S-3

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As filed with the Securities and Exchange Commission on April 19, 2002

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

OSI PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

Delaware	13-3159796
(State or other jurisdiction of incorporation organization)	(I.R.S. Employer Identification No.)

58 South Service Road, Suite 110, Melville, New York 11747, (631) 962-2000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Robert L. Van Nostrand
Vice President and Chief Financial Officer
OSI Pharmaceuticals, Inc.
58 South Service Road, Suite 110, Melville, New York 11747, (631) 962-2000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications to:

Spencer W. Franck, Jr., Esquire
Saul Ewing LLP
1200 Liberty Ridge Drive, Suite 200, Wayne, Pennsylvania 19087-5055, (610) 251-5082

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ý

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o                   

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o                   

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
4% Convertible Senior Subordinated Notes due 2009	$200,000,000(1)	100%	$200,000,000(1)(2)	$18,400(3)
Common Stock, $.01 par value per share	4,000,000(4)	(5)	(5)	$0(5)

(1)

Represents the aggregate principal amount of the notes that were originally issued by the Registrant in February 2002.

(2)

Equals the aggregate principal amount of notes being registered. Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act.

(3)

Represents the Proposed Maximum Offering Price multiplied by $0.000092.

(4)

This number represents the number of shares of common stock that are initially issuable upon conversion of the 4% Convertible Senior Subordinated Notes due 2009 registered hereby. For purposes of estimating the number of shares of common stock to be included upon conversion of the notes, we calculated the number of shares issuable upon conversion of the notes based on a conversion price of $50.00 per share of common stock. In addition to the shares set forth in the table, pursuant to Rule 416 under the Securities Act, the amount to be registered includes an indeterminate number of shares of common stock issuable upon conversion of the notes, as this amount may be adjusted as a result of stock splits, stock dividends and antidilution provisions.

(5)

No separate compensation will be received for the shares of common stock issuable upon conversion of the notes, and therefore, no registration fee is required pursuant to Rule 457(i) of the Securities Act.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING SECURITY HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 19, 2002

$200,000,000

4% Convertible Senior Subordinated Notes Due 2009
And 4,000,000 Shares Of Common Stock Issuable Upon
Conversion Of The Notes

        On February 1, 2002, we issued and sold $200,000,000 aggregate principal amount of our 4% Convertible Senior Subordinated Notes due 2009 in a private placement. This prospectus will be used by selling securityholders to resell the notes and the common stock issuable upon conversion of the notes.

        The notes are convertible, at the option of the holder, at any time on or prior to maturity into shares of our common stock. The notes are convertible at a conversion price of $50.00 per share which is equal to a conversion rate of 20 shares per $1,000 principal amount of notes, subject to adjustment. On April 17, 2002, the closing bid price of our common stock as reported on the Nasdaq National Market was $36.79 per share.

        We will pay interest on the notes on February 1 and August 1 of each year, beginning August 1, 2002. The notes will mature on February 1, 2009. We may redeem some or all of the notes at any time before February 1, 2005 at a redemption price of $1,000 per $1,000 principal amount of notes, plus accrued and unpaid interest, if any, to the redemption date, if the closing price of our common stock has exceeded 150% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day before the date on which we mail the provisional redemption notice, and subject to certain other conditions. Upon any such provisional redemption, we will make an additional payment in cash equal to $120 per $1,000 principal amount of notes, less the amount of any interest actually paid on the notes before the provisional redemption date. We may also redeem some or all of the notes at any time on or after February 1, 2005, at a redemption price of $1,000 per $1,000 principal amount of notes, plus accrued and unpaid interest, if any, to the redemption date if the closing price of our common stock has exceeded 140% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day before the date on which we mail the optional redemption notice.

        In the event of a Change of Control, as defined in the section entitled "Description of the Notes—Repurchase at Option of Holders Upon a Change of Control," each holder of the notes may require us to repurchase the notes at 100% of the principal amount of the notes plus accrued interest. At our option, we may repurchase the notes for cash or common stock.

        The notes are unsecured (except to the extent described in this prospectus) and subordinated to our existing and future senior indebtedness. The notes rank equally with our existing and future senior subordinated indebtedness.

        We have pledged a portfolio of U.S. government securities as security for the notes in an amount sufficient to pay the first six scheduled interest payments on the notes.

        The notes originally issued in the private placement are eligible for trading on the PORTAL market. However, notes sold pursuant to this prospectus will no longer be eligible for trading on the PORTAL market. We do not intend to list the notes on any national securities exchange. Our common stock is quoted on the Nasdaq National Market under the symbol "OSIP."

Investing in the notes involves risks that are described in the "Risk Factors" section beginning on page 5 of this prospectus.

        We will not receive any of the proceeds from the sale of the notes or the shares of common stock by any of the selling securityholders. The notes and the shares of common stock may be offered in negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices. The timing and amount of any sale are within the sole discretion of the selling securityholders. In addition, the shares of common stock may be offered from time to time through ordinary brokerage transactions on the Nasdaq National Market. See "Plan of Distribution." The selling securityholders may be deemed to be "underwriters" as defined in the Securities Act of 1933, as amended. Any profits realized by the selling securityholders may be deemed to be underwriting commissions. If the selling securityholders use any broker-dealers, any commission paid to broker-dealers and, if broker-dealers purchase any notes or shares of common stock as principals, any profits received by such broker-dealers on the resale of the notes or shares of common stock may be deemed to be underwriting discounts or commissions under the Securities Act.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is April    , 2002.

TABLE OF CONTENTS

AVAILABLE INFORMATION	i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	i
FORWARD-LOOKING STATEMENTS	ii
SUMMARY	1
RISK FACTORS	5
RATIO OF EARNINGS TO FIXED CHARGES	14
USE OF PROCEEDS	14
DIVIDEND POLICY	14
RECENT EVENTS	14
DESCRIPTION OF THE NOTES	15
SELLING SECURITY HOLDERS	32
DESCRIPTION OF CAPITAL STOCK	33
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS	35
PLAN OF DISTRIBUTION	42
LEGAL MATTERS	44
EXPERTS	44

        In this prospectus, "OSI," "our company," "we," "us," and "our" refer to OSI Pharmaceuticals, Inc.

AVAILABLE INFORMATION

        We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), under which we file periodic reports, proxy statements and other information with the SEC. Copies of the reports, proxy statements and other information may be examined without charge at the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and the SEC's regional office located at 500 West Madison Street, Suite 1400, Chicago, IL 60600 or on the Internet at http://www.sec.gov. Copies of all or a portion of such materials can be obtained from the Public Reference Section of the SEC upon payment of prescribed fees. Please call the SEC at 800-SEC-0330 for further information about the Public Reference Room. We also maintain our own website which is located at www.osip.com.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

        The SEC allows us to "incorporate by reference" the information we provide in documents filed with the SEC, which means that we can disclose important information by referring to those documents. The information incorporated by reference is an important part of this prospectus. Any statement contained in a document which is incorporated by reference in this prospectus is automatically updated and superseded if information contained in this prospectus, or information that we later file with the SEC, modifies and replaces this information.

        We are "incorporating by reference" specified documents that we file with the SEC, which means:

•

incorporated documents are considered part of this prospectus;

•

we are disclosing important information to you by referring you to those documents; and

•

information that we file in the future with the SEC automatically will update and supersede earlier information in or incorporated by reference in this prospectus.

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        We incorporate by reference the following documents filed with the SEC:

•

our annual report on Form 10-K for the fiscal year ended September 30, 2001 filed on December 13, 2001;

•

our current reports on Forms 8-K filed on January 7, 2002, January 25, 2002 and January 29, 2002 and our Form 8-K/A filed on March 6, 2002;

•

our definitive proxy statement on Schedule 14A filed on January 25, 2002; and

•

our quarterly report on Form 10-Q for the quarter ended December 31, 2001 filed on February 14, 2002.

        All documents we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the end of the offering of the notes under this prospectus will become a part of this prospectus. To receive a free copy of any of the documents incorporated by reference in this prospectus call or write Robert L. Van Nostrand, Vice President and Chief Financial Officer, OSI Pharmaceuticals, Inc., 58 South Service Road, Suite 110, Melville, New York 11747, telephone (631) 962-2000. We will not send exhibits to the documents unless those exhibits have been specifically incorporated by reference in this prospectus.

        You should rely only on the information incorporated by reference or included in this prospectus. We have not authorized anyone else to provide you with different information. The selling securityholders are offering these securities only in states where the offer is permitted. You should not assume that the information in this prospectus is accurate as of any date other than the dates set forth on the front of these documents.

FORWARD-LOOKING STATEMENTS

        This prospectus and the documents incorporated by reference herein include forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements include, among other things, statements relating to:

•

our anticipated business strategies;

•

our pending and anticipated clinical trials;

•

our intention to introduce new product candidates;

•

our relationships with collaborators;

•

our integration of acquired businesses, assets and liabilities;

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anticipated trends in our businesses;

•

future capital expenditures; and

•

our ability to conduct clinical trials and obtain regulatory approval.

        The forward-looking statements included in this prospectus or in the documents incorporated by reference herein are subject to risks, uncertainties and assumptions about us. Our actual results of operations may differ materially from the forward-looking statements as a result of, among other things, the success or failure of our clinical trials, the speed at which our clinical trials progress, the success of our competitors in developing products equal or superior to ours and the timing of their development of such products, the success of our collaborative relationships and the other reasons described under "Risk Factors." We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

        For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Securities Act of 1933, as amended (the "Securities Act").

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SUMMARY

The following is a short summary of our business. This summary may not contain all of the information that you should consider before investing in the notes or the shares of common stock issuable upon their conversion. You should carefully read the entire prospectus and the documents incorporated by reference into the prospectus.

OSI PHARMACEUTICALS, INC.

        We are a leading biopharmaceutical company primarily focused on the discovery, development and commercialization of novel products for the treatment of cancer. We have built a pipeline of discovery programs and drug candidates addressing unmet needs in cancer complemented by selected opportunities arising from our extensive drug discovery research programs that represent significant commercial opportunities outside of cancer. We have seven candidates in clinical trials and seven candidates in late stage pre-clinical development.

        Our lead product candidate, Tarceva™ (also known as erlotinib HCl and OSI-774), is a potent, selective and orally active, small molecule inhibitor of the epidermal growth factor receptor, or EGFR. A high proportion of the approximately 1.2 million new U.S. solid tumor patients each year may benefit from EGFR targeted drugs. We, therefore, believe that this new class of EGFR inhibitors has significant market potential. In January 2001, we entered into an alliance with Genentech, Inc. and Roche for the global co-development and commercialization of Tarceva™. If the drug is successful in obtaining regulatory approval, we will share equally in the profits from sales of Tarceva™ in the United States with Genentech and we will receive a royalty from Roche based on sales outside of the United States.

        In December 2001, we acquired from Gilead Sciences, Inc. its pipeline of clinical candidates in oncology (NX211, GS7836 and GS7904L, since renamed OSI-211, OSI-7836 and OSI-7904L, respectively), certain related intellectual property, and Gilead's Boulder, Colorado operations consisting of clinical research and drug development personnel, infrastructure and facilities. With this acquisition and that of certain assets acquired from British Biotech plc in September 2001, we have expanded our research and development capabilities from early stage research through pre-clinical and clinical development by adding high quality infrastructure and professionals. We believe these acquisitions have accelerated our development and commercialization capabilities and balanced our oncology pipeline of novel targeted therapies with next-generation cytotoxic agents.

        Our strategy to become a leading oncology-focused biopharmaceutical company has two key elements. First, we intend to build on our existing franchise by leveraging our corporate presence in oncology stemming from Tarceva™, our extensive pipeline of oncology product candidates, our strong core of discovery research, and the top-tier oncology clinical operations group acquired from Gilead. Second, we intend to continue to explore licensing and acquisition initiatives designed to add oncology products and late stage drug candidates in order to further strengthen our growing position in oncology.

        We were incorporated in the State of Delaware in March 1983. Our corporate headquarters are located at 58 South Service Road, Suite 110, Melville, New York 11747 and our telephone number is (631) 962-2000.

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THE OFFERING

        The following is a brief summary of the terms of this offering. For a more complete description of the notes, see "Description of the Notes" in this prospectus.

Issuer	OSI Pharmaceuticals, Inc.
Notes offered	$200,000,000 aggregate principal amount of 4% Convertible Senior Subordinated Notes due 2009.
Maturity	February 1, 2009.
Interest	4% per annum on the principal amount, payable semi-annually on February 1 and August 1 of each year, beginning August 1, 2002.
Ranking	The notes are our unsecured (except to the extent described under "Description of the Notes—Security") senior subordinated obligations. They rank junior in right of payment to all of our existing and future Senior Indebtedness (as defined herein), and rank equally with all of our future senior subordinated indebtedness. The notes will also be effectively subordinated to all existing and future indebtedness and other liabilities of our subsidiaries. We had approximately $0.8 million of Senior Indebtedness and senior subordinated indebtedness outstanding, and our subsidiaries had no indebtedness outstanding, at December 31, 2001. See "Description of the Notes—Subordination."
Conversion rights	The notes are convertible at the option of the holder at any time on or prior to maturity into shares of our common stock at a conversion price of $50.00 per share, which is equal to a conversion rate of 20 shares per $1,000 principal amount of notes. The conversion price is subject to adjustment. See "Description of the Notes—Conversion Rights."
Security	We have purchased and pledged to the trustee under the indenture, as security for the notes and for the exclusive benefit of the holders of the notes, approximately $22.9 million of U.S. government securities, which will be sufficient upon receipt of scheduled principal and interest payments thereon, to provide for the payment in full of the first six scheduled interest payments due on the notes when due. The notes will not otherwise be secured. See "Description of the Notes—Security."

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Provisional redemption	We may redeem the notes, in whole or in part, at any time before February 1, 2005 at a redemption price equal to $1,000 per $1,000 principal amount of notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the date of the provisional redemption if (i) the closing price of our common stock has exceeded 150% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day before the date on which we mail the provisional redemption notice and (ii) during the period that we are obligated under the registration rights agreement to keep the shelf registration statement effective, such shelf registration statement covering resales of the notes and the common stock issuable upon conversion of the notes is effective and available for use as of, and including, the date on which we mail the provisional redemption notice through and including the provisional redemption date. See "Description of the Notes—Registration Rights."
	Upon any provisional redemption, we will make an additional "make-whole" payment, in cash, with respect to the notes called for redemption in an amount equal to $120 per $1,000 principal amount of notes, less the amount of any interest actually paid on the notes before the provisional redemption date.
	We will be obligated to make this additional payment on all notes called for provisional redemption, including any notes converted after the provisional redemption notice date and before the provisional redemption date. See "Description of the Notes—Provisional Redemption."
Optional redemption	We may redeem all or a portion of the notes on or after February 1, 2005 at $1,000 per $1,000 principal amount of the notes, plus accrued and unpaid interest, if any, to, but excluding the date of the optional redemption, if the closing price of our common stock has exceeded 140% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day before the date on which we mail the optional redemption notice. See "Description of the Notes—Optional Redemption."
Repurchase upon Change of Control	Holders of the notes may require us to repurchase all or part of the holder's notes at 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date in certain circumstances involving a Change of Control (defined below). The repurchase price is payable:
	•  in cash; or

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	•  at our option, subject to the satisfaction of certain conditions, in shares of our common stock. The number of shares of common stock will equal the repurchase price divided by 95% of the average closing sales prices of our common stock for the five-trading-day period ending on the third business day prior to the repurchase date.
	See "Description of the Notes—Repurchase at Option of Holders Upon a Change of Control."
Form and denomination	The notes were issued in fully registered form. The notes are represented by one or more global notes, deposited with the trustee as a custodian for the Depository Trust Company, New York, New York ("DTC"), and registered in the name of Cede & Co., DTC's nominee. Beneficial interests in the global notes are shown on, and any transfers are effective only through, records maintained by DTC and its participants. See "Description of the Notes—Book-Entry Form."
Use of proceeds	We will not receive any proceeds from the sale by any securityholder of the notes or shares of common stock offered under this prospectus. See "Use of Proceeds."
Trading	The notes sold to qualified institutional buyers are eligible for trading in the PORTAL market, however, the notes resold pursuant to this prospectus will no longer trade on the PORTAL market. We do not intend to list the notes on any national securities exchange or the Nasdaq National Market.
Nasdaq symbol for our common stock	Our common stock is quoted on the Nasdaq National Market under the symbol "OSIP."
Common stock	As of April 16, 2002, there were 36,279,933 shares of common stock outstanding. See "Description of Capital Stock—Common Stock."
Risk factors	See "Risk Factors" and other information in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the notes.

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RISK FACTORS

You should carefully consider the following risk factors together with the other information contained in or incorporated into this prospectus before you decide to buy our notes or the common stock issuable upon conversion of the notes. If any of these risks actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the trading price of the notes or our common stock to decline and you may lose part or all of your investment.

Risks Related to Our Business

Although we have potential products that appear to be promising at early stages of development and in clinical trials, none of our potential products may reach the market for a number of reasons.

        Our success depends on the discovery of new drugs which we can commercialize and take to market. None of our potential products, including Tarceva™, may ever reach the market for a number of reasons. They may be found ineffective or cause harmful side effects during pre-clinical testing or clinical trials or fail to receive necessary regulatory approvals. We may find that the products cannot be manufactured on a large scale basis, and therefore, they may not be economical to produce. Our products could also fail to achieve market acceptance or be precluded from commercialization by proprietary rights of third parties.

        We have a number of product candidates in very early stages of development and we do not expect them to be commercially available for several years, if at all. All but seven of our product candidates are in the pre-clinical development phase. The seven candidates that are in clinical trials will still require significant research and development and regulatory approvals before we or our collaborative partners will be able to market them.

If we have a setback in our Tarceva™ program, our stock price would almost certainly decline.

        We are currently in Phase III clinical trials for Tarceva™. If the results of the trials are not satisfactory, we would need to conduct additional clinical trials or abandon our Tarceva™ program. Since Tarceva™ is our most advanced product candidate, a setback of this nature would almost certainly cause a decline in our stock price.

If we are unable to demonstrate acceptable safety and efficacy of Tarceva™ during clinical trials, we will not be able to obtain regulatory approval and thus will not be able to commercialize and generate revenues from Tarceva™.

        We must continue to demonstrate, through pre-clinical testing and clinical trials, that Tarceva™ is safe and effective. The results from pre-clinical testing and early clinical trials may not be predictive of results obtained in subsequent clinical trials, and we cannot be sure that our clinical trials will demonstrate the safety and efficacy necessary to obtain regulatory approval for Tarceva™. A number of companies in the biotechnology and pharmaceutical industries have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier trials. In addition, certain clinical trials are conducted with patients having the most advanced stages of disease. During the course of treatment, these patients often die or suffer other adverse medical effects for reasons that may not be related to the pharmaceutical agent being tested. These events can cause our statistical analysis of clinical trial results to be incorrect.

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        The completion of clinical trials of Tarceva™ may be delayed by many factors. One such factor is the rate of enrollment of patients. We cannot control the rate at which patients present themselves for enrollment, and we cannot be sure that the rate of patient enrollment will be consistent with our expectations or be sufficient to enable clinical trials of our product candidates to be completed in a timely manner. Any significant delays in, or termination of, clinical trials of our product candidates may hinder our ability to obtain regulatory approval of Tarceva™.

        We cannot be sure that regulatory authorities will permit us to undertake additional clinical trials for Tarceva™. Any delays in obtaining or failure to obtain regulatory approval will hinder us from commercializing and generating revenues from Tarceva™.

If we are unable to maintain our co-development and marketing alliance with Genentech and Roche for Tarceva™, our ability to proceed with the timely and profitable manufacture and sale of Tarceva™ may be compromised.

        If we fail to maintain a successful collaborative partnership with Genentech and Roche for the co-development and commercialization of Tarceva™, we may not have or be able to obtain the resources needed to commercialize Tarceva™ in the optimal manner.

        In order to successfully commercialize Tarceva™ and our other product candidates, we must be able to:

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manufacture our products in commercial quantities at reasonable costs;



•

obtain reimbursement coverage for our products;



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compete favorably against other products; and



•

market our products successfully.

        Consequently, if we fail to successfully maintain the collaborative partnership with Genentech and Roche, we may be forced to focus our efforts internally to accomplish the above which would require a greater expenditure of financial resources that may be difficult to recover.

If we are unable to establish a commercial infrastructure for the marketing of our potential oncology products other than Tarceva™, we will need to enter into and maintain arrangements with third parties for commercialization of such products.

        We may not be successful in establishing a commercial infrastructure to enable us to directly market and sell our potential oncology products other than Tarceva™. If we are unsuccessful or delayed in establishing this infrastructure, we would need to enter into and successfully maintain additional co-development and commercialization agreements. This would result in our receipt of a decreased share of the revenues generated from the sale of such products.

If our competitors succeed in developing products and technologies that are more effective than our own, our products and technologies may be rendered less competitive.

        We face significant competition from industry participants that are pursuing similar products and technologies as we are, and from organizations that are developing pharmaceutical products that are competitive with our potential products. Where we are developing products independently, some of the organizations competing with us have greater capital resources, larger research and development staffs and facilities, and more extensive experience in drug discovery and development, obtaining regulatory approval and pharmaceutical product manufacturing and marketing. With these additional resources, our competitors may be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster than we can. Our future success will depend in large part on our ability to maintain a competitive position with respect to these technologies. Rapid technological development may result in our compounds, products or processes becoming obsolete before we recover any of the expenses incurred to develop them.

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        In particular, we face significant competition from other biotechnology and pharmaceutical companies which are currently developing drugs similar to Tarceva™ that could decrease our potential sales of the product. We are aware of four companies, two of which have resources substantially greater than we do, which are currently developing drugs similar to Tarceva™. AstraZeneca PLC is developing a small molecule with a close structural relationship to Tarceva™, called Iressa®, that is currently in Phase III trials. Pfizer/Warner-Lambert Company has a compound, CI-1033, now in Phase I trials, which is structurally similar to Iressa® and Tarceva™. ImClone Systems, Incorporated and Abgenix, Inc. are developing a different kind of product, humanized antibodies, against the EGFR target. The ImClone product is currently in Phase III trials, and the Abgenix product is in Phase I trials. AstraZeneca and ImClone could both enter the market ahead of us. If our competitors succeed in developing drugs similar to Tarceva™ that are more effective than our own, or if they enter the market with their products before we do, our product may not gain widespread market acceptance.

If government agencies do not grant us or our collaborative partners required approvals for any of our potential products, then we or our collaborative partners will not be able to manufacture or sell our products.

        All of our newly discovered potential products must undergo an extensive regulatory approval process in the United States and other countries. This regulatory process, which includes pre-clinical testing and clinical trials of each compound to establish its safety and efficacy, can take many years and requires the expenditure of substantial resources. Moreover, data obtained from pre-clinical and clinical activities are susceptible to varying interpretations that could delay, limit or prevent regulatory approval. The Food and Drug Administration and other regulatory agencies may delay or deny the approval of our proposed products. None of our products has yet received governmental approval, and none may ever do so.

        Even if we obtain regulatory approval, a marketed product and its manufacturer are subject to continuing review, including post-marketing surveillance. We may be required to withdraw our product from the market if previously unknown problems are discovered. Violations of regulatory requirements at any stage may result in various unfavorable consequences to us, including the FDA's imposition of criminal penalties against the manufacturer and the holder of the new drug application.

If we are unable to successfully manage and assimilate the operations, personnel, technologies and products acquired from British Biotech and Gilead, we may deplete our existing financial and management resources, as well as our opportunities for favorable acquisitions in the future.

        An important part of our business strategy has been, and will continue to be, to grow through mergers and acquisitions of products, companies and businesses. In September 2001, we acquired certain pre-clinical research operations of British Biotech, including laboratory equipment, several research and administrative professionals and certain of its facilities in the United Kingdom. In December 2001, we acquired certain assets associated with Gilead's oncology business, including its pipeline of clinical candidates in oncology, related intellectual property, key members of its personnel and its facilities in Colorado. We may face difficulties integrating the new operations, personnel, technologies, products and cultures. Management's attention may be diverted from other business concerns to address these integration issues, analyze new technologies and manage these geographically diverse infrastructures. In addition, failure to integrate and assimilate the acquisitions into our company's current structure could lead to frustrated employees and the potential loss of such employees who may be vital to the new operations. We have incurred and will continue to incur certain liabilities and expenses in connection with these acquisitions. Any increases in liabilities or expenses may result in dilutive issuances of equity securities, further increases of debt, reduction of existing cash balances, amortization expenses related to intangible assets and other charges to operating results. If we are unable to successfully manage these acquisitions, not only do we risk depleting our resources to address immediate concerns, we risk delaying and possibly losing suitable strategic acquisition opportunities as they arise in the future.

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If our competitors who are currently developing products similar to Tarceva™ gain market approval significantly before us, then the number of patients available and willing to volunteer for our clinical trials may be reduced.

        In order for us to meet the FDA's requirements for Phase III clinical trials, we will have to demonstrate our drug's efficacy and safety in a pre-determined number of patients. If the pre-determined number of patients do not volunteer for treatment with our drug in clinical trials, the FDA may determine that our data is insufficient to establish the drug's efficacy and safety and deny us market approval. Patients who enroll in clinical trials do so on a voluntary basis. By volunteering for a clinical trial, a select number of patients are given early access to an experimental treatment. Currently, AstraZeneca and Pfizer/Warner-Lambert have compounds, now in clinical trials, which are structurally similar to Tarceva™, and will be indicated for a similar use. In addition, ImClone and Abgenix are developing a different kind of product, humanized antibodies, against the EGFR target. If one or all of these drugs is granted market approval before Tarceva™, then those drugs will be available by prescription for all patients who need treatment. Patients who have an alternative treatment available on the market may be less likely to volunteer for our clinical trials. Any reduction in the number of volunteers for our clinical trials could delay the completion of the study or cause some trials to be cancelled.

Our reliance on clinical distributors, manufacturers and clinical research organizations, or CROs, may result in delays in completing or a failure to complete clinical trials if they fail to perform under our agreements with them.

        From time to time in the course of product development, we may engage clinical distributors, manufacturers and CROs to manufacture and distribute the product candidate and to conduct and manage clinical studies and to assist us in guiding products through the FDA review and approval process. Because we have engaged and intend to engage clinical distributors, manufacturers and CROs to help us obtain market approval for our drug candidates, many important aspects of this process have been and will be out of our direct control. If the clinical distributors, manufacturers and CROs fail to perform their obligations under our agreements with them or fail to manufacture and distribute the product candidate and to perform clinical trials in a satisfactory manner, we may face delays in completing our clinical trials, as well as commercialization of any drug candidate. Furthermore, any loss or delay in obtaining contracts with such entities may also delay the completion of our clinical trials and the market approval of drug candidates.

We have incurred losses since our inception, and we expect to incur losses over the next several years, which may cause the value of our common stock to decrease.

        We have had net operating losses since our inception in 1983. At December 31, 2001, our accumulated deficit was approximately $248.1 million. Our losses have resulted principally from costs incurred in research and development and from general and administrative costs associated with our operations. These costs have exceeded our revenues, which to date have been generated principally from collaborative research agreements.

        We expect to incur substantial additional operating expenses over the next several years as a result of increases in our expenses for the development of Tarceva™ and our other clinical products as well as our research programs including those acquired from Gilead. These expenses include enhancements in our drug discovery technologies and increases in the resources we will devote to our internally funded proprietary projects, which are undertaken without collaborative partners. We do not expect to generate revenues from the sale of our potential products for a number of years, and we expect to continue to incur operating losses during this period.

8

If we cannot protect our intellectual property rights, our ability to develop and commercialize our products will be severely limited.

        Not including patents which we have acquired as a result of the Gilead transaction, we currently own 16 U.S. patents, 42 foreign patents, 31 pending applications for U.S. patents, four of which have been allowed, and 100 applications for foreign patents. In the Gilead transaction, we acquired ownership of, or exclusive license to, certain U.S. and foreign patents and U.S. and foreign pending patent applications relating to the three clinical products which we acquired, and we now jointly own, with North Carolina State University, one issued U.S. patent and certain U.S. and foreign pending patent applications. We intend to continue to aggressively seek patent protection for all of the product candidates that we have discovered, developed or acquired.

        Our success depends, in part, on our ability and our collaborative partners' ability to obtain patent protection for new product candidates, maintain trade secret protection and operate without infringing the proprietary rights of third parties. As with most biotechnology and pharmaceutical companies, our patent position is highly uncertain and involves complex legal and factual questions. Without patent and other similar protection, other companies could offer substantially identical products for sale without incurring the sizable discovery and development costs that we have incurred. Our ability to recover these expenditures and realize profits upon the sale of products could be diminished.

        The process of obtaining patents can be time consuming and expensive. Even if we spend the necessary time and money, a patent may not issue or it may insufficiently protect the technology it was intended to protect. We can never be certain that we were the first to develop the technology or that we were the first to file a patent application for the particular technology because most U.S. patent applications are confidential until a patent issues, and publications in the scientific or patent literature lag behind actual discoveries.

        The degree of future protection for our proprietary rights will remain uncertain if our pending patent applications are not approved for any reason or if we are unable to develop additional proprietary technologies that are patentable. Furthermore, third parties may independently develop similar or alternative technologies, duplicate some or all of our technologies, design around our patented technologies and challenge issued patents.

If we cannot obtain adequate funding for our research and development efforts, we may have to limit the scope of our proprietary product development or enter into more restrictive arrangements with collaborative partners.

        Our future capital requirements will depend on many factors, including the size and complexity of our research and development programs, the progress of pre-clinical testing and early stage clinical trials, the time and costs involved in obtaining regulatory approvals for our product candidates, the costs of manufacturing arrangements and the costs of commercialization activities.

        Although we believe our current cash reserves are sufficient for our near-term operating needs, we may choose to raise additional funds through public or private sales of our securities, including equity securities, as well as from collaborative partners in order to further our growth. We may not be able to obtain adequate funding from equity financings on reasonable or acceptable terms, if at all. Furthermore, any additional equity financings may dilute the value of the common stock held by our stockholders. If adequate funds are not available, we may be required to significantly curtail one or more of our research and development programs or obtain funds through arrangements with collaborative partners or others that may require us to relinquish certain of our rights to a number of our technologies or product candidates.

9

If our collaborative partners give other products greater priority than our products, then our products may be subject to delays in research and development, manufacture and commercialization that may impede our ability to take them to market before our competitors. This may render our products obsolete or may result in lower than anticipated revenues for us.

        We rely on some of our collaborative partners to assist with research and development as well as the manufacture of our potential products in their FDA-approved manufacturing facilities. Some of our collaborative agreements allow our partners significant discretion in electing whether or not to pursue the activities that they have agreed to pursue for us. We cannot control the amount and timing of resources our collaborative partners devote to our programs or potential products. Our potential products may be in competition with other products for priority of access to our collaborative partners' research and development and manufacturing facilities. If our collaborative partners do not give significant priority to the research and development or manufacture of our potential products in an effective or timely manner, the clinical development of our product candidates or their submission for regulatory approval could be delayed, and our ability to deliver products to the market on a timely basis could be impaired. Furthermore, we may not be able to enter into any necessary third-party research and development or manufacturing arrangements on acceptable terms, if at all.

If we or our collaborative partners are required to obtain licenses from third parties, our revenues and royalties on any commercialized products could be reduced.

        The development of some of our products may require the use of technology developed by third parties. The extent to which efforts by other researchers have resulted or will result in patents and the extent to which we or our collaborative partners are forced to obtain licenses from others, if available, is currently unknown. If we or our collaborative partners must obtain licenses from third parties, fees must be paid for such licenses. These fees would reduce the revenues and royalties we may receive on commercialized products.

If other companies claim that we infringe on their intellectual property rights, we may be subject to costly and time-consuming litigation and delays in product introduction.

        Our processes and potential products may conflict with patents which have been or may be granted to competitors, academic institutions or others. As the biotechnology industry expands and more patents are filed and issued, the risk increases that our product candidates may give rise to a declaration of interference by the Patent and Trademark Office, or to claims of patent infringement by other companies, institutions or individuals. These entities or persons could bring legal proceedings against us seeking substantial damages or seeking to enjoin us from testing, manufacturing or marketing our products. If any of these actions were successful, we may also be required to cease the infringing activity or obtain the requisite licenses or rights to use the technology which may not be available to us on acceptable terms, if at all. Any litigation, regardless of the outcome, could be extremely costly to us.

The use of any of our potential products in clinical trials and the sale of any approved products may expose us to liability claims resulting from the use of products or product candidates.

        The nature of our business exposes us to potential liability risks inherent in the testing, manufacturing and marketing of drug discovery candidates and products. Using our drug candidates in clinical trials may expose us to product liability claims. These risks will expand with respect to drugs, if any, that receive regulatory approval for commercial sale. While we currently maintain product liability insurance that we believe is adequate, such insurance may not be available at reasonable rates, if at all, in the future. If we do not or cannot maintain adequate insurance coverage, we may incur significant liability if a product liability claim arises.

10

If other biotechnology and pharmaceutical companies are not willing to pay appropriate royalties for the use of our patented "gene transcription estate," then we may choose to expend substantial amounts of funds and resources in enforcing the patents.

        We are seeking to license to other companies rights to use our patented "gene transcription estate" which consists of drug discovery assays that provide a way to identify novel product candidates that can control the activity of genes. We believe technology and practices covered by these patents are in widespread use in the pharmaceutical and biotechnology industries. To date, we have granted five licenses to use our gene transcription patent. If other pharmaceutical and biotechnology companies which we believe are using our patented technology are not willing to negotiate license arrangements with us on reasonable terms, we may have to choose between abandoning our licensing strategy or initiating legal proceedings against those companies. Legal action, particularly patent infringement litigation, is extremely costly.

If the market price of our common stock, similar to other biotechnology companies, remains highly volatile, then our stockholders may not be able to sell their stock when desired or at desirable prices.

        When the stock prices of companies in the Nasdaq Biotechnology Index fall, our stock price will most likely fall as well. The market price of the common stock of biotechnology and pharmaceutical companies and our common stock has been volatile and may remain volatile for the foreseeable future. If our stock price falls, our stockholders may not be able to sell their stock when desired or at desirable prices.

        The following factors, among others, may also cause our stock price to decline:

•

fluctuations in operating results;



•

announcements of technological innovations or new therapeutic products by others;



•

negative or neutral clinical trial results;



•

developments concerning strategic alliance agreements;



•

changes in government regulation;



•

developments in patent or other proprietary rights;



•

public concern as to the safety of our products;



•

future sales of substantial amounts of our common stock by existing stockholders; and



•

comments by securities analysts and general market conditions.

11

Our corporate governance documents and state law provide certain anti-takeover measures which will discourage certain types of transactions involving an actual or potential change in control of our company.

        Under our certificate of incorporation, our Board of Directors has the authority, without further action by the stockholders, to fix the rights and preferences, and issue shares of, preferred stock. Since January 1999, we have had a shareholders rights plan, which was subsequently replaced with a new plan, commonly referred to as a "poison pill." Further, we are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, restricts certain transactions and business combinations between a corporation and a stockholder owning 15% or more of the corporation's outstanding voting stock for a period of three years from the date the stockholder becomes an interested stockholder.

Risks Related to The Notes

The notes are subordinated to any existing and future Senior Indebtedness.

        The notes are contractually subordinated in right of payment to our existing and future Senior Indebtedness (as the term is defined in the indenture entered into in connection with the issuance of the notes). This means that the payment of the principal and interest on the notes is subordinated to the prior payment in full of all of our existing and future Senior Indebtedness. However, payment from the money or the proceeds from U.S. government securities pledged to the trustee as security for the exclusive benefit of the holders of the notes, as described under "Description of the Notes—Security" or amounts deposited with the trustee to pay and discharge all outstanding notes, as described under "Description of the Notes—Satisfaction and Discharge," is not subordinated to any Senior Indebtedness or subject to the subordination restrictions described in this prospectus. As of December 31, 2001, we had approximately $0.8 million of Senior Indebtedness. Our Senior Indebtedness ranks prior in right of payment to the notes.

        The indenture does not limit the creation of additional indebtedness. We may not be able to service our debt, including the notes, if we incur any significant additional indebtedness. Due to the subordination provisions, in the event of our insolvency, funds which we would otherwise use to pay the holders of the notes will be used to pay the holders of Senior Indebtedness to the extent necessary to pay the Senior Indebtedness in full. As a result of these payments, our general creditors may recover more, ratably, than the holders of the notes. In addition, the holders of our Senior Indebtedness may restrict or prohibit us from making payments on the notes.

We may not be able to repurchase the notes, if required.

        In some circumstances involving a change of control of OSI, the holders of the notes may require us to repurchase some or all of the notes. We may not have sufficient financial resources at such time, or the ability to arrange financing to pay the repurchase price of the notes. Our ability to repurchase the notes in such event may be limited by law, the indenture, by the terms of other agreements relating to our Senior Indebtedness and as such indebtedness and agreements may be entered into, replaced, supplemented or amended from time to time. We may be required to refinance our Senior Indebtedness in order to make such payments.

12

Our outstanding indebtedness has increased substantially with the issuance of the notes and we may not be able to pay our debt and other obligations.

        As a result of the sale of the notes in February 2002, our long-term debt has increased by $200 million. This increased indebtedness will:

•

make it more difficult for us to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements or other purposes;



•

significantly increase our interest expense and related debt service costs; and



•

make us more vulnerable in the event of a downturn in our business.

        Currently, we do not have any product sales and we are not generating sufficient cash flow to satisfy the annual debt service payments that will be required as a result of the consummation of the sale of the notes. This may require us to use a portion of the proceeds from the sale of the notes to pay interest or borrow additional funds or sell additional equity to meet our debt service obligations after the first three years when the payment of interest on the notes is no longer secured. If we are unable to satisfy our debt service requirements, we will default on the notes.

An active trading market for the notes may not develop.

        The notes are a new issue of securities for which there is currently no trading market. The notes will not be listed on any securities exchange or included in any automated quotation system. We cannot assure you that an active trading market for the notes will develop or be sustained. If an active trading market for the notes fails to develop or be sustained, the notes could trade at prices that may be lower than the initial offering price of the notes. Whether or not the notes will trade at lower prices depends on many factors, including:

•

prevailing interest rates and the markets for similar securities;



•

the market price of our common stock;



•

general economic conditions; and



•

our financial condition, financial performance and future prospects.

13

RATIO OF EARNINGS TO FIXED CHARGES

        The ratios of earnings to fixed charges for the fiscal years indicated are stated below. For purposes of computing the ratios, earnings represent income (loss) from continuing operations before fixed charges and taxes, and fixed charges represent gross interest expense and a portion of rental expense, which is deemed to be representative of the interest factor.

Fiscal Year	Ratio	Deficiency(2)
2001	(1)	$20,886,979
2000	(1)	$15,999,749
1999	(1)	$  9,598,437
1998	(1)	$  9,183,387
1997	(1)	$  8,557,226

(1)

For the fiscal years ended September 30, 2001, 2000, 1999, 1998 and 1997 and the three months ended December 31, 2001, earnings were insufficient to cover fixed charges of $745,678, $688,935, $535,370, $383,481, $387,452 and $321,417, respectively. For this reason, no ratios are provided.

(2)

The deficiency for the three months ended December 31, 2001 was $142,382,066.

USE OF PROCEEDS

        We will not receive any proceeds from the sale by any selling security holders of the notes or shares of common stock offered under this prospectus.

DIVIDEND POLICY

        We have never paid cash dividends and do not anticipate paying any dividends in the foreseeable future.

RECENT EVENTS

        On February 1, 2002, we issued $200,000,000 aggregate principal amount of notes to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill, Inc. and Lazard Fréres & Co. LLC, the initial purchasers of the notes, for resale in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the initial purchasers to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act. We agreed to file a registration statement, of which this prospectus is a part, to enable the selling securityholders to sell their notes and the shares issuable upon conversion of the notes.

14

DESCRIPTION OF THE NOTES

        We issued $200 million aggregate principal amount of notes in a private placement in February 2002. The notes were issued under an indenture between us and The Bank of New York, as trustee, dated February 1, 2002. The terms of the notes include those provided in the indenture and those provided in the registration rights agreement, which we entered into with the initial purchasers. As used in this description, the words "we," "us," "our" or "OSI" do not include any current or future subsidiary of OSI Pharmaceuticals, Inc.

        The following description of provisions of the notes is not complete and is subject to, and qualified in its entirety by reference to, the notes, the indenture and the registration rights agreement.

General

        The notes represent general unsecured (except to the extent described under "—Security") obligations of OSI and rank junior in right of payment to all of our existing and future senior debt. This means that the payment of the principal, premium, if any, and interest on the notes is subordinated to the prior payment in full of all of our existing and future Senior Indebtedness (as defined below). The notes are also effectively subordinated to all existing and future indebtedness and other liabilities of our subsidiaries. However, payment from the money or the proceeds from U.S. government securities pledged to the trustee as security for the notes and for the exclusive benefit of the holders of the notes, as described under "—Security," or amounts deposited with the trustee to pay and discharge all outstanding notes, as described under "—Satisfaction and Discharge," are not subordinated to any Senior Indebtedness or subject to the subordination restrictions described in this prospectus. The notes rank equally with all our existing and future senior subordinated indebtedness. The notes are convertible into shares of our common stock as described under "—Conversion Rights." The notes are limited to $200 million aggregate principal amount, and mature on February 1, 2009, unless earlier redeemed by us or repurchased by us at the option of the holder upon the occurrence of a Change of Control (as defined below).

        The notes bear interest from February 1, 2002 at the rate of 4% per year. Interest is payable semi-annually on February 1 and August 1 of each year to holders of record at the close of business on the immediately preceding January 15 and July 15, respectively, beginning August 1, 2002. We may pay interest on notes represented by certificated notes by check mailed to such holders. However, a holder of notes with an aggregate principal amount in excess of $10 million may elect to be paid by wire transfer in immediately available funds. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Principal will be payable, and the notes may be presented for conversion, registration of transfer and exchange, without service charge, at our office or agency in New York City, which shall initially be the office or agency of the trustee in New York, New York.

        The indenture does not contain any financial covenants or any restrictions on the payment of dividends, the repurchase of our securities or the incurrence of Senior Indebtedness or any other indebtedness. The indenture also does not contain any covenants or other provisions that afford protection to holders of notes in the event of a highly leveraged transaction or a change of control of OSI except to the extent described under "Repurchase at Option of Holders Upon a Change of Control" below.

Security

        On February 1, 2002, we purchased and pledged to the trustee as security for the notes and for the exclusive benefit of the holders of the notes (and not for the benefit of our other creditors), $22.9 million of U.S. government securities. These securities, when held by the trustee in accordance with the terms of the pledge agreement that we entered into with the trustee, will be sufficient upon receipt of scheduled interest and principal payments of such securities to provide for payment in full of the first six scheduled interest payments due on the notes when due.

15

        The U.S. government securities were pledged by us to the trustee for the exclusive benefit of the holders of the notes and are being held by the trustee in a pledge account. Immediately prior to an interest payment date, the trustee will release from the pledge account proceeds sufficient to pay interest then due on the notes. We may also make additional payments to the trustee to ensure that sufficient funds are available to pay interest then due on the notes, if necessary.

        The pledged U.S. government securities and the pledge account also secure, to the extent available, the repayment of the principal amount on the notes. If prior to February 1, 2005:

•

an Event of Default under the notes or the indenture occurs and is continuing; and



•

the trustee or the holders of 25% in aggregate principal amount of the notes accelerate the notes by declaring the principal amount of the notes to be immediately due and payable (by written consent, at a meeting of note holders or otherwise), except for the occurrence of an Event of Default relating to our bankruptcy, insolvency or reorganization, upon which the notes will be accelerated automatically,

then the proceeds from the pledged U.S. government securities will be promptly released for payment to note holders, subject to the automatic stay provisions of bankruptcy law, if applicable. Distributions from the pledge account will be applied:

•

first, to any accrued and unpaid interest on the notes; and



•

second, to the extent available, to the repayment of a portion of the principal amount of the notes.

        If any Event of Default is not cured prior to the acceleration of the notes by the trustee or holders of the notes referred to above, the trustee and the holders of the notes will be able to accelerate the notes as a result of that Event of Default.

        For example, if the first two interest payments were made when due but the third interest payment was not made when due and the note holders promptly exercised their right to declare the principal amount of the notes to be immediately due and payable, then, assuming automatic stay provisions of bankruptcy law are inapplicable and the proceeds of the pledged U.S. government securities are promptly distributed from the pledge account,

•

an amount equal to the interest payment due on the third interest payment would be distributed from the pledge account as accrued interest; and



•

the balance of the proceeds of the pledge account would be distributed as a portion of the principal amount of the notes.

        In addition, note holders would have an unsecured claim against us for the remainder of the principal amount of their notes.

        Once we make the first six scheduled interest payments on the notes, all of the remaining pledged U.S. government securities and cash, if any, will be released to us from the pledge account and thereafter the notes will be unsecured.

Conversion Rights

        The holders of notes may, at any time prior to the close of business on the final maturity date of the notes, convert any outstanding notes (or portions thereof) into shares of our common stock, initially at the conversion price of $50.00 per share, subject to adjustment as described below. Holders may convert notes only in denominations of $1,000 and whole multiples of $1,000. Except as described below, no adjustment will be made to the conversion price of any notes for interest accrued thereon or dividends paid on any common stock.

16

        If notes are converted after a record date for an interest payment but prior to the next interest payment date, those notes, other than notes called for provisional or optional redemption, must be accompanied by funds equal to the interest payable on the next interest payment date on the principal amount so converted. No such payment will be required from a holder if we exercise our right to redeem such notes. We are not required to issue fractional shares of our common stock upon conversion of the notes. Instead, we will pay a cash adjustment based upon the market price of our common stock on the last business day before the date of the conversion. In the case of notes called for redemption, conversion rights will expire at the close of business on the business day preceding the date fixed for redemption, and in the case of notes tendered for repurchase in connection with a Change of Control, conversion rights will expire at the close of business on the date specified in the Change of Control notice, unless we default in payment of the redemption or Change of Control repurchase price.

        The conversion price will be adjusted for certain events, including:

(1)

the issuance of our common stock as a dividend or distribution on our common stock;



(2)

certain subdivisions and combinations of our common stock;



(3)

the issuance to all holders of our common stock of certain rights or warrants to purchase our common stock (or securities convertible into our common stock) at less than (or having a conversion price per share less than) the then current market price of our common stock;



(4)

the dividend or other distribution to all holders of our common stock of shares of our capital stock (other than common stock) or our debt instruments or our assets (including securities, but excluding: (A) those rights and warrants referred to in item (3) above, (B) dividends or distributions in connection with a reclassification, consolidation, merger, combination, sale or conveyance resulting in a change in the conversion consideration pursuant to the second succeeding paragraph and (C) dividends or distributions paid exclusively in cash);



(5)

dividends or other distributions consisting exclusively of cash to all holders of our common stock to the extent that such distributions, combined together with (A) all other such all-cash distributions made within the preceding 12 months for which no adjustment has been made plus (B) any cash and the fair market value of other consideration paid for any tender offers by us or any of our subsidiaries for our common stock concluded within the preceding 12 months for which no adjustment has been made, exceeds 5% of our market capitalization on the record date for such distribution; market capitalization is the product of the then current market price of our common stock and the number of shares of our common stock then outstanding; and



(6)

the purchase of our common stock pursuant to a tender offer made by us or any of our subsidiaries which involves an aggregate consideration that, together with (A) any cash and the fair market value of any other consideration paid in any other tender offer by us or any of our subsidiaries for our common stock expiring within the 12 months preceding such tender offer for which no adjustment has been made plus (B) the aggregate amount of any all-cash distributions referred to in clause (5) above to all holders of our common stock within 12 months preceding the expiration of that tender offer for which no adjustments have been made, exceeds 5% of our market capitalization on the expiration of such tender offer.

17

        In the event that we pay a dividend or make a distribution on shares of our common stock consisting of capital stock of, or similar equity interests in, a subsidiary or other business unit of ours, the conversion rate will be adjusted based on the market value of the securities so distributed relative to the market value of our common stock, in each case, based on the average closing prices of those securities for the 10 trading days commencing on and including the fifth trading day after the date on which the "ex-dividend trading" commences for such dividend or distribution on the principal U.S. securities exchange or market on which the securities are then listed or quoted.

        No adjustment in the conversion price will be required unless such adjustment would require a change of at least 1% in the conversion price then in effect at such time. However, any adjustment that would otherwise be required to be made but for the fact that such 1% threshold has not been met shall be carried forward and taken into account for the purposes of any subsequent adjustments. Except as stated above, the conversion price will not be adjusted for the issuance of our common stock or any securities convertible into or exchangeable for our common stock or carrying the right to purchase any of the foregoing.

        In the case of:

•

any reclassification of or change in our common stock (other than changes resulting from a subdivision or combination); or



•

a consolidation, merger or combination involving us or a sale or conveyance to another corporation of all or substantially all of our property and assets,

in each case, as a result of which holders of our common stock are entitled to receive stock, other securities, other property or assets (including cash or any combination thereof) with respect to or in exchange for our common stock, the holders of the notes then outstanding will be entitled thereafter to convert those notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) which they would have owned or been entitled to receive upon such reclassification, change, consolidation, merger, combination, sale or conveyance had such notes been converted into our common stock immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. We may not become a party to any such transaction unless its terms are consistent with the foregoing.

        If a taxable distribution to holders of our common stock or other transaction occurs which results in any adjustment of the conversion price, the holders of notes may, in certain circumstances, be deemed to have received a distribution subject to U.S. federal income tax as a dividend. In certain other circumstances, the absence of an adjustment may result in a taxable dividend to the holders of common stock. See "Certain United States Federal Income Tax Considerations."

        We may from time to time, to the extent permitted by law, reduce the conversion price of the notes by any amount for any period of at least 20 days. In that case, we will give at least 15 days' notice of such decrease. We may make such reductions in the conversion price, in addition to those set forth above, as our Board of Directors deems advisable to avoid or diminish any income tax to holders of our 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.

18

Provisional Redemption by OSI

        We may redeem the notes, in whole or in part, at any time prior to February 1, 2005, at a redemption price equal to $1,000 per $1,000 principal amount of notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the provisional redemption date if:

•

the closing price of our common stock has exceeded 150% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day prior to the date on which we mail the provisional redemption notice (which date shall be at least 30 days but not more than 60 days prior to the provisional redemption date); and



•

during the period that we are obligated under the registration rights agreement to keep the shelf registration statement effective, such shelf registration statement covering resales of the notes and the common stock issuable upon conversion of the notes is effective and available for use as of, and including, the date on which we mail the provisional redemption notice through and including the provisional redemption date.

        However, if a provisional redemption date is an interest payment date, the semi-annual payment of interest becoming due on such date will be payable to the holder of record as of the relevant record date, and the redemption price will not include such payment.

        The "closing price" of our common stock will be the closing bid price of our common stock as reported by the Nasdaq National Market. The provisional redemption date will be the date specified in our provisional redemption notice as such date that the notes will be redeemed.

        If we do not redeem all of the notes, the trustee will select the notes to be redeemed in principal amounts of $1,000 or whole multiples of $1,000 by lot or on a pro rata basis. If any notes are to be redeemed in part only, a new note or notes in principal amount equal to the unredeemed principal portion thereof will be issued. If a portion of a holder's notes is selected for partial redemption and the holder thereafter converts a portion of its notes, the converted portion will be deemed to be taken from the portion selected for redemption.

        Upon any provisional redemption, we will make an additional "make-whole" payment, in cash, with respect to the notes called for redemption to holders on the notice date in an amount equal to $120 per $1,000 principal amount of notes, less the amount of any interest actually paid on the notes on or prior to the provisional redemption date. We will be obligated to make this additional payment on all notes called for provisional redemption, including any notes converted after the notice date and before the provisional redemption date.

Optional Redemption by OSI

        At any time on or after February 1, 2005, we may redeem some or all of the notes on at least 30 days but not more than 60 days notice, at a price equal to $1,000 per $1,000 principal amount, plus accrued and unpaid interest to, but excluding, the optional redemption date, if the closing price of our common stock has exceeded 140% of the conversion price then in effect for at least 20 trading days within a period of 30 consecutive trading days ending on the trading day prior to the date on which we mail the optional redemption notice. However, if an optional redemption date is an interest payment date, the semi-annual payment of interest becoming due on such date will be payable to the holder of record as of the relevant record date, and the redemption price will not include such interest payment.

        The optional redemption date will be the date specified in our optional redemption notice as such date that the notes will be redeemed. If we do not redeem all of the notes, the trustee will select the notes to be redeemed in principal amounts of $1,000 or whole multiples of $1,000 by lot or on a pro rata basis. If any notes are to be redeemed in part only, a new note or notes in principal amount equal to the unredeemed principal portion thereof will be issued. If a portion of a holder's notes is selected for partial redemption and the holder thereafter converts a portion of its notes, the converted portion will be deemed to be taken from the portion selected for redemption.

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Sinking Fund

        No sinking fund is provided for the notes.

Repurchase at Option of Holders Upon a Change of Control

        If a Change of Control (as defined below) occurs, each holder of notes will have the right to require us to repurchase all of that holder's notes not previously called for redemption, or any portion of those notes that is equal to $1,000 or a whole multiple of $1,000, on the date that is no later than 30 days after the date we give notice of the occurrence of a Change in Control (such date being the repurchase date) at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, together with interest accrued and unpaid to, but excluding, the repurchase date.

        We may elect to pay the repurchase price in common stock instead of cash if we so specify in our Change of Control notice referred to below. The number of shares of common stock a holder will receive will equal the repurchase price divided by 95% of the average of the closing prices of our common stock for the five-trading-day period ending on the third business day prior to the repurchase date. However, we may not pay in common stock unless we satisfy certain conditions prior to the repurchase date, as provided in the indenture.

        Within 30 days after the occurrence of a Change of Control, we are required to give notice to all holders of notes, as provided in the indenture, of the occurrence of the Change of Control and of their resulting repurchase right and specifying our form of payment. We must also deliver a copy of our notice to the trustee. In order to exercise the repurchase right, a holder of notes must deliver, on or prior to the 30^th day after the date of our notice, written notice to the trustee of the holder's exercise of the holder's repurchase right, together with the notes with respect to which the repurchase right is being exercised.

        Under the indenture, a "Change of Control" of OSI will be deemed to have occurred at such time after the original issuance of the notes when the following has occurred:

•

the acquisition by any person of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions of shares of our capital stock entitling that person to exercise 50% or more of the total voting power of all shares of our capital stock entitled to vote generally in elections of directors, other than any acquisition by us, any of our subsidiaries or any of our employee benefit plans;



•

our consolidation or merger with or into any other person, any merger of another person into us, or any conveyance, transfer, sale, lease or other disposition of all or substantially all of our properties and assets to another person, other than:



(1)

any transaction (A) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of our capital stock and (B) pursuant to which holders of our capital stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of our capital stock entitled to vote generally in the election of directors of the continuing or surviving person immediately after the transaction; or



(2)

any merger solely for the purpose of changing our jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of common stock solely into shares of common stock of the surviving entity;

20

•

during any consecutive two-year period, individuals who at the beginning of that two-year period constituted our Board of Directors (together with any new directors whose election to our Board of Directors, or whose nomination for election by our stockholders, was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of our Board of Directors then in office; or



•

we are liquidated or dissolved or our stockholders pass a resolution approving a plan of liquidation or dissolution.

        The beneficial owner shall be determined in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act. The term "person" includes any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.

        Rule 13e-4 under the Exchange Act, as amended, requires the dissemination of information to security holders if an issuer tender offer occurs and may apply if the repurchase option becomes available to holders of the notes. We will comply with this rule to the extent applicable at that time.

        The foregoing provisions would not necessarily protect holders of the notes if highly leveraged or other transactions involving us occur that may adversely affect holders.

        Our ability to repurchase notes upon the occurrence of a Change of Control is subject to important limitations. The occurrence of a Change of Control could cause an Event of Default under, or be prohibited or limited by, the terms of our existing or future senior debt. As a result, any repurchase of the notes would, absent a waiver, be prohibited under the subordination provisions of the indenture until all of our senior debt is paid in full. Further, we cannot assure you that we would have the financial resources, or would be able to arrange financing, to pay the repurchase price for all the notes that might be delivered by holders of notes seeking to exercise the repurchase right. Any failure by us to repurchase the notes when required following a Change of Control would result in an event of default under the indenture, whether or not such repurchase is permitted by the subordination provisions of the indenture. Any such default may, in turn, cause a default under our existing or future senior debt. See "—Subordination" below.

Subordination

        The payment of principal of, premium, if any, and interest on the notes (other than payments derived from U.S. government securities pledged by us to the trustee for the exclusive benefit of the holders of the notes (hereinafter referred to as "Permitted Payments")) is subordinated in right of payment, as set forth in the indenture, to the prior payment in full in cash or cash equivalents of all Senior Indebtedness (as defined below), whether outstanding on the date of the indenture or thereafter incurred. The notes are also effectively subordinated to all existing and future indebtedness of our subsidiaries. Any right that we have to receive assets of our existing subsidiaries or any future subsidiaries in the event of any liquidation or reorganization of any of such subsidiaries (and the consequent right of the holders of the notes to participate in the assets of such subsidiaries), are effectively subordinated to the claims of such subsidiaries' creditors, except to the extent that we are ourselves recognized as a creditor of such subsidiaries, in which case, our claims would still be subordinate to any security interests in the assets of that subsidiary and any indebtedness of that subsidiary senior to that held by us. As of December 31, 2001, our subsidiaries had no indebtedness outstanding.

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        In the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to OSI or to its assets, or any liquidation, dissolution or other winding-up of OSI, whether voluntary or involuntary, or any assignment for the benefit of creditors or other marshaling of assets or liabilities of OSI (except in connection with the consolidation or merger of OSI or its liquidation or dissolution following the conveyance, transfer or lease of all or substantially all of its properties and assets upon the terms and conditions described under "—Mergers and Sales of Assets" below), the holders of Senior Indebtedness will be entitled to receive payment in full in cash or cash equivalents of all Senior Indebtedness, or provision shall be made for such payment in full, before the holders of notes will be entitled to receive any payment or distribution of any kind or character (other than Permitted Payments and other than any payment or distribution in the form of equity securities or subordinated securities of OSI or any successor obligor that, in the case of any such subordinated securities, are subordinated in right of payment to all Senior Indebtedness that may at the time be outstanding to at least the same extent as the notes are so subordinated (such equity securities or subordinated securities hereinafter being "Permitted Junior Securities")) on account of principal of, or premium, if any, or interest on the notes; and any payment or distribution of assets of OSI of any kind or character, whether in cash, property or securities (other than a payment or distribution in the form of Permitted Junior Securities), by set-off or otherwise, to which the holders of the notes or the trustee would be entitled but for the provisions of the indenture relating to subordination shall be paid by the liquidating trustee or agent or other person making such payment or distribution directly to the holders of Senior Indebtedness or their representatives ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid, after giving effect to any current payment or distribution to the holders of such Senior Indebtedness.

        No payment or distribution of any assets of OSI of any kind or character, whether in cash, property or securities (other than Permitted Payments and Permitted Junior Securities), may be made by or on behalf of OSI on account of principal of, premium, if any, or interest on the notes or on account of the purchase, redemption or other acquisition of notes upon the occurrence of any default in payment (whether at scheduled maturity, upon scheduled installment, by acceleration or otherwise) of principal of, premium, if any, or interest on Designated Senior Indebtedness (as defined below) beyond any applicable grace period (a "Payment Default") until such Payment Default shall have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full in cash or cash equivalents.

        No payment or distribution of any assets of OSI of any kind or character, whether in cash, property or securities (other than Permitted Payments and Permitted Junior Securities), may be made by or on behalf of OSI on account of principal of, premium, if any, or interest on the notes or on account of the purchase, redemption or other acquisition of notes during the period specified below (a "Payment Blockage Period") upon the occurrence of any default or event of default with respect to any Designated Senior Indebtedness other than any Payment Default, pursuant to which the maturity thereof may be accelerated (a "Non-Payment Default"), and receipt by the trustee of written notice thereof from OSI or the representative of holders of the Designated Senior Indebtedness or the trustee for any such holder.

        The Payment Blockage Period will commence upon the date of receipt by the trustee of written notice from OSI or the representative of the holders of the Designated Senior Indebtedness in respect of which the Non-Payment Default exists, or the trustee for any such holder, and shall end on the earliest of:

•

179 days thereafter (provided that any Designated Senior Indebtedness as to which such written notice was given shall not theretofore have been accelerated);

22

•

the date on which such Non-Payment Default is cured, waived or ceases to exist; the date on which such Designated Senior Indebtedness is discharged or paid in full; or



•

the date on which such Payment Blockage Period shall have been terminated by written notice to the trustee or OSI from the trustee or such other representative initiating such Payment Blockage Period,

after which OSI will resume making any and all required payments in respect of the notes, including any missed payments. In any event, not more than one Payment Blockage Period may be commenced during any period of 365 consecutive days. No Non-Payment Default that existed or was continuing on the date of the commencement of any Payment Blockage Period will be, or can be made, the basis for the commencement of a subsequent Payment Blockage Period, unless such Non-Payment Default has been cured or waived for a period of not less than 90 consecutive days subsequent to the commencement of such initial Payment Blockage Period.

        In the event that, notwithstanding the provisions of the preceding four paragraphs, if any payment or distribution shall be received by the trustee or any holder of the notes that is prohibited by such provisions, then and in such event such payment shall be paid over and delivered by such trustee or holder to the trustee or any other representative of holders of Senior Indebtedness, as their interest may appear, for application toward our Senior Indebtedness. Until all of our Senior Indebtedness is paid in full, holders of the notes shall be subrogated (equally and ratably with all other indebtedness that is equal in right of payment to the notes) to the rights of holders of Senior Indebtedness to receive distributions.

        Failure by OSI to make any required payment in respect of the notes when due or within any applicable grace period, whether or not occurring during a Payment Blockage Period, will result in an Event of Default (as defined below) and, thereafter, holders of the notes will have the right to accelerate the maturity thereof. See "—Events of Default."

        By reason of such subordination, in the event of liquidation, receivership, reorganization or insolvency of OSI, our general creditors may recover less, ratably, than holders of senior debt and such general creditors may recover more, ratably, than holders of notes.

        At December 31, 2001, on a pro forma basis, giving effect to the offering of notes:

•

the total outstanding Senior Indebtedness and senior subordinated indebtedness of OSI would have been approximately $200.8 million; and



•

OSI would have had no subordinated indebtedness other than the notes.

        "Designated Senior Indebtedness" means any Senior Indebtedness which, at the time of determination, has an aggregate principal amount outstanding of at least $20 million and that has been specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior Indebtedness" of OSI.

        "indebtedness" means, with respect to any person, without duplication:

•

all liabilities of such person for borrowed money (including overdrafts) or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities;



•

all obligations of such person evidenced by bonds, notes, debentures or other similar instruments;

23

•

indebtedness of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business;



•

all capitalized lease obligations of such person;



•

all obligations of such person under or in respect of interest rate agreements or currency agreements;



•

all indebtedness referred to in (but not excluded from) the preceding clauses of other persons and all dividends of other persons, the payment of which is secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any lien or with respect to property (including, without limitation, accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such indebtedness (the amount of such obligation being deemed to be the lesser of the value of such property or asset or the amount of the obligation so secured);



•

all guarantees by such person of indebtedness referred to in this definition of any other person;



•

all Redeemable Capital Stock of such person valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends; and



•

the present value of the obligation of such person as lessee for net rental payments (excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water, utilities and similar charges to the extent included in such rental payments) during the remaining term of the lease included in any sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with accounting principles generally accepted in the United States of America.

        "Redeemable Capital Stock" means any class of our capital stock that, either by its terms, by the terms of any securities into which it is convertible or exchangeable or by contract or otherwise, is, or upon the happening of an event or passage of time would be, required to be redeemed (whether by sinking fund or otherwise) prior to the date that is 91 days after the final scheduled maturity of the notes or is redeemable at the option of the holder thereof at any time prior to such date, or is convertible into or exchangeable for debt securities at any time prior to such date (unless it is convertible or exchangeable solely at our option).

        "Senior Indebtedness" or "senior debt" means:

•

all indebtedness of OSI, now or hereafter existing, under or in respect of the documents and instruments executed in connection therewith, whether for principal, premium, if any, interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against OSI under bankruptcy law, whether or not such interest is allowed as a claim after such filing in any proceeding under such law) and other amounts due in connection therewith (including, without limitation, any fees, premiums, expenses, reimbursement obligations with respect to letters of credit and indemnities), whether outstanding on the date of the indenture or thereafter created, incurred or assumed; and

24

•

the principal of, premium, if any, and interest on all other indebtedness of OSI (other than the notes), whether outstanding on the date of the indenture or thereafter created, incurred or assumed,

unless, in the case of any particular indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such indebtedness shall not be senior in right of payment to the notes.

        Notwithstanding the foregoing, "Senior Indebtedness" and "senior debt" shall not include:

•

indebtedness evidenced by the notes offered hereby;



•

indebtedness of OSI that is expressly subordinated in right of payment to Senior Indebtedness of OSI;



•

indebtedness or other obligations of OSI that by its terms ranks equal or junior in right of payment to the notes;



•

indebtedness of OSI that by operation of law is subordinate to any general unsecured obligations of OSI;



•

any liability for federal, state or local taxes or other taxes, owed or owing by OSI;



•

accounts payable or other liabilities owed or owing by OSI to trade creditors (including guarantees thereof or instruments evidencing such liabilities);



•

amounts owed by OSI for compensation to employees or for services rendered to OSI;



•

indebtedness of OSI to any subsidiary or any other affiliate of OSI or any of such affiliate's subsidiaries;



•

capital stock of OSI;



•

indebtedness evidenced by any guarantee of any indebtedness ranking equal or junior in right of payment to the notes; or



•

indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without recourse to OSI.

Events of Default

        Each of the following constitutes an "Event of Default" under the indenture:

(1)

our failure to pay when due the principal of or premium, if any, on any of the notes at maturity, upon redemption or exercise of a repurchase right or otherwise, whether or not such payment is prohibited by the subordination provisions of the indenture;



(2)

our failure to pay an installment of interest (including liquidated damages, if any) on any of the notes that continues for 30 days after the date when due, whether or not such payment is prohibited by the subordination provisions of the indenture; provided that a failure to make any of the first six scheduled interest payments on the notes within three business days of the applicable interest payment dates will constitute an Event of Default with no additional grace or cure period;

25

(3)

our failure to deliver shares of common stock, together with cash in lieu of fractional shares, when such common stock or cash in lieu of fractional shares is required to be delivered upon conversion of a note or upon the exercise of a repurchase right that continues for ten days after such delivery date;



(4)

our failure to perform or observe any other term, covenant or agreement contained in the notes or the indenture for a period of 60 days after written notice of such failure, requiring us to remedy the same, shall have been given to us by the trustee, or to us and the trustee by the holders of at least 25% in aggregate principal amount of the notes then outstanding;



(5)

one or more defaults in the payment of principal of or premium, if any, on any of our indebtedness aggregating $5 million or more, when the same becomes due and payable at the scheduled maturity thereof, and such default or defaults shall have continued after any applicable grace period and shall not have been cured or waived within a thirty day period after the date of such default or (B) any of our indebtedness aggregating $5 million or more shall have been accelerated or otherwise declared due and payable, or required to be prepaid or repurchased (other than by regularly scheduled required prepayment) prior to the scheduled maturity thereof and such acceleration is not rescinded or annulled within a thirty-day period after the date of such acceleration;



(6)

certain events of our bankruptcy, insolvency or reorganization or that of any significant subsidiaries;



(7)

our filing of a voluntary petition seeking liquidation, reorganization arrangement, readjustment of debts or for any other relief under the federal bankruptcy code; and



(8)

the agreement made by us in favor of the trustee governing the disbursements of funds from the pledge account, as such agreement may be amended, restated, supplemented or otherwise modified from time to time, shall cease to be in full force and effect or enforceable in accordance with its terms, other than in accordance with its terms.

26

        The indenture provides that the trustee shall, within 90 days of the occurrence of a default, give to the registered holders of the notes notice of all uncured defaults known to it, but the trustee shall be protected in withholding such notice if it, in good faith, determines that the withholding of such notice is in the best interest of such registered holders, except in the case of a default in the payment of the principal of, or premium, if any, or interest on any of the notes when due or in the payment of any redemption or repurchase obligation.

        If an Event of Default specified in clause (6) or clause (7) above occurs and is continuing, then, automatically, the principal of all the notes and the interest thereon shall become immediately due and payable. If an Event of Default shall occur and be continuing, other than with respect to clause (6) or clause (7) above (such default not having been cured or waived as provided under "—Modifications and Waiver" below), the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding may declare the notes due and payable at their principal amount together with accrued interest, and thereupon the trustee may, at its discretion, proceed to protect and enforce the rights of the holders of notes by appropriate judicial proceedings. Such declaration may be rescinded or annulled with the written consent of the holders of a majority in aggregate principal amount of the notes then outstanding upon the conditions provided in the indenture.

        The indenture contains a provision entitling the trustee, subject to the duty of the trustee during default to act with the required standard of care, to be indemnified by the holders of notes before proceeding to exercise any right or power under the indenture at the request of such holders. The indenture provides that the holders of a majority in aggregate principal amount of the notes then outstanding through their written consent 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 upon the trustee.

        We will be required to furnish annually to the trustee a statement as to the fulfillment of our obligations under the indenture.

Certain Covenants

        The indenture provides that we will not, and will not permit our subsidiaries or other business units to, incur, create, assume, guarantee or in any other manner become directly or indirectly liable with respect to or responsible for, or permit to remain outstanding (other than if required by law), any indebtedness that is subordinate or junior in right of payment to Senior Indebtedness unless such indebtedness ranks equal or junior in right of payment to the notes.

Mergers and Sales of Assets

        We may, without the consent of the holders of notes, consolidate with, merge into or transfer all or substantially all of our assets to any other corporation organized under the laws of the United States or any of its political subdivisions provided that:

•

the surviving corporation assumes all our obligations under the indenture and the notes;



•

at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have happened and be continuing; and



•

certain other conditions are met.

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Modifications and Waiver

        The indenture (including the terms and conditions of the notes) may be modified or amended by us and the trustee, without the consent of the holder of any note, for the purposes of, among other things:

•

adding to our covenants for the benefit of the holders of notes;



•

surrendering any right or power conferred upon us;



•

providing for conversion rights of holders of notes if any reclassification or change of our common stock or any consolidation, merger or sale of all or substantially all of our assets occurs;



•

providing for the assumption of our obligations to the holders of notes in the case of a merger, consolidation, conveyance, transfer or lease;



•

reducing the conversion price, provided that the reduction will not adversely affect the interests of holders of notes in any material respect;



•

complying with the requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act of 1939, as amended;



•

making any changes or modifications to the indenture necessary in connection with the registration of the notes under the Securities Act, as contemplated by the registration rights agreement, provided that this action does not adversely affect the interests of the holders of the notes in any material respect;



•

curing any ambiguity or correcting or supplementing any defective provision contained in the indenture; provided that such modification or amendment does not, in the good faith opinion of our Board of Directors and the trustee, adversely affect the interests of the holders of the notes in any material respect;



•

adding or modifying any other provisions which we and the trustee may deem necessary or desirable and which will not adversely affect the interests of the holders of notes in any material respect; or



•

to evidence and provide for the appointment of a successor trustee.

        Modifications and amendments to the indenture or to the terms and conditions of the notes may also be made, and past default by us may be waived, with the written consent of the holders of at least a majority in aggregate principal amount of the notes at the time outstanding.

        However, no such modification, amendment or waiver may, without the written consent of the holder of each note affected thereby:

•

change the maturity of the principal of or any installment of interest on any note (including any payment of liquidated damages);



•

reduce the principal amount of, or any premium or interest on (including any payment of liquidated damages), any note;



•

change the currency of payment of such note or interest thereon;



•

impair the right to institute suit for the enforcement of any payment on or with respect to any note;



•

modify our obligations to maintain an office or agency in New York City;

28

•

except as otherwise permitted or contemplated by provisions concerning corporate reorganizations, adversely affect the repurchase option of holders upon a change of control or the conversion rights of holders of the notes;



•

modify the subordination provisions of the notes in a manner adverse to the holders of notes; or



•

reduce the percentage in aggregate principal amount of notes outstanding necessary to modify or amend the indenture or to waive any past default.

Satisfaction and Discharge

        We may discharge our obligations under the indenture while notes remain outstanding, subject to certain conditions, if:

•

all outstanding notes have become due and payable or will become due and payable at their scheduled maturity within one year, or



•

all outstanding notes are scheduled for redemption within one year; and



•

in either case, we have deposited with the trustee an amount sufficient to pay and discharge all outstanding notes on the date of their scheduled maturity or the scheduled date of redemption; provided that we shall remain obligated to issue shares upon conversion of the notes.

Governing Law

        The indenture and the notes will be governed by, and construed in accordance with, the law of the State of New York.

Information Concerning the Trustee

        The Bank of New York, as trustee under the indenture, has been appointed by us as paying agent, conversion agent, registrar and custodian with regard to the notes. The Bank of New York is also the transfer agent and registrar for our common stock. The trustee or its affiliates may from time to time in the future provide other services to us in the ordinary course of their business.

Registration Rights

        We entered into a registration rights agreement with the initial purchasers of the notes. If you sell the notes or shares of common stock issued upon conversion of the notes under this registration statement, you generally will be required to be named as a selling securityholder in this prospectus, deliver this prospectus to purchasers and be bound by applicable provisions of the registration rights agreement, including some indemnification provisions.

        In the registration rights agreement, we agreed to use our reasonable best efforts to keep the registration statement effective until the earlier of (1) February 1, 2004; (2) the date when, in the written opinion of our counsel, all outstanding registrable securities held by persons which are not our affiliates may be resold without registration under the Securities Act pursuant to Rule 144(k) under the Securities Act or any successor provision thereto; or (3) the sale pursuant to this shelf registration statement of all securities registered hereunder.

29

        We may suspend the use of this prospectus under certain circumstances relating to pending corporate developments, public filings with the SEC and similar events for a period not to exceed 30 days in any three-month period and not to exceed 90 days in any 12-month period. We also agreed to pay liquidated damages to holders of the notes and shares of common stock issued upon conversion of the notes if this registration statement is not timely filed or made effective or if the prospectus is unavailable for periods in excess of those permitted above. You should refer to the registrations rights agreement for a description of these liquidated damages.

Book-Entry System

        The notes were originally issued in the form of a global security issued in reliance on Rule 144A. Upon the issuance of a global security, DTC (referred to as the depository) or its nominee credited the accounts of persons holding through it with the respective principal amounts of the notes represented by such global security. Such accounts were designated by the initial purchasers with respect to notes placed by the initial purchasers for us. The notes that are sold under this prospectus will be represented by a new unrestricted global security. Upon issuance of this new unrestricted global security, the depository or its nominee will credit the accounts of persons holding through it with the respective principal amounts of the notes represented by the new unrestricted global security. Ownership of beneficial interests in a global security is limited to persons that have accounts with the depository ("participants") or persons that may hold interests through participants. Ownership of beneficial interests by participants in a global security is shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depository for such global security. Ownership of beneficial interests in such global security by persons that hold through participants will be shown on, and the transfer of those ownership interests through such participant will be effected only through, records maintained by such participant. The foregoing may impair the ability to transfer beneficial interests in a global security.

        We will make payment of principal, premium, if any, and interest on notes represented by any such global security to the depository or its nominee, as the case may be, as the sole holder of the notes represented thereby for all purposes under the indenture. None of OSI, the trustee, any agent of OSI, or the trustee or the initial purchasers will have any responsibility or liability for any aspect of the depository's records relating to or payments made on account of beneficial ownership interests in global security representing any notes or for maintaining, supervising or reviewing any of the depository's records relating to such beneficial ownership interests. We have been advised by the depository that, upon receipt of any payment of principal, premium, if any, or interest on any global security, the depository will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global security as shown on the records of the depository. Payments by participants to owners of beneficial interests in a global security held through such participants will be governed by standing instructions and customary practices as is now the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of such participants. A global security may not be transferred except as a whole by the depository for such global security to a nominee of such depository or by a nominee of such depository to such depository or another nominee of such depository or by such depository or any such nominee to a successor of such depository or a nominee of such successor. If the depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by us or the depository within 90 days, we will issue notes in definitive form in exchange for the global security. In either instance, an owner of a beneficial interest in the global security will be entitled to have notes equal in principal amount to such beneficial interest registered in its name and will be entitled to physical delivery of such notes in definitive form. Notes so issued in definitive form will be issued in denominations of $1,000 and integral multiples thereof and will be issued in registered form only, without coupons. We will pay principal, premium, if any, and interest on the notes and the notes may be presented for registration of transfer or exchange, at the offices of the trustee.

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        So long as the depository for a global security, or its nominee, is the registered owner of such global security, such depository or such nominee, as the case may be, will be considered the sole holder of the notes represented by such global security for the purposes of receiving payment on the notes, receiving notices and for all other purposes under the indenture and the notes. Beneficial interests in notes will be evidenced only by, and transfers thereof will be effected only through, records maintained by the depository and its participants. The depository has nominated Cede & Co. as the nominee. Except as provided above, owners of beneficial interests in a global security will not be entitled to have the notes represented by the global security registered in their name, will not be entitled to receive physical delivery of certificated notes and will not be considered the holders thereof for any purposes under the indenture. Accordingly any such person owning a beneficial interest in such a global security must rely on the procedures of the depository, and, if any such person is not a participant, on the procedures the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. The indenture provides that the depository may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the indenture. We understand that under existing industry practices, in the event that we request any action of holders or that an owner of a beneficial interest in such a global security desires to give or take any action which a holder is entitled to give or take under the indenture, the depository would authorize the participants holding the relevant beneficial interest to give or take such action and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them.

        The depository has advised us that the depository is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the Exchange Act. The depository was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The depository's participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the depository. Access to the depository's book-entry system is also available to others, such as banks, brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

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SELLING SECURITY HOLDERS

        We originally issued the notes in a private placement in February 2002. The notes were resold by the initial purchasers to persons reasonably believed by the initial purchasers to be "qualified institutional buyers" as defined by Rule 144A under the Securities Act. The selling securityholders may from time to time offer and sell pursuant to this prospectus any or all of the notes listed below and the shares of common stock issued upon conversion of such notes. When we refer to the "selling securityholders" in this prospectus, we mean those persons listed in the table below, as well as the pledgees, donees, assignees, transferees, successors and others who later hold any of the selling securityholders' interests. The table below sets forth the name of each selling securityholder, the principal amount of notes that each selling securityholder beneficially owns and may offer pursuant to this prospectus, the number of shares of common stock into which such notes are convertible, the number of shares of common stock offered, and the number of shares of common stock and the principal amount of notes owned by the selling securityholders after the completion of the offering. Unless set forth below, to our knowledge, none of the selling securityholders has, or within the past three years has had, any material relationship with us or any of our predecessors or affiliates or beneficially owns in excess of 1% of the outstanding common stock. The principal amounts of the notes provided in the table below is based on information provided to us by each of the selling securityholders as of April 16, 2002. The number of shares of common stock that may be sold is calculated based on the current conversion price of $50.00 per share. Since the date on which each selling securityholder provided this information, each selling securityholder identified below may have sold, transferred or otherwise disposed of all or a portion of its notes in a transaction exempt from the registration requirements of the Securities Act. Information concerning the selling securityholders may change from time to time and any changed information will be set forth in supplements or amendments to this prospectus to the extent required. In addition, the conversion ratio, and therefore the number of shares of our common stock issuable upon conversion of the notes, is subject to adjustment. Accordingly, the number of shares of common stock issuable upon conversion of the notes may increase or decrease.

        The selling securityholders may from time to time offer and sell any or all of the securities under this prospectus. Because the selling securityholders are not obligated to sell the notes or the shares of common stock issuable upon conversion of the notes, we cannot estimate the amount of the notes or how many shares of common stock that the selling securityholders will hold upon consummation of any such sales.

Selling Securityholder		Principal Amount of Notes Beneficially Owned and Offered	Common Stock Issuable Upon Conversion of the Notes	Common Stock Offered(1)	Principal Amount of Notes Owned After Completion of Offering	Common Stock Owned After Completion of Offering
		$
		$
		$
	Total

(1)

Assumes conversion of all of the securityholders' notes at a conversion rate of 20 shares of common stock per $1,000 principal amount of the notes. This conversion rate is subject to adjustment, however, as described under "Description of the Notes—Conversion Rights." As a result, the number of shares of common stock issuable upon conversion of the notes may increase or decrease in the future.

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DESCRIPTION OF CAPITAL STOCK

        The following description of our capital stock and certain provisions of our certificate of incorporation and bylaws is a summary and is qualified in its entirety by the provisions of our certificate of incorporation and bylaws.

        Our authorized capital stock consists of 200,000,000 shares of common stock and 5,000,000 shares of preferred stock.

Common Stock

        As of April 16, 2002, there were 36,279,933 shares of our common stock outstanding. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. The holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, and as a consequence, minority stockholders are not able to elect directors on the basis of their votes alone. Subject to preferences that may be applicable to any shares of preferred stock issued in the future, holders of common stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of our company, holders of the common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock. Holders of common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

        The Board of Directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, without any further vote or action by stockholders. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation and could have the effect of delaying, deferring or preventing a change in control. We have no present plan to issue any shares of preferred stock.

Registration Rights of Certain Holders

        Certain of our stockholders have registration rights. Under the agreements between us and the holders of registration rights we are required to maintain the effectiveness of certain registration statements covering their shares.

Rights Plan

        Our Board of Directors adopted a shareholder rights plan, pursuant to which one Series SRPA Junior Participating Preferred Stock Purchase Right was issued as a dividend for each outstanding share of common stock.

        These rights entitle the holder to buy one one-thousandth of a share of Series SRPA Junior Participating Preferred Stock upon a triggering event as discussed below.

        The rights become exercisable upon the occurrence of a triggering event, such as the announcement by a potential acquirer of the intention to initiate a tender offer that would result in the acquisition of 17.5% or more of the outstanding shares of our company or the actual acquisition of 17.5% or more of the outstanding shares of our company by any person or group of affiliated or associated persons.

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        Upon the actual acquisition of 17.5% or more of the outstanding common stock of our company by a person or group, the rights held by all holders other than the acquiring person or group will be modified automatically to be rights to purchase shares of common stock (instead of rights to purchase preferred stock) at 50% of the then market value of such common stock. Furthermore, such rightholders will have the further right to purchase shares of common stock at the same discount if our company merges with, or sells 50% or more of its assets or earning power to, the acquiring person or group or any person acting for or with the acquiring person or group. If the transaction takes the form of a merger of our company into another corporation, these rightholders will have the right to acquire at the same percentage discount shares of common stock of the acquiring person or other ultimate parent of such merger party.

        We can redeem the rights at any time before (but not after) a person has acquired 17.5% or more of our Company's common stock, with certain exceptions. The rights will expire on August 31, 2010 if not redeemed prior to such date.

        Our rights agreement may have anti-takeover effects. The rights may cause substantial dilution to a person or group that attempts to acquire us. Accordingly, the existence of the rights may deter acquirors from making takeover proposals or tender offers. However, the rights are not intended to prevent a takeover, but rather are designed to enhance the ability of our board to negotiate with an acquiror on behalf of all of the stockholders. In addition, the rights should not interfere with a proxy contest.

Anti-Takeover Effects of Provisions of our Charter and Bylaws

        Our certificate of incorporation and bylaws discourage certain types of transactions involving an actual or potential change in control of our company which might be beneficial to our company or its stockholders. Our certificate of incorporation requires that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of the stockholders and may not be effected by a consent in writing. Our bylaws allow special meetings of stockholders to be called only by a majority vote of the Board of Directors and impose advance notice requirements and procedures for the submission by stockholders of nominations for the Board of Directors and stockholder proposals.

Transfer Agent and Registrar

        The Transfer Agent and Registrar for our common stock is The Bank of New York. The address is Stock Transfer Administration, 63 Madison Avenue, 8th Floor, New York, NY 10016, and its telephone number is (212) 503-4294.

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

        The following is a summary of certain U.S. federal income tax consequences with respect to the purchase, ownership and disposition of notes or our common stock acquired upon conversion of a note, and is for general information purposes only. This summary is based on the U.S. federal income tax law now in effect, which is subject to change, possibly retroactively. This summary does not discuss all aspects of U.S. federal income taxation which may be important to particular holders in light of their individual investment circumstances or to certain types of holders subject to special tax rules, such as banks, financial institutions, broker-dealers, insurance companies, tax-exempt organizations, persons holding notes in connection with a hedging, straddle, conversion or other integrated transaction, holders subject to the U.S. federal alternative minimum tax, U.S. persons whose "functional currency" is not the U.S. dollar, securities traders that elect to use a mark-to-market method of accounting, or persons who have ceased to be U.S. citizens or to be taxed as resident aliens, nor does it address state, local or foreign tax consequences or estate and gift tax consequences. This summary assumes that holders will hold the notes and the shares of common stock into which the notes are convertible as "capital assets" (generally, property held for investment) under Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). We have not sought any ruling from the Internal Revenue Service (the "IRS") with respect to statements made and conclusions reached in this discussion, and there can be no assurance that the IRS will agree with such statements and conclusions. Each holder is urged to consult his own tax advisor regarding the specific U.S. federal, state, local and foreign income and other tax consequences of the purchase, ownership and disposition of the notes or our common stock acquired upon conversion of a note.

        For purposes of this summary, a "U.S. holder" is a beneficial owner of notes that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation created in or organized under the law of the United States or any State or political subdivision thereof, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that was in existence on August 20, 1996, was treated as a U.S. person under the Code on the previous day and elected to continue to be so treated. A "non-U.S. holder" is a beneficial owner of notes that is neither a U.S. holder nor a partnership for U.S. federal income tax purposes.

        A partnership for U.S. federal income tax purposes is not subject to U.S. federal income tax on income derived from holding the notes. A partner of the partnership may be subject to U.S. federal income tax on such income pursuant to rules similar to the rules for U.S. holders or non-U.S. holders depending on whether (1) the partnership is a U.S. or non-U.S. partnership, (2) the partner is a U.S. or non-U.S. person and (3) the partnership is or is not engaged in a U.S. trade or business to which the income or gain from the notes is effectively connected.

        Based on currently applicable authorities, we believe that the notes constitute indebtedness for U.S. federal income tax purposes. We also believe that the possibility of our making certain payments (other than stated principal and interest) with respect to the notes is remote, and also that the possibility of an additional payment in connection with a provisional or optional redemption does not result in the notes being treated as "contingent payment debt obligations." These determinations are not, however, binding on the IRS. Persons considering the purchase of notes should consult their own tax advisors as to the foregoing. Except as otherwise noted, the remainder of this discussion assumes that the notes will constitute indebtedness for U.S. federal income tax purposes.

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PROSPECTIVE PURCHASERS OF THE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

U.S. Holders

Interest

        A U.S. holder will be required to recognize as ordinary income any interest paid or accrued on the notes, in accordance with such holder's regular method of tax accounting. In certain circumstances, we may be obligated to pay a U.S. holder amounts in excess of stated interest or principal. For example, as more fully described under "Description of the Notes—Repurchase at Option of Holders Upon a Change of Control," if a holder requires us to repurchase some or all of such holder's notes and we elect to pay the purchase price in common stock, the value of the stock could exceed the sum of the principal amounts of the notes and accrued and unpaid interest. We intend to treat the possibility that we will pay any such excess amounts as a remote or incidental contingency, within the meaning of applicable Treasury regulations and, therefore, in the unlikely event an additional amount becomes due on the notes, we believe U.S. holders will be taxable on such amount only at the time it accrues or is received in accordance with each such holder's method of tax accounting. Our determination that these amounts are incidental and that there is a remote likelihood of paying additional amounts on the notes is binding on each U.S. holder unless the U.S. holder explicitly discloses in the manner required by applicable Treasury regulations that its determination is different from ours. Our determination is not, however, binding on the IRS.

        If a U.S. holder purchases a note at a price above or below the principal amount of such note, the amount includible as interest is subject to the next three sections, as applicable.

Notes Purchased at a Premium

        A U.S. holder that purchases a note for a price in excess of its principal amount may have bond premium. For this purpose, the purchase price allocable to the note is deemed to be the total purchase price reduced by an amount equal to the value of the conversion option on the note. If the purchase price, after giving effect to this reduction, exceeds the principal amount of the note, the U.S. holder will have premium with respect to the note in the amount of such excess. Such U.S. holder may elect under section 171 of the Code to treat the premium as "amortizable bond premium." If such an election is made, the amount of interest such U.S. holder must include in income for each accrual period is reduced by the portion of the premium allocable to such period based on the note's yield to maturity. If the amortizable bond premium exceeds the interest allocable to the accrual period, the excess is treated as a bond premium deduction for the accrual period. However, the amount treated as a bond premium deduction is limited to the amount by which such U.S. holder's total interest income on the note in prior accrual periods exceeds the total amount of bond premium deducted or used to offset interest on the note by such U.S. holder in prior accrual periods. A U.S. holder generally may not assume that a note will be redeemed prior to maturity, and therefore must amortize the premium until the maturity date. If the note is in fact redeemed, such U.S. holder may deduct any unamortized premium in the year of redemption. The U.S. holder's basis in the note is reduced by any bond premium deducted or used to offset interest by such U.S. holder. The election to amortize bond premium applies to all debt instruments the interest on which is not excludible from gross income ("fully taxable bonds") that such U.S. holder holds at the beginning of the first taxable year to which the election applies and to all fully taxable bonds such U.S. holder later acquires, and may be revoked only with the consent of the IRS.

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        If a U.S. holder does not make this election, such U.S. holder must include the full amount of each interest payment in income as described in "Interest" above. The U.S. holder will receive a tax benefit from the premium only in computing gain or loss upon the sale or other disposition or retirement of the note.

Notes Purchased at a Discount

        A U.S. holder that purchases a note for an amount that is less than its principal amount will have market discount with respect to the note in the amount of the difference. Such U.S. holder is required (unless the market discount is less than a de minimis amount) to treat any principal payments on, or any gain realized on the disposition or retirement of such note, as interest income to the extent of the market discount that accrued while such U.S. holder held the note, unless the U.S. holder elects to include the market discount in income on a current basis (see "Accrual Method Election" below). "Accrued" market discount is determined on a straight-line basis or, at the U.S. holder's election, on a constant-yield basis. Market discount is considered to be a de minimis amount if it is less than one-quarter of one percent of the note's principal amount multiplied by the number of complete years to maturity after the U.S. holder acquired the note. If a U.S. holder disposes of a note with more than a de minimis amount of market discount in a nontaxable transaction in exchange for property whose adjusted basis is determined by reference to the adjusted basis of the note (including a conversion), the transaction will not be made taxable, but any gain on a disposition of the property received in the exchange will be ordinary income to the extent of accrued market discount as of the time of the exchange. If a U.S. holder disposes of a note with more than a de minimis amount of market discount in an otherwise nontaxable transaction that is not in exchange for property (for example, a gift), such U.S. holder must include all accrued market discount in income as if the note had been sold at its then fair market value.

        If a U.S. holder acquires a note at a market discount and does not make the accrual method election described below, such U.S. holder may be required to defer the deduction of a portion of the interest expense on any indebtedness incurred or continued to purchase or carry the note until the deferred income is realized.

Accrual Method Election

        A U.S. holder that purchases a note with market discount may elect to include market discount in gross income based on the compounding of interest at a constant rate. The U.S. holder's basis in the note is increased by any amount included in income as a result of this election. This election to include market discount applies to all market discount obligations acquired during or after the first taxable year to which the election applies, and may be revoked only with the consent of the IRS.

Conversion or Repurchase for Common Stock

        A U.S. holder generally will not recognize income, gain or loss upon conversion of the notes solely into our common stock except with respect to cash received in lieu of fractional shares. The U.S. holder's tax basis in the common stock received on conversion of a note for common stock will be the same as the U.S. holder's adjusted tax basis in the notes exchanged therefor at the time of conversion (reduced by any basis allocable to a fractional share), and the holding period for the common stock received on conversion will include the holding period of the notes that were converted. If we repurchase a note solely in exchange for common stock pursuant to the exercise of the repurchase right, although the matter is not entirely clear, such exchange should be treated in the same manner as a conversion of the note.

        Cash received in lieu of a fractional share of common stock upon conversion of the notes into common stock or upon a repurchase of a note for common stock pursuant to exercise of the repurchase right will generally be treated as a payment in exchange for the fractional share of common stock rather than as a dividend. Accordingly, the receipt of cash in lieu of a fractional share of common stock generally will result in gain or loss measured by the difference between the cash received for the fractional share and the U.S. holder's adjusted tax basis allocable to the fractional share. Such gain or loss will generally be capital gain or loss, except as set forth above under "Notes Purchased at a Discount."

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Dividends on Common Stock

        Distributions, if any, on our common stock will constitute dividends for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under U.S. federal income tax principles and will be included in a U.S. holder's income as ordinary income as they are paid. To the extent that a U.S. holder receives distributions on shares of common stock that would otherwise constitute dividends for U.S. federal income tax purposes but that exceed our current and accumulated earnings and profits, such distributions will be treated first as a non-taxable return of capital reducing the U.S. holder's basis in the shares of common stock. Any such distributions in excess of the U.S. holder's basis in the shares of common stock will generally be treated as gain. Such gain or loss will generally be capital gain or loss, except as set forth above under "Notes Purchased at a Discount." Subject to applicable limitations, dividends paid to U.S. holders that are U.S. corporations will qualify for the dividends-received deduction so long as we have sufficient earnings and profits.

Sale, Redemption or Repurchase for Cash

        Except as set forth above under "Conversion or Repurchase for Common Stock," U.S. holders generally will recognize gain or loss upon the taxable sale, redemption, including a repurchase by us for cash pursuant to the repurchase right, or other taxable disposition of the notes or common stock in an amount equal to the difference between the amount realized on the disposition, other than amounts attributable to accrued but unpaid interest on the notes not previously included in income (which amounts will be taxable as ordinary income), and the holder's tax basis in such notes. A U.S. holder's initial tax basis in a note generally will be equal to the amount paid therefor, and will thereafter be increased by any previously included market discount described above under "Accrual Method Election" and reduced by any previously deducted bond premium described above under "Notes Purchased at a Premium." Such gain or loss will generally be capital gain or loss, except as set forth above under "Notes Purchased at a Discount." Any capital gain or loss will be long-term if the notes have been held for more than one year and will generally be U.S. source gain or loss to a U.S. holder. Capital gain that is not long-term capital gain will be taxed at ordinary income tax rates. The claim of a deduction in respect of a capital loss, for U.S. federal income tax purposes, is subject to limitations.

        If we elect to redeem the notes as a provisional redemption, or if a U.S. holder elects to convert the U.S. holder's notes between the notice date of the provisional redemption and provisional redemption date, we will be obligated to make an additional "make-whole" payment to holders. The U.S. federal income tax consequences of the right to receive this additional payment are unclear. In particular, the notes might be subject to the special rules for contingent payment debt instruments. If those special rules were to apply to the notes, the effect on a conversion of the notes is uncertain. Under one reading of the rules, conversion of the notes would be a taxable event requiring the U.S. holders to recognize gain or loss. We do not believe, however, that the notes should be treated as contingent payment debt instruments, and we will not treat them as such for purposes of filing tax or information returns with the IRS. Accordingly, we intend to treat such a make-whole payment as additional proceeds in respect of the provisional redemption of the notes. Based upon such treatment, a U.S. holder that has notes redeemed should be subject to U.S. federal income tax on the additional proceeds in the manner described in the preceding paragraph. While the matter is not entirely clear under current U.S. federal income tax law, a U.S. holder that elects to convert notes between the notice date of the provisional redemption and the provisional redemption date, but that receives the make-whole payment, could be required to treat as ordinary interest income an amount equal to the interest (including market discount as set forth above under "Notes Purchased at a Discount") that has accrued on the notes but has not previously been included in gross income, and to recognize capital gain, if any, to the extent of the excess of the make-whole payment over the amount, if any, characterized as interest. Such gain should give rise to an increase in the adjusted tax basis of the common stock received by the U.S. holder upon conversion of the notes. U.S. holders should consult their own tax advisors regarding the U.S. federal income taxation of amounts received as a make-whole payment.

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Adjustment of Conversion Price

        The conversion price of the notes is subject to adjustment under certain circumstances. Section 305 of the Code and the Treasury Regulations issued thereunder may treat the holders of the notes as having received a constructive distribution, resulting in ordinary income (subject to a possible dividends received deduction in the case of corporate holders) to the extent of our current or accumulated earnings and profits, if, and to the extent that certain adjustments in the conversion price, which may occur in limited circumstances (particularly an adjustment to reflect a taxable dividend to holders of common stock), increase the proportionate interest of a holder of notes in the fully diluted common stock, whether or not such holder ever exercises its conversion privilege. Moreover, if there is not a full adjustment to the conversion ratio of the notes to reflect a stock dividend or other event increasing the proportionate interest of the holders of outstanding common stock in our assets or earnings and profits, then such increase in the proportionate interest of the holders of the common stock generally will be treated as a distribution to such holders, taxable as ordinary income (subject to a possible dividends received deduction in the case of corporate holders) to the extent of our current or accumulated earnings and profits. Therefore, U.S. holders may recognize income in the event of a deemed distribution even though they may not receive any cash or property.

Information Reporting and Backup Withholding

        A. U.S. holder of notes or common stock may be subject to "backup withholding" (currently at a rate of 30%) with respect to certain "reportable payments", including interest payments, dividend payments, proceeds from the disposition of the notes or common stock to or through a broker and, under certain circumstances, principal payments on the notes. These backup withholding rules apply, if, among other things, (i) the holder fails to furnish a social security number or other taxpayer identification number "TIN") certified under penalties of perjury within a reasonable time after the request therefor, (ii) the holder fails to report properly interest or dividends, (iii) under certain circumstances, the holder fails to provide a certified statement, signed under penalties of perjury, that the TIN furnished is the correct number and that such holder is not subject to backup withholding or (iv) the IRS provides notification that the U.S. holder has furnished us an incorrect TIN. Any amount withheld from a payment to a holder under the backup withholding rules is creditable against the holder's U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Backup withholding will not apply, however, with respect to payments made to certain holders, including corporations, tax exempt organizations and certain foreign persons, provided their exemptions from backup withholding are properly established.

        We will report to the U.S. holders of notes and common stock and to the IRS the amount of our "reportable payments" for each calendar year and the amount of tax withheld, if any, with respect to such payments.

        Any amounts withheld under the backup withholding rules from a payment to a U.S. holder will be allowed as a refund or credit against such U.S. holder's federal income tax liability, provided that the requisite procedures are followed.

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Non-U.S. Holders

Interest

        Generally, interest income of a non-U.S. holder that is not effectively connected with a U.S. trade or business is subject to a withholding tax at a 30% rate (or, if applicable, a lower treaty rate). However, interest paid on a note to a non-U.S. holder will qualify for the "portfolio interest exemption" and therefore, subject to the discussion of backup withholding below, will not be subject to U.S. federal income tax or withholding tax, provided that such interest income is not effectively connected with a U.S. trade or business of the non-U.S. holder and provided that (1) the non-U.S. holder does not actually or constructively own (pursuant to the conversion feature of the notes or otherwise) 10% or more of the combined voting power of all classes of our stock entitled to vote, (2) the non-U.S. holder is not a controlled foreign corporation related to us actually or constructively through stock ownership, and (3) either (i) the non-U.S. holder certifies to us or our agent, under penalties of perjury, that it is not a U.S. holder and provides its name and address on U.S. Treasury Form W-8BEN (or a suitable substitute form) or (ii) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution") certifies under penalties of perjury that such a Form W-8BEN (or suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof (and, in the case of either (i) or (ii), the agent does not have actual knowledge that the holder is a U.S. holder).

        Except to the extent that an applicable treaty otherwise provides, a non-U. S. holder generally will be taxed in the same manner as a U.S. holder with respect to interest if the interest income is effectively connected with a U.S. trade or business of the non-U.S. holder. Effectively connected interest received by a corporate non-U.S. holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate). Even though such effectively connected interest is subject to income tax, and may be subject to the branch profits tax, it is not subject to withholding tax if the holder delivers a properly executed Internal Revenue Service Form W-8ECI to the payor.

Conversion or Repurchase for Common Stock

        In general, no U.S. federal income tax or withholding tax will be imposed upon the conversion of a note into common stock by a non-U.S. holder except with respect to the receipt of cash in lieu of fractional shares upon conversion of a note where either of the conditions described below under "Sale, Redemption or Repurchase for Cash" is satisfied. If we repurchase a note solely in exchange for common stock pursuant to the exercise of the repurchase right, although the matter is not entirely clear, such exchange should be treated in the same manner as a conversion of the note.

Dividends on Common Stock

        Distributions by us with respect to the common stock that are treated as dividends paid (or deemed paid), as described above under "U.S. Holders—Dividends on Common Stock," to a non-U.S. holder (excluding dividends that are effectively connected with the conduct of a trade or business in the U.S. by such holder which are taxable as described below) will be subject to U.S. federal withholding tax at a 30% rate (or lower rate provided under any applicable income tax treaty).

        Except to the extent that an applicable tax treaty otherwise provides, a non-U.S. holder will be taxed in the same manner as a U.S. holder on dividends paid (or deemed paid) that are effectively connected with the conduct of a trade or business in the U.S. by the non-U.S. holder. If such non-U.S. holder is a foreign corporation, it may also be subject to a U.S. branch profits tax on such effectively connected income at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Even though such effectively connected dividends are subject to income tax, and may be subject to the branch profits tax, they will not be subject to U.S. withholding if the holder delivers a properly executed IRS Form W-8ECI to the payor.

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Sale, Redemption or Repurchase for Cash

        A non-U.S. holder of a note will generally not be subject to U.S. federal income tax or withholding tax upon the sale, redemption, including a repurchase by us for cash pursuant to the repurchase right, or other taxable disposition of the notes or common stock unless (i) the gain is effectively connected with a U.S. trade or business of the non-U.S. holder or (ii) subject to certain exceptions, the non-U.S. holder is an individual who holds the note or common stock as a capital asset and is present in the U.S. for 183 days or more in the taxable year of the disposition. If such gain is effectively connected with a U.S. trade or business, the non-U.S. holder will be taxed in the same manner as a U.S. holder as described above under "U.S. Holder—Sale, Redemption or Repurchase for Cash," "—Notes Purchased at a Premium" and "—Notes purchased at a Discount."

Adjustment of Conversion Price

        The conversion price of the notes is subject to adjustment under certain circumstances. As described under "U.S. Holders—Adjustment of Conversion Price" above, the holders of the notes may be treated as having received a constructive distribution if such an adjustment occurs. The tax treatment of such a deemed distribution is the same as described above under "Non-U.S. Holders—Dividends on Common Stock."

Information Reporting and Backup Withholding

        Generally, we must report annually to the IRS and to each non-U.S. holder any interest or dividend that is subject to withholding, any income that is exempt from U.S. withholding tax pursuant to a treaty, or any payments of portfolio interest. Under certain circumstances, we must report to the IRS payments of principal.

        In general, information reporting and backup withholding will not apply to payments made by us or our paying agents, in their capacities as such, to a non-U.S. holder if the holder has provided the required certification that it is not a U.S. person as described above, provided that neither we nor our paying agent has actual knowledge that the holder is a U.S. person. Information reporting and backup withholding of U.S. federal income tax at a rate of 30% may apply to payments made by us or any agent of ours to a non-U.S. holder if the payee fails to make the appropriate certification that the holder is a non-U.S. person or if we or our paying agent has actual knowledge that the payee is a U.S. person.

        The payment of the proceeds from the disposition of the notes or common stock to or through the U.S. office of any broker, U.S. or foreign, will be subject to information reporting and possible backup withholding unless the holder has provided the required certification that it is not a U.S. person. The payment of the proceeds from a disposition by a non-U.S. holder of a note or common stock made to or through a foreign office of a broker will generally not be subject to information reporting or backup withholding. However, if the broker is (i) a U.S. person; (ii) a controlled foreign corporation for U.S. federal income tax purposes; (iii) a foreign person 50% or more of whose gross income from all sources is effectively connected with a U.S. trade or business for a specified three-year period; or (iv) a foreign partnership, if at any time during its tax year, one or more of its partners are U.S. persons, as defined in Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership or if, at any time during its tax year, the foreign partnership is engaged in a U.S. trade or business, then such payments will be subject to information reporting, but not backup withholding, unless (A) such broker has documentary evidence in its records that the beneficial owner is not a U.S. person and certain other conditions are met or (B) the beneficial owner otherwise establishes an exemption. Both backup withholding and information reporting will apply to the proceeds from such a disposition if the broker has actual knowledge that the payee is a U.S. holder.

        Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a refund or credit against such non-U.S. holder's federal income tax liability, provided that the requisite procedures are followed.

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PLAN OF DISTRIBUTION

        The selling securityholders will be offering and selling all of the securities offered and sold under this prospectus. We will not receive any of the proceeds from the offering of the notes or the underlying shares of common stock by the selling securityholders. In connection with the initial offering of the notes, we entered into a registration rights agreement dated February 1, 2002 with the initial purchasers of the notes. Securities may only be offered or sold under this prospectus pursuant to the terms of the registration rights agreement. However, selling securityholders may resell all or a portion of the securities in open market transactions in reliance upon Rule 144 or Rule 144A under the Securities Act, provided they meet the criteria and conform to the requirements of one of these rules. We are registering the notes and shares of common stock covered by this prospectus to permit holders to conduct public secondary trading of these securities from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses, other than underwriting discounts and selling commissions, in connection with the registration and sale of the notes and the shares of common stock covered by this prospectus.

        The selling securityholders and any such broker-dealers or agents who participate in the distribution of the notes and the underlying common stock may be deemed to be "underwriters." As a result, any profits on the sale of the underlying common stock by selling securityholders and any discounts, commissions or concessions received by any such broker-dealers or agents may be deemed to be underwriting discounts and commissions under the Securities Act. If the selling security holders are deemed to be underwriters, the selling securityholders may be subject to statutory liabilities including, but not limited to, those of Section 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.

        If the notes and the underlying common stock are sold through underwriters or broker-dealers, the selling securityholders will be responsible for underwriting discounts or commission or agent's commission.

        The selling securityholders may sell all or a portion of the notes and shares of common stock beneficially owned by them and offered hereby from time to time:

•

directly; or



•

through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or concessions from the selling securityholders and/or from the purchasers of the notes and shares of common stock for whom they may act as agent.

        The notes and the shares of common stock may be sold from time to time in one or more transactions at:

•

fixed prices, which may be changed;



•

prevailing market prices at the time of sale;



•

varying prices determined at the time of sale; or



•

negotiated prices.

        These prices will be determined by the holders of the securities or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection with the sale. The aggregate proceeds to the selling securityholders from the sale of the notes or shares of common stock offered by them hereby will be the purchase price of the notes or shares of common stock less discounts and commissions, if any.

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        The sales described in the preceding paragraph may be effected in transactions:

•

on any national securities exchange or quotation service on which the notes or shares of common stock may be listed or quoted at the time of sale, including the Nasdaq National Market in the case of the shares of common stock;



•

in the over-the counter market;



•

in transactions otherwise than on such exchanges or services or in the over-the-counter market; or



•

through the writing of options.

        These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.

        In connection with sales of the notes and shares of common stock or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of the notes and shares of common stock in the course of hedging their positions. The selling securityholders may also sell the notes and shares of common stock short and deliver the notes and shares of common stock to close out short positions, or loan or pledge notes and shares of common stock to broker-dealers that in turn may sell the notes and shares of common stock.

        To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the notes and the shares of common stock by the selling securityholders. Selling securityholders may not sell any, or may not sell all, of the notes and the shares of common stock offered by them pursuant to this prospectus. In addition, we cannot assure you that a selling securityholder will not transfer, devise or gift the notes and the shares of common stock by other means not described in this prospectus. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.

        The notes were issued and sold on February 1, 2002 in a private placement. The notes were resold by the initial purchasers to persons reasonably believed by the initial purchasers to be "qualified institutional buyers," as defined in Rule 144A under the Securities Act. Pursuant to the registration rights agreement, we have agreed to indemnify the initial purchasers and each selling securityholder, and each selling securityholder has agreed to indemnify us against specified liabilities arising under the Securities Act. The selling securityholders may also agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the securities against some liabilities, including liabilities that arise under the Securities Act.

        The selling securityholders and any other person participating in such distribution will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the notes and the underlying shares of common stock by the selling securityholders and any such other person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the notes and the underlying shares of common stock to engage in market-making activities with respect to the particular notes and the underlying shares of common stock being distributed for a period of up to five business days prior to the commencement of distribution. This may affect the marketability of the notes and the underlying shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the notes and the underlying shares of common stock.

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        Under the registration rights agreement, we are obligated to use our reasonable best efforts to keep the registration statement of which this prospectus is a part effective until the earlier of:

•

February 1, 2004;



•

the date when the notes and the shares of common stock issuable upon conversion of the notes (i) may be resold immediately without restriction pursuant to the volume limitation provisions of Rule 144(k) under the Securities Act or (ii) cease to be outstanding; and



•

the sale, pursuant to the registration statement to which this prospectus relates, of all the securities registered thereunder.



•

Our obligation to keep the registration statement to which this prospectus relates effective is subject to specified, permitted exceptions set forth in the registration rights agreement. In these cases, we may prohibit offers and sales of the notes and shares of common stock pursuant to the registration statement to which this prospectus relates.

        We may suspend the use of this prospectus if we learn of any event that causes this prospectus to include an untrue statement of a material fact required to be stated in the prospectus or necessary to make the statements in the prospectus not misleading in light of the circumstances then existing. If this type of event occurs, a prospectus supplement or post-effective amendment, if required, will be distributed to each selling securityholder. Each selling securityholder has agreed not to trade securities from the time the selling securityholder receives notice from us of this type of event until the selling securityholder receives a prospectus supplement or amendment. This time period will not exceed 30 days in any three-month period and will not exceed 90 days in any 12 month-period.

LEGAL MATTERS

        Saul Ewing LLP, Philadelphia, Pennsylvania, will pass upon the validity of the notes and the shares of common stock into which those notes are convertible for OSI.

EXPERTS

        The consolidated financial statements of OSI Pharmaceuticals, Inc. and subsidiaries as of September 30, 2001 and 2000 and for each of the years in the three-year period ended September 30, 2001 incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent accountants, incorporated by reference herein, and upon the authority of KPMG LLP as experts in accounting and auditing. The audit report covering the September 30, 2001 consolidated financial statements refers to a change in method of revenue recognition for certain up front non-refundable fees in 2001.

        The financial statements of the Oncology Related Assets, Liabilities and Activities of Gilead Sciences, Inc. appearing in OSI Pharmaceuticals, Inc.'s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 6, 2002, have been audited by Ernst & Young, LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference and in the registration statement in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

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        You should rely only on the information contained in this prospectus or incorporated by reference. OSI has not authorized anyone to provide you with additional or different information. OSI is not making an offer of these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the date of delivery of this prospectus or the date of any sale of the securities.

$200,000,000

4% Convertible Senior Subordinated Notes due 2009
and 4,000,000 Shares of Common Stock Issuable Upon Conversion of the Notes

PROSPECTUS

April    , 2002

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 14. Other Expenses of Issuance and Distribution.

        The following expenses incurred in connection with the sale of the securities being registered will be borne by OSI. Other than the SEC registration fee, the amounts stated are estimates.

SEC registration fee	$	18,400
Accounting fees and expenses	$	17,000
Legal fees and expenses	$	60,000
Total	$	95,400

Item 15. Indemnification of Directors and Officers.

        Section 145 of the General Corporation Law of Delaware empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or another enterprise if serving such enterprise at the request of the corporation. Depending on the character of the proceeding, a corporation may indemnify against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of an action by or in the right of the corporation, no indemnification may be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses that the court shall deem proper. Section 145 further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him or her in connection therewith.

        OSI's Certificate of Incorporation provides that OSI shall, to the fullest extent authorized by the General Corporation Law of Delaware, indemnify any person, or the legal representative of any person, who is or was a director, officer, employee or agent of OSI or another enterprise if said person served such enterprise at the request of OSI. The Certificate of Incorporation also provides that any amendment to the General Corporation Law of Delaware shall only be applicable to the extent any such amendment permits OSI to provide broader indemnification rights than said law permitted OSI to provide prior to such amendment. The Certificate of Incorporation further provides that in the case of an action, suit or proceeding initiated by the indemnified person, OSI shall indemnify the person only if such action, suit or proceeding was authorized by OSI's Board of Directors. The Certificate of Incorporation also contains a provision eliminating the liability of directors of OSI to OSI or its stockholders for monetary damages for breach of fiduciary duty except under certain specified circumstances. The Certificate of Incorporation also permits OSI to maintain insurance to protect itself and any director, officer, employee or agent against any liability with respect to which OSI would have the power to indemnify such persons under the General Corporation Law of Delaware. OSI maintains an insurance policy insuring its directors and officers against certain liabilities.

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Item 16. Exhibits.

        The following is a list of exhibits filed as part of the Registration Statement:

4.1	Indenture, by and between OSI Pharmaceuticals, Inc. and The Bank of New York, dated as of February 1, 2002.
4.2	Form of 4% Convertible Senior Subordinated Note Due 2009 (included in Exhibit 4.1).
4.3	Collateral Pledge and Security Agreement, by and between OSI Pharmaceuticals, Inc. and the Bank of New York, dated February 1, 2002.
4.4	Registration Rights Agreements, by and among OSI Pharmaceuticals, Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill, Inc. and Lazard Fréres & Co. LLC, dated as of February 1, 2002.
4.5	Account Control Agreement, by and among OSI Pharmaceuticals, Inc., The Bank of New York, as Trustee and The Bank of New York, as securities intermediary and depository bank, dated as of February 1, 2002.
5.1	Opinion of Saul Ewing LLP as to the legality of the securities registered hereunder.
12.1	Computation of Ratios of Earnings to Fixed Charges.
23.1	Consent of KPMG LLP, Independent Accountants.
23.2	Consent of Ernst & Young LLP, Independent Auditors.
23.3	Consent of Saul Ewing LLP (included in Exhibit 5.1).
24.1	Power of Attorney (included on Signature Page of this Registration Statement).
25.1	A Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York, trustee under the Indenture.

Item 17. Undertakings.

        A. Rule 415 Offering

        The undersigned Registrant hereby undertakes:

        (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 as amended;

        (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

        (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

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        Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

        (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        B. Filing Incorporating Subsequent Exchange Act Documents By Reference.

        The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        C. Request for Acceleration of Effective Date

        Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Melville, State of New York, on April 19, 2002.

OSI PHARMACEUTICALS, INC.
By:	/s/  COLIN GODDARD, PH.D.
	Colin Goddard, Ph.D. Chairman of the Board and Chief Executive Officer

POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby makes, constitutes and appoints Colin Goddard, Ph.D. and Robert L. Van Nostrand, and each of them, with full power to act without the other, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign any and all amendments to this registration statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  COLIN GODDARD, PH.D. Colin Goddard, Ph.D.	Chairman of the Board and Chief Executive Officer (principal executive officer)	April 19, 2002
/s/  ROBERT L. VAN NOSTRAND Robert L. Van Nostrand	Vice President and Chief Financial Officer (principal financial and accounting officer)	April 19, 2002
/s/  G. MORGAN BROWNE G. Morgan Browne	Director	April 19, 2002
/s/  JOHN H. FRENCH, II John H. French, II	Director	April 19, 2002

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/s/  EDWIN A. GEE, PH.D. Edwin A. Gee, Ph.D.	Director	April 19, 2002
/s/  DARYL K. GRANNER, M.D. Daryl K. Granner, M.D.	Director	April 19, 2002
/s/  WALTER M. LOVENBERG, PH.D. Walter M. Lovenberg, Ph.D.	Director	April 19, 2002
/s/  VIREN MEHTA Viren Mehta	Director	April 19, 2002
/s/  SIR MARK RICHMOND, PH.D. Sir Mark Richmond, Ph.D.	Director	April 19, 2002
/s/  JOHN P. WHITE, ESQUIRE John P. White, Esquire	Director	April 19, 2002

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EXHIBIT INDEX

Exhibit No.	Exhibit
4.1	Indenture, by and between OSI Pharmaceuticals, Inc. and The Bank of New York, dated as of February 1, 2002.
4.2	Form of 4% Convertible Senior Subordinated Note Due 2009 (included in Exhibit 4.1)
4.3	Collateral Pledge and Security Agreement, by and between OSI Pharmaceuticals, Inc. and the Bank of New York, dated February 1, 2002.
4.4	Registration Rights Agreements, by and among OSI Pharmaceuticals, Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill, Inc. and Lazard Fréres & Co. LLC, dated as of February 1, 2002.
4.5	Account Control Agreement, by and among OSI Pharmaceuticals, Inc., The Bank of New York, as Trustee and The Bank of New York, as securities intermediary and depository bank, dated as of February 1, 2002.
5.1	Opinion of Saul Ewing LLP as to the legality of the securities registered hereunder.
12.1	Computation of Ratios of Earnings to Fixed Charges.
23.1	Consent of KPMG LLP, Independent Accountants.
23.2	Consent of Ernst & Young LLP, Independent Auditors.
23.3	Consent of Saul Ewing LLP (included in Exhibit 5.1).
24.1	Power of Attorney (included on Signature Page of this Registration Statement).
25.1	A Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York, trustee under the Indenture.

QuickLinks

TABLE OF CONTENTS
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
FORWARD-LOOKING STATEMENTS
SUMMARY
RISK FACTORS
RATIO OF EARNINGS TO FIXED CHARGES
USE OF PROCEEDS
DIVIDEND POLICY
RECENT EVENTS
DESCRIPTION OF THE NOTES
SELLING SECURITY HOLDERS
DESCRIPTION OF CAPITAL STOCK
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
SIGNATURES
EXHIBIT INDEX

EX-4.1

                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY


                            OSI PHARMACEUTICALS, INC.

                    4% Convertible Senior Subordinated Notes

                                    due 2009

           ----------------------------------------------------------

                                    INDENTURE


                          Dated as of February 1, 2002

           ----------------------------------------------------------

                              The Bank of New York


                                     TRUSTEE

           ----------------------------------------------------------



                             CROSS REFERENCE TABLE*



TIA SECTION.......................................        INDENTURE SECTION
                                                       
310(a)(1).........................................              7.09
   (a)(2).........................................              7.09
   (a)(3).........................................              N.A.
   (a)(4).........................................              N.A.
   (b)............................................           7.08; 7.10
   (c)............................................              N.A.
311(a)............................................              7.13
   (b)............................................              7.13
   (c)............................................              N.A.
312(a)............................................              2.05
   (b)............................................             12.03
   (c)............................................             12.03
313(a)............................................              7.14
   (b)(1).........................................              N.A.
   (b)(2).........................................              7.14
   (c)............................................             12.02
   (d)............................................              7.14
314(a)............................................        4.02; 4.03; 12.02
   (b)............................................              N.A.
   (c)(1).........................................             12.04
   (c)(2).........................................             12.04
   (c)(3).........................................              N.A.
   (d)............................................              N.A.
   (e)............................................             12.05
   (f)............................................              N.A.
315(a)............................................              7.01
   (b)............................................           7.15; 12.02
   (c)............................................              7.01
   (d)............................................              7.01
   (e)............................................              6.11
316(a)(last sentence).............................              2.08
   (a)(1)(A)......................................              6.05
   (a)(1)(B)......................................              6.04
   (a)(2).........................................              N.A.
   (b)............................................              6.07
317(a)(1).........................................              6.08
   (a)(2).........................................              6.09
   (b)............................................              2.04
318(a)............................................             12.01


                           N.A. means Not Applicable.

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



                               TABLE OF CONTENTS*



                                                                                            PAGE
                                                                                        
ARTICLE 1  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............................1

  SECTION 1.01.   Definitions..................................................................1
  SECTION 1.02.   Other Definitions...........................................................10
  SECTION 1.03.   Incorporation by Reference of Trust Indenture Act...........................11
  SECTION 1.04.   Rules of Construction.......................................................12
  SECTION 1.05.   Acts of Holders.............................................................12

ARTICLE 2  THE NOTES .........................................................................13

  SECTION 2.01.   Form and Dating.............................................................13
  SECTION 2.02.   Execution and Authentication................................................15
  SECTION 2.03.   Registrar, Paying Agent and Conversion Agent................................15
  SECTION 2.04.   Paying Agent to Hold Money and Notes in Trust...............................16
  SECTION 2.05.   Noteholder Lists............................................................16
  SECTION 2.06.   Transfer and Exchange.......................................................16
  SECTION 2.07.   Replacement Notes...........................................................18
  SECTION 2.08.   Outstanding Notes; Determinations of Holders' Action........................18
  SECTION 2.09.   Temporary Notes.............................................................19
  SECTION 2.10.   Cancellation................................................................20
  SECTION 2.11.   Persons Deemed Owners.......................................................20
  SECTION 2.12.   Global Notes................................................................20
  SECTION 2.13.   CUSIP Numbers...............................................................25
  SECTION 2.14.   Defaulted Interest..........................................................25

ARTICLE 3  REDEMPTION AND PURCHASES...........................................................25

  SECTION 3.01.   Provisional Redemption......................................................25
  SECTION 3.02.   Optional Redemption.........................................................26
  SECTION 3.03.   Notice of Trustee...........................................................26
  SECTION 3.04.   Selection of Notes to be Redeemed...........................................26
  SECTION 3.05.   Notice of Redemption........................................................27
  SECTION 3.06.   Effect of Notice of Redemption..............................................28
  SECTION 3.07.   Deposit of Redemption Price.................................................28
  SECTION 3.08.   Notes Redeemed in Part......................................................29
  SECTION 3.09.   Conversion Arrangement on Call for Redemption...............................29
  SECTION 3.10.   Repurchase of Notes at Option of the Holder upon Change of Control..........30
  SECTION 3.11.   Effect of Change of Control Repurchase Notice...............................34
  SECTION 3.12.   Deposit of Change of Control Repurchase Price...............................35


- ----------
* Note: This Table of Contents shall not, for any purpose, be deemed to be part
        of the Indenture.

                                       -i-


                                                                                        
  SECTION 3.13.   Notes Purchased in Part.....................................................35
  SECTION 3.14.   Covenant to Comply with Securities Laws upon Purchase of Notes..............35
  SECTION 3.15.   Repayment to the Company....................................................36

ARTICLE 4  COVENANTS .........................................................................36

  SECTION 4.01.   Payment of Principal, Premium, Interest on the Notes........................36
  SECTION 4.02.   SEC and Other Reports.......................................................36
  SECTION 4.03.   Compliance Certificate......................................................37
  SECTION 4.04.   Further Instruments and Acts................................................37
  SECTION 4.05.   Maintenance of Office or Agency.............................................37
  SECTION 4.06.   Delivery of Certain Information.............................................38
  SECTION 4.07.   Subordination...............................................................38

ARTICLE 5  MERGERS AND SALES OF ASSETS........................................................38

  SECTION 5.01.   When Company May Merge or Transfer Assets...................................38

ARTICLE 6  DEFAULTS AND REMEDIES..............................................................39

  SECTION 6.01.   Events of Default...........................................................39
  SECTION 6.02.   Acceleration................................................................41
  SECTION 6.03.   Other Remedies..............................................................42
  SECTION 6.04.   Waiver of Past Defaults.....................................................42
  SECTION 6.05.   Control by Majority.........................................................42
  SECTION 6.06.   Limitation on Suits.........................................................42
  SECTION 6.07.   Rights of Holders to Receive Payment........................................43
  SECTION 6.08.   Collection Suit by Trustee..................................................43
  SECTION 6.09.   Trustee May File Proofs of Claim............................................43
  SECTION 6.10.   Priorities..................................................................44
  SECTION 6.11.   Undertaking for Costs.......................................................44
  SECTION 6.12.   Waiver of Stay, Extension or Usury Laws.....................................45

ARTICLE 7  TRUSTEE ...........................................................................45

  SECTION 7.01.   Duties and Responsibilities of the Trustee;
                  During Default; Prior to Default............................................45
  SECTION 7.02.   Certain Rights of the Trustee...............................................46
  SECTION 7.03.   Trustee Not Responsible for Recitals, Disposition of
                  Notes or Application of Proceeds Thereof....................................48
  SECTION 7.04.   Trustee and Agents May Hold Notes; Collections, etc.........................48
  SECTION 7.05.   Moneys Held by Trustee......................................................48
  SECTION 7.06.   Compensation and Indemnification of Trustee and Its Prior Claim.............48
  SECTION 7.07.   Right of Trustee to Rely on Officers' Certificate, etc......................49
  SECTION 7.08.   Conflicting Interests.......................................................49
  SECTION 7.09.   Persons Eligible for Appointment as Trustee.................................49



                                      -ii-


                                                                                        
  SECTION 7.10.   Resignation and Removal; Appointment of Successor Trustee...................49
  SECTION 7.11.   Acceptance of Appointment by Successor Trustee..............................51
  SECTION 7.12.   Merger, Conversion, Consolidation or Succession to
                  Business of Trustee.........................................................51
  SECTION 7.13.   Preferential Collection of Claims Against the Company.......................52
  SECTION 7.14.   Reports by the Trustee......................................................52
  SECTION 7.15.   Trustee to Give Notice of Default, But May Withhold in Certain
                  Circumstances...............................................................52

ARTICLE 8  SATISFACTION AND DISCHARGE OF INDENTURE............................................52

  SECTION 8.01.   Termination of the Company's Obligations....................................52
  SECTION 8.02.   Defeasance and Discharge of Indenture.......................................53
  SECTION 8.03.   Defeasance of Certain Obligations...........................................55
  SECTION 8.04.   Application of Trust Money..................................................55
  SECTION 8.05.   Reinstatement...............................................................55
  SECTION 8.06.   Defeasance and Certain Other Events of Default..............................56
  SECTION 8.07.   Repayment of the Company....................................................56
  SECTION 8.08.   Conversion of Notes Upon Discharge..........................................56

ARTICLE 9  AMENDMENTS ........................................................................56

  SECTION 9.01.   Without Consent of Holders..................................................56
  SECTION 9.02.   With Consent of Holders.....................................................57
  SECTION 9.03.   Compliance with Trust Indenture Act.........................................58
  SECTION 9.04.   Revocation and Effect of Consents, Waivers and Actions......................58
  SECTION 9.05.   Notation on or Exchange of Notes............................................58
  SECTION 9.06.   Trustee to Sign Supplemental Indentures.....................................59
  SECTION 9.07.   Effect of Supplemental Indentures...........................................59

ARTICLE 10  CONVERSION .......................................................................59

  SECTION 10.01.  Conversion Right and Conversion Price.......................................59
  SECTION 10.02.  Exercise of Conversion Right................................................60
  SECTION 10.03.  Fractions of Shares.........................................................61
  SECTION 10.04.  Adjustment of Conversion Price..............................................61
  SECTION 10.05.  Notice of Adjustments of Conversion Price...................................71
  SECTION 10.06.  Notice Prior to Certain Actions.............................................71
  SECTION 10.07.  Company to Reserve Common Stock.............................................72
  SECTION 10.08.  Taxes on Conversions........................................................72
  SECTION 10.09.  Covenant as to Common Stock.................................................73
  SECTION 10.10.  Cancellation of Converted Notes.............................................73
  SECTION 10.11.  Effect of Reclassification, Consolidation, Merger or Sale...................73
  SECTION 10.12.  Responsibility of Trustee for Conversion Provisions.........................74



                                      -iii-


                                                                                        
ARTICLE 11  SUBORDINATION ....................................................................75

  SECTION 11.01.  Agreement to Subordinate....................................................75
  SECTION 11.02.  Liquidation; Dissolution; Bankruptcy........................................75
  SECTION 11.03.  Default on Designated Senior Indebtedness...................................75
  SECTION 11.04.  Acceleration of Notes.......................................................77
  SECTION 11.05.  When Distribution Must Be Paid Over.........................................77
  SECTION 11.06.  Notice by the Company.......................................................77
  SECTION 11.07.  Subrogation.................................................................77
  SECTION 11.08.  Relative Rights.............................................................78
  SECTION 11.09.  Subordination May Not Be Impaired by the Company............................78
  SECTION 11.10.  Distribution or Notice to Representative....................................78
  SECTION 11.11.  Rights of Trustee and Paying Agent..........................................79

ARTICLE 12  SECURITY .........................................................................79

  SECTION 12.01. Security.....................................................................79

ARTICLE 13  MISCELLANEOUS ....................................................................80

  SECTION 13.01.  Trust Indenture Act Controls................................................80
  SECTION 13.02.  Notices. ...................................................................81
  SECTION 13.03.  Communication by Holders with Other Holders.................................81
  SECTION 13.04.  Certificate and Opinion as to Conditions Precedent..........................82
  SECTION 13.05.  Statements Required in Certificate or Opinion...............................82
  SECTION 13.06.  Separability Clause.........................................................82
  SECTION 13.07.  Rules by Trustee, Paying Agent, Conversion Agent and Registrar..............83
  SECTION 13.08.  Legal Holidays..............................................................83
  SECTION 13.09.  GOVERNING LAW...............................................................83
  SECTION 13.10.  No Recourse Against Others..................................................83
  SECTION 13.11.  Successors..................................................................83
  SECTION 13.12.  Multiple Originals..........................................................83



EXHIBITS

Exhibit A-1  Form of Global Note
Exhibit A-2  Form of Certificated Note
Exhibit B-1  Transfer Certificate
Exhibit B-2  Form of Letter to Be Delivered by Accredited Investors

                                      -iv-


          INDENTURE dated as of February 1, 2002 between OSI PHARMACEUTICALS,
INC., a Delaware corporation (the "Company"), and The Bank of New York, a New
York banking corporation, as Trustee hereunder (the "Trustee").

                             RECITALS OF THE COMPANY

          The Company has duly authorized the creation of an issue of its 4%
Convertible Senior Subordinated Notes due 2009 (herein called the "Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.

          All things necessary to make the Notes, when the Notes are executed by
the Company and authenticated and delivered hereunder, the valid obligations of
the Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done. Further, all things
necessary to duly authorize the issuance of the Common Stock of the Company
issuable upon the conversion of the Notes, and to duly reserve for issuance the
number of shares of Common Stock issuable upon such conversion, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                    ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          SECTION 1.01. DEFINITIONS.

          For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

          (1) the terms defined in this Article have the meanings assigned to
     them in this Article and include the plural as well as the singular;

          (2) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with GAAP; and

          (3) the words "herein", "hereof" and "hereunder" and other words of
     similar import refer to this Indenture as a whole and not to any particular
     Article, Section or other subdivision.

          "AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct or
cause the direction of the management and policies of such person,



directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

          "APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Note or beneficial interest therein, the rules
and procedures of the Depositary for such Note, in each case to the extent
applicable to such transaction and as in effect from time to time.

          "BOARD OF DIRECTORS" means either the board of directors of the
Company or any duly authorized committee of such board.

          "BOARD RESOLUTION" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.

          "BUSINESS DAY" means each day of the year, other than a Saturday or a
Sunday, on which banking institutions are not required or authorized to close in
the City of New York.

          "CAPITAL STOCK" of any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.

          "CERTIFICATED NOTES" means Notes that are in the form of the Notes
attached hereto as Exhibit A-2.

          "CLOSING PRICE" of any security on any date of determination means:

          (1) the closing sale price (or, if no closing sale price is reported,
     the last reported sale price) of such security on the New York Stock
     Exchange on such date;

          (2) if such security is not listed for trading on the New York Stock
     Exchange on any such date, the closing sale price as reported in the
     composite transactions for the principal U.S. securities exchange on which
     such security is so listed;

          (3) if such security is not so listed on a U.S. national or regional
     securities exchange, the closing bid price as reported by the NASDAQ Stock
     Market;

          (4) if such security is not so reported, the last quoted bid price for
     such security in the over-the-counter market as reported by the National
     Quotation Bureau or similar organization; or

          (5) if such bid price is not available, the average of the mid-point
     of the last bid and ask prices of such security on such date from at least
     three nationally recognized independent investment banking firms retained
     for this purpose by the Company.

                                       -2-


          "COMMON STOCK" means the Common Stock, par value $0.01 per share, of
the Company as it exists on the date of this Indenture, or, subject to
Section 10.11 hereof, any shares of Capital Stock of the Company into which the
Common Stock shall be reclassified or changed.

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

          "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any two Officers.

          "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 5 Penn Plaza, Thirteenth Floor, New
York, New York, 10001, attention: Corporate Trust Administration, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).

          "DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "DESIGNATED SENIOR INDEBTEDNESS" means any Senior Indebtedness which,
at the time of determination, has an aggregate principal amount outstanding of
at least $20.0 million and that has been specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" of the Company.

          "DOLLAR" or "U.S.$" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.

          "EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934 (or any
successor statute), as amended from time to time.

          "GAAP" means accounting principles generally accepted in the United
States of America, as in effect from time to time.

          "GLOBAL NOTES" means Notes that are in the form of the Notes attached
hereto as Exhibit A-1, including, to the extent that such Notes are required to
bear the Legend required by Section 2.06(f), 144A Global Notes.

          "GOVERNMENT SECURITIES" means the direct obligations of, obligations
fully guaranteed by, or participations in pools consisting solely of obligations
of or obligations guaranteed by the United States of America for the payment of
which guarantee or obligations

                                       -3-


the full faith and credit of the United States of America is pledged and which
are not callable or redeemable at the option of the issuer thereof.

          "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, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.

          "HOLDER" or "NOTEHOLDER" means a person in whose name a Note is
registered on the Registrar's books.

          "INDEBTEDNESS" means, with respect to any person, without duplication:

          (a) all liabilities of such person for borrowed money (including
overdrafts) or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities incurred in
the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such person in connection with any
letters of credit and acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities;

          (b) all obligations of such person evidenced by bonds, notes,
debentures or other similar instruments;

          (c) indebtedness of such person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business;

          (d) all capitalized lease obligations of such person;

          (e) all obligations of such person under or in respect of interest
rate agreements or currency agreements;

          (f) all indebtedness referred to in (but not excluded from) the
preceding clauses of other persons and all dividends of other persons, the
payment of which is secured by (or for which the holder of such indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien or with
respect to property (including, without limitation, accounts and contract
rights) owned by such person, even though such person has not assumed or become
liable for the payment of such indebtedness (the amount of such obligation being
deemed to be the lesser of the value of such property or asset or the amount of
the obligation so secured);

          (g) all Guarantees by such person of indebtedness referred to in this
definition of any other person;

                                       -4-


          (h) all Redeemable Capital Stock of such person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends; and

          (i) the present value of the obligation of such person as lessee for
net rental payments (excluding all amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water, utilities and
similar charges to the extent included in such rental payments) during the
remaining term of the lease included in any sale and leaseback transaction
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.

          "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.

          "INSTITUTIONAL ACCREDITED INVESTOR" means an institutional "accredited
investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.

          "INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.

          "INTEREST RATE" means 4% per annum.

          "ISSUE DATE" of any Note means the date on which the Note was
originally issued or deemed issued as set forth on the face of the Note.

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

          "NOTES" has the meaning ascribed to it in the first paragraph of this
Indenture under the caption "Recitals of the Company."

          "OFFICER" means the Chairman of the Board, the Vice Chairman, the
Chief Executive Officer, the President, any Executive Vice President, any Senior
Vice President, any Vice President, the Treasurer or the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company.

          "OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be

                                       -5-


signed by an authorized financial or accounting Officer of the Company but need
not contain the information specified in Sections 13.04 and 13.05.

          "OPTIONAL REDEMPTION DATE" means the date specified in the Optional
Redemption Notice as the date for Optional Redemption of the Notes, in
accordance with the terms of the Notes and this Indenture.

          "144A GLOBAL NOTE" means a Global Note in the form of the Note
attached hereto as Exhibit A-1, and that is deposited with and registered in the
name of the Depositary, representing Notes sold in reliance on Rule 144A under
the Securities Act.

          "OPINION OF COUNSEL" means a written opinion containing the
information specified in Sections 13.04 and 13.05, from legal counsel. The
counsel may be an employee of, or counsel to, the Company.

          "PERMITTED PAYMENTS" shall mean payments on the Notes derived from the
Pledged Securities that are pledged for the benefit of the Holders of the Notes
in accordance with the terms and provisions of the Pledge Agreement.

          "PERMITTED JUNIOR SECURITIES" shall mean any payment or distribution
in the form of equity securities or subordinated securities of the Company or
any successor obligor that, in the case of any such subordinated securities, are
subordinated in right of payment to all Senior Indebtedness that may at the time
be outstanding to at least the same extent as the Notes are so subordinated.

          "PERSON" or "PERSON" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.

          "PLEDGE ACCOUNT" means an account established by the Trustee pursuant
to the terms of the Pledge Agreement for the deposit of the Pledged Securities
purchased by the Company with a portion of the proceeds from the sale of the
Notes.

          "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, made by the Company in favor of the Trustee, governing the disbursement
of funds from the Pledge Account, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.

          "PLEDGED SECURITIES" means the Government Securities to be purchased
by the Company and held in the Pledge Account in accordance with the Pledge
Agreement.

          "PRINCIPAL" of a Note means the principal amount due on the Stated
Maturity as set forth on the face of the Note.

                                       -6-


          "PROVISIONAL REDEMPTION DATE" means the date specified in the
Provisional Redemption Notice as the date for Provisional Redemption of the
Notes, in accordance with the terms of the Notes and this Indenture.

          "REDEEMABLE CAPITAL STOCK" means any class of the Company's Capital
Stock that, either by its terms, by the terms of any securities into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed
(whether by sinking fund or otherwise) prior to the date that is 91 days after
the final scheduled maturity of the Notes, or is redeemable at the option of the
holder thereof at any time prior to such date, or is convertible into or
exchangeable for debt securities at any time prior to such date (unless it is
convertible or exchangeable solely at the Company's option).

          "REDEMPTION DATE" or "REDEMPTION DATE" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture. In the case of a Provisional Redemption pursuant to Section 3.01
hereof, the Redemption Date shall mean the Provisional Redemption Date, and, in
the case of an Optional Redemption pursuant to Section 3.02 hereof, the
Redemption Date shall mean the Optional Redemption Date.

          "REDEMPTION NOTICE" or "NOTICE OF REDEMPTION" shall mean the Optional
Redemption Notice or Provisional Redemption Notice, as applicable, given by the
Company to the Holders in accordance with Section 3.05 hereof.

          "REDEMPTION PRICE" or "REDEMPTION PRICE" when used with respect to any
security to be redeemed, means the price at which such security is to be
redeemed (including accrued and unpaid interest, if any) pursuant to the terms
of this Indenture. In the case of a Provisional Redemption pursuant to
Section 3.01 hereof, the Redemption Price shall mean the Provisional Redemption
Price, and, in the case of an Optional Redemption pursuant to Section 3.02
hereof, the Redemption Price shall mean the Optional Redemption Price.

          "REGISTRATION RIGHTS AGREEMENT" shall mean the registration rights
agreement dated the date hereof between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill,
Inc. and Lazard Freres & Co. LLC.

          "REGULAR RECORD DATE" means, with respect to the interest payable on
any Interest Payment Date, the close of business on January 15 and July 15
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date.

          "RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject.

                                       -7-


          "RESTRICTED NOTE" means a Note required to bear the Legend, as set
forth in the form of Note attached to this Indenture as Exhibit A-1 and Exhibit
A-2.

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

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES ACT" means the United States Securities Act of 1933 (or
any successor statute), as amended from time to time.

          "SENIOR INDEBTEDNESS" or "SENIOR DEBT" means:

          (a) all Indebtedness of the Company, now or hereafter existing, under
or in respect of the documents and instruments executed in connection therewith,
whether for principal, premium, if any, interest (including interest accruing
after the filing of, or which would have accrued but for the filing of, a
petition by or against the Company under bankruptcy law, whether or not such
interest is allowed as a claim after such filing in any proceeding under such
law) and other amounts due in connection therewith (including, without
limitation, any fees, premiums, expenses, reimbursement obligations with respect
to letters of credit and indemnities), whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed; and

          (b) the principal of, premium, if any, and interest on all other
Indebtedness of the Company (other than the Notes), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating
or evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to
the Notes.

          Notwithstanding the foregoing, "Senior Indebtedness" shall not
include:

          (a) Indebtedness evidenced by the Notes;

          (b) Indebtedness of the Company that is expressly subordinated in
right of payment to Senior Indebtedness;

          (c) Indebtedness or other obligations of the Company that by its terms
ranks equal or junior in right of payment to the Notes;

          (d) Indebtedness of the Company that, by operation of law, is
subordinate to any general unsecured obligations of the Company;

          (e) any liability for federal, state or local taxes or other taxes,
owed or owing by the Company;

                                       -8-


          (f) accounts payable or other liabilities owed or owing by the Company
to trade creditors (including Guarantees thereof or instruments evidencing such
liabilities);

          (g) amounts owed by the Company for compensation to employees or for
services rendered to the Company;

          (h) Indebtedness of the Company to any Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries;

          (i) Capital Stock of the Company;

          (j) Indebtedness evidenced by any Guarantee of any Indebtedness
ranking equal or junior in right of payment to the Notes; and

          (k) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11 of the United States Code, is without
recourse to the Company.

          "SIGNIFICANT SUBSIDIARY" means a Subsidiary of the Company, including
its Subsidiaries, which meets any of the following conditions:

          (a) the Company's and its other Subsidiaries' investments in and
advances to such Subsidiary exceed 10 percent of the total assets of the Company
and its Subsidiaries consolidated as of the end of any two of the three most
recently completed fiscal years; or

          (b) the Company's and its other Subsidiaries' proportionate share of
the total assets of such Subsidiary exceeds 10 percent of the total assets of
the Company and its Subsidiaries consolidated as of the end of any two of the
three most recently completed fiscal years; or

          (c) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of such Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated as of the end of any two of the three most recently completed
fiscal years.

          "STATED MATURITY" when used with respect to any Note or any
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable.

          "SUBSIDIARY" means (i) a corporation, a majority of whose Capital
Stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more subsidiaries of the Company or by the Company and one or more
subsidiaries of the Company, (ii) a partnership in which the Company or a
subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a subsidiary of the Company or the Company
and one or more subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest

                                       -9-


or (y) the power to elect or direct the election of a majority of the directors
or other governing body of such person.

          "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, on the
National Association of Notes Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.

          "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.

          "UNITED STATES" means the United States of America (including the
States and the District of Columbia), its territories, its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands) and other areas subject to its
jurisdiction.

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

          SECTION 1.02. OTHER DEFINITIONS.



                                                                   Defined in
     Term                                                            Section
     ----                                                            -------
                                                                  
     "Act"........................................................   1.05(a)
     "Agent Members"..............................................   2.12(f)


                                      -10-


                                                            
     "Bankruptcy Law".............................................   6.01
     "Change of Control"..........................................   3.10(a)
     "Change of Control Repurchase Date"..........................   3.10(a)
     "Change of Control Repurchase Notice"........................   3.10(d)
     "Change of Control Repurchase Price".........................   3.10(a)
     "Conversion Agent"...........................................   2.03
     "Conversion Price"...........................................  10.01
     "Current Market Price".......................................  10.04(h)
     "Custodian"..................................................   6.01
     "Depositary".................................................   2.01(a)
     "DTC"........................................................   2.01(a)
     "Event of Default"...........................................   6.01
     "excluded securities"........................................  10.04(d)
     "Expiration Time"............................................  10.04(f)
     "fair market value"..........................................  10.04(h)
     "Legal Holiday"..............................................  13.08
     "Legend".....................................................   2.06(f)
     "Make-Whole Payment".........................................   3.01
     "Non-Electing Share".........................................  10.11
     "Non-Payment Default"........................................  11.03(b)
     "Notice Date"................................................   3.01(a)
     "Notice of Default"..........................................   6.01
     "Optional Redemption"........................................   3.02
     "Optional Redemption Notice".................................   3.05
     "Paying Agent"...............................................   2.03
     "Payment Blockage Period"....................................  11.03(b)
     "Payment Default"............................................  11.03(a)
     "Provisional Redemption".....................................   3.01
     "Provisional Redemption Notice"..............................   3.05
     "Purchased Shares"...........................................  10.04(f)
     "QIB"........................................................   2.01(a)
     "Record Date"................................................  10.04(g)
     "Reference Period"...........................................  10.04(d)
     "Registrar"..................................................   2.03
     "Rule 144A Information"......................................   4.06
     "Trigger Event"..............................................  10.04(d)

     

          SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

          Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

          The following TIA term used in this Indenture has the following
meaning: "obligor" on the Notes means the Company. All other TIA terms used in
this Indenture that are defined by the TIA, defined by TIA reference to another
statute or defined by SEC rule have the meanings assigned to them by such
definitions.

                                      -11-


          SECTION 1.04. RULES OF CONSTRUCTION.

          Unless the context otherwise requires:

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

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

          (c) "or" is not exclusive;

          (d) "including" means including, without limitation; and

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

          SECTION 1.05. 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 their agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.

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

          The ownership of Notes shall be proved by the register for the Notes
or by a certificate of the Registrar.

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

                                      -12-


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

                                    ARTICLE 2

                                    THE NOTES

          SECTION 2.01. FORM AND DATING.

          The Notes and the Trustee's certificate of authentication to be borne
by such Notes shall be substantially in the forms annexed hereto as Exhibits A-1
and A-2, which forms of Notes are incorporated in and made a part of this
Indenture. The terms and provisions contained in the forms of Note shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.

          Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the notes may be
listed or designated for issuance, or to conform to usage. The Notes shall be
dated the date of their authentication.

          (a) 144A GLOBAL NOTES. Notes offered and sold within the United States
to qualified institutional investors as defined in Rule 144A ("QIBs") in
reliance on Rule 144A shall be issued, initially in the form of one or more 144A
Global Notes, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary, and registered in the name of The
Depository Trust Company, New York, New York ("DTC"), or the nominee thereof
(such depositary, or any successor thereto, and any such nominee being
hereinafter referred to as the "Depositary"), duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the 144A Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary as
hereinafter provided.

                                      -13-


          (b) CERTIFICATED NOTES. Notes not issued as interests in Global Notes
will be issued in certificated form substantially in the form of Exhibit A-2
attached hereto. Except as provided in this Section 2.01, 2.06 or 2.12, owners
of beneficial interests in Global Notes will not be entitled to receive physical
delivery of Certificated Notes. Notes offered and sold within the United States
to Institutional Accredited Investors shall be issued, initially in the form of
a Certificated Note, duly executed by the Company and authenticated by the
Trustee as hereinafter provided.

          (c) GLOBAL NOTES IN GENERAL. Each Global Note shall represent such of
the outstanding Notes as shall be specified therein, and each Global Note shall
provide that it shall represent the aggregate amount of outstanding Notes from
time to time endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and conversions.

          Any adjustment of the aggregate principal amount of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary as hereinafter
provided.

          (d) BOOK-ENTRY PROVISIONS. This Section 2.01(d) shall apply only to
Global Notes deposited with or on behalf of the Depositary.

          The Company shall execute and the Trustee shall, in accordance with
Section 2.02 hereof, authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depositary or its nominee, (b)
shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions and (c) shall bear legends substantially to the
following effect:

     "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
     THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
     TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
     THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
     AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
     HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
     AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
     PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
     WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
     HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
     NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
     THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
     GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
     RESTRICTIONS

                                      -14-


     SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE
     HEREOF."

          SECTION 2.02. EXECUTION AND AUTHENTICATION.

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

          Notes bearing the manual or facsimile signatures of individuals who
were at the time of the execution of the Notes the proper Officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Notes or did not hold such offices at the date of authentication of such
Notes.

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

          The Trustee shall authenticate and deliver Notes for original issue in
an aggregate principal amount of up to $230,000,000 upon a Company Order without
any further action by the Company. The aggregate principal amount of Notes
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07.

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

          SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

          The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Notes may be presented for purchase or payment ("Paying Agent")
and an office or agency where Notes may be presented for conversion (together
with any other person authorized by the Company to convert Notes in accordance
with the provisions of Article 10 hereof, the "Conversion Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-Registrars, one or more additional Paying Agents
and one or more additional Conversion Agents. The term Paying Agent includes any
additional paying agent, including any named pursuant to Section 4.05. The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 4.05.

          The Company shall enter into an appropriate agency agreements with any
Registrar, Paying Agent, Conversion Agent or co-Registrar, if other than the
Trustee. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such, and shall be entitled
to appropriate compensation therefor pursuant to Section 7.06. The

                                      -15-


Company or any Subsidiary, or an Affiliate of either of them, may act as Paying
Agent, Registrar, Conversion Agent and/or co-Registrar.

          The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Notes.

          SECTION 2.04. PAYING AGENT TO HOLD MONEY AND NOTES IN TRUST.

          Except as otherwise provided herein, on or prior to each due date of
payments in respect of any Note, the Company shall deposit with the Paying Agent
a sum of money (in immediately available funds if deposited on the due date) or,
if applicable in accordance with the provisions of Section 3.10 hereof, shares
of Common Stock sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (if other than the Trustee) to agree in
writing that such Paying Agent shall (a) hold in trust for the benefit of
Noteholders or the Trustee all money and Common Stock held by the Paying Agent
for the making of payments in respect of the Notes and (b) notify the Trustee of
any default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and Common Stock
so held in trust. If the Company or a Subsidiary, or an Affiliate of either of
them, acts as Paying Agent, it shall segregate the money and Common Stock held
by it as Paying Agent and hold it as a separate trust fund. The Company may, at
any time, require a Paying Agent to pay all money and Common Stock held by it to
the Trustee and to account for any funds and Common Stock disbursed by it. Upon
doing so, the Paying Agent shall have no further liability for such money or
Common Stock.

          SECTION 2.05. NOTEHOLDER 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
Noteholders. If the Trustee is not the Registrar, the Company shall cause to be
furnished to the Trustee, at least semiannually, on August 1 and February 1 of
each year, a listing of Noteholders dated within 15 days of the date on which
the list is furnished and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Noteholders.

          SECTION 2.06. TRANSFER AND EXCHANGE.

          Subject to Section 2.12 hereof, (a) upon surrender for registration of
transfer of any Note, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Noteholder or such
Noteholder's attorney duly authorized in writing, at the office or agency of the
company designated as Registrar or co-Registrar pursuant to Section 2.03, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations, of a like aggregate principal amount.
The Company shall not charge a service charge for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed

                                      -16-


in connection with the transfer or exchange of the Notes from the Noteholder
requesting such transfer or exchange.

          At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder's attorney duly authorized in writing, at such
office or agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Holder making the exchange is entitled to receive.

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

          (b) Notwithstanding any provision to the contrary herein, so long as a
Global Note remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Note, 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
Note shall be limited to transfers of such Global Note in whole, or in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.

          (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 Notes.

          (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 Notes upon transfer or
exchange of Notes.

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

          (f) If Notes are issued upon the transfer, exchange or replacement of
Notes subject to restrictions on transfer and bearing the legends set forth on
the form of Note attached hereto as Exhibits A-1 and A-2 setting forth such
restrictions (collectively, the "Legend"), or if a request is made to remove the
Legend on a Note, the Notes so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A or Rule 144 under the Securities Act or that such Notes are not

                                      -17-


"restricted" within the meaning of Rule 144 under the Securities Act. Upon (i)
provision of such satisfactory evidence, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Note pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Note that
does not bear the Legend. If  the Legend is removed from the face of a Note and
the Note is subsequently held by an Affiliate of the Company, the Legend shall
be reinstated.

          SECTION 2.07. REPLACEMENT NOTES.

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

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

          Upon the issuance of any new Notes under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

          Every new Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note 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 Notes duly issued hereunder.

          The provisions of this Section 2.07 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 Notes.

          SECTION 2.08. OUTSTANDING NOTES; DETERMINATIONS OF HOLDERS' ACTION.

          Notes outstanding at any time are all the Notes authenticated by the
Trustee, except for those cancelled by it or delivered to it for cancellation,
those paid pursuant to Section 2.07 and those described in this Section 2.08 as
not outstanding. A Note does not cease to be outstanding because the Company or
an Affiliate thereof holds the Note; PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite principal amount of the outstanding Notes
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Company or any other
obligor upon the Notes or any

                                      -18-


Affiliate of the Company 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 Notes which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Subject to the foregoing,
only Notes outstanding at the time of such determination shall be considered in
any such determination (including, without limitation, determinations pursuant
to Articles 6 and 9).

          If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note 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 the Change of Control
Repurchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Notes payable on that date, then immediately after
such Redemption Date, Change of Control Repurchase Date or Stated Maturity, as
the case may be, such Notes shall cease to be outstanding and interest on such
Notes shall cease to accrue; PROVIDED THAT, if such Notes are to be redeemed,
the Redemption Notice with respect thereto has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.

          If a Note is converted in accordance with Article 10 hereof, then,
from and after the time of conversion on the conversion date, such Note shall
cease to be outstanding and interest shall cease to accrue on such Note.

          SECTION 2.09. TEMPORARY NOTES.

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

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

                                      -19-


          SECTION 2.10. CANCELLATION.

          All Notes surrendered for payment, purchase by the Company,
conversion, redemption or registration of transfer or exchange pursuant to the
provisions of this Indenture shall, if surrendered to any person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. The Company may not issue new Notes to replace Notes
it has paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 10. No Notes shall be authenticated in lieu of or
in exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be disposed of the Trustee in its customary manner and the Trustee shall
deliver a certificate of destruction to the Company.

          SECTION 2.11. PERSONS DEEMED OWNERS.

          Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of the Note or the payment of any
Redemption Price or Change of Control Repurchase Price in respect thereof, and
interest thereon, for the purpose of conversion and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee, shall be affected by notice
to the contrary.

          SECTION 2.12. GLOBAL NOTES.

          (a) Notwithstanding any other provisions of this Indenture or the
Notes, (A) transfers of a Global Note, in whole or in part, shall be made only
in accordance with Section 2.06 and Section 2.12(a)(i), (B) transfer of a
beneficial interest in a Global Note for a Certificated Note shall comply with
Section 2.06 and Section 2.12(a)(ii) below, and (C) transfers of a Certificated
Note shall comply with Section 2.06 and Section 2.12(a)(iii) and (iv) below.

              (i)  TRANSFER OF GLOBAL NOTE. A Global Note 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 (i) shall not prohibit any transfer
of a Note that is issued in exchange for a Global Note but is not itself a
Global Note. No transfer of a Note to any Person shall be effective under this
Indenture or the Notes unless and until such Note has been registered in the
name of such Person. Nothing in this Section 2.12(a)(i) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Note effected in
accordance with the other provisions of this Section 2.12(a).

              (ii) RESTRICTIONS ON TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL
NOTE FOR A CERTIFICATED NOTE. A beneficial interest in a Global Note may not be
exchanged for a Certificated Note except upon satisfaction of the requirements
set forth below. Upon receipt by the Trustee of a transfer of a beneficial
interest in a Global Note in accordance with Applicable Procedures for a
Certificated Note in the form satisfactory to the Trustee, together with:

                                      -20-


               (a) so long as the Notes are Restricted Notes, certification, in
          the form set forth in Exhibit B-1, and, if requested by the Company or
          the Registrar, certification in the form set forth in Exhibit B-2,
          that such beneficial interest in the Global Note is being transferred
          to an Institutional Accredited Investor;

               (b) written instructions to the Trustee to make, or direct the
          Registrar to make, an adjustment on its books and records with respect
          to such Global Note to reflect a decrease in the aggregate principal
          amount of the Notes represented by the Global Note, such instructions
          to contain information regarding the Depositary account to be credited
          with such decrease; and

               (c) if the Company so requests, an opinion of counsel or other
          evidence reasonably satisfactory to them as to the compliance with the
          restrictions set forth in the Legend,

then, the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of Notes represented by the
Global Note to be decreased by the aggregate principal amount of the
Certificated Note to be issued, shall issue such Certificated Note and shall
debit or cause to be debited to the account of the Person specified in such
instructions a beneficial interest in the Global Note equal to the principal
amount of the Certificated Note so issued.

             (iii) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. When
Certificated Notes are presented to the Registrar with a request:

                   (x)  to register the transfer of such Certificated Notes;
                        or
                   (y)  to exchange such Certificated Notes for an equal
                        principal amount of Certificated Notes of other
                        authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Notes surrendered for transfer or exchange:

               (a) shall be duly endorsed or accompanied by a written instrument
          of transfer in form reasonably satisfactory to the Company and the
          Registrar, duly executed by the Holder thereof or his attorney duly
          authorized in writing; and

               (b) so long as such Notes are Restricted Notes, such Notes are
          being transferred or exchanged pursuant to an effective registration
          statement under the Securities Act or pursuant to clause (A), (B) or
          (C) below, and are accompanied by the following additional information
          and documents, as applicable:

                   (A) if such Certificated Notes are being delivered to the
               Registrar by a Holder for registration in the name of such
               Holder, without transfer, a certification from such Holder to
               that effect; or

                                      -21-


                   (B) if such Certificated Notes are being transferred to the
               Company, a certification to that effect; or

                   (C) if such Certificated Notes are being transferred pursuant
               to an exemption from registration, (i) a certification to that
               effect (in the form set forth in Exhibits B-1 and B-2, if
               applicable) and (ii) if the Company so requests, an opinion of
               counsel or other evidence reasonably satisfactory to them as to
               the compliance with the restrictions set forth in the Legend.

              (iv) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A
BENEFICIAL INTEREST IN A GLOBAL NOTE. A Certificated Note may not be exchanged
for a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below.

          Upon receipt by the Trustee of a Certificated Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:

               (a) so long as the Notes are Restricted Notes, certification, in
          the form set forth in Exhibit B-1, that such Certificated Note is
          being transferred to a QIB in accordance with Rule 144A; and

               (b) written instructions directing the Trustee to make, or to
          direct the Registrar to make, an adjustment on its books and records
          with respect to such Global Note to reflect an increase in the
          aggregate principal amount of the Notes represented by the Global
          Note, such instructions to contain information regarding the
          Depositary account to be credited with such increase, then the Trustee
          shall cancel such Certificated Note and cause, or direct the Registrar
          to cause, in accordance with the standing instructions and procedures
          existing between the Depositary and the Registrar, the aggregate
          principal amount of Notes represented by the Global Note to be
          increased by the aggregate principal amount of the Certificated Note
          to be exchanged, and shall credit or cause to be credited to the
          account of the Person specified in such instructions a beneficial
          interest in the Global Note equal to the principal amount of the
          Certificated Note so cancelled. If no Global Notes are then
          outstanding, the Company shall issue and the Trustee shall
          authenticate, upon written order of the Company in the form of an
          Officers' Certificate, a new Global Note in the appropriate principal
          amount.

               (c) Subject to the succeeding paragraph, every Note shall be
          subject to the restrictions on transfer provided in the Legend
          including the delivery of an opinion of counsel, if so provided.
          Whenever any Restricted Note is presented or surrendered for
          registration of transfer or for exchange for a Note registered in a
          name other than that of the Holder, such Note must be accompanied by a
          certificate in substantially the form set forth in Exhibit B-1, dated
          the date of such surrender and signed by the Holder of such Note, as
          to compliance with such restrictions on transfer. The Registrar shall
          not be required to accept for such registration of transfer or
          exchange any Note not so accompanied by a properly completed
          certificate.

                                      -22-


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

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

               (f) The provisions of clauses (1), (2), (3) and (4) below shall
          apply only to Global Notes:

                   (1) Notwithstanding any other provisions of this Indenture or
               the Notes, except as provided in Section 2.12(a)(ii), a Global
               Note shall not be exchanged in whole or in part for a Note
               registered in the name of any Person other than the Depositary or
               one or more nominees thereof, provided that a Global Note may be
               exchanged for Notes registered in the names of any person
               designated by the Depositary in the event that (i) the Depositary
               has notified the Company that it is unwilling or unable to
               continue as Depositary for such Global Note or such Depositary
               has ceased to be a "clearing agency" registered under the
               Exchange Act, and a successor Depositary is not appointed by the
               Company within 90 days or (ii) an Event of Default has occurred
               and is continuing with respect to the Notes. Any Global Note
               exchanged pursuant to clause (i) above shall be so exchanged in
               whole and not in part, and any Global Note exchanged pursuant to
               clause (ii) above may be exchanged in whole or from time to time
               in part as directed by the Depositary. Any Note issued in
               exchange for a Global Note or any portion thereof shall be a
               Global Note; PROVIDED THAT any such Note so issued that is
               registered in the name of a Person other than the Depositary or a
               nominee thereof shall not be a Global Note.

                                      -23-


                   (2) Notes issued in exchange for a Global Note 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 Note or portion thereof to be
               so exchanged, shall be registered in such names and be in such
               authorized denominations as the Depositary shall designate and
               shall bear the applicable legends provided for herein. Any Global
               Note to be exchanged in whole shall be surrendered by the
               Depositary to the Trustee, as Registrar. With regard to any
               Global Note to be exchanged in part, either such Global Note
               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 Note, 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 Note issuable on such exchange to or
               upon the order of the Depositary or an authorized representative
               thereof.

                   (3) Subject to the provisions of clause (5) 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
               Notes.

                   (4) In the event of the occurrence of any of the events
               specified in clause (1) above, the Company will promptly make
               available to the Trustee a reasonable supply of Certificated
               Notes in definitive, fully registered form, without interest
               coupons.

                   (5) 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 Note
               registered in the name of the Depositary or any nominee thereof,
               or under any such Global Note, and the Depositary or such
               nominee, as the case may be, may be treated by the Company, the
               Trustee and any agent of the Company or the Trustee as the
               absolute owner and holder of such Global Note for all purposes
               whatsoever. Notwithstanding the foregoing, nothing herein shall
               prevent the Company, the Trustee or any agent of the Company or
               the Trustee from giving effect to any written certification,
               proxy or other authorization furnished by the Depositary or such
               nominee, as the case may be, or 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 Note.

                                      -24-


          SECTION 2.13. CUSIP NUMBERS.

          The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Company and the Trustee shall use "CUSIP"
numbers in Redemption Notices and other notices to Holders, 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 Notes or as
contained in any Redemption Notice or other notices, and that reliance may be
placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
numbers.

          SECTION 2.14. DEFAULTED INTEREST.

          If the Company defaults in a payment of interest on the Notes, it
shall pay, or shall deposit with the Paying Agent money in immediately available
funds sufficient to pay, the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the Persons who are Holders on a
special record date. The special record date, as used in this Section 2.14 with
respect to the payment of any defaulted interest, shall mean the 15th day
immediately preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before
such special record date, the Company shall mail to each Holder and to the
Trustee a notice that states such special record date, the payment date for the
defaulted interest and the amount of defaulted interest to be paid.

                                    ARTICLE 3

                            REDEMPTION AND PURCHASES

          SECTION 3.01. PROVISIONAL REDEMPTION.

          Any time prior to February 1, 2005, the Company may, at its option,
redeem (such redemption being hereinafter referred to as the "Provisional
Redemption") the Notes, in whole at any time or in part from time to time, upon
notice given in accordance with Section 3.05, at a redemption price equal to
$1,000 per $1,000 principal amount of the Notes to be redeemed, plus accrued and
unpaid interest, if any, to but excluding the Provisional Redemption Date (such
amount, together with the Make-Whole Payment described below, the "Provisional
Redemption Price"), if:

          (a) the Closing Price of the Common Stock has exceeded 150% of the
Conversion Price (as defined in Article 10 hereof, and as such may be adjusted
from time to time) then in effect for at least 20 Trading Days within a period
of 30 consecutive Trading Days ending on the Trading Day prior to the date on
which the Company mails the Provisional Redemption Notice pursuant to Section
3.05 (the "Notice Date"); and

          (b) during the period that the Company is obligated, pursuant to the
terms of the Registration Rights Agreement, to keep a registration statement
covering resales of the Notes and the Common Stock issuable upon conversion
thereof effective, such registration statement is

                                      -25-


effective and available for use as of, and including, the Notice Date through
and including the Provisional Redemption Date.

          If a Provisional Redemption Date is an Interest Payment Date, the
interest on the Notes payable on such Interest Payment Date will be payable to
the Holder of record as of the relevant Regular Record Date, and the Provisional
Redemption Price will not include such interest payment.

          Upon any Provisional Redemption, the Company shall make an additional
cash payment (the "Make-Whole Payment") with respect to the Notes called for
redemption to Holders on the Notice Date in an amount equal to $120 per $1,000
principal amount of the Notes to be redeemed, less the amount of any interest
actually paid on such Notes prior to or on the Provisional Redemption Date. The
Company shall make the Make-Whole Payment on all Notes called for Provisional
Redemption, including any Notes converted into Common Stock after the Notice
Date and before the Provisional Redemption Date.

          SECTION 3.02. OPTIONAL REDEMPTION.

          Except as set forth under Section 3.01 hereof, the Notes are not
redeemable prior to February 1, 2005. On and after February 1, 2005, the Company
may, at its option, redeem (such redemption being hereinafter referred to as the
"Optional Redemption") the Notes, in whole at any time or in part from time to
time, on any date prior to the Stated Maturity, upon notice given in accordance
with Section 3.05, at a redemption price equal to $1,000 per $1,000 principal
amount, plus accrued and unpaid interest, if any, to but excluding Optional
Redemption Date (the "Optional Redemption Price"), if the Closing Price of the
Common Stock has exceeded 140% of the Conversion Price (as defined in Article 10
and as such may be adjusted from time to time) then in effect for at least 20
Trading Days within a period of 30 consecutive Trading Days ending on the
Trading Day prior to the date on which the Company mails the Optional Redemption
Notice pursuant to Section 3.05.

          If a Optional Redemption Date is an Interest Payment Date, the
interest on the Notes payable on such Interest Payment Date will be payable to
the Holder of record as of the relevant Regular Record Date, and the Optional
Redemption Price will not include such interest payment.

          SECTION 3.03. NOTICE OF TRUSTEE.

          If the Company elects to redeem Notes pursuant to the redemption
provisions of Section 3.01 or Section 3.02 hereof, it shall notify the Trustee
at least 30 days prior but not more than 60 days prior to the Redemption Date of
such intended redemption, the Redemption Date, the principal amount of Notes to
be redeemed and the CUSIP numbers of the Notes to be redeemed.

          SECTION 3.04. SELECTION OF NOTES TO BE REDEEMED.

          If fewer than all the Notes are to be redeemed, the Trustee shall
select the particular Notes to be redeemed from the outstanding Notes by a
method that complies with the

                                      -26-


requirements of any exchange on which the Notes are listed, or, if the Notes are
not listed on an exchange, on a pro rata basis or by lot or in accordance with
any other method of Trustee considers appropriate. Notes and portions thereof
that the Trustee selects shall be in principal amounts equal to $1,000 or any
whole multiple thereof.

          If any Note selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Note so selected, the converted portion of such Note shall be deemed to be the
portion selected for redemption; provided, however, that the Holder of such Note
so converted and deemed redeemed shall not be entitled to any additional
interest payment as a result of such deemed redemption than such Holder would
have otherwise been entitled to receive upon conversion of such Note. Notes that
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.

          The Trustee shall promptly notify the Company and the Registrar in
writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.

          SECTION 3.05. NOTICE OF REDEMPTION.

          Redemption Notices shall be given by the Company, in the manner
provided in Section 13.02 hereof, to the Holders of Notes to be redeemed. Such
notice shall be given not less than 30 nor more than 60 days prior to the
Optional Redemption Date pursuant to Section 3.01 (such notice being referred to
as the "Optional Redemption Notice") or the Provisional Redemption Date pursuant
to Section 3.02 (such notice being referred to as the "Provisional Redemption
Notice").

          All Redemption Notices shall state:

          (1) the Redemption Date;

          (2) the applicable Redemption Price (including the amount of
     Make-Whole Payment in the event of a Provisional Redemption);

          (3) if fewer than all the outstanding Notes are to be redeemed, the
     aggregate principal amount of Notes to be redeemed and the aggregate
     principal amount of Notes which will be outstanding after such partial
     redemption;

          (4) that on the Redemption Date, the applicable Redemption Price
     (including the amount of Make-Whole Payment in the event of a Provisional
     Redemption) will become due and payable upon each such Note to be redeemed,
     and that interest thereon shall cease to accrue on and after such
     Redemption Date;

                                      -27-


          (5) the Conversion Price then in effect, the date on which the right
     of the Holders to convert the principal of the Notes to be redeemed will
     terminate, and the places where such Notes may be surrendered for
     conversion;

          (6) the place or places where such Notes are to be surrendered for
     payment of the applicable Redemption Price; and

          (7) the CUSIP number of the Notes.

          The Redemption Notice shall specify the last date on which exchanges
or transfers of Notes may be made pursuant to Section 2.06 hereof, and shall
specify the serial numbers of Notes and the portions thereof called for
redemption.

          Redemption Notices relating to Notes to be redeemed at the election of
the Company shall be given by the Company.

          SECTION 3.06. EFFECT OF NOTICE OF REDEMPTION.

          Notice of redemption having been given as provided in Section 3.05
hereof, the Notes so to be redeemed shall, on the Redemption Date, become due
and payable at the applicable Redemption Price therein specified, and from and
after such date (unless the Company shall default in the payment of the
applicable Redemption Price) such Notes shall cease to bear interest.

          Upon surrender of any such Note for redemption in accordance with such
notice, such Note shall be paid by the Company at the applicable Redemption
Price (which shall include accrued and unpaid interest, if any, and a Make-Whole
Payment in the case of a Provisional Redemption); PROVIDED, HOWEVER, that the
installments of interest on Notes whose Stated Maturity is prior to or on the
Redemption Date shall be payable to the Holders of such Notes, registered as
such on the relevant Regular Record Date according to their terms and the
provisions of Article 2 hereof and, with respect to a Provisional Redemption,
the Holder on the Notice Date of any Note converted into Common Stock after the
Notice Date and before the Provisional Redemption Date shall have the right to
receive the Make-Whole Payment regardless of the conversion of such Note.

          If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from and including the applicable Redemption Date at the Interest
Rate.

          SECTION 3.07. DEPOSIT OF REDEMPTION PRICE.

          Prior to or on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the
applicable Redemption Price (including accrued and unpaid interest, if any, and,
with respect to a Provisional Redemption, Make-Whole Payments due on the
Provisional Redemption Date with respect to the Notes) of all the Notes to be
redeemed on that Redemption Date, other than any Notes called for redemption on
that date which have been converted prior to the date of such deposit (subject
to the right of

                                      -28-


the Holder of such Note to receive Make-Whole Payments, as provided in Section
3.01 and Section 3.06 hereof in the case of a Provisional Redemption).

          If any Note called for redemption is thereafter converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the payment of the Redemption Price for such Note shall (subject to
any right of the Holder of such Note to receive interest as provided in Section
4.01 hereof or Make-Whole Payments as provided in Sections 3.01 and 3.06 hereof)
be paid to the Company on a Company Request or, if then held by the Company or
any Subsidiary, or an Affiliate of either of them, shall be discharged from such
trust.

          SECTION 3.08. NOTES REDEEMED IN PART.

          Any Note which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 4.05 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Note without
service charge, a new Note or Notes of any authorized denomination as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.

          SECTION 3.09. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

          In connection with any redemption of Notes, the Company may arrange
for the purchase and conversion of any Notes called for redemption by an
agreement with one or more investment banks or other purchasers to purchase such
Notes by paying to the Trustee in trust for the benefit of the Noteholders, at
or prior to 10:00 a.m., New York City time, on the Redemption Date, an amount
that, together with any amounts deposited with the Trustee by the Company for
the redemption of such Notes, is not less than the Redemption Price of such
Notes. Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Notes shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, any Notes not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, 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 10) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to the
Holders whose Notes are selected for redemption any such amount paid to it for
purchase and conversion in the same manner as it would moneys deposited with it
by the Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee 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

                                      -29-


Notes between the Company and such purchasers, including the costs and expenses
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.

          SECTION 3.10. REPURCHASE OF NOTES AT OPTION OF THE HOLDER UPON CHANGE
OF CONTROL.

          (a) If there shall have occurred a Change of Control, all or any
portion of the Notes of any Holder equal to $1,000 or a whole multiple of
$1,000, not previously called for redemption, shall be repurchased by the
Company, at the option of such Holder, at a repurchase price equal to 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (such amount payable
being, the "Change of Control Repurchase Price"), on the date that is no later
than 30 days after notice of the occurrence of a Change of Control is given by
the Company or the Trustee (such repurchase date being, the "Change of Control
Repurchase Date") in accordance with Section 3.10(c); PROVIDED, HOWEVER, that
installments of interest on Notes whose Stated Maturity is prior to or on the
Change of Control Repurchase Date shall be payable to the Holders of such Notes,
registered as such on the relevant Regular Record Date according to their terms.
Such right to require the repurchase of the Notes shall not continue after a
discharge of the Company from its obligations with respect to the Notes in
accordance with Article 8 hereof, unless a Change of Control shall have occurred
prior to such discharge.

          Subject to the fulfillment by the Company of the conditions set forth
in Section 3.10(b) hereof, the Company may elect to pay the Change of Control
Repurchase Price by delivering the number of shares of Common Stock equal to (i)
the Change of Control Repurchase Price divided by (ii) 95% of the average of the
Closing Prices per share of Common Stock for the five consecutive Trading Days
ending on the third Trading Day prior to the Change of Control Repurchase Date.

          Whenever in this Indenture (including in the terms of the Notes
attached hereto as Exhibit A-1 or Exhibit A-2) there is a reference, in any
context, to the principal of any Note as of any time, such reference shall be
deemed to include reference to the Change of Control Repurchase Price payable in
respect to such Note to the extent that such Change of Control Repurchase Price
is, was or would be so payable at such time, and express mention of the Change
of Control Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Change of Control Repurchase Price in those
provisions of this Indenture when such express mention is not made; PROVIDED,
HOWEVER, that, for the purposes of Article 11 hereof, such reference shall be
deemed to include reference to the Change of Control Repurchase Price only to
the extent the Change of Control Repurchase Price is payable in cash.

          A "Change of Control" of the Company shall be deemed to have occurred
at such time as any of the following events shall occur:

               (i) the acquisition by any person, including any syndicate or
group deemed to be a "person" under Section 13(d)(3) of the Exchange Act, of
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of

                                      -30-


transactions of shares of the Capital Stock of the Company entitling that person
to exercise 50% or more of the total voting power of all shares of Capital Stock
entitled to vote generally in elections of directors, other than any acquisition
by the Company, any of its subsidiaries or any of the employee benefit plans;

              (ii) any consolidation or merger of the Company with or into any
other person, any merger of another person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of the
Company's properties and assets to another person, other than:

                   (A) any transaction (x) that does not result in any
               reclassification, conversion, exchange or cancellation of
               outstanding shares of the Capital Stock and (y) pursuant to which
               holders of the Capital Stock immediately prior to the transaction
               have the entitlement to exercise, directly or indirectly, 50% or
               more of the total voting power of all shares of the Capital Stock
               entitled to vote generally in the election of directors of the
               continuing or surviving person immediately after the transaction;
               or

                   (B) any merger solely for the purpose of changing the
               Company's jurisdiction of incorporation and resulting in a
               reclassification, conversion or exchange of outstanding shares of
               Common Stock solely into shares of Common Stock of the surviving
               entity;

             (iii) during any consecutive two-year period, individuals who at
the beginning of that two-year period constituted the Board of Directors
(together with any new directors whose election to the Board of Directors, or
whose nomination for election by the stockholders, was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
board of directors then in office; or

              (iv) any liquidation or dissolution of the Company or the
stockholders of the Company shall pass a resolution approving a plan of
liquidation or dissolution of the Company.

          (b) The following are conditions to the Company's election to pay for
the Change of Control Repurchase Price in shares of Common Stock:

               (i) The shares of Common Stock to be issued upon repurchase of
Notes hereunder:

                   (A) shall not require registration under any federal
               securities law before such shares may be freely transferable
               without being subject to any transfer restrictions under the
               Securities Act upon repurchase or, if such registration is
               required, such registration shall be completed and shall become
               effective prior to the Change of Control Repurchase Date; and

                                      -31-


                   (B) shall not require registration with, or approval of, any
               governmental authority under any state law or any other federal
               law before shares may be validly issued or delivered upon
               repurchase or if such registration is required or such approval
               must be obtained, such registration shall be completed or such
               approval shall be obtained prior to the Change of Control
               Repurchase Date.

               (ii)  The shares of Common Stock to be issued upon repurchase of
Notes hereunder are, or shall have been, approved for listing on the Nasdaq
National Market or the New York Stock Exchange or listed on another national
securities exchange, in any case, prior to the Change of Control Repurchase
Date.

               (iii) All shares of Common Stock which may be issued upon
repurchase of Notes will be issued out of the Company's authorized but unissued
Common Stock or Common Stock held in treasury and will, upon issue, be duly and
validly issued and fully paid and nonassessable and free of any preemptive or
similar rights.

               (iv)  If any of the conditions set forth in clauses (i) through
(iii) of this Section 3.10(b) are not satisfied in accordance with the terms
thereof, the Change of Control Repurchase Price shall be paid by the Company
only in cash.

          (c) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, on or prior to the 30th day after the occurrence
of a Change of Control, the Company, or, at the written request and expense of
the Company, the Trustee, shall give to all Noteholders, in the manner provided
in Section 13.02 hereof, notice of the occurrence of the Change of Control and
of the repurchase right set forth herein arising as a result thereof. If the
Trustee is requested to give such notice, the Company will provide the written
request at least one (1) day prior. The Company shall also deliver a copy of
such notice of a repurchase right to the Trustee. The notice shall include a
form of Change of Control Repurchase Notice (as defined in Section 3.10(d)) to
be completed by the Noteholder and shall state:

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

          (2)  the date by which the Change of Control Repurchase Notice
     pursuant to this Section 3.10 must be given;

          (3)  the Change of Control Repurchase Date;

          (4)  the Change of Control Repurchase Price and the form of payment;

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

          (6)  the Conversion Price then in effect and any adjustments thereto;

          (7)  that Notes as to which a Change of Control Repurchase Notice has
     been given may be converted pursuant to Article 10 hereof only if the
     Change of Control

                                      -32-


     Repurchase Notice, if duly given, has been withdrawn in accordance with the
     terms of this Indenture;

          (8)  that Notes must be surrendered to the Paying Agent to collect
     payment;

          (9)  that the Change of Control Repurchase Price for any Note as to
     which a Change of Control Repurchase Notice has been duly given and not
     withdrawn will be paid promptly on the later of the Change of Control
     Repurchase Date and the time of surrender of such Note as described in (8)
     above and Section 3.10(d) below;

          (10) briefly, the procedures the Holder must follow to exercise rights
     under this Section 3.10;

          (11) briefly, the conversion rights of the Notes;

          (12) the procedures for withdrawing a Change of Control Repurchase
     Notice;

          (13) that, unless the Company defaults in making payment of such
     Change of Control Repurchase Price, interest on Notes for which a Change of
     Control Repurchase Notice has been delivered will cease to accrue on and
     after the Change of Control Repurchase Date; and

          (14) the CUSIP number of the Notes.

          (d)  A Holder may exercise its rights specified in Section 3.10(a)
hereof upon delivery of a written notice of purchase (a "Change of Control
Repurchase Notice") to the Paying Agent at any time prior to the close of
business on the Change of Control Repurchase Date, stating:

          (1)  the certificate number of the Note which the Holder will deliver
     to be repurchased;

          (2)  the portion of the principal amount of the Note which the Holder
     will deliver to be repurchased, which portion must be $1,000 or an integral
     multiple thereof; and

          (3)  that such Note shall be repurchased pursuant to the terms and
     conditions specified in paragraph 7 of the Notes.

          The delivery by the Holder of the Note to be repurchased to the Paying
Agent, together with all necessary endorsements, at the offices of the Paying
Agent shall be a condition to the receipt by the Holder of the Change of Control
Repurchase Price therefor; provided, however, that such Change of Control
Repurchase Price shall be so paid pursuant to this Section 3.10 only if the Note
so delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Change of Control Repurchase
Notice.

          The Company shall purchase from the Holder thereof, pursuant to this
Section 3.10, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple

                                      -33-


of $1,000. Provisions of this Indenture that apply to the purchase of all of a
Note also apply to the purchase of such portion of such Note.

          Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.10 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change of Control
Repurchase Date and the time of delivery of the Note to the Paying Agent in
accordance with this Section 3.10.

          Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change of Control Repurchase Notice contemplated by this
Section 3.10(d) shall have the right to withdraw such Change of Control
Repurchase Notice at any time prior to the close of business on the Change of
Control Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.11.

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

          SECTION 3.11. EFFECT OF CHANGE OF CONTROL REPURCHASE NOTICE.

          Upon receipt by the Paying Agent of the Change of Control Repurchase
Notice specified in Section 3.10(d), the Holder of the Note in respect of which
such Change of Control Repurchase Notice was given shall (unless such Change of
Control Repurchase Notice is withdrawn as specified in this Section 3.11)
thereafter be entitled to receive solely the Change of Control Repurchase Price
with respect to such Note. Such Change of Control Repurchase Price shall be paid
to such Holder, subject to receipts of funds and/or Notes by the Paying Agent,
promptly following the later of (x) the Change of Control Repurchase Date with
respect to such Note (provided the conditions in Section 3.10(d) have been
satisfied) and (y) the time of delivery of such Note to the Paying Agent by the
Holder thereof in the manner required by Section 3.10(d). Notes in respect of
which a Change of Control Repurchase Notice, has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Change of Control Repurchase Notice, unless such Change
of Control Repurchase Notice has first been validly withdrawn as specified in
this Section 3.11.

          A Change of Control Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent at any
time prior to the close of business on the Change of Control Repurchase Date
specifying:

          (1) the certificate number of the Note in respect of which such notice
     of withdrawal is being submitted;

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

          (3) the principal amount, if any, of such Note which remains subject
     to the original Change of Control Repurchase Notice and which has been or
     will be delivered for repurchase by the Company.

                                      -34-


          Notwithstanding the delivery of any Change of Control Repurchase
Notice by any Holder, there shall be no repurchase of any Notes by the Company
pursuant to Section 3.10 if there has occurred and is continuing an Event of
Default, other than a default in the payment of the Change of Control Repurchase
Price with respect to such Notes. The Paying Agent will promptly return to the
respective Holders thereof any Notes (x) with respect to which a Change of
Control Repurchase 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 Change of Control Repurchase Price with respect to
such Notes), in which case, upon such return, the Change of Control Repurchase
Notice with respect thereto shall be deemed to have been withdrawn.

          SECTION 3.12. DEPOSIT OF CHANGE OF CONTROL REPURCHASE PRICE.

          Prior to 10:00 a.m. (New York City time) on the Business Day following
the Change of Control Repurchase Date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or any Subsidiary, or an
Affiliate of either of them, is acting as the Paying Agent, the Company, such
Subsidiary or such Affiliate shall segregate and hold in trust as provided in
Section 2.04 hereof) an amount of money in immediately available funds or shares
of Common Stock, if permitted hereunder, sufficient to pay the aggregate Change
of Control Repurchase Price of all the Notes or portions thereof which are to be
purchased as of the Change of Control Repurchase Date.

          SECTION 3.13. NOTES PURCHASED IN PART.

          Any Note which is to be repurchased only in part shall be surrendered
at the office of the Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Note, without service charge, a new Note or Notes, 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 Note so
surrendered which is not repurchased.

          SECTION 3.14. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
NOTES.

          In connection with any offer to purchase or repurchase Notes under
Section 3.10 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act which may then be
applicable, (ii) file the related Schedule TO (or any successor schedule, form
or report) or any other schedule required under the Exchange Act, and (iii)
otherwise comply with all federal and state securities laws so as to permit the
rights and obligations under Section 3.10 to be exercised in the time and in the
manner specified in Section 3.10.

                                      -35-


          SECTION 3.15. REPAYMENT TO THE COMPANY.

          The Trustee and the Paying Agent shall return to the Company any cash
or shares of Common Stock that remain unclaimed as provided in paragraph 13 of
the Notes, together with interest or dividends, if any, thereon, held by them
for the payment of the Change of Control Repurchase Price; PROVIDED, HOWEVER,
that to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.12 hereof exceeds the aggregate
Change of Control Repurchase Price of the Notes or portions thereof which the
Company is obligated to purchase as of the Change of Control Repurchase Date,
then promptly (but no later than 3 Business Days) following the Change of
Control Repurchase Date, the Trustee shall return any such excess to the Company
together with interest or dividends, if any, thereon.

                                    ARTICLE 4

                                    COVENANTS

          SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM, INTEREST ON THE NOTES.

          The Company will duly and punctually pay the principal of and premium,
if any, and interest in respect of the Notes in accordance with the terms of the
Notes and this Indenture. The Company will deposit or cause to be deposited with
the Trustee, as directed by the Trustee, no later than the day of the Stated
Maturity of any Note or installment of interest, all payments so due. Principal
amount, Redemption Price, Change of Control Repurchase Price, and cash interest
shall be considered paid on the applicable date due if, on such date (or, in the
case of a Change of Control Repurchase Price on the Business Day following the
applicable Change of Control Repurchase Date), the Trustee or the Paying Agent
holds, in accordance with this Indenture, money or shares of Common Stock, if
permitted hereunder, sufficient to pay all such amounts then due.

          The Company shall, to the extent permitted by law, pay cash interest
on overdue amounts at the Interest Rate, compounded semi-annually, which
interest shall accrue from the date such overdue amount was originally due to
the date that such overdue amount, including any interest thereon, has been made
or duly provided for in full. All such interest shall be payable on demand.

          SECTION 4.02. SEC AND OTHER REPORTS.

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

                                      -36-


event, such reports shall be provided at the times the Company would have been
required to provide reports had it continued to have been subject to such
reporting requirements. The Company also shall comply with the other provisions
of TIA Section 314(a). Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein,
including the Company's compliance with any of its covenants hereunder (us to
which the Trustee is entitled to rely exclusively on Officers' Certificates).

          SECTION 4.03. COMPLIANCE CERTIFICATE.

          The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company (beginning with the fiscal year ending on
September 30, 2002), an Officer's Certificate, stating whether or not, to the
best knowledge of the signer thereof, the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

          SECTION 4.04. FURTHER INSTRUMENTS AND ACTS.

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

          SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY.

          The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency of the Trustee, Registrar, Paying Agent and Conversion
Agent where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The office of The Bank of New York,
located at 5 Penn Plaza, Thirteenth Floor, New York, New York 10001, attention:
Corporate Trust Department, shall initially be such office or agency for all of
the aforesaid purposes. The Company shall give prompt written notice to the
Trustee of the location, and of any change in the location, of any such office
or agency (other than a change in the location of the office of the Trustee). If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.

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

                                      -37-


          SECTION 4.06. DELIVERY OF CERTAIN INFORMATION.

          At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a holder or any beneficial holder of Notes
or shares of Common Stock issued upon conversion thereof, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or any beneficial holder of Notes or holder of shares of
Common Stock issued upon conversion of Notes, or to a prospective purchaser of
any such security designated by any such holder, as the case may be, to the
extent required to permit compliance by such Holder or holder with Rule 144A
under the Securities Act in connection with the resale of any such security.
"Rule 144A Information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act.

          SECTION 4.07. SUBORDINATION.

          The Company shall not and will not permit its subsidiaries or other
business units to incur, create, assume, guarantee or in any other manner become
directly or indirectly liable with respect to or responsible for, or permit to
remain outstanding (other than if required by law), any Indebtedness that is
subordinated or junior in right of payment to Senior Indebtedness unless such
Indebtedness ranks equal or junior in right of payment to the Notes.

                                    ARTICLE 5

                           MERGERS AND SALES OF ASSETS

          SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.

          The Company shall not, without the consent of the Holders, consolidate
with, merge into or, transfer all or substantially all of its assets to any
other Person, unless:

          (a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or the person which acquires by, transfer all or
substantially all of the assets of the Company (i) shall be organized and
validly existing under the laws of the United States and (ii) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the obligations
of the Company under the Notes and this Indenture;

          (b) at the time of such transaction, no Event of Default and no event
which, after notice or lapse of time, would become an Event of Default, shall
have happened and be continuing; and

          (c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, or transfer and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article 5
and that all conditions precedent herein provided for relating to such
transaction have been satisfied.

                                      -38-


          For purposes of the foregoing, the transfer of the properties and
assets of one or more Subsidiaries (other than to the Company or another
Subsidiary), which, if such assets were owned by the Company, would constitute
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.

          The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such, transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor had
been named as the Company herein; and thereafter, except in the case of
obligations the Company may have under a supplemental indenture pursuant to
Section 10.11, the Company shall be discharged from all obligations and
covenants under this Indenture and the Notes. Subject to Section 9.06, the
Company, the Trustee and the successor person shall enter into a supplemental
indenture to evidence the succession and substitution of such successor person
and such discharge and release of the Company.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

          SECTION 6.01. EVENTS OF DEFAULT.

          An "Event of Default" occurs if:

          (1) the Company fails to pay when due the principal of or premium, if
     any, on any of the Notes at maturity, upon redemption or exercise of a
     repurchase right or otherwise, whether or not such payment is prohibited by
     Article 11 of this Indenture;

          (2) the Company fails to pay an installment of interest (including
     liquidated damages, if any) on any of the Notes on an Interest Payment
     Date, and such failure to pay continues for 30 days after the such Interest
     Payment Date, whether or not such payment is prohibited by Article 11 of
     this Indenture, PROVIDED THAT a failure to make any of the first six
     scheduled interest payments on the Notes within three Business Days after
     the applicable Interest Payment Date will constitute an Event of Default
     with no additional grace or cure period;

          (3) the Company fails to deliver shares of Common Stock, together with
     cash in lieu of fractional shares, when such Common Stock or cash in lieu
     of fractional shares is required to be delivered upon conversion of a Note
     pursuant to Article 10 hereof or upon exercise of a repurchase right
     pursuant to Section 3.10 hereof, and such failure continues for 10 days
     after the delivery due date;

          (4) the Company fails to perform or observe any other term, covenant
     or agreement contained in the Notes or this Indenture for a period of 60
     days after receipt by the Company of a Notice of Default (as defined in
     this Section 6.01);

                                      -39-


          (5) one or more defaults in the payment of principal of or premium, if
     any, on any of the Company's Indebtedness aggregating $5.0 million or more,
     when the same becomes due and payable at the scheduled maturity thereof,
     and such default or defaults shall have continued after any applicable
     grace period and shall not have been cured or waived within a 30-day period
     after the date of such default, or (B) any of the Company's Indebtedness
     aggregating $5.0 million or more shall have been accelerated or otherwise
     declared due and payable, or required to be prepaid or repurchased (other
     than by regularly scheduled required prepayment) prior to the scheduled
     maturity thereof and such acceleration is not rescinded or annulled within
     a 30-day period after the date of such acceleration;

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

              (A) commences a voluntary case or proceeding;

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

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

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

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

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

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

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

              (B) appoints a Custodian of the Company or any Significant
          Subsidiary or for any substantial part of its or their properties; or

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

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

          (8) the Pledge Agreement shall cease to be in full force and effect
     (unless it shall have been terminated in accordance with its terms) or
     enforceable in accordance with its terms.

                                      -40-


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

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

          A Default under clause (4) above is not an Event of Default until the
Trustee notifies the Company in writing, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding notify the
Company and the Trustee in writing, of the Default and the Company does not cure
such Default (and such Default is not waived) within the time specified in
clause (4) above after actual receipt of such notice. Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default."

          The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition, the Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the lapse of time would become an Event of Default under clause (4) above, its
status and what action the Company is taking or proposes to take with respect
thereto.

          SECTION 6.02. ACCELERATION.

          If an Event of Default (other than an Event of Default specified in
Section 6.01(6) or (7) above) occurs and is continuing, the Trustee by written
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding by notice to the Company and the
Trustee, may declare the notes immediately due and payable at their principal
amount, together with accrued and unpaid interest, if any. Upon such declaration
of acceleration, the principal amount and accrued and unpaid interest, if any,
to the date of payment on the aggregate principal amount of Notes at the time
outstanding shall be immediately due and payable.

          If an Event of Default specified in Section 6.01(6) or (7) above
occurs and is continuing, then the principal and accrued and unpaid interest, if
any, on the aggregate principal amount of the Notes then outstanding shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Noteholders.

          The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding, by written notice to the Trustee (and without notice to
any other Noteholder), may rescind or annul a declaration of acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived (except
nonpayment of the principal and any accrued cash interest that have become due
solely as a result of acceleration) and if all amounts due to the Trustee under
Section 7.06 have been paid. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.

                                      -41-


          SECTION 6.03. OTHER REMEDIES.

          If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of the principal, the
premium, if any, and any accrued cash interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

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

          SECTION 6.04. WAIVER OF PAST DEFAULTS.

          The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding, by written notice to the Trustee (and without notice to
any other Noteholder), may waive an existing Default and its consequences except
(1) an Event of Default described in Section 6.01(1), (2) or (3), (2) a Default
in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Noteholder affected or (3) a Default which consists of a failure
to convert any Note in accordance with the terms of Article 11. When a Default
is waived, it is deemed cured, but no such waiver shall extend to any subsequent
or other Default or impair any consequent right. This Section 6.04 shall be in
lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

          SECTION 6.05. CONTROL BY MAJORITY.

          The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding may, by notice in writing to the Trustee, direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Noteholders or would involve the Trustee in
personal liability unless the Trustee is offered indemnity satisfactory to it
against loss, liability or expense. This Section 6.05 shall be in lieu of
Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly
excluded from this Indenture, as permitted by the TIA.

          SECTION 6.06. LIMITATION ON SUITS.

          A Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:

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

                                      -42-


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

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

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

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

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

          SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

          Notwithstanding any other provision of this Indenture, the right of
any Holder (a) to receive payment of the principal amount, premium, if any, the
Redemption Price, Change of Control Repurchase Price or any accrued cash
interest in respect of the Notes held by such Holder, on or after the respective
due dates expressed in the Notes or any Redemption Date or any Change of Control
Repurchase Date, as applicable, (b) to convert the Notes in accordance with
Article 10, or (c) to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, shall not be impaired or
affected adversely without the consent of such Holder.

          SECTION 6.08. COLLECTION SUIT BY TRUSTEE.

          If an Event of Default described in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to the Notes and the amounts provided for in Section 7.06.

          SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.

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

          (a) to file and prove a claim for the whole amount of the principal
amount, Redemption Price, Change of Control Repurchase Price or any accrued cash
interest and to file

                                      -43-


such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel or
any other amounts due the Trustee under Section 7.06) and of the Holders allowed
in such judicial proceeding, and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.

          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 Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.

          SECTION 6.10. PRIORITIES.

          Subject to the provisions of the Pledge Agreement and Article 12 of
this Indenture, if the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:

          (1) to the Trustee for amounts due under Section 7.06;

          (2) to Noteholders for the amount of principal due and unpaid on the
     Notes, the Redemption Price, the Change of Control Repurchase Price or any
     accrued cash interest as the case may be, ratably, without preference or
     priority of any kind, according to such amounts due and payable on the
     Notes; and

          (3) the balance, if any, to the Company.

          The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the amount to be paid.

          SECTION 6.11. UNDERTAKING FOR COSTS.

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

                                      -44-


having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10%
in aggregate principal amount of the Notes at the time outstanding. This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such
Section 315(e) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

          SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS.

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

                                    ARTICLE 7

                                     TRUSTEE

          SECTION 7.01. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT.

          The Trustee, prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all such Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default hereunder
has occurred (which has not been cured or waived), 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 man would exercise or
use under the circumstances in the conduct of his own affairs.

          No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that

          (a) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default which may have occurred:

              (i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

                                      -45-


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

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

          (c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders pursuant to Section 6.05 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.

          None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.

          The provisions of this Section 7.01 are in furtherance of and subject
to Sections 315 and 316 of the TIA.

          SECTION 7.02. CERTAIN RIGHTS OF THE TRUSTEE.

          In furtherance of and subject to the TIA and subject to Section 7.01:

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

          (b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company;

          (c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;

                                      -46-


          (d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture with the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred therein or thereby;

          (e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;

          (f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all such Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or any
predecessor trustee, shall be repaid by the Company upon demand;

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

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

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

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

                                      -47-


          SECTION 7.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
NOTES OR APPLICATION OF PROCEEDS THEREOF.

          The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any of the Notes or of the proceeds thereof.

          SECTION 7.04. TRUSTEE AND AGENTS MAY HOLD NOTES; COLLECTIONS, ETC.

          The Trustee or any agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not the Trustee or such agent and,
subject to Sections 7.08 and 7.13, if operative, may otherwise deal with the
Company and receive, collect, hold and retain collections from the Company with
the same rights it would have if it were not the Trustee or such agent.

          SECTION 7.05. MONEYS HELD BY TRUSTEE.

          Subject to the provisions of Section 8.02 hereof, all moneys received
by the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by mandatory provisions of law.
Neither the Trustee nor any agent of the Company or the Trustee shall be under
any liability for interest on any moneys received by it hereunder.

          SECTION 7.06. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS
PRIOR CLAIM.

          The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) to be agreed to in writing from time to time between the
Trustee and the Company, and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense that shall be determined by a court of competent jurisdiction to have
been caused by the Trustee's own negligence or bad faith. The Company also
covenants to fully indemnify the Trustee and each predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, claim, damage or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises. The obligations of the Company under this Section 7.06 to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of

                                      -48-


the Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the Holders of particular Notes,
and the Notes are hereby effectively subordinated to such senior claim to such
extent. The provisions of this Section 7.06 shall survive the termination of
this Indenture and the resignation or removal of the Trustee. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 6.01 or in connection with Article Six hereof, the expenses
(including the reasonable fees and expenses of its counsel) and the compensation
for services in connection therewith are to constitute the expenses of
administration under any bankruptcy law.

          SECTION 7.07. RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC.

          Subject to Sections 7.01 and 7.02, whenever in the administration of
the trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting
any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.

          SECTION 7.08. CONFLICTING INTERESTS.

          If the Trustee has or shall acquire a conflicting interest within the
meaning of the TIA, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the TIA.

          SECTION 7.09. PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE.

          The Trustee shall at all times be a corporation or banking association
having a combined capital and surplus of at least $10,000,000. If such
corporation or banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then, for the purposes of this Section 7.09, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.

          SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE.

          (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Notes by giving
written notice of resignation to the Company and by mailing notice thereof by
first class mail to the Holders of Notes at their last addresses as they shall
appear on the Note register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee or trustees by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor

                                      -49-


trustee or trustees. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Noteholder who
has been a bona fide Holder of a Note for at least six months may, subject to
the provisions of Section 7.11, on behalf of himself and all others similarly
situated, petition at the expense of the Company any such court for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.

          (b) In case at any time any of the following shall occur:

              (i)   the Trustee shall fail to comply with the provisions of
Section 7.08 with respect to any Notes after written request therefor by the
Company or by any Noteholder who has been a bona fide Holder of a Note for at
least six months; or

              (ii)  the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any Noteholder; or

              (iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or

              (iv)  the Company shall determine that the Trustee has failed to
perform its obligations under this Indenture in any material respect;

then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.11, any Noteholder who has been a bona
fide Holder of a Note for at least six months may on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. If no successor trustee
shall have been appointed and have accepted appointment within 30 days after a
notice of removal has been given, the removed trustee may petition at the
expense of the Company a court of competent jurisdiction for the appointment of
a successor trustee.

          (c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company the evidence provided for in
Section 1.05 of the action in that regard taken by the Noteholders.

          (d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.

                                      -50-


          SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE.

          Any successor trustee appointed as provided in Section 7.10 shall
execute and deliver to the Company and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee hereunder; but, nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 7.06.

          No successor trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 7.08 and eligible under the
provisions of Section 7.09.

          Upon acceptance of appointment by any successor trustee as provided in
this Section 7.11, the Company shall mail notice thereof by first class mail to
the Holders of Notes at their last addresses as they shall appear in the
register. If the acceptance of appointment is substantially contemporaneous with
the resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 7.10. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.

          SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE.

          Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
banking association resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation or banking association shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case at the
time such successor to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver such Notes so authenticated; and, in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force and effect that this Indenture provides
for the

                                      -51-


certificate of authentication of the Trustee; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate
Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.

          SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.

          The Trustee shall comply with the provisions of Section 311 of the
TIA.

          SECTION 7.14. REPORTS BY THE TRUSTEE.

          (a) The Trustee shall transmit to Holders and other persons such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the TIA on or before July 15 in each year that such report
is required, such reports to be dated as of the immediately preceding May 15.

          (b) A copy of each such report shall, at the time of such transmission
to Noteholders, be furnished to the Company and be filed by the Trustee with
each stock exchange upon which the Notes are listed and also with the SEC. The
Company agrees to notify the Trustee when and as the Notes become listed on any
national securities exchange or delisted therefrom.

          SECTION 7.15. TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES.

          The Trustee shall transmit to the Noteholders, as the names and
addresses of such Holders appear on the Note register, notice by mail of all
Defaults which have occurred, such notice to be transmitted within 90 days after
the occurrence thereof, unless such defaults shall have been cured before the
giving of such notice; PROVIDED THAT, except in the case of Default in the
payment of the principal of, interest on, or other similar obligation with
respect to, any of the Notes, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the best interests of the
Noteholders.

                                   ARTICLE 8

                     SATISFACTION AND DISCHARGE OF INDENTURE

          SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS.

          Except as otherwise provided in this Section 8.01, the Company may
terminate its obligations under the Notes and this Indenture if:

          (i) all Notes previously authenticated and delivered (other than
     destroyed, lost or stolen Notes that have been replaced pursuant to
     Section 2.07 hereof or Notes for whose payment money or securities have
     theretofore been held in trust and thereafter

                                      -52-


     repaid to the Company, as provided in Section 8.05 hereof) have been
     delivered to the Trustee for cancellation and the Company has paid all sums
     payable by it pursuant to the terms of this Indenture or the Notes; or

          (ii) (A) all of the Notes will mature within one year or all of the
     Notes are to be called for redemption within one year under arrangements
     satisfactory to the Trustee for giving the applicable Redemption Notice,
     (B) the Company shall have deposited in trust with the Trustee, under the
     terms of an irrevocable trust agreement in form and substance satisfactory
     to the Trustee, as trust funds solely for the benefit of the Holders for
     that purpose, money or U.S. Government Obligations sufficient to pay in
     full the principal, premium, if, any, and interest on the Notes to maturity
     or redemption, as the case may be, and to pay all other sums payable by
     pursuant to the terms of the Indenture or the Notes, (C) no Default or
     Event of Default with respect to the Notes shall have occurred and be
     continuing on the date of such deposit, (D) such deposit will not result in
     a breach or violation of, or constitute a default under, this Indenture or
     any other agreement or instrument to which the Company is a party or by
     which it is bound, and (E) the Company has delivered to the Trustee an
     Officers' Certificate and an Opinion of Counsel, in each case stating that
     all conditions precedent provided for herein relating to the satisfaction
     and discharge of this Indenture have been complied with.

          With respect to the foregoing clause (i), the Company's obligations
under Section 7.06 hereof shall survive. With respect to the foregoing
clause (ii), the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 4.05, 7.06, 7.10 8.04, 8.05 and 8.06 of this Indenture shall survive
until the Notes are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.06, 8.05 and 8.06 of this Indenture shall survive.
After any such irrevocable deposit, the Trustee upon request shall acknowledge
in writing the discharge of the Company's obligations, as the case may be, under
the Notes and this Indenture, except for those surviving obligations specified
above.

          SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE.

          Subject to Section 8.08, the Company will be deemed to have paid and
will be discharged from any and all obligations in respect of the Notes on the
123rd day after the deposit referred to below, and the provisions of this
Indenture will no longer be in effect with respect to the Notes (except for,
among other matters, certain obligations to register the transfer or exchange of
the Notes, to replace stolen, lost or mutilated Notes, to maintain paying
agencies and to hold monies for payment in trust) if, among other things:

               (A) the Company has deposited with the Trustee, in trust, money
          and/or U.S. Government Obligations that through the payment of
          interest and principal in respect thereof in accordance with their
          terms will provide money in an amount sufficient in the opinion of a
          nationally recognized independent public accounting firm to pay in
          full the principal of, premium, if any, and accrued interest on the
          Notes on the Stated Maturity of such payments in accordance with the
          terms of this Indenture and the Notes;

                                      -53-


               (B) the Company has delivered to the Trustee (i) either (x) an
          Opinion of Counsel to the effect that Holders will not recognize
          income, gain or loss for federal income tax purposes as a result of
          the Company's exercise of its option under this Section 8.02 and will
          be subject to federal income tax on the same amount and in the same
          manner and at the same times as would have been the case if such
          deposit, defeasance and discharge had not occurred, which Opinion of
          Counsel must be based upon (and accompanied by a copy of) a ruling of
          the Internal Revenue Service to the same effect unless there has been
          a change in applicable federal income tax law after the date hereof
          such that a ruling is no longer required or (y) a ruling directed to
          the Trustee received from the Internal Revenue Service to the same
          effect as the aforementioned Opinion of Counsel and (ii) an Opinion of
          Counsel to the effect that the creation of the defeasance trust does
          not violate the Investment Company Act of 1940 and after the passage
          of 123 days following the deposit, the trust fund will not be subject
          to the effect of Section 547 of the United States Bankruptcy Code or
          Section 15 of the New York Debtor and Creditor Law; and

               (C) immediately after giving effect to such deposit, on a pro
          forma basis, no Event of Default, or event that after the giving of
          notice or lapse of time or both would become an Event of Default,
          shall have occurred and be continuing on the date of such deposit or
          during the period ending on the 123rd day after the date of such
          deposit, and such deposit shall not result in a breach or violation
          of, or constitute a default under, any other agreement or instrument
          to which the Company or any of its Subsidiaries is a party or by which
          the Company or any of its Subsidiaries is bound.

          Notwithstanding the foregoing, prior to the end of the 123-day period
referred to in clause (B)(ii) of this Section 8.02, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 8.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.05, 7.06, 7.10, 8.04,
8.05, 8.06, 8.08 and Article 10 shall survive such satisfaction and discharge
until the Notes are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.06, 8.05 and 8.06 shall survive. If and when a ruling
from the Internal Revenue Service or an Opinion of Counsel referred to in
clause (B)(i) of this Section 8.02 may be provided specifically without regard
to, and not in reliance upon, the continuance of the Company's obligations under
Section 4.01, then the Company's obligations under such Section 4.01 shall cease
upon delivery to the Trustee of such ruling or Opinion of Counsel and compliance
with the other conditions precedent provided for herein relating to the
defeasance contemplated by this Section 8.02.

          After the 123 day period referred to in clause (B)(ii) of this
Section 8.02, the Trustee upon Company Order shall acknowledge in writing the
discharge of the Company's obligations under the Notes and this Indenture except
for those surviving obligations in the immediately preceding paragraph.

                                      -54-


          SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS.

          The Company may omit to comply with any term, provision or condition
set forth in Article 4 upon:

          (a) the deposit, in trust, with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof) of money and/or U.S.
Government Obligations that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized independent public
accounting firm to pay the principal of, premium, if any, and accrued interest
on the Notes on the Stated Maturity of such payments in accordance with the
terms of this Indenture and the Notes;

          (b) the satisfaction of the provisions described in clauses (B)(ii)
and (C) of Section 8.02 hereof;

          (c) delivery by the Company to the Trustee of an Opinion of Counsel to
the effect that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance and will be
subject to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred; and

          (d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.03 have been complied with.

          SECTION 8.04. APPLICATION OF TRUST MONEY.

          Subject to Section 8.06, the Trustee or Paying Agent shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01, 8.02 or 8.03, as the case may be, and shall apply the deposited
money and the money from U.S. Government Obligations in accordance with the
Notes and this Indenture to the payment of principal of, premium, if any, and
interest on the Notes; but such money need not be segregated from other funds
except to the extent required by law.

          SECTION 8.05. REINSTATEMENT.

          If the Trustee or the Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.01, 8.02 or 8.03, as
the case may be, by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be, until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01, 8.02 or 8.03, as the
case may be; PROVIDED THAT, if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to

                                      -55-


the rights of the Holders of such Notes to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.

          SECTION 8.06. DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT.

          If, in the event the Company exercises its option to omit compliance
with certain covenants and provisions of this Indenture with respect to the
Notes pursuant to Section 8.03 and such Notes are declared due and payable
because of the occurrence of an Event of Default that remains applicable, and
the amount of money and/or U.S. Government Obligations on deposit with the
Trustee is insufficient to pay amounts due on the Notes at the time of the
acceleration resulting from such Events of Default pursuant to Section 6.02, the
Company will remain liable for such payments.

          SECTION 8.07. REPAYMENT OF THE COMPANY.

          The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person and the Trustee and the Paying Agent shall have no further liability to
the Noteholders with respect to such money or securities for that period
commencing after the return thereof.

          SECTION 8.08. CONVERSION OF NOTES UPON DISCHARGE.

          Notwithstanding any satisfaction, defeasance or discharge of this
Indenture pursuant to the provisions of this Article 8, for so long as any of
the Notes are outstanding, the conversion right of Noteholders set forth in this
Indenture shall not expire until the close of business on February 1, 2009 and
the Company shall remain obligated to issue duly authorized, fully paid and
nonassessable shares of Common Stock upon conversion of the Notes in accordance
with the terms of this Indenture.

                                    ARTICLE 9

                                   AMENDMENTS

          SECTION 9.01. WITHOUT CONSENT OF HOLDERS.

          The Company and the Trustee may amend this Indenture or the Notes
without the consent of any Noteholder for the purposes of, among other things:

          (1)  adding to the Company's covenants or obligations under this
     Indenture for the benefit of the Holders;

          (2)  surrendering any right or power conferred upon the Company by
     this Indenture;

                                      -56-


          (3)  providing for conversion rights of Holders if any
     reclassification or change of Common Stock or any consolidation, merger or
     sale of all or substantially all of the Company's assets occurs;

          (4)  providing for the assumption of the Company's obligations to the
     Holders in the case of a merger, consolidation, conveyance, transfer or
     lease;

          (5)  reducing the Conversion Price, provided that the reduction will
     not adversely affect the interests of Holders in any material respect;

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

          (7)  making any changes or modifications to this Indenture necessary
     in connection with the registration of the Notes under the Securities Act
     as contemplated by the registration rights agreement, provided that this
     action does not adversely affect the interests of the Holders in any
     material respect;

          (8)  curing any ambiguity or correcting or supplementing any defective
     provision contained in this Indenture; provided that such modification or
     amendment does not, in the good faith opinion of the Board of Directors and
     the Trustee, adversely affect the interests of the Holders in any material
     respect;

          (9)  adding or modifying any other provisions which the Company and
     the Trustee may deem necessary or desirable and which will not adversely
     affect the interests of the Holders in any material respect; or

          (10) to evidence and provide for the acceptance of appointment of a
     successor Trustee.

          SECTION 9.02. WITH CONSENT OF HOLDERS.

          With the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes at the time outstanding, the Company and
the Trustee may amend this Indenture or the Notes. However, without the consent
of each Noteholder affected, an amendment to this Indenture or the Notes may
not:

          (1) change the maturity of the principal of or any installment of
     interest on any Note (including any payment of liquidated damages);

          (2) reduce the principal amount of, or any premium or interest on
     (including any payment of liquidated damages), any Note;

          (3) change the currency of payment of such Note or interest thereon;

          (4) impair the right to institute suit for the enforcement of any
     payment on or with respect to any Note;

                                      -57-


          (5) modify the Company's obligations to maintain an office or agency
     in New York City;

          (6) except as otherwise permitted or contemplated by provisions
     concerning corporate reorganizations, adversely affect the repurchase
     option of Holders upon a Change of Control or the conversion rights of
     Holders;

          (7) modify the subordination provisions of this Indenture or the Notes
     in a manner adverse to the Holders; or

          (8) reduce the percentage in aggregate principal amount of Notes
     outstanding necessary to modify or amend this Indenture or to waive any
     past default.

          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, but it
shall be sufficient if such consent approves the substance thereof.

          After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.

          SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.

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

          SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.

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

          SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.

          Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Notes.

                                      -58-


          SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.

          The Trustee shall sign any supplemental indenture authorized pursuant
to this Article 9 if the amendment contained therein does not affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but need not, sign such supplemental indenture. In signing such supplemental
indenture the Trustee shall be entitled to receive, and (subject to the
provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.

          SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.

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

                                   ARTICLE 10

                                   CONVERSION

          SECTION 10.01. CONVERSION RIGHT AND CONVERSION PRICE.

          Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Note or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into duly
authorized, fully paid and nonassessable shares of Common Stock, at the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on
February 1, 2009.

          In case a Note or portion thereof is called for redemption, such
conversion right in respect of the Note or the portion so called, shall expire
at the close of business on the Business Day immediately preceding the
Redemption Date, unless the Company defaults in the payment of the Redemption
Price due. In the case of a Change of Control for which the Holder exercises its
repurchase right with respect to a Note or portion thereof, such conversion
right in respect of the Note or portion thereof shall expire at the close of
business on the Business Day immediately preceding the Change of Control
Repurchase Date, unless the Company defaults in the payment of the Change of
Control Repurchase Price due.

          The price at which shares of Common Stock shall be delivered to a
Holder upon conversion of Notes pursuant to this Article 10 (the "Conversion
Price") shall initially be equal to $50.00 per share of Common Stock. The
Conversion Price shall be adjusted in certain instances as provided in
paragraphs (a), (b), (c), (d), (e), (f), (g), (h) and (i) of Section 10.04
hereof.

                                      -59-


          SECTION 10.02. EXERCISE OF CONVERSION RIGHT.

          To exercise the conversion right, the Holder of any Note to be
converted shall surrender such Note, duly endorsed or assigned to the Company or
in blank, at the specified office of any Conversion Agent, accompanied by a duly
signed conversion notice substantially in the form set forth in the form Note
attached to this Indenture, to the Company stating that the Holder elects to
convert such Note or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted.

          Notes surrendered for conversion, other than those called for
Provisional Redemption or Optional Redemption, after the close of business on
any Regular Record Date but prior to the opening of business on the next
succeeding Interest Payment Date shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest to be received on such Interest Payment Date on the principal
amount of Notes being surrendered for conversion. No such payment will be
required if the Notes have been called for Provisional Redemption or Optional
Redemption.

          Notes shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Notes for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Notes as Holders shall cease, and the Person or Persons entitled
to receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall cause
to be issued and delivered to such Conversion Agent a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as provided
in Section 10.03 hereof.

          In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Notes.

          If shares of Common Stock to be issued upon conversion of a Restricted
Note, or securities to be issued upon conversion of a Restricted Note in part
only, are to be registered in a name other than that of the Holder of such
Restricted Note, such Holder must deliver to the Conversion Agent a certificate
in substantially the form set forth in the form of Note set forth in Exhibit A
annexed hereto, dated the date of surrender of such Restricted Note and signed
by such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Note. Neither the Trustee nor any Conversion Agent, Registrar or
Transfer Agent shall be required to register in a name other than that of the
Holder shares of Common Stock or Notes issued upon conversion of any such
Restricted Note not so accompanied by a properly completed certificate.

          The Company hereby initially appoints the Trustee as the Conversion
Agent.

                                      -60-


          SECTION 10.03. FRACTIONS OF SHARES.

          No fractional shares of Common Stock shall be issued upon conversion
of any Note or Notes. If more than one Note shall be surrendered for conversion
at one time by the same Holder, the number of full shares which shall be issued
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof) so surrendered.
Instead of any fractional share of Common Stock which would otherwise be issued
upon conversion of any Note or Notes (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to the same fraction of the
quoted price of per Common Stock as of the Trading Day immediately preceding the
date of conversion.

          SECTION 10.04. ADJUSTMENT OF CONVERSION PRICE.

          The Conversion Price shall be subject to adjustments, calculated by
the Company, from time to time as follows:

          (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of holders of Common Stock
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction:

              (1) the numerator of which shall be the number of shares of Common
          Stock outstanding at the close of business on the Record Date (as
          defined in Section 10.04(g)) fixed for such determination; and

              (2) the denominator of which shall be the sum of such number of
          shares and the total number of shares constituting such dividend or
          other distribution payable to the holders of Common Stock.

Such reduction shall become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution of the
type described in this Section 10.04(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

          (b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, 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.

                                      -61-


          (c) In case the Company shall issue rights or warrants (other than any
rights or warrants referred to in Section 10.04(d)) to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share (or having a conversion price per share) less than the Current Market
Price (as defined in Section 10.04(g)) on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction:

              (1) the numerator of which shall be the number of shares of Common
          Stock outstanding at the close of business on the Record Date plus the
          number of shares which the aggregate offering price of the total
          number of shares so offered for subscription or purchase (or the
          aggregate conversion price of the convertible securities so offered)
          would purchase at such Current Market Price, and

              (2) the denominator of which shall be the number of shares of
          Common Stock outstanding on the close of business on the Record Date
          plus the total number of additional shares of Common Stock so offered
          to the holders of Common Stock for subscription or purchase (or into
          which the convertible securities so offered are convertible).

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

          (d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of Capital Stock of the
Company (other than any dividends or distributions to which Section 10.04(a) or
Section 10.4(g) applies) or evidences of its indebtedness, cash or other assets,
including securities, but excluding (1) any rights or warrants referred to in
Section 10.04(c), (2) any stock, securities or other property or assets
(including cash) distributed in connection with a reclassification, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 10.11 hereof applies and (3) dividends and distributions paid
exclusively in cash (the securities described in foregoing clauses (1), (2) and
(3) hereinafter in this Section 10.04(d) called the "excluded securities"),
then, in each

                                      -62-


such case, subject to the second succeeding paragraph of this Section 10.04(d),
the Conversion Price shall be adjusted so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the Record Date (as defined in Section 10.04(g))
with respect to such distribution by a fraction:

              (1) the numerator of which shall be the Current Market Price
          (determined as provided in Section 10.04(g)) on such date less the
          fair market value (as determined by the Board of Directors, whose
          determination shall be conclusive and set forth in a Board Resolution)
          on such date of the portion of the securities so distributed (other
          than excluded securities) applicable to one share of Common Stock
          (determined on the basis of the number of shares of the Common Stock
          outstanding on the Record Date), and

              (2) the denominator of which shall be such Current Market Price.

Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then fair market value (as so determined) of the portion of the securities so
distributed (other than excluded securities) 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 of a Note (or any
portion thereof) the amount of securities so distributed (other than excluded
securities) such Holder would have received had such Holder converted such Note
(or portion thereof) immediately prior to such Record Date. In the event that
such dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.

          If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 10.04(d) by reference to the actual or
when issued trading market for any securities comprising all or part of such
distribution (other than excluded securities), it must in doing so consider the
prices in such market over the same period (the "Reference Period") used in
computing the Current Market Price pursuant to Section 10.04(g) to the extent
possible, unless the Board of Directors in a Board Resolution determines in good
faith that determining the fair market value during the Reference Period would
not be in the best interest of the Holder.

          Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's Capital Stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):

              (i)   are deemed to be transferred with such shares of Common
          Stock;

              (ii)  are not exercisable; and

              (iii) are also issued in respect of future issuances of Common
          Stock,

                                      -63-


shall be deemed not to have been distributed for purposes of this
Section 10.04(d) (and no adjustment to the Conversion Price under this
Section 10.04(d) will be required) until the occurrence of the earliest Trigger
Event. If such right or warrant is subject to subsequent events, upon the
occurrence of which such right or warrant shall become exercisable to purchase
different securities, evidences of indebtedness or other assets or entitle the
holder to purchase a different number or amount of the foregoing or to purchase
any of the foregoing at a different purchase price, then the occurrence of each
such event shall be deemed to be the date of issuance and record date with
respect to a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof). In addition,
in the event of any distribution (or deemed distribution) of rights or warrants,
or any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto, that resulted in an adjustment to the Conversion
Price under this Section 10.04(d):

              (1) in the case of any such rights or warrants which shall all
          have been redeemed or repurchased without exercise by any holders
          thereof, the Conversion Price shall be readjusted upon such final
          redemption or repurchase to give effect to such distribution or
          Trigger Event, as the case may be, as though it were a cash
          distribution, equal to the per share redemption or repurchase price
          received by a holder of Common Stock with respect to such rights or
          warrant (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 all of which shall have
          expired or been terminated without exercise, the Conversion Price
          shall be readjusted as if such rights and warrants had never been
          issued.

          For purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b)
and 10.04(c), any dividend or distribution to which this Section 10.04(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 10.04(b) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which
Section 10.04(c) applies (or any combination thereof), shall be deemed instead
to be:

              (1) a dividend or distribution of the evidences of indebtedness,
          assets, shares of Capital Stock, rights or warrants other than such
          shares of Common Stock, such subdivision or combination or such rights
          or warrants to which Sections 10.04(a), 10.04(b) and 10.04(c) apply,
          respectively (and any Conversion Price reduction required by this
          Section 10.04(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,
          such subdivision or combination or such rights or warrants (and any
          further Conversion Price reduction required by Sections 10.04(a),
          10.04(b) and 10.04(c) 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 (x) "the date fixed for the determination of
              stockholders

                                      -64-


              entitled to receive such dividend or other distribution", "Record
              Date fixed for such determinations" and "Record Date" within the
              meaning of Section 10.04(a), (y) "the day upon which such
              subdivision becomes effective" and "the day upon which such
              combination becomes effective" within the meaning of Section
              10.04(b), and (z) as "the date fixed for the determination of
              stockholders entitled to receive such rights or warrants", "the
              Record Date fixed for the determination of the stockholders
              entitled to receive such rights or warrants" and such "Record
              Date" within the meaning of Section 10.04(c), 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 10.04(a) and any reduction or increase in the
              number of shares of Common Stock resulting from such subdivision
              or combination shall be disregarded in connection with such
              dividend or distribution.

          With respect to any shareholder rights plan existing on the date
hereof or in the event that the Company implements any other shareholder rights
plan, upon conversion of the Notes the Holders will receive, in addition to the
Common Stock issuable upon such conversion, the rights issued under such rights
plan, but only to the extent such rights would be issuable pursuant to the terms
of such rights plan upon the issuance of shares of Common Stock at the time the
Notes are converted pursuant to Article 10 hereof; PROVIDED THAT, a Holder who
is a holder of Common Stock (or direct or indirect interests therein) at the
time of conversion, but who is not entitled as such a holder to such rights
pursuant to the terms of any such plan, shall not be eligible to receive any
such rights hereunder. Any distribution of rights or warrants pursuant to a
shareholder rights plan complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants for the purposes of the other provisions of
this section 10.04(d).

          (e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a reclassification, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 10.11 hereof applies or as part
of a distribution referred to in Section 10.04(d) hereof), in an aggregate
amount that, combined together with: (1) the aggregate amount of any other such
distributions to all holders of Common Stock made exclusively in cash within the
12 months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to this Section 10.04(e) has been made, and (2) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of such distribution, and in
respect of which no adjustment pursuant to Section 10.04(f) hereof has been
made, exceeds 5% of the product of the Current Market Price (determined as
provided in Section 10.04(g)) on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on such
date, then and in each such case, immediately after the close of business on
such date, the Conversion Price

                                      -65-


shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Record Date by a fraction:

              (i)  the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of (x) the excess
of such combined amount over such 5% and (y) the number of shares of Common
Stock outstanding on the Record Date, and

              (ii) the denominator of which shall be equal to the Current Market
Price on such date.

However, in the event that the then fair market value (as so determined) of the
portion of the securities so distributed (other than excluded securities)
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 of a Note (or any portion thereof) the amount of cash such Holder
would have received had such Holder converted such Note (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.

          (f) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:

              (1) the aggregate of the cash plus the fair market value (as
          determined by the Board of Directors, whose determination shall be
          conclusive and set forth in a Board Resolution), as of the expiration
          of such tender offer, of consideration payable in respect of any other
          tender offers, by the Company or any of its subsidiaries for all or
          any portion of the Common Stock expiring within the 12 months
          preceding the expiration of such tender offer and in respect of which
          no adjustment pursuant to this Section 10.04(f) has been made, and

              (2) the aggregate amount of any distributions to all holders of
          the Company's Common Stock made exclusively in cash within 12 months
          preceding the expiration of such tender offer and in respect of which
          no adjustment pursuant to Section 10.04(e) has been made, exceeds 5%
          of the product of the Current Market Price (determined as provided in
          Section 10.04(g)) as of the last time (the "Expiration Time") tenders
          could have been made pursuant to such tender offer (as it may be
          amended) times the number of shares of Common Stock outstanding
          (including any tendered shares) on the Expiration Time, then, and in
          each such case, immediately prior to the opening of business on the
          day after the date of the Expiration Time, the Conversion Price shall
          be adjusted so that the same shall

                                      -66-


          equal the price determined by multiplying the Conversion Price in
          effect immediately prior to close of business on the date of the
          Expiration Time by a fraction:

              (i)  the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, and

              (ii) the denominator 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
offer) of all shares of Common Stock validly tendered and not withdrawn as of
the Expiration Time (the shares of Common Stock 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)
on the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time.

Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 10.04(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 10.04(f).

          (g) If, after the date of issuance of the Notes, the Company 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 Company, the Conversion
Rate shall be adjusted in accordance with the formula:

              R'  =  R x   (1 + F/M)

where:

       R' = the adjusted Conversion Rate.
       R = the current Conversion Rate.

          "Conversion Rate" means the number of shares of Common Stock issuable
upon conversion of $1,000 aggregate principal amount of Notes, which shall
initially be 20 shares per $1,000 aggregate principal amount of Notes.

          M = the average of the Post-Distribution Prices of the Common Stock
for the 10 Trading Days commencing on and including the fifth Trading Day after
the date on which "ex-dividend trading" commences for such dividend or
distribution on the principal United States exchange or market which such
securities are then listed or quoted (the "Ex-Dividend Date").

                                      -67-


          F = the fair market value of the securities distributed in respect of
each share of Common Stock for which this Section 10.04(g) shall mean the number
of securities distributed in respect of each share of Common Stock multiplied by
the average of the Post-Distribution Prices of those securities distributed for
the 10 Trading Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date.

          "Post-Distribution Price" of Capital Stock or any similar equity
interest on any date means the closing per unit sale price (or, if no closing
sale price is reported, the average of the bid and ask prices or, if more than
one in either case, the average of the average bid and the average ask prices)
on such date for trading of such units on a "when issued" basis without due
bills (or similar concept) as reported in the composite transactions for the
principal United States securities exchange on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated;
provided that if on any date such units have not traded on a "when issued"
basis, the Post-Distribution Price shall be the closing per unit sale price (or,
if no closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid and the average
ask prices) on such date for trading of such units on a "regular way" basis
without due bills (or similar concept) as reported in the composite transactions
for the principal United States securities exchange on which such Capital Stock
or equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated. In
the absence of such quotation, the Company shall be entitled to determine the
Post-Distribution Price on the basis of such quotations that reflect the
post-distribution value of the Capital Stock or equity interests as it considers
appropriate.

          (h) For purposes of this Section 10.04, the following terms shall have
the meanings indicated:

              (1) "Current Market Price" shall mean the average of the daily
          Closing Prices per share of Common Stock for the ten consecutive
          Trading Days immediately prior to the date in question; provided,
          however, that if:

                  (i)  the "ex" date (as hereinafter defined) for any event
              (other than the issuance or distribution requiring such
              computation) that requires an adjustment to the Conversion Price
              pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs
              during such ten consecutive Trading Days, the Closing Price for
              each Trading Day prior to the "ex" date for such other event shall
              be adjusted by multiplying such Closing Price by the same fraction
              by which the Conversion Price is so required to be adjusted as a
              result of such other event;

                  (ii) the "ex" date for any event (other than the issuance or
              distribution requiring such computation) that requires an
              adjustment to the

                                      -68-


              Conversion Price pursuant to Section 10.04(a), (b), (c), (d), (e)
              or (f) occurs on or after the "ex" date for the issuance or
              distribution requiring such computation and prior to the day in
              question, the Closing Price for each Trading Day on and after the
              "ex" date for such other event shall be adjusted by multiplying
              such Closing Price by the reciprocal of the fraction by which the
              Conversion Price is so required to be adjusted as a result of such
              other event; and

                 (iii) the "ex" date for the issuance or distribution requiring
              such computation is prior to the day in question, after taking
              into account any adjustment required pursuant to clause (i) or
              (ii) of this proviso, the Closing Price for each Trading Day on or
              after such "ex" date shall be adjusted by adding thereto the
              amount of any cash and the fair market value (as determined by the
              Board of Directors in a manner consistent with any determination
              of such value for purposes of Section 10.04(d) or (f), whose
              determination shall be conclusive and set forth in a Board
              Resolution) of the evidences of indebtedness, shares of Capital
              Stock or assets being distributed applicable to one share of
              Common Stock as of the close of business on the day before such
              "ex" date.

For purposes of any computation under Section 10.04(f), the Current Market Price
of the Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the "ex" date for any event
(other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.04(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:

                  (A) 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
              Price was obtained without the right to receive such issuance or
              distribution;

                  (B) 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,
              and

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

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 10.04, such adjustments shall be
made to the Current Market

                                      -69-


Price as may be necessary or appropriate to effectuate the intent of this
Section 10.04 and to avoid unjust or inequitable results as determined in good
faith by the Board of Directors.

               (2) "fair market value" shall mean the amount which a willing
          buyer would pay a willing seller in an arm's length transaction.

               (3) "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).

          (i) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 10.04(a), (b), (c), (d), (e) or (f), 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 Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.

          (j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this
Section 10.04(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Article 10 shall be made by the Company and shall be made to the nearest cent or
to the nearest one hundredth of a share, as the case may be. No adjustment need
be made for a change in the par value or no par value of the Common Stock.

          (k) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after a Record Date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Holder of any Note converted after such Record Date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 10.03 hereof.

                                      -70-


          (l) For purposes of this Section 10.04, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

          (m) If the distribution date for the rights provided in the Company's
rights agreement, if any, occurs prior to the date a Note is converted, the
Holder of the Note who converts such Note after the distribution date is not
entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon such conversion;
PROVIDED, HOWEVER, that an adjustment shall be made to the Conversion Price
pursuant to Section 10.04(c) or (d), as applicable, as if the rights were being
distributed to the holders of Common Stock of the Company immediately prior to
such conversion. If such an adjustment is made and the rights are later
redeemed, invalidated or terminated, then a corresponding reversing adjustment
shall be made to the Conversion Price, on an equitable basis, to take account of
such event.

          SECTION 10.05. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.

          Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of
Section 10.04(i) for which the notice required by such paragraph has been
provided), the Company shall promptly file with the Trustee and any Conversion
Agent other than the Trustee an Officers' Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based. Promptly after delivery of such Officers' Certificate, the
Company shall prepare a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective, and shall mail such notice to each Holder at
the address of such Holder as it appears in the Register within 20 days of the
effective date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

          SECTION 10.06. NOTICE PRIOR TO CERTAIN ACTIONS.

          In case at any time after the date hereof:

               (1) the Company shall declare a dividend (or any other
          distribution) on its Common Stock payable otherwise than in cash out
          of its capital surplus or its consolidated retained earnings;

               (2) the Company shall authorize the granting to the holders of
          its Common Stock of rights or warrants to subscribe for or purchase
          any shares of Capital Stock of any class (or of securities convertible
          into shares of Capital Stock of any class) or of any other rights;

               (3) there shall occur any reclassification of the Common Stock of
          the Company (other than a subdivision or combination of its
          outstanding Common Stock, a change in par value, a change from par
          value to no par value or a change

                                      -71-


          from no par value to par value), or any merger, consolidation,
          statutory share exchange or combination to which the Company is a
          party and for which approval of any shareholders of the Company is
          required, or the sale, transfer or conveyance of all or substantially
          all of the assets of the Company; or

               (4) there shall occur the voluntary or involuntary dissolution,
          liquidation or winding up of the Company;

the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of Notes pursuant to Section 4.05 hereof, and shall cause
to be provided to the Trustee and all Holders in accordance with Section 13.02
hereof, at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified, a
notice stating:

                    (A) the date on which a record is to be taken for the
               purpose of such dividend, distribution, rights or warrants, or,
               if a record is not to be taken, the date as of which the holders
               of Common Stock of record to be entitled to such dividend,
               distribution, rights or warrants are to be determined, or

                    (B) the date on which such reclassification, merger,
               consolidation, statutory share exchange, combination, sale,
               transfer, conveyance, dissolution, liquidation or winding up is
               expected to become effective, and the date as of which it is
               expected that holders of Common Stock of record shall be entitled
               to exchange their shares of Common Stock for securities, cash or
               other property deliverable upon such reclassification, merger,
               consolidation, statutory share exchange, sale, transfer,
               dissolution, liquidation or winding up.

          Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 10.06.

          SECTION 10.07. COMPANY TO RESERVE COMMON STOCK.

          The Company shall at all times use its best efforts to reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of Notes, the full
number of shares of fully paid and nonassessable Common Stock then issuable upon
the conversion of all Notes outstanding.

          SECTION 10.08. TAXES ON CONVERSIONS.

          Except as provided in the next sentence, the Company will pay any and
all taxes (other than taxes on income) and duties that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Notes
pursuant hereto. A Holder delivering a Note for conversion shall be liable for
and will be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock

                                      -72-


in a name other than that of the Holder of the Note or Notes to be converted,
and no such issue or delivery of shares of Common Stock shall be made unless the
Holder requesting such issuance and delivery has paid to the Company the amount
of any such tax or duty, or has established to the satisfaction of the Company
that such tax or duty has been paid.

          SECTION 10.09. COVENANT AS TO COMMON STOCK.

          The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable
and, except as provided in Section 10.08, the Company will pay all taxes, liens
and charges with respect to the issue thereof.

          SECTION 10.10. CANCELLATION OF CONVERTED NOTES.

          All Notes delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.10.

          SECTION 10.11. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.

          If any of following events occur, namely:

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

               (2) any merger, consolidation or combination of the Company with
          another corporation; or

               (3) any sale or conveyance of the properties and assets of the
          Company as, or substantially as, an entirety to any other corporation,

in each case, as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash or any
combination thereof) with respect to or in exchange for such Common Stock, the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the Notes
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash or any combination thereof)
which such Holder would have owned or been entitled to receive upon such
reclassification, change, merger, consolidation, combination, sale or conveyance
had such Notes been converted into shares of Common Stock immediately prior to
such reclassification, change, merger, consolidation, combination, sale or
conveyance, assuming such holder of Common Stock did not exercise its rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation,
combination, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, merger,

                                      -73-


consolidation, combination, 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 10.11
the kind and amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, combination, sale or conveyance
for each Non-Electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
10. If, in the case of any such reclassification, change, merger, consolidation,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock 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,
merger, consolidation, 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 Notes
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for the
repurchase rights set forth in Section 3.10 hereof.

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

          The above provisions of this Section 10.11 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.

          If this Section 10.11 applies to any event or occurrence,
Section 10.04 hereof shall not apply.

          SECTION 10.12. RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.

          The Trustee, subject to the provisions of Section 7.01 hereof, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or intent of
any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor
any Conversion Agent shall be accountable with respect to the validity or value
(of the kind or amount) of any Common Stock, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee, subject to the provisions of
Section 7.01 hereof, and any Conversion Agent shall not be

                                      -74-


responsible or liable for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.

                                   ARTICLE 11

                                  SUBORDINATION

          SECTION 11.01. AGREEMENT TO SUBORDINATE.

          The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness, interest and other obligations of any kind evidenced by the
Notes and this Indenture (except as set forth in this Section 11, with respect
to Permitted Payments) are subordinated in right of payment, to the extent and
in the manner provided in this Article 11, to the prior payment in full in cash
or cash equivalents of all Senior Indebtedness (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Indebtedness.

          SECTION 11.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.

          In the event of any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its assets, or
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary, or any assignment for the benefit of creditors or
other marshaling of assets or liabilities of the Company (except in connection
with the consolidation or merger of the Company or its liquidation or
dissolution following the conveyance, transfer or lease of all or substantially
all of its properties and assets upon the terms and conditions described in
Article 5), the holders of Senior Indebtedness will be entitled to receive
payment in full in cash or cash equivalents of all Senior Indebtedness, or
provision shall be made for such payment in full, before the Noteholders will be
entitled to receive any payment or distribution of any kind or character (other
than Permitted Payments and Permitted Junior Securities) on account of principal
of, or premium, if any, or additional interest, if any, or interest on the
Notes; and any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than a payment or
distribution in the form of Permitted Payments and Permitted Junior Securities),
by set-off or otherwise, to which the Noteholders or the Trustee would be
entitled but for the provisions of this Article 11 shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness to the extent necessary
to make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.

          SECTION 11.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.

          (a) No payment or distribution of any assets of the Company of any
kind or character, whether in cash, property or securities (other than Permitted
Payments and Permitted Junior Securities), may be made by or on behalf of the
Company on account of principal of,

                                      -75-


premium, if any, or interest on the Notes or on account of the purchase,
redemption or other acquisition of Notes upon the occurrence of any default in
payment (whether at Stated Maturity, upon scheduled installment, by acceleration
or otherwise) of principal of, premium, if any, or interest on Designated Senior
Indebtedness beyond any applicable grace period (a "Payment Default") until such
Payment Default shall have been cured or waived in writing or shall have ceased
to exist or such Designated Senior Indebtedness shall have been discharged or
paid in full in cash or cash equivalents.

          (b) No payment or distribution of any assets of the Company of any
kind or character, whether in cash, property or securities (other than Permitted
Payments and Permitted Junior Securities), may be made by or on behalf of the
Company on account of principal of, premium, if any, or interest on the Notes or
on account of the purchase, redemption or other acquisition of Notes for the
period specified below (a "Payment Blockage Period") upon the occurrence of any
default or event of default with respect to any Designated Senior Indebtedness
other than any Payment Default pursuant to which the maturity of such Designated
Service Indebtedness may be accelerated (a "Non-Payment Default") and receipt by
the Trustee of written notice thereof from the Company or the trustee or other
representative of holders of Designated Senior Indebtedness.

          The Payment Blockage Period will commence upon the date of receipt by
the Trustee of written notice from the Company or such other representative of
the holders of the Designated Senior Indebtedness in respect of which the
Non-Payment Default exists and shall end on the earliest of:

              (i)   179 days thereafter (provided that any Designated Senior
Indebtedness as to which notice was given shall not theretofore have been
accelerated);

              (ii)  the date on which such Non-Payment Default is cured, waived
or ceases to exist;

              (iii) the date on which such Designated Senior Indebtedness is
discharged or paid in full; or

              (iv)  the date on which such Payment Blockage Period shall have
been terminated by written notice to the Trustee or the Company from the trustee
or such other representative initiating such Payment Blockage Period,

after which the Company will resume making any and all required payments in
respect of the Notes, including any missed payments. In any event, not more than
one Payment Blockage Period may be commenced during any period of 365
consecutive days. No Non-Payment Default that existed or was continuing on the
date of the commencement of any Payment Blockage Period will be, or can be made,
the basis for the commencement of a subsequent Payment Blockage Period, unless
such Non-Payment Default has been cured or waived for a period of not less than
90 consecutive days subsequent to the commencement of such initial Payment
Blockage Period.

                                      -76-


          SECTION 11.04. ACCELERATION OF NOTES.

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

          SECTION 11.05. WHEN DISTRIBUTION MUST BE PAID OVER.

          In the event that, notwithstanding the provisions of Sections 11.02
and 11.03, any payment or distribution of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or any Noteholder
which is prohibited by such provisions, then and in such event such payment
shall be held in trust for the benefit of, and shall be paid over and delivered
by such Trustee or Noteholder to, the trustee or any other representative of
holders of Senior Indebtedness, as their interest may appear, for application to
Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been
paid in full in cash or cash equivalents after giving effect to any concurrent
distribution to or for the holders of Senior Indebtedness.

          With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Noteholders or the Company or any other Person money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 11, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee.

          SECTION 11.06. NOTICE BY THE COMPANY.

         The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
obligations with respect to the Notes to violate this Article 11, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article 11.

          SECTION 11.07. SUBROGATION.

          After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Noteholders shall be subrogated (equally and ratably with all
other Indebtedness that is equal in right of payment to the Notes) to the rights
of holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Noteholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article 11 to holders of Senior Indebtedness that
otherwise would have been made to Noteholders is not, as between the Company and
Noteholders, a payment by the Company of the Notes.

                                      -77-


          SECTION 11.08. RELATIVE RIGHTS.

          This Article 11 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall: (i) impair, as between the
Company and Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms; (ii) affect the relative rights of Holders and creditors of
Holdings other than their rights in relation to holders of Senior Indebtedness;
or (iii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of holders
and owners of Senior Indebtedness to receive distributions and payments
otherwise payable to Holders of Notes. If the Company fails because of this
Article 11 to pay principal of or interest on a Note on the due date, the
failure is still a Default or Event of Default.

          SECTION 11.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.

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

          Without in any way limiting the generality of this Section 11.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article 11 or the obligations hereunder of
the Holders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release, foreclose against or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company, any Subsidiary thereof or any other Person.

          SECTION 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

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

          Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such representative(s) or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, all holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 11.

                                      -78-


          SECTION 11.11. RIGHTS OF TRUSTEE AND PAYING AGENT.

          Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless a Responsible Officer of the Trustee shall
have received at its Corporate Trust Office at least three Business Days prior
to the date of such payment written notice of facts that would cause the payment
of any obligations with respect to the Notes to violate this Article 11. Only
the Company or its duly authorized representative may give the notice. Nothing
in this Article 11 shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.06.

          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. Any
Agent may do the same with like rights. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise. With respect to the holders
of Senior Indebtedness, the Trustee undertakes to perform or to observe only
such of its covenants or obligations as are specifically set forth in this
Article and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.

                                   ARTICLE 12

                                    SECURITY

          SECTION 12.01. SECURITY.

          (a) On the date of this Indenture, the Company shall enter into the
Pledge Agreement and comply with the terms and provisions thereof. On each date
of issuance of the Notes, the Company shall purchase Pledged Securities to be
pledged to the Trustee for the benefit of the Holders in such amount as will be
sufficient upon receipt of scheduled interest and/or principal payments of such
Pledged Securities to provide for payment in full of the first six scheduled
interest payments due on the Notes. The Pledged Securities shall be pledged by
the Company to the Trustee for the benefit of the Holders and shall be held by
the Trustee in the Pledge Account pending disposition pursuant to the Pledge
Agreement.

          (b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Pledged Securities) as the same may
be in effect or may be amended from time to time in accordance with its terms,
and authorizes and directs the Trustee to enter into the Pledge Agreement and to
perform its respective obligations and exercise its respective rights thereunder
in accordance therewith. The Company will do or cause to be done all such acts
and things as may be necessary or reasonably requested by the Trustee, or as may
be required by the provisions of the Pledge Agreement, to assure and confirm to
the Trustee the security interest in the Pledged Securities contemplated hereby,
by the Pledge Agreement or any part thereof, as

                                      -79-


from time to time constituted, so as to render the same available for the
security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein and therein expressed. The Company
shall take, or shall cause to be taken, upon request of the Trustee, any and all
actions reasonably required to cause the Pledge Agreement to create and
maintain, as security for the obligations of the Company under this Indenture
and the Notes, valid and enforceable first priority liens in and on all the
Pledged Securities, in favor of the Trustee, superior to and prior to the rights
of third Persons and subject to no other Liens.

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

          (d)  The Company shall cause TIA Section 314(b), relating to opinions
of counsel regarding the Lien under the Pledge Agreement, to be complied with.
The Trustee may accept, to the extent permitted by Sections 4.03 and 7.14 as
conclusive evidence of compliance with the foregoing provisions, the appropriate
statements contained in such instruments.

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

                                   ARTICLE 13

                                  MISCELLANEOUS

          SECTION 13.01. TRUST INDENTURE ACT CONTROLS.

          If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.

                                      -80-


          SECTION 13.02. NOTICES.

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

     if to the Company:

          OSI Pharmaceuticals, Inc.
          58 South Service Road, Suite 110
          Melville, New York 11747

          Telephone No. (631) 962-2000
          Facsimile No. (631) 752-3880
          Attention:  General Counsel

     if to the Trustee:

          The Bank of New York
          5 Penn Plaza, Thirteenth Floor
          New York, NY 10001
          Attention:  Corporate Trust Department

          Telephone No. (212) 896-7105
          Facsimile No. (212) 896-7294

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

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

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

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

          SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

          Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the

                                      -81-


Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone else
shall have the protection of TIA Section 312(c).

          SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

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

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

               (2)  an Opinion of Counsel stating that, in the opinion of such
          counsel, all such conditions precedent have been complied with.

          (b)  If a Company Order pursuant to Section 2.02 hereof has been, or
simultaneously is, delivered, any instructions by the Company to the Trustee
with respect to endorsement, delivery or redelivery of a Note issued in global
form shall be in writing, but need not comply with Section 13.04(a) hereof and
need not be accompanied by an Opinion of Counsel.

          SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

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

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

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

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

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

          SECTION 13.06. SEPARABILITY CLAUSE.

          In case any provision in this Indenture or in the Notes 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.

                                      -82-


          SECTION 13.07.RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR.

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

          SECTION 13.08. LEGAL HOLIDAYS.

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

          SECTION 13.09. GOVERNING LAW.

          THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 13.10. NO RECOURSE AGAINST OTHERS.

          A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder shall waive
and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.

          SECTION 13.11. SUCCESSORS.

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

          SECTION 13.12. MULTIPLE ORIGINALS.

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

                                      -83-


          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.

                                     OSI PHARMACEUTICALS, INC.


                                     By: /s/ ROBERT L. VAN NOSTRAND
                                         --------------------------
                                         Name:    Robert L. Van Nostrand
                                         Title:   Vice President and
                                                  Chief Financial Officer


                                     THE BANK OF NEW YORK, as Trustee


                                     By: /s/ JULIE SALOVITCH-MILLER
                                         --------------------------
                                         Name:    Julie Salovitch-Miller
                                         Title:   Vice President

                                      -84-


                                   EXHIBIT A-1

                          [FORM OF FACE OF GLOBAL NOTE]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE 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.

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION
HEREOF, THE HOLDER: (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT,
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE, OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE,
EXCEPT (A) TO OSI PHARMACEUTICALS, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF AVAILABLE), (D) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT ("REGULATION S"), OR (E) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET

                                      A-1-1


FORTH ON THE REVERSE HEREOF, RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS OSI
PHARMACEUTICALS, INC. MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE TERMS "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATIONS.

     [THE FOREGOING LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS NOTE PURSUANT TO CLAUSE 2(E) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE
ORIGINAL ISSUANCE OF THIS NOTE.]

                                      A-1-2


                            OSI PHARMACEUTICALS, INC.
                4% Convertible Senior Subordinated Notes due 2009


No.:  1                                            CUSIP:  671040 AA 1
Issue Date: February 1, 2002


     OSI PHARMACEUTICALS, INC., a Delaware corporation, promises to pay to Cede
& Co. or registered assigns, the principal sum of TWO HUNDRED MILLION DOLLARS
($200,000,000) on February 1, 2009.

     This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.

     Additional provisions of this Note are set forth on the other side of this
Note.


Dated: February 1, 2002              OSI PHARMACEUTICALS, INC.

                                     By:
                                        ------------------------------------
                                        Name:
                                        Title:

TRUSTEE'S CERTIFICATE OF
 AUTHENTICATION

THE BANK OF NEW YORK, as Trustee,
certifies that this is one of the Notes referred
to in the within-mentioned Indenture (as
defined on the other side of this Note).

By
  ----------------------------------
         Authorized Signatory

Dated:
      --------------------------

                                      A-1-3


                         [FORM OF REVERSE SIDE OF NOTE]

                4% Convertible Senior Subordinated Note due 2009


1.   Cash Interest.

     The Company promises to pay interest in cash on the principal amount of
this Note at the rate per annum of 4%. The Company will pay cash interest
semiannually in arrears on August 1 and February 1 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on the
immediately preceding January 15 and July 15 (whether or not a Business Day)
(each a "Regular Record Date"), as the case may be, immediately preceding such
Interest Payment Date. Cash interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided or, if no interest
has been paid, from the Issue Date. Cash interest will be computed on the basis
of a 360-day year of twelve 30-day months.

     In accordance with the terms of the Registration Rights Agreement, during
the first 90 days following the day on which an Event (as defined in the
Registration Rights Agreement) has occurred and is continuing, the Interest Rate
borne by the Notes shall be increased by .25% of the principal amount. From and
after the 91st day following the day on which an Event has occurred and such
Event is continuing, the Interest Rate borne by the Notes shall be increased by
an additional 0.5%. In no event shall the Interest Rate borne by the Notes
exceed 0.5%. Any amount of additional interest will be payable in cash
semiannually, in arrears, on each Interest Payment Date to Holders of record at
the close of business on the immediately preceding Regular Record Date and will
cease to accrue on the date the Event is cured. The Holder of this Security is
entitled to the benefits of the Registration Rights Agreement.

     The Holder of this Note is entitled to the benefits of the Pledge
Agreement, dated February 1, 2002, between the Company and the Trustee, pursuant
to which the Company has placed in the Pledge Account cash or Pledged Financial
Assets sufficient to provide for the payment of the first six interest payments
on this Note. The terms capitalized but undefined in this paragraph have the
meanings given to them in the Pledge Agreement.

2.   Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of, premium, if any, and cash interest on
this Note to a Paying Agent. In respect of Redemption Prices and Change of
Control Repurchase Prices, the Company will make payments in respect of the
principal of, premium, if any, and cash interest on this Note (and any
Make-Whole Payment in the case of a Provisional Redemption) to Holders who
surrender Notes to a Paying Agent to collect such payments in respect of the
Notes. The Company will pay cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
A holder of Notes with an aggregate principal amount in excess of $10,000,000
will be paid by wire transfer in immediately available funds at the election of
such holder. Any payment required to be made on any day that is not a Business
Day will be made on the next succeeding Business Day.

                                      A-1-4


3.   Paying Agent, Conversion Agent and Registrar.

     Initially, The Bank of New York (the "Trustee"), will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-Registrar without notice, other than
notice to the Trustee, except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries, or an Affiliate of either of them, may act as Paying Agent,
Conversion Agent, Registrar or co-Registrar.

4.   Indenture.

     The Company issued the Notes under an Indenture dated as of February 1,
2002 (the Indenture"), between the Company and the Trustee. The terms of the
Notes 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"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all the
terms of the Indenture, and Noteholders are referred to the Indenture and the
TIA for a statement of those terms.

     The Notes are general unsecured obligations of the Company (except as
provided in Article 12 of the Indenture) limited to $200,000,000 aggregate
principal amount. Subject to Section 4.07 of the Indenture, the Indenture does
not limit other indebtedness of the Company, secured or unsecured.

5.   Provisional Redemption.

     The Notes may be redeemed at the election of the Company, as a whole or
from time to time in part on any date, upon not less than 30 nor more than 60
days' notice to the Trustee, at any time prior to February 1, 2005, at a
Redemption Price equal to $1,000 per $1,000 principal amount of the Notes plus
accrued and unpaid interest, if any, to but excluding the Provisional Redemption
Date if (i) the Closing Price of the Common Stock has exceeded 150% of the
Conversion Price then in effect for at least 20 Trading Days within a period of
30 consecutive Trading Days ending on the Trading Day prior to the Notice Date
and (ii) during the period that the Company is obligated, under the Registration
Rights Agreement, to keep a registration statement covering resales of the Notes
and the Common Stock issuable upon conversion thereof effective, such
registration statement is effective and available for use as of, and including,
the Notice Date through and including the Provisional Redemption Date. If a
Provisional Redemption Date is an Interest Payment Date, the semi-annual payment
will be payable to the holder of record as of the relevant Regular Record Date,
and the Redemption Price will not include such semi-annual interest payment.

     Upon any such Provisional Redemption, the Company shall make an additional
Make-Whole Payment with respect to the Notes called for redemption to Holders on
the Notice Date in an amount equal to $120 per $1,000 principal amount of the
Notes to be redeemed, less the

                                      A-1-5


amount of any interest actually paid on such Notes prior to or on the
Provisional Redemption Date. The Make-Whole payment is payable in cash. The
Company shall make the Make-Whole Payment on all Notes called for Provisional
Redemption, including those Notes converted into Common Stock after the Notice
Date and before the Provisional Redemption Date.

6.   Optional Redemption.

     At any time on or after February 1, 2005, the Company may at its option
redeem the Notes in whole at any time or in part from time to time upon not less
than 30 nor more than 60 days' notice, at a Redemption Price equal to $1,000 per
$1,000 principal amount, plus any accrued and unpaid interest to but excluding
the Redemption Date, if the Closing Price of the Common Stock has exceeded 140%
of the Conversion Price (as such may be adjusted from time to time) then in
effect for at least 20 Trading Days within a period of 30 consecutive Trading
Days ending on the Trading Day prior to the date on which the Company mails the
Optional Redemption Notice pursuant to Section 3.05 of the Indenture. If an
Optional Redemption Date is an Interest Payment Date, the semi-annual interest
payment will be payable to the holder of record as of the relevant Regular
Record Date, and the redemption price will not include the semi-annual interest
payment.

     If the Company does not redeem all the Notes, the Trustee will select the
Notes to be redeemed in principal amounts of $1,000 or whole multiples of $1,000
by lot or on a pro rata basis. If any Notes are to be redeemed in part only, a
new Note or Notes in principal amount equal to the unredeemed principal portion
thereof will be issued. If a portion of a Holder's Notes is selected for partial
redemption and the Holder converts a portion of its Notes, the converted portion
will be deemed to be taken from the portion selected for redemption.

     No sinking fund is provided for the Notes.

7.   Repurchase by the Company at the Option of the Holder.

     If a Change of Control occurs, the Holder, at the Holder's option, shall
have the right, in accordance with the provisions of the Indenture, to require
the Company to repurchase all or any portion of the principal amount of the
Notes that is at least $1,000 or an integral multiple thereof (provided that the
portion of the principal amount of this Note to be outstanding after such
repurchase is at least equal to $1,000) at the Change of Control Repurchase
Price in cash (or Common Stock subject to the following paragraph), plus any
interest accrued and unpaid to, but excluding, the Change of Control Repurchase
Date.

     Subject to the conditions provided in the Indenture, the Company may elect
to pay the Change of Control Repurchase Price by delivering a number of shares
of Common Stock equal to (i) the Change of Control Repurchase Price divided by
(ii) 95% of the average of the Closing Prices per share of Common Stock for the
five consecutive Trading Days ending on the third Trading Day prior to the
Change of Control Repurchase Date.

                                      A-1-6


     No fractional shares of Common Stock will be issued upon repurchase of any
Notes. Instead of any fractional share of Common Stock that would otherwise be
issued upon conversion of such Notes, the Company shall pay a cash adjustment as
provided in the Indenture.

     Notice of the occurrence of a Change of Control will be given by the
Company to the Holders as provided in the Indenture. To exercise a repurchase
right, a Holder must deliver to the Trustee a written notice as provided in the
Indenture.

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

8.   Notice of Redemption.

     Notice of redemption will be mailed by the Company not less than 30 days
but not more than 60 days before the Redemption Date to each Holder of Notes to
be redeemed at the Holder's address as it appears on the registration books of
the registrar. If money sufficient to pay the Redemption Price of all Notes (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 ceases to accrue on such Notes or portions thereof.
Notes in denominations larger than $1,000 of principal amount may be redeemed in
part but only in integral multiples of $1,000 of principal amount.

9.   Conversion.

     Subject to the next two succeeding sentences, a Holder of a Note may
convert it into shares of Common Stock of the Company at any time before the
close of business on February 1, 2009. If the Note is called for redemption, the
Holder may convert it at any time before the close of business on the Business
Day preceding the Redemption Date, unless the Company defaults in the payment of
the Redemption Price due. A Note in respect of which a Holder has delivered a
Change of Control Repurchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.

     The initial Conversion Price shall be $50.00 per share of Common Stock,
subject to adjustment in certain events described in the Indenture. The Company
shall pay a cash adjustment as provided in the Indenture in lieu of any
fractional share of Common Stock.

     To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
duly signed and endorsed to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee and (4) pay any transfer or similar tax or payment
detailed below, if required.

                                      A-1-7


     Notes surrendered for conversion, other than those called for Provisional
Redemption or Optional Redemption, after the close of business on any Regular
Record Date but prior to the opening of business on the next succeeding Interest
Payment Date shall be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest to be
received on such Interest Payment Date on the principal amount of Notes being
surrendered for conversion. No such payment will be required if the Notes have
been called for Provisional Redemption or Optional Redemption.

10.  Conversion Arrangement on Call for Redemption.

     Any Notes called for redemption, unless surrendered for conversion before
the close of business on the Redemption Date, may be deemed to be purchased from
the Holders of such Notes at an amount not less than the Redemption Price, by
one or more investment bankers or other purchasers who may agree with the
Company to purchase such Notes from the Holders, to convert them into Common
Stock of the Company and to make payment for such Notes to the Trustee in trust
for such Holders.

11.  Denominations; Transfer; Exchange.

     The Notes 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 Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange (i) any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed), (ii) any Notes in respect of which
a Change of Control Repurchase Notice has been given and not withdrawn (except,
in the case of a Note to be purchased in part, the portion of the Note not to be
purchased) or (iii) any Notes for a period of 15 days before the mailing of a
notice of redemption of Notes to be redeemed.

12.  Persons Deemed Owners.

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

13.  Unclaimed Money or Notes.

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

                                      A-1-8


14.  Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes 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 Notes at the time
outstanding. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article 5 of the Indenture (provided that certain conditions
set forth therein are satisfied), to make any change that does not adversely
affect the rights of any Noteholder, or to comply with any requirement of the
SEC in connection with the qualification of the Indenture under the TIA.

15.  Defaults and Remedies.

     Under the Indenture, Events of Default include (1) the Company fails to pay
when due the principal of or premium, if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company fails
to pay an installment of interest (including liquidated damages, if any) on any
of the Notes on an Interest Payment Date and such failure to pay interest
continues for 30 days after such Interest Payment Date, whether or not such
payment is prohibited by Article 11 of the Indenture, provided that a failure to
make any of the first six scheduled interest payments on the Notes within 3
Business Days after the applicable Interest Payment Date will constitute an
Event of Default with no additional grace or cure period; (3) the Company fails
to deliver shares of Common Stock, together with cash in lieu of fractional
shares, when such Common Stock or cash in lieu of fractional shares is required
to be delivered upon conversion of a Note pursuant to Article 10 of the
Indenture or upon exercise of a repurchase right and such failure continues for
10 days after the delivery due date; (4) the Company fails to perform or observe
any other term, covenant or agreement contained in the Notes or the Indenture
for a period of 60 days after written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (5) (A) one or more defaults in
the payment of principal of or premium, if any, on any of the Company's
Indebtedness aggregating $5.0 million or more, when the same becomes due and
payable at the scheduled maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been cured
or waived within a 30-day period after the date of such default or (B) any of
the Company's Indebtedness aggregating $5.0 million or more shall have been
accelerated or otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior to the
scheduled maturity thereof and such acceleration is not rescinded or annulled
within a 30-day period after the date of such acceleration; (6) certain events
of bankruptcy, insolvency or reorganization with respect to the Company or any
Significant Subsidiary and (7) the Pledge Agreement shall cease to be in full
force and effect (unless it shall have been terminated in accordance with its
terms) or enforceable in accordance with its terms. If an Event of Default
(other than an Event of Default specified in clause (6) above) occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding, may declare all the

                                      A-1-9


Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default that will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.

     Noteholders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.

16.  Subordination

     The payment of principal of, premium, if any, and interest on the Notes
will be subordinated (except as provided in Article 12 of the Indenture) in
right of payment, as set forth in the Indenture, to the prior payment in full in
cash or cash equivalents of all Senior Indebtedness whether outstanding on the
date of the Indenture or thereafter incurred.

17.  Trustee Dealings with the Company.

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

18.  No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.

19.  Authentication.

     This Note 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 Note.

20.  Abbreviations.

     Customary abbreviations may be used in the name of a Noteholder 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).

                                     A-1-10


21.  GOVERNING LAW.

     THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                             ----------------------

     The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture that has in it the text of this Note. Requests
may be made to:

          General Counsel
          OSI Pharmaceuticals, Inc.
          58 South Service Road, Suite 110
          Melville, New York 11747

                                     A-1-11


                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

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

and irrevocably appoint

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

                                CONVERSION NOTICE

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

                                    / /

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

$_______________________

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

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax ID no.)


- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)

- --------------------------------------------------------------------------------

Date:                              Your Signature:
     -----------------------------                 -----------------------------

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

                                     A-1-12


                                   EXHIBIT A-2

                       [FORM OF FACE OF CERTIFICATED NOTE]

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION
HEREOF, THE HOLDER: (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT,
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE, OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE,
EXCEPT (A) TO OSI PHARMACEUTICALS, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF AVAILABLE), (D) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT ("REGULATION S"), OR (E) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF, RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER
IS PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS OSI PHARMACEUTICALS, INC.
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.

     [THE FOREGOING LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS NOTE PURSUANT TO CLAUSE 2(E) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE
ORIGINAL ISSUANCE OF THIS NOTE.]

                                      A-2-1


                            OSI PHARMACEUTICALS, INC.
                4% Convertible Senior Subordinated Notes due 2009


No.                                               CUSIP:
Issue Date:  February 1, 2002

     OSI PHARMACEUTICALS, INC., a Delaware corporation, promises to pay to
Cede & Co. or registered assigns, the principal sum of TWO HUNDRED MILLION
DOLLARS ($200,000,000) on February 1, 2009.

     This Note shall bear interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.

     Additional provisions of this Note are set forth on the other side of this
Note.

Dated: February 1, 2002              OSI PHARMACEUTICALS, INC.

                                     By
                                       ---------------------------------------
                                        Name:
                                        Title:

TRUSTEE'S CERTIFICATE OF
 AUTHENTICATION

THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Notes referred
to in the within-mentioned Indenture (as
defined on the other side of this Note).

By
  -----------------------------------
        Authorized Signatory

Dated:
      -------------------------------

                                      A-2-2


                         [FORM OF REVERSE SIDE OF NOTE]

                4% Convertible Senior Subordinated Note due 2009

1.   Cash Interest.

     The Company promises to pay interest in cash on the principal amount of
this Note at the rate per annum of 4%. The Company will pay cash interest
semiannually in arrears on August 1 and February 1 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on the
immediately preceding January 15 and July 15 (whether or not a Business Day)
(each a "Regular Record Date"), as the case may be, immediately preceding such
Interest Payment Date. Cash interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided or, if no interest
has been paid, from the Issue Date. Cash interest will be computed on the basis
of a 360-day year of twelve 30-day months.

     In accordance with the terms of the Registration Rights Agreement, during
the first 90 days following the day on which an Event (as defined in the
Registration Rights Agreement) has occurred and is continuing, the Interest Rate
borne by the Notes shall be increased by .25% of the principal amount. From and
after the 91st day following the day on which an Event has occurred and such
Event is continuing, the Interest Rate borne by the Notes shall be increased by
an additional 0.5%. In no event shall the Interest Rate borne by the Notes
exceed 0.5%. Any amount of additional interest will be payable in cash
semiannually, in arrears, on each Interest Payment Date to Holders of record at
the close of business on the immediately preceding Regular Record Date and will
cease to accrue on the date the Event is cured. The Holder of this Security is
entitled to the benefits of the Registration Rights Agreement.

     The Holder of this Note is entitled to the benefits of the Pledge
Agreement, dated February 1, 2002, between the Company and the Trustee, pursuant
to which the Company has placed in the Pledge Account cash or Pledged Financial
Assets sufficient to provide for the payment of the first six interest payments
on this Note. The terms capitalized but undefined in this paragraph have the
meanings given to them in the Pledge Agreement.

2.   Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of, premium, if any, and cash interest on
this Note to a Paying Agent. In respect of Redemption Prices and Change of
Control Repurchase Prices, the Company will make payments in respect of the
principal of, premium, if any, and cash interest on this Note (and any
Make-Whole Payment in the case of a Provisional Redemption) to Holders who
surrender Notes to a Paying Agent to collect such payments in respect of the
Notes. The Company will pay cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
A holder of Notes with an aggregate principal amount in excess of $10,000,000
will be paid by wire transfer in immediately available funds at the election of
such holder. Any payment required to be made on any day that is not a Business
Day will be made on the next succeeding Business Day.

                                      A-2-3


3.   Paying Agent, Conversion Agent and Registrar.

     Initially, The Bank of New York (the "Trustee"), will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-Registrar without notice, other than
notice to the Trustee, except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries, or an Affiliate of either of them, may act as Paying Agent,
Conversion Agent, Registrar or co-Registrar.

4.   Indenture.

     The Company issued the Notes under an Indenture dated as of February 1,
2002 (the Indenture"), between the Company and the Trustee. The terms of the
Notes 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"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all the
terms of the Indenture, and Noteholders are referred to the Indenture and the
TIA for a statement of those terms.

     The Notes are general unsecured obligations of the Company (except as
provided in Article 12 of the Indenture) limited to $200,000,000 aggregate
principal amount. Subject to Section 4.07 of the Indenture, the Indenture does
not limit other indebtedness of the Company, secured or unsecured.

5.   Provisional Redemption.

     The Notes may be redeemed at the election of the Company, as a whole or
from time to time in part on any date, upon not less than 30 nor more than 60
days' notice to the Trustee, at any time prior to February 1, 2005, at a
Redemption Price equal to $1,000 per $1,000 principal amount of the Notes plus
accrued and unpaid interest, if any, to but excluding the Provisional Redemption
Date if (i) the Closing Price of the Common Stock has exceeded 150% of the
Conversion Price then in effect for at least 20 Trading Days within a period of
30 consecutive Trading Days ending on the Trading Day prior to the Notice Date
and (ii) during the period that the Company is obligated, under the Registration
Rights Agreement, to keep a registration statement covering resales of the Notes
and the Common Stock issuable upon conversion thereof effective, such
registration statement is effective and available for use as of, and including,
the Notice Date through and including the Provisional Redemption Date. If a
Provisional Redemption Date is an Interest Payment Date, the semi-annual payment
will be payable to the holder of record as of the relevant Regular Record Date,
and the Redemption Price will not include such semi-annual interest payment.

     Upon any such Provisional Redemption, the Company shall make an additional
Make-Whole Payment with respect to the Notes called for redemption to Holders on
the Notice Date in an amount equal to $120 per $1,000 principal amount of the
Notes to be redeemed, less the

                                      A-2-4


amount of any interest actually paid on such Notes prior to or on the
Provisional Redemption Date. The Make-Whole payment is payable in cash. The
Company shall make the Make-Whole Payment on all Notes called for Provisional
Redemption, including those Notes converted into Common Stock after the Notice
Date and before the Provisional Redemption Date.

6.   Optional Redemption.

     At any time on or after February 1, 2005, the Company may at its option
redeem the Notes in whole at any time or in part from time to time upon not less
than 30 nor more than 60 days' notice, at a Redemption Price equal to $1,000 per
$1,000 principal amount, plus any accrued and unpaid interest to but excluding
the Redemption Date, if the Closing Price of the Common Stock has exceeded 140%
of the Conversion Price (as such may be adjusted from time to time) then in
effect for at least 20 Trading Days within a period of 30 consecutive Trading
Days ending on the Trading Day prior to the date on which the Company mails the
Optional Redemption Notice pursuant to Section 3.05 of the Indenture. If an
Optional Redemption Date is an Interest Payment Date, the semi-annual interest
payment will be payable to the holder of record as of the relevant Regular
Record Date, and the redemption price will not include the semi-annual interest
payment.

     If the Company does not redeem all the Notes, the Trustee will select the
Notes to be redeemed in principal amounts of $1,000 or whole multiples of $1,000
by lot or on a pro rata basis. If any Notes are to be redeemed in part only, a
new Note or Notes in principal amount equal to the unredeemed principal portion
thereof will be issued. If a portion of a Holder's Notes is selected for partial
redemption and the Holder converts a portion of its Notes, the converted portion
will be deemed to be taken from the portion selected for redemption.

     No sinking fund is provided for the Notes.

7.   Repurchase by the Company at the Option of the Holder.

     If a Change of Control occurs, the Holder, at the Holder's option, shall
have the right, in accordance with the provisions of the Indenture, to require
the Company to repurchase all or any portion of the principal amount of the
Notes that is at least $1,000 or an integral multiple thereof (provided that the
portion of the principal amount of this Note to be outstanding after such
repurchase is at least equal to $1,000) at the Change of Control Repurchase
Price in cash (or Common Stock subject to the following paragraph), plus any
interest accrued and unpaid to, but excluding, the Change of Control Repurchase
Date.

     Subject to the conditions provided in the Indenture, the Company may elect
to pay the Change of Control Repurchase Price by delivering a number of shares
of Common Stock equal to (i) the Change of Control Repurchase Price divided by
(ii) 95% of the average of the Closing Prices per share of Common Stock for the
five consecutive Trading Days ending on the third Trading Day prior to the
Change of Control Repurchase Date.

                                      A-2-5


     No fractional shares of Common Stock will be issued upon repurchase of any
Notes. Instead of any fractional share of Common Stock that would otherwise be
issued upon conversion of such Notes, the Company shall pay a cash adjustment as
provided in the Indenture.

     Notice of the occurrence of a Change of Control will be given by the
Company to the Holders as provided in the Indenture. To exercise a repurchase
right, a Holder must deliver to the Trustee a written notice as provided in the
Indenture.

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

8.   Notice of Redemption.

     Notice of redemption will be mailed by the Company not less than 30 days
but not more than 60 days before the Redemption Date to each Holder of Notes to
be redeemed at the Holder's address as it appears on the registration books of
the registrar. If money sufficient to pay the Redemption Price of all Notes (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 ceases to accrue on such Notes or portions thereof.
Notes in denominations larger than $1,000 of principal amount may be redeemed in
part but only in integral multiples of $1,000 of principal amount.

9.   Conversion.

     Subject to the next two succeeding sentences, a Holder of a Note may
convert it into shares of Common Stock of the Company at any time before the
close of business on February 1, 2009. If the Note is called for redemption, the
Holder may convert it at any time before the close of business on the Business
Day preceding the Redemption Date, unless the Company defaults in the payment of
the Redemption Price due. A Note in respect of which a Holder has delivered a
Change of Control Repurchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.

     The initial Conversion Price shall be $50.00 per share of Common Stock,
subject to adjustment in certain events described in the Indenture. The Company
shall pay a cash adjustment as provided in the Indenture in lieu of any
fractional share of Common Stock.

     To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
duly signed and endorsed to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee and (4) pay any transfer or similar tax or payment
detailed below, if required.

                                      A-2-6


     Notes surrendered for conversion, other than those called for Provisional
Redemption or Optional Redemption, after the close of business on any Regular
Record Date but prior to the opening of business on the next succeeding Interest
Payment Date shall be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest to be
received on such Interest Payment Date on the principal amount of Notes being
surrendered for conversion. No such payment will be required if the Notes have
been called for Provisional Redemption or Optional Redemption.

10.  Conversion Arrangement on Call for Redemption.

     Any Notes called for redemption, unless surrendered for conversion before
the close of business on the Redemption Date, may be deemed to be purchased from
the Holders of such Notes at an amount not less than the Redemption Price, by
one or more investment bankers or other purchasers who may agree with the
Company to purchase such Notes from the Holders, to convert them into Common
Stock of the Company and to make payment for such Notes to the Trustee in trust
for such Holders.

11.  Denominations; Transfer; Exchange.

     The Notes 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 Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange (i) any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed), (ii) any Notes in respect of which
a Change of Control Repurchase Notice has been given and not withdrawn (except,
in the case of a Note to be purchased in part, the portion of the Note not to be
purchased) or (iii) any Notes for a period of 15 days before the mailing of a
notice of redemption of Notes to be redeemed.

12.  Persons Deemed Owners.

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

13.  Unclaimed Money or Notes.

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

                                      A-2-7


14.  Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes 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 Notes at the time
outstanding. Subject to certain exceptions set forth in the Indenture, without
the consent of any Noteholder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article 5 of the Indenture (provided that certain conditions
set forth therein are satisfied), to make any change that does not adversely
affect the rights of any Noteholder, or to comply with any requirement of the
SEC in connection with the qualification of the Indenture under the TIA.

15.  Defaults and Remedies.

     Under the Indenture, Events of Default include (1) the Company fails to pay
when due the principal of or premium, if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company fails
to pay an installment of interest (including liquidated damages, if any) on any
of the Notes on an Interest Payment Date and such failure to pay interest
continues for 30 days after such Interest Payment Date, whether or not such
payment is prohibited by Article 11 of the Indenture, provided that a failure to
make any of the first six scheduled interest payments on the Notes within 3
Business Days after the applicable Interest Payment Date will constitute an
Event of Default with no additional grace or cure period; (3) the Company fails
to deliver shares of Common Stock, together with cash in lieu of fractional
shares, when such Common Stock or cash in lieu of fractional shares is required
to be delivered upon conversion of a Note pursuant to Article 10 of the
Indenture or upon exercise of a repurchase right and such failure continues for
10 days after the delivery due date; (4) the Company fails to perform or observe
any other term, covenant or agreement contained in the Notes or the Indenture
for a period of 60 days after written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (5) (A) one or more defaults in
the payment of principal of or premium, if any, on any of the Company's
Indebtedness aggregating $5.0 million or more, when the same becomes due and
payable at the scheduled maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been cured
or waived within a 30-day period after the date of such default or (B) any of
the Company's Indebtedness aggregating $5.0 million or more shall have been
accelerated or otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior to the
scheduled maturity thereof and such acceleration is not rescinded or annulled
within a 30-day period after the date of such acceleration; (6) certain events
of bankruptcy, insolvency or reorganization with respect to the Company or any
Significant Subsidiary and (7) the Pledge Agreement shall cease to be in full
force and effect (unless it shall have been terminated in accordance with its
terms) or enforceable in accordance with its terms. If an Event of Default
(other than an Event of Default specified in clause (6) above) occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding, may declare all the

                                      A-2-8


Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default that will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.

     Noteholders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.

16.  Subordination

     The payment of principal of, premium, if any, and interest on the Notes
will be subordinated (except as provided in Article 12 of the Indenture) in
right of payment, as set forth in the Indenture, to the prior payment in full in
cash or cash equivalents of all Senior Indebtedness whether outstanding on the
date of the Indenture or thereafter incurred.

17.  Trustee Dealings with the Company.

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

18.  No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.

19.  Authentication.

     This Note 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 Note.

20.  Abbreviations.

     Customary abbreviations may be used in the name of a Noteholder 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).

                                      A-2-9


21.  GOVERNING LAW.

     THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                   ----------

     The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture that has in it the text of this Note. Requests
may be made to:

          General Counsel
          OSI Pharmaceuticals, Inc.
          58 South Service Road, Suite 110
          Melville, New York 11747

                                     A-2-10


                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

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

and irrevocably appoint

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

                                CONVERSION NOTICE

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

                                       / /

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

$_______________________

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

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax ID no.)

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)


- --------------------------------------------------------------------------------

Date:                              Your Signature:
     -----------------------------                 -----------------------------

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

                                     A-2-11


                                   EXHIBIT B-1

                              Transfer Certificate

     In connection with any transfer of any of the Notes within the period prior
to the expiration of the holding period applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act")
(or any successor provision), the undersigned registered owner of this Note
hereby certifies with respect to $_____________ principal amount of the
above-captioned Notes presented or surrendered on the date hereof (the
"Surrendered Notes") for registration of transfer, or for exchange or conversion
where the Notes issuable upon such exchange or conversion are to be registered
in a name other than that of the undersigned registered owner (each such
transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Notes for the reason
checked below:

     / /  A transfer of the Surrendered Notes is made to the Company or any
          subsidiaries; or

     / /  The transfer of the Surrendered Notes complies with Rule 144A under
          the U.S. Securities Act of 1933, as amended (the "Securities Act"); or

     / /  The transfer of the Surrendered Notes is to an institutional
          accredited investor, as described in Rule 501(a)(1), (2), (3) or (7)
          of Regulation D under the Securities Act; or

     / /  The transfer of the Surrendered Notes is pursuant to an effective
          registration statement under the Securities Act, or

     / /  The transfer of the Surrendered Notes is pursuant to an offshore
          transaction in accordance with Rule 904 of Regulation S under the
          Securities Act; or

     / /  The transfer of the Surrendered Notes is pursuant to another available
          exemption from the registration requirement of the Securities Act.

and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Notes are not being transferred to an "affiliate"
of the Company as defined in Rule 144 under the Securities Act (an "Affiliate").

     / /  The transferee is an Affiliate of the Company.

DATE:
     ---------------------             -----------------------------------------
                                                      Signature(s)

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

                                      B-1-1


                                   EXHIBIT B-2

             Form of Letter to Be Delivered by Accredited Investors

OSI Pharmaceuticals, Inc.
58 South Service Road, Suite 110
Melville, NY 11747
Attention: Barbara Wood, General Counsel

The Bank of New York
5 Penn Plaza, Thirteenth Floor
New York, New York 10001
Attention: Corporate Trust Department

Telephone No. (212) 896-7105
Facsimile No. (212) 896-7294

Dear Sirs:

     We are delivering this letter in connection with the proposed transfer of
$_____________ principal amount of the 4% Convertible Senior Subordinated Notes
due 2009 (the "Notes") of OSI Pharmaceuticals, Inc. (the "Company"), which are
convertible into shares of the Company's Common Stock, $0.01 par value per share
(the "Common Stock").

     We hereby confirm that:

           (i)  we are an "accredited investor" within the meaning of Rule
     501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
     "Securities Act"), or an entity in which all of the equity owners are
     accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
     the Securities Act (an "Institutional Accredited Investor");

          (ii)  the purchase of Notes by us is for our own account or for the
     account of one or more other Institutional Accredited Investors or as
     fiduciary for the account of one or more trusts, each of which is an
     "accredited investor" within the meaning of Rule 501(a)(7) under the
     Securities Act and for each of which we exercise sole investment discretion
     or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
     Securities Act, or a "savings and loan association" or other institution
     described in Section 3(a)(5)(A) of the Securities Act that is acquiring
     Notes fiduciary for the account of one or more institutions for which we
     exercise sole investment discretion;

          (iii) we have such knowledge and experience in financial and business
     matters that we are capable of evaluating the merits and risks of
     purchasing Notes; and

          (iv)  we are not acquiring Notes with a view to distribution thereof
     or with any present intention of offering or selling Notes or the Common
     Stock issuable upon conversion thereof, except as permitted below; provided
     that the disposition of our

                                      B-2-1


     property and property of any accounts for which we are acting as fiduciary
     shall remain at all times within our control.

     We understand that the Notes were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Notes and the shares of Common
Stock (the "Notes") issuable upon conversion thereof have not been registered
under the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Notes, that if in the future we decide to
resell or otherwise transfer such Notes prior to the date (the "Resale
Restriction Termination Date") which is two years after the later of the
original issuance of the Notes and the last date on which the Company or an
affiliate of the Company was the owner of the Note, such Notes may be resold or
otherwise transferred only (i) to the Company or any subsidiary thereof, or (ii)
for as long as the Notes are eligible for resale pursuant to Rule 144A, to a
person it reasonably believes is a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) that purchases for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A, or (iii) to an Institutional
Accredited Investor that is acquiring the Note for its own account, or for the
account of such Institutional Accredited Investor for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, or (iv) pursuant to another available exemption
from registration under the Securities Act (if applicable), or (v) pursuant to a
registration statement which has been declared effective under the Securities
Act and, in each case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction and in
accordance with the legends set forth on the Notes. We further agree to provide
any person purchasing any of the Notes other than pursuant to clause (v) above
from us a notice advising such purchaser that resales of such Notes are
restricted as stated herein. We understand that the trustee or the transfer
agent, as the case may be, for the Notes will not be required to accept for
registration of transfer any Notes pursuant to (iii) or (iv) above except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that any
Notes will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Notes transferred pursuant to clause (v) above.

     We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

                                      B-2-2


     THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

                                     ------------------------------------------
                                     (Name of Purchaser)

                                     By:
                                        ----------------------------------------
                                        Name:
                                        Title:
                                        Address:

                                      B-2-3

EX-4.3

                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY


                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

                             Dated February 1, 2002

                                      From

                            OSI PHARMACEUTICALS, INC.

                                   AS PLEDGOR

                                       to

                              THE BANK OF NEW YORK

                                   AS TRUSTEE



                                TABLE OF CONTENTS

                                                                                                
Section 1.    Grant Of Security........................................................................2

Section 2.    Security For Obligations.................................................................3

Section 3.    Maintaining The Pledged Account..........................................................3

Section 4.    Delivery And Control Of Collateral.......................................................3

Section 5.    Release Of Amounts.......................................................................5

Section 6.    Representations And Warranties...........................................................5

Section 7.    Further Assurances.......................................................................6

Section 8.    Covenants................................................................................8

Section 9.    Post-Closing Changes.....................................................................8

Section 10.   Transfers And Other Liens................................................................8

Section 11.   Trustee Appointed Attorney-In-Fact.......................................................8

Section 12.   No Assumption Of Duties; Reasonable Care.................................................9

Section 13.   Remedies................................................................................10

Section 14.   Indemnity And Expenses..................................................................11

Section 15.   Security Interest Absolute..............................................................11

Section 16.   Amendments; Waivers.....................................................................12

Section 17.   Notices; Etc............................................................................12

Section 18.   Continuing Security Interest; Assignments Under The Indenture...........................13

Section 19.   Termination.............................................................................13

Section 20.   Execution In Counterparts...............................................................13

Section 21.   Governing Law; Submission To Jurisdiction; Waiver Of Jury Trial.........................13

Schedule I    Pledged Security Entitlements
Schedule II   Osi Pharmaceuticals

EXHIBIT A     FORM OF CONTROL AGREEMENT



                                        i


                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

          COLLATERAL PLEDGE AND SECURITY AGREEMENT dated February 1, 2002 made
by OSI Pharmaceuticals, Inc., a Delaware corporation (the "PLEDGOR"), to The
Bank of New York, a New York Banking Corporation, in its capacity as Trustee
(the "TRUSTEE") for the holders (the "HOLDERS") of the Notes (as defined
herein), issued by the Pledgor under the Indenture referred to below.
Capitalized terms used and not defined herein have the meanings set forth or
referred to in the Indenture.

                             PRELIMINARY STATEMENTS

          (1)  The Pledgor and the Trustee have entered into that certain
Indenture dated as of February 1, 2002 (said Indenture, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the "INDENTURE") pursuant to which the Pledgor is issuing on the
date hereof $200,000,000 aggregate principal amount of 4% Convertible Senior
Subordinated Notes due 2009.

          (2)  The Pledgor has security entitlements (the "PLEDGED SECURITY
ENTITLEMENTS") with respect to (i) the United States Treasury securities
identified on Schedule I hereto, and credited to the Pledgor's account, Account
No. 341431 (the "PLEDGED ACCOUNT"), with the Trustee at its office at 101
Barclay Street, New York, NY 10286 and (ii) all other financial assets credited
from time to time to the Pledged Account (such other financial assets, together
with the Pledged Security Entitlements, the "PLEDGED FINANCIAL ASSETS").

          (3)  To secure the obligations of the Pledgor under the Indenture and
the Notes to pay in full each of the first six scheduled interest payments on
the Notes and to secure repayment of the principal and interest on the Notes in
the event that the Notes become due and payable prior to such time as the first
six scheduled interest payments thereon shall have been paid in full
(collectively, the "OBLIGATIONS"), the Pledgor has agreed (i) to pledge to the
Trustee for its benefit and the ratable benefit of the Holders of the Notes, a
security interest in the Collateral (as defined herein) and (ii) to execute and
deliver this Pledge Agreement in order to secure the payment and performance by
the Pledgor of all of the Obligations.

          (4)  It is a condition precedent to the initial purchase of the Notes
by the initial Holders thereof that the Pledgor shall have granted the security
interest and made the pledge contemplated by this Agreement.

          (5)  Unless otherwise defined in this Agreement or in the Indenture,
terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. "UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of New York; PROVIDED that, if perfection or the effect of
perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other



than the State of New York, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority. The term "FEDERAL BOOK ENTRY REGULATIONS" means (a) the federal
regulations contained in Subpart B ("TREASURY/RESERVE AUTOMATED DEBT ENTRY
SYSTEM (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("ADDITIONAL PROVISIONS") of 31 C.F.R. Part
357, 31 C.F.R. Section. 357.2, Section. 357.10 through Section. 357.14 and
Section. 357.41 through Section. 357.44 and (b) to the extent substantially
identical to the federal regulations referred to in clause (a) above (as in
effect from time to time), the federal regulations governing other book-entry
securities.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the initial Holders of the Notes to purchase the Notes, the Pledgor
hereby agrees with the Trustee for the ratable benefit of the Holders of the
Notes as follows:

          Section 1.  GRANT OF SECURITY

          The Pledgor hereby pledges to the Trustee, for the ratable benefit of
the Holders of the Notes, and hereby grants to the Trustee, for the ratable
benefit of the Holders of the Notes, a security interest in, such Pledgor's
right, title and interest in and to the following, in each case, as to each type
of property described below, whether now owned or hereafter acquired by such
Pledgor, wherever located, and whether now or hereafter existing or arising
(collectively, the "COLLATERAL"):

               (a)    the Pledged Account, all Pledged Security Entitlements
     with respect to all Pledged Financial Assets from time to time credited to
     the Pledged Account, and all Pledged Financial Assets, and all dividends,
     distributions, return of capital, interest, cash, instruments and other
     property from time to time received, receivable or otherwise distributed in
     respect of or in exchange for any or all of such Pledged Security
     Entitlements or such Pledged Financial Assets and all subscription
     warrants, rights or options issued thereon or with respect thereto, any
     such property not constituting "securities" as defined in the UCC to be
     treated as a financial asset pursuant to Article 8 of the UCC;

               (b)    all other securities, security entitlements and other
     financial assets from time to time acquired by the Pledgor pursuant to
     Article 12 of the Indenture;

               (c)    all proceeds of any and all of the Collateral (including,
     without limitation, proceeds, collateral and supporting obligations that
     constitute property of the types described in clauses (a) and (b) of this
     Section 1 and this clause (c) and, to the extent not otherwise included,
     all cash).

                                        2


          Section 2.  SECURITY FOR OBLIGATIONS

          The security interest granted by this Agreement secures the payment of
all the Obligations, whether for principal or interest, now or hereafter
existing under the Notes (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by the Pledgor to the Trustee or any Holder of the Notes but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.

          Section 3.  MAINTAINING THE PLEDGED ACCOUNT

          So long as any Secured Obligation shall remain outstanding:

               (a)    The Pledgor will maintain separately the Pledged Account
     with the Trustee.

               (b)    The Trustee shall have sole right to direct the
     disposition of funds with respect to the Pledged Account; and it shall be a
     term and condition of the Pledged Account, notwithstanding any term or
     condition to the contrary in any other agreement relating to the Pledged
     Account, that, except as otherwise provided by the provisions of Section 5
     and Section 19, no amount (including, without limitation, interest on the
     Pledged Securities Entitlements or Pledged Financial Assets credited
     thereto) will be paid or released to or for the account of, or withdrawn by
     or for the account of, the Pledgor or any other Person from the Pledged
     Account.

               (c)    The Trustee may, at any time and without notice to, or
     consent from, the Pledgor, transfer, or direct the transfer of, funds from
     the Pledged Account to satisfy the Pledgor's obligations under the
     Indenture if an Event of Default (as hereinafter defined) shall have
     occurred and be continuing.

          The Pledged Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.

          Section 4.  DELIVERY AND CONTROL OF COLLATERAL

               (a)    All cash, certificates or instruments representing or
     evidencing the Collateral shall be delivered to and held by or on behalf of
     the Trustee pursuant hereto and shall be in suitable form for transfer by
     delivery, or shall be accompanied by duly executed instruments of transfer
     or assignment in blank, all in form and substance satisfactory to the
     Trustee. The Trustee shall have the right, at any time in its discretion
     and without notice to the Pledgor, to transfer to or to register in the
     name of the Trustee or any of its nominees any or all of the Collateral. In
     addition, the Trustee shall have the right at any time to exchange
     certificates or instruments representing or evidencing the Collateral for
     certificates or instruments of smaller or larger denominations. Also, the
     Trustee shall have the right at any time to convert Collateral consisting
     of financial assets

                                        3


     credited to the Pledged Account to Collateral consisting of financial
     assets held directly by the Trustee, and to convert Collateral consisting
     of financial assets held directly by the Trustee to Collateral consisting
     of financial assets credited to the Pledged Account.

               (b)    With respect to any Collateral in which the Pledgor has
     any right, title or interest and that constitutes an uncertificated
     security, the Pledgor shall cause the issuer thereof either (i) to register
     the Trustee as the registered owner of such security or (ii) to agree in
     writing with the Pledgor and the Trustee that such issuer will comply with
     instructions with respect to such security originated by the Trustee
     without further consent of the Pledgor, such agreement to be in form and
     substance satisfactory to the Trustee.

               (c)    With respect to any Collateral in which the Pledgor has
     any right, title or interest and that constitutes a security entitlement in
     which the Trustee is not the entitlement holder, such Pledgor will cause
     the securities intermediary with respect to such security entitlement
     either (i) to identify in its records the Trustee as the entitlement holder
     of such security entitlement against such securities intermediary or (ii)
     to agree in an authenticated record with such Pledgor and the Trustee that
     such securities intermediary will comply with entitlement orders (that is,
     notifications communicated to such securities intermediary directing
     transfer or redemption of the financial asset to which such Pledgor has a
     security entitlement) originated by the Trustee without further consent of
     such Pledgor, such authenticated record to be in substantially the form of
     Exhibit A hereto or otherwise in form and substance satisfactory to the
     Trustee.

               (d)    Prior to or concurrently with the execution and delivery
     hereof and prior to the transfer to the Trustee of the Pledged Financial
     Assets, the Trustee shall establish the Pledged Account on its books as a
     separate account segregated from all other custodial or collateral accounts
     at its office. Upon transfer of the Pledged Financial Assets to the
     Trustee, as confirmed to the Trustee by the securities intermediary, the
     Trustee shall make appropriate book entries indicating that the Pledged
     Financial Assets have been credited to and are held in the Pledged Account.
     Subject to the other terms and conditions of this Agreement, all funds or
     other property held by the Trustee pursuant to this Agreement shall be held
     in the Pledged Account subject to the exclusive dominion and control of the
     Trustee and exclusively for the ratable benefit of the Holders of the Notes
     and segregated from all other funds or other property otherwise held by the
     Trustee.

               (e)    All Collateral shall be retained in the Pledged Account
     pending disbursement pursuant to the terms hereof.

               (f)    Concurrently with the execution and delivery of this
     Agreement, the Trustee is delivering to the Pledgor a duly executed Control
     Agreement (the "Control Agreement") in the form of Exhibit A hereto, and a
     certificate of an officer of the Trustee, confirming the Trustee's
     establishment and separate maintenance of the Pledged Account, its receipt
     and holding of the Pledged Financial Assets and the crediting of the
     Pledged Financial Assets to the Pledged Account, all in accordance with
     this Agreement.

                                        4


               (g)    Concurrently with the execution and delivery of this
     Agreement, the Pledgor is delivering to the Trustee financing statements,
     in form acceptable to the Trustee, for filing under the UCC in all
     jurisdictions as necessary or desirable in order to perfect and protect the
     security interest created by this Agreement, covering the Collateral
     described in this Agreement.

          Section 5.  RELEASE OF AMOUNTS

               (a)    On the due date of any of the first six scheduled interest
     payments on the Notes, the Trustee will release from the Pledged Account
     funds sufficient to provide for the payment of the interest on the Notes in
     accordance with the payment provisions of the Indenture to the Holders of
     the Notes from (and to the extent of) proceeds of the Pledged Financial
     Assets. Nothing in this Section 5 shall affect the Trustee's rights to
     apply the Collateral to the payments of amounts due on the Notes upon
     acceleration thereof.

               (b)    The Trustee shall liquidate Collateral in the Pledged
     Account in order to make any scheduled payment of interest pursuant to the
     Notes, unless there are sufficient funds in the Pledged Account on such
     interest payment date. The Trustee shall be entitled to sell any Collateral
     as contemplated hereunder prior to the maturity of such Collateral and the
     Pledgor shall be responsible for the costs and expenses of such sale.

               (c)    If at any time before the first six scheduled interest
     payments on the Notes have been paid in full, repayment of the principal
     amount of the Notes shall be accelerated under the Indenture, the Trustee
     shall liquidate all Collateral in the Pledged Account for payment to the
     Holders, subject to the automatic stay provisions of bankruptcy law, if
     applicable. Distributions from the Pledged Account will be applied first to
     any accrued and unpaid interest on the Notes and second, to the extent
     available, to the repayment of the outstanding principal of the Notes.

          Section 6.  REPRESENTATIONS AND WARRANTIES

          The Pledgor represents and warrants that:

               (a)    The execution and delivery by the Pledgor of, and the
     performance by the Pledgor of its obligations under, this Agreement will
     not contravene any provision of applicable law or the certificate of
     incorporation of the Pledgor or any material agreement or other material
     instrument binding upon the Pledgor or any of its subsidiaries or any
     judgment, order or decree of any governmental body, agency or court having
     jurisdiction over the Pledgor or any of its subsidiaries, or result in the
     creation or imposition of any lien on any assets of the Pledgor, except for
     the security interests granted under this Agreement.

               (b)    No consent of any other person and no approval,
     authorization, order of, action by, notice to, filing or qualification
     with, any governmental authority, regulatory body, agency or other third
     party is required (i) for the execution, delivery or performance by the
     Pledgor of this Agreement, (ii) for the grant by the Pledgor of the

                                        5


     assignment, pledge and security interest created hereby, (iii) for the
     perfection or maintenance of the assignment, pledge and security interest
     created hereunder (including the first priority nature of such assignment,
     pledge and security interest), except for (A) the execution of the Control
     Agreement by the parties thereto and (B) the filing of financing statements
     under the Uniform Commercial Code, which financing statements have been
     delivered to the Trustee for filing or (iv) for the exercise by the Trustee
     of its rights provided for in this Agreement or the remedies in respect of
     the Collateral pursuant to this Agreement, except as may be required in
     connection with the disposition of any portion of the Collateral by laws
     affecting the offering and sale of securities generally.

               (c)    The Pledgor is the legal and beneficial owner of the
     Collateral free and clear of any Lien, claim, option or right of others,
     except for the security interest created under this Agreement. No effective
     financing statement or other instrument similar in effect covering all or
     any part of the Collateral or listing the Pledgor or any trade name of the
     Pledgor as debtor is on file in any recording office, except such as may
     have been filed in favor of the Trustee relating to this Agreement. The
     Pledgor has only the trade names listed on Schedule II hereto.

               (d)    This Pledge Agreement has been duly authorized and validly
     executed and delivered by the Pledgor and constitutes a valid and binding
     agreement of the Pledgor, enforceable against the Pledgor in accordance
     with its terms.

               (e)    Upon the transfer to the Trustee of the Pledged Financial
     Assets, in accordance with Section 4 above, the pledge and grant of a
     security interest in the Collateral pursuant to this Agreement for the
     benefit of the Trustee and the Holders of the Notes will constitute a valid
     and perfected first-priority security interest in such Collateral, securing
     the payment of the Secured Obligations, enforceable as such against all
     creditors of the Pledgor (and any persons purporting to purchase any of the
     Collateral from the Pledgor).

               (f)    There are no legal or governmental proceedings pending or,
     to the best of the Pledgor's knowledge, threatened to which the Pledgor or
     any of its subsidiaries is a party or to which any of the properties of the
     Pledgor or any such subsidiary are subject that would materially adversely
     affect the power or ability of the Pledgor to perform its obligations under
     this Agreement or to consummate the transactions contemplated hereby.

               (g)    The pledge of the Collateral pursuant to this Agreement is
     not prohibited by law or governmental regulation (including, without
     limitation, Regulations G, T, U, and X of the Board of Governors of the
     Federal Reserve System) applicable to the Pledgor.

               (h)    No Event of Default (as defined below) exists.

               (i)    The jurisdiction (for purposes of Section 8-110(e) of the
     UCC) of the Trustee and the Pledged Account is New York.

          Section 7.  FURTHER ASSURANCES

                                        6


               (a)    The Pledgor agrees that from time to time, at the expense
     of the Pledgor, the Pledgor will promptly execute and deliver, or otherwise
     authenticate, all further instruments and documents, and take all further
     action that may be necessary or desirable, or that the Trustee may request,
     in order to perfect and protect any pledge or security interest granted or
     purported to be granted by the Pledgor hereunder or to enable the Trustee
     to exercise and enforce its rights and remedies hereunder with respect to
     any Collateral. Without limiting the generality of the foregoing, the
     Pledgor will promptly with respect to Collateral of such Pledgor: (i) if
     any such Collateral shall be evidenced by a promissory note or other
     instrument or chattel paper, deliver and pledge to the Trustee hereunder
     such note or instrument or chattel paper duly indorsed and accompanied by
     duly executed instruments of transfer or assignment, all in form and
     substance satisfactory to the Trustee; (ii) execute or authenticate and
     file such financing or continuation statements, or amendments thereto, and
     such other instruments or notices, as may be necessary or desirable, or as
     the Trustee may request, in order to perfect and preserve the security
     interest granted or purported to be granted by the Pledgor hereunder; (iii)
     deliver and pledge to the Trustee for benefit of the Trustee and the
     Holders of the Notes certificates representing Collateral that constitutes
     certificated securities, accompanied by undated stock or bond powers
     executed in blank; (iv) take all action necessary to ensure that the
     Trustee has control of the Pledged Account; and (v) deliver to the Trustee
     evidence that all other action that the Trustee may deem reasonably
     necessary or desirable in order to perfect and protect the security
     interest created by the Pledgor under this Agreement has been taken. From
     time to time upon request by the Trustee, the Pledgor will, at the
     Pledgor's expense, cause to be delivered to the Trustee, for the benefit of
     the Trustee and the Holders of the Notes, an opinion of counsel, from
     outside counsel reasonably satisfactory to the Trustee, as to such matters
     relating to the transactions contemplated hereby as the Trustee may
     reasonably request.

               (b)    The Pledgor hereby authorizes the Trustee to file one or
     more financing or continuation statements, and amendments thereto, relating
     to all or any part of the Collateral, in each case without the signature of
     the Pledgor, and regardless of whether any particular asset described in
     such financing statements falls within the scope of the UCC. A photocopy or
     other reproduction of this Agreement or any financing statement covering
     the Collateral or any part thereof shall be sufficient as a financing
     statement where permitted by law. The Pledgor ratifies its authorization
     for the Trustee to have filed such financing statements, continuation
     statements or amendments filed prior to the date hereof.

               (c)    The Pledgor will furnish to the Trustee from time to time
     statements and schedules further identifying and describing the Collateral
     and such other reports in connection with the Collateral as the Trustee may
     reasonably request, all in reasonable detail.

               (d)    The Pledgor will promptly pay all costs incurred in
     connection with any of the foregoing within 45 days of receipt of an
     invoice therefor. The Pledgor also agrees, whether or not requested by the
     Trustee, to take all actions that are necessary to perfect or continue the
     perfection of, or to protect the first priority nature of, the Trustee's
     security interest in and to the Collateral, including the filing of all
     necessary

                                        7


     financing and continuation statements, and to protect the Collateral
     against the rights, claims of interests of third persons (other than any
     such rights, claims or interests created by or arising through the
     Trustee).

          Section 8.  COVENANTS

          The Pledgor covenants and agrees with the Trustee and the Holders of
the Notes that from and after the date of this Agreement until the earlier of
payment in full in cash of (x) each of the first six scheduled interest payments
due on the Notes under the terms of the Indenture or (y) all obligations due and
owing under the Indenture and the Notes in the event such obligations become due
and payable prior to payment of the first six scheduled interest payments on the
Notes:

               (a)    that (i) it will not (and will not purport to) sell or
     otherwise dispose of, or grant any option or warrant with respect to, any
     of the Collateral or its beneficial interest therein and (ii) it will not
     create or permit to exist any Lien or other adverse interest in or with
     respect to its beneficial interest in any of the Collateral (except for the
     security interest granted under this Agreement); and

               (b)    that it will not (i) enter into any agreement or
     understanding that restricts or inhibits or purports to restrict or inhibit
     the Trustee's rights or remedies hereunder, including, without limitation,
     the Trustee's right to sell or otherwise dispose of the Collateral or (ii)
     fail to pay or discharge any tax, assessment or levy of any nature with
     respect to its beneficial interest in the Collateral not later than five
     days prior to the date of any proposed sale under any judgments, writ or
     warrant of attachment with respect to such beneficial interest.

          Section 9.  POST-CLOSING CHANGES

               (a)    The Pledgor will not change its name, type of
     organization, jurisdiction of organization, organizational identification
     number or location from those set forth in this Agreement without first
     giving at least 30 days' prior written notice to the Trustee and taking all
     action required by the Trustee for the purpose of perfecting or protecting
     the security interest granted by this Agreement. If the Pledgor does not
     have an organizational identification number and later obtains one, it will
     forthwith notify the Trustee of such organizational identification number.

          Section 10. TRANSFERS AND OTHER LIENS

          The Pledgor agrees that it will not (i) sell, assign or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii)
create or suffer to exist any lien upon or with respect to any of the Collateral
except for the pledge, assignment and security interest created under this
Agreement.

          Section 11. TRUSTEE APPOINTED ATTORNEY-IN-FACT

          The Pledgor hereby irrevocably appoints the Trustee the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or

                                        8


otherwise, from time to time in the Trustee's discretion, to take any action and
to execute any instrument that the Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:

               (a)    to ask for, demand, collect, sue for, recover, compromise,
     receive and give acquittance and receipts for moneys due and to become due
     under or in respect of any of the Collateral,

               (b)    to receive, indorse and collect any drafts or other
     instruments, documents and chattel paper, in connection with clause (a)
     above, and

               (c)    to file any claims or take any action or institute any
     proceedings that the Trustee may deem necessary or desirable for the
     collection of any of the Collateral or otherwise to enforce the rights of
     the Trustee with respect to any of the Collateral, and

               (d)    to pay or discharge any taxes or Liens levied or placed
     upon the Collateral that the Pledgor has failed to pay or discharge in
     accordance herewith, the legality or validity thereof and the amounts
     necessary to discharge the same to be determined by the Trustee in its sole
     discretion, and such payments made by the Trustee to become part of the
     Obligations of the Pledgor to the Trustee, due and payable immediately upon
     demand;

PROVIDED, HOWEVER, that the Trustee shall have no obligation to perform any of
the foregoing. The Trustee's authority under this Section 11 shall include,
without limitation, the authority to endorse and negotiate any checks or
instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
other documents deemed necessary or appropriate by the Trustee to preserve,
protect or perfect the security interest in the Collateral and to file the same,
prepare, file and sign the Pledgor's name on any notice of Lien, and to take any
other actions arising from or incident to the powers granted to the Trustee in
this Agreement. This power of attorney is coupled with an interest and is
irrevocable by the Pledgor.

          Section 12. NO ASSUMPTION OF DUTIES; REASONABLE CARE

          The powers conferred on the Trustee hereunder are solely to protect
the interest of the Trustee and the Holders of the Notes in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Trustee shall have no duty as to any
Collateral, (a) as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Trustee or any Holder of the Notes has or is
deemed to have knowledge of such matters, (b) as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral or (c) as to investing or reinvesting any of the Collateral or
any loss on any investment. The Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.

                                        9


          Section 13. REMEDIES

          If any Event of Default under the Indenture or default hereunder (any
such Event of Default or default being referred to in this Agreement as an
"EVENT OF DEFAULT") shall have occurred and be continuing:

               (a)    The Trustee may exercise in respect of the Collateral, in
     addition to other rights and remedies provided for herein or otherwise
     available to it, all the rights and remedies of a secured party upon
     default under the UCC (whether or not the UCC applies to the affected
     Collateral) and also may: (i) require the Pledgor to, and the Pledgor
     hereby agrees that it will at its expense and upon request of the Trustee
     forthwith, assemble all or part of the Collateral as directed by the
     Trustee and make it available to the Trustee at a place and time to be
     designated by the Trustee that is reasonably convenient to both parties;
     (ii) without notice except as specified below, sell the Collateral or any
     part thereof in one or more parcels at public or private sale, at any of
     the Trustee's offices or elsewhere, for cash, on credit or for future
     delivery, and upon such other terms as the Trustee may deem commercially
     reasonable; and (iii) exercise any and all rights and remedies of the
     Pledgor under or in connection with the Collateral, or otherwise in respect
     of the Collateral, including, without limitation, (A) withdraw, or cause or
     direct the withdrawal, of all funds with respect to the Pledged Account and
     (B) exercise all other rights and remedies with respect to the Collateral,
     including, without limitation, those set forth in Section 9-607 of the UCC.
     The Pledgor agrees that, to the extent notice of sale shall be required by
     law, at least ten days' notice to the Pledgor of the time and place of any
     public sale or the time after which any private sale is to be made shall
     constitute reasonable notification. The Trustee shall not be obligated to
     make any sale of Collateral regardless of notice of sale having been given.
     The Trustee may adjourