be collected by, the Agent; and

(b) Remit any remaining funds to you.

It is the intent of the parties that such trading plan would comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934.

14. General Provisions

14.1 Assignment. The Company may assign its rights under the Agreement at any time, whether or not such rights are then exercisable, to any Subsidiary designated by the Compensation Committee.

14.2 Notices. Any notice required in connection with this Agreement will be given in writing and will be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered or certified, postage prepaid and addressed to the party entitled to such notice at the address indicated in this Agreement or at such other address as such party may designate by 10 business days’ advance written notice under this Section 14.2 to all other parties to this Agreement hereunder. Notices delivered to the Company shall be addressed to it at its principal business office, Attention: Compensation Committee of the Board of Directors, and any notice hereunder to you shall be sent to the address reflected on the payroll records of the Company, subject to the right of either party to designate at any time hereafter in writing some other address.

14.3 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder.

14.4 Mutual Undertakings. You and the Company each hereby agree to take whatever additional action and execute whatever additional documents the other party may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on you, the Units or the shares of Common Stock acquired upon conversion of the Units or the Company pursuant to the express provisions of this Agreement.

14.5 Agreement Is Entire Contract. This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement is made pursuant to the provisions of the Plan and will in all respects be construed in conformity with the express terms and provisions of the Plan. Any portion or provision of this Agreement that is deemed invalid or unenforceable shall be deemed stricken from this Agreement, without impact or affect on the remaining provisions of the Agreement.

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14.6 Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding on, the Company and its Subsidiaries, their successors and assigns and you and your legal representatives, heirs, legatees, distributees, assignees and transferees by operation of law, whether or not any such person will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof.

14.7 No Employment or Service Contract. This Agreement shall not confer upon you any right with respect to continuance of employment by the Company or any Subsidiary, nor shall it interfere in any way with the right of the Company or any Subsidiary to terminate your employment at any time.

14.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but which, upon execution, will constitute one and the same instrument.

14.9 Washington Law to Govern. This Agreement will be construed and administered in accordance with and governed by the laws of the State of Washington.

15. Noncompetition Covenants.

In consideration for the benefits provided by this Agreement and the corresponding Restricted Stock Unit Award provided to you and the Shares issuable to you upon conversion of Vested Units, which would not have been granted absent your consent to the covenant to not compete outlined in this Section 15, you agree that for so long as you are employed by the Company and for a period of six (6) months following the final day of your employment with the Company, you shall not directly or indirectly, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, consultant or otherwise, those companies (or such companies’ successors or assigns) listed in the “Competition” section of the Company’s most recent Form 10-K or 10-Q filing with the Securities and Exchange Commission (or any similar such section), or provide services or goods provided by the Company as of the effective date of your termination of employment. Notwithstanding any provision of this Agreement to the contrary, any violation by you of this Section 15 shall result in the forfeiture by you of all Units and you shall be obligated to return all Shares that may have been issued to you upon conversion of Vested Units; provided that, if you no longer hold such Shares, you shall be obligated to pay to the Company an amount in cash equal to the Fair Market Value of the Common Stock on the date of your violation of this Section 15. All determinations regarding enforcement, waiver or modification of this Section 15 shall be made in the Company’s sole discretion. Determinations made under this Section 15 need not be uniform and may be made selectively among individuals, whether or not such individuals are similarly situated. You agree that this Section 15 is reasonable and agree not to challenge the reasonableness of this Section 15, even where forfeiture is the penalty for violation.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year indicated above on the first page of this Agreement as the Effective Date.

GETTY IMAGES, INC.
By: James C. Gurke	Name
SVP, Human Resources and Chief of Staff

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EX-12.1

Exhibit 12.1

Ratio of Earnings to Fixed Charges

	Years ended December 31,
	2005			2004		2003		2002		2001
(in thousands, except ratios)
Income (loss) before income taxes and extraordinary item	$	230,654	3	$	174,039	$	87,716	$	36,087	$	(98,662	)
Add fixed charges
Interest expense		7,618	3		3,828		9,765		15,364		17,231
Interest portion of rent expense		6,280			6,185		6,113		6,235		7,005
Income (loss) before income taxes, extraordinary item and fixed charges	$	244,552		$	184,082	$	103,594	$	57,686	$	(74,426	)
Fixed charges
Interest expense	$	7,618	3	$	3,828	$	9,765	$	15,364	$	17,231
Interest portion of rent expense		6,280			6,185		6,113		6,235		7,005
Fixed charges	$	13,898	3	$	10,013	$	15,878	$	21,599	$	24,236
Ratio of earnings to fixed charges 1		17.6	3		18.4		6.5		2.7		—
Deficiency of earnings to fixed charges 2		—			—		—		—	$	(98,662	)

1 Ratio of earnings to fixed charges means the ratio of income before fixed charges and income taxes to fixed charges, where fixed charges are the aggregate of interest expense, including amortization of debt issuance costs, and an allocation of rental charges to approximate equivalent interest.

2 Due to net losses incurred in 2001, the ratio of earnings to fixed charges in that year was less than 1:1. We would have had to generate additional earnings in the amounts indicated in the table to have achieved a ratio of 1:1.

3 Included as a deduction from income before income taxes and as an addition to interest expense in 2005 is accelerated amortization of debt issuance costs in the amount of $5.0 million. Excluding this amortization, the ratio of earnings to fixed charges would have been 27.6 for the year ended December 31, 2005.

EX-21.1

Exhibit 21.1

GETTY IMAGES, INC.

SUBSIDIARIES

Subsidiaries of the Registrant	Jurisdiction of Incorporation
3032097 Nova Scotia Limited	Canada
All-Sport (UK) Limited	England and Wales
Allsport Australia Pty Limited	Australia
Allsport Photographic Limited	England and Wales
Allsport Photographic Share Scheme Trustees Limited	England and Wales
Amana Europe Limited	England and Wales
Amana France S.A.S.	France
Amana Germany GmbH	Germany
Amana Images Limited	England and Wales
Amana Italy S.r.l.	Italy
Bavaria Bildagentur Verwaltungsgesellschaft GmbH	Germany
Bongarts Sportfotografie GmbH	Germany
Colorific Photo Library Limited	England and Wales
Digital Vision GmbH	Germany
Digital Vision, Inc.	Nevada
Digital Vision Limited	England and Wales
Digital Vision Online.com, LLC	Delaware
Digital Vision SARL	France
Digital Vision (US) Limited	England and Wales
Eyewire Partners Company	Canada
Eyewire Services, Inc.	Canada
Eyewire, Inc.	Delaware
FPG Canada, Incorporated	Canada
Getty Communications Group Finance Limited	England and Wales
Getty Communications Limited	England and Wales
Getty Images GmbH	Austria
Getty Images (Beijing) Company Limited	People’s Republic of China
Getty Images (Canada), Inc.	Canada
Getty Images (Cayman) Ltd.	Cayman
Getty Images (Ireland), Inc.	Delaware
Getty Images (Ireland) Limited	Ireland
Getty Images (Management Company) LLC	California
Getty Images (Photographers), Inc.	California
Getty Images (PRC Representative Office), Inc.	Delaware

Subsidiaries of the Registrant	Jurisdiction of Incorporation
Getty Images (Seattle), Inc.	Washington
Getty Images (Thailand) Co., Ltd.	Thailand
Getty Images (UK) Limited	England and Wales
Getty Images (US), Inc.	New York
Getty Images Bvb.A.	Belgium
Getty Images Denmark Ap.S.	Denmark
Getty Images do Brasil Ltda.	Brazil
Getty Images France S.A.S.	France
Getty Images Deutschland GmbH	Germany
Getty Images Film Gmbh & Co. KG	Germany
Getty Images B.V.	The Netherlands
Getty Images Hong Kong Limited	Hong Kong
Getty Images (Japan), Inc.	Japan
Getty Images Limited	England and Wales
Getty Images New Zealand Ltd.	New Zealand
Getty Images News Service (PRC) Ltd.	England and Wales
Getty Images News Services (PRC), Inc.	Delaware
Getty Images Pte Limited	Singapore
Getty Images Pty Ltd.	Australia
Getty Images S.L.	Spain
Getty Images Sweden A.B.	Sweden
Hulton Archive Limited	England and Wales
Hulton Getty Holdings Limited	England and Wales
Iconica Limited	England and Wales
i/us Corporation	Canada
Imagenet Limited	England and Wales
Image.net Holdings Ltd.	England and Wales
IPL E-Pic Pty Limited	Australia
IPL Profile Pty Limited	Australia
iSwoop GmbH	Germany
iSwoop Limited	Ireland
Jacira Ag	Switzerland
Liaison Agency, Inc.	New York
MedioImages, Inc.	Delaware
Mission Studios Limited	England
Photodisc Australia Pty Limited	Australia
Photodisc do Brasil Ltda.	Brazil
Photodisc Europe Limited	England and Wales
Photodisc International, Inc.	Barbados
Photonica Europe Limited	England and Wales
Photonica US, Inc.	Delaware

Subsidiaries of the Registrant	Jurisdiction of Incorporation
Photovisual Communications, Inc. (Bruce Bennett Studios)	New York
Planet Earth Pictures Limited	England and Wales
R.E.D. Image Pty Limited	Australia
Rubberball Holdings, LLC	Utah
Space Frontiers Limited	England and Wales
Sportimage Fotoagentur GmbH	Germany
Stone America, Inc.	Illinois
Sumer Australasia Pty Limited	Australia
The Image Bank Unit Trust	Australia
The Telegraph Colour Library Limited	England and Wales
TIB Hong Kong Limited	Hong Kong
TIB Images Limited	Canada
TIB London Limited	England and Wales
Tony Stone Associates Limited	England and Wales
Tony Stone Images/Canada, Inc.	Canada
VCG Deutschland GmbH & Co. KG	Germany
VCG Holdings LLC	Delaware
Visual Communications Group Holdings Limited	England and Wales
Visual Communications Group Limited	England and Wales
Visual Communications Limited	England and Wales

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File No. 333-44098, 333-75599, 333-46325 and 333-88060) and in the Registration Statement on Form S-3 (File No. 333-107952) of Getty Images, Inc. of our reports dated March 9, 2006 relating to the consolidated financial statements and financial statement schedule, which appear in this Form 10-K.

PricewaterhouseCoopers LLP

Seattle, Washington

March 9, 2006

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathan D. Klein, Chief Executive Officer, certify that:

1. I have reviewed this Annual Report on Form 10-K of Getty Images, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/    JONATHAN D. KLEIN
	Jonathan D. Klein Co-Founder and Chief Executive Officer

Date: March 9, 2006

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth J. Huebner, Chief Financial Officer, certify that:

1. I have reviewed this Annual Report on Form 10-K of Getty Images, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/    ELIZABETH J. HUEBNER
	Elizabeth J. Huebner Senior Vice President and Chief Financial Officer

Date: March 9, 2006

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Getty Images, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), I, Jonathan D. Klein, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 9, 2006

/s/    JONATHAN D. KLEIN        

Jonathan D. Klein

Co-Founder and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Getty Images, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), I, Elizabeth J. Huebner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 9, 2006

/s/    ELIZABETH J. HUEBNER        

Elizabeth J. Huebner

Senior Vice President and Chief Financial Officer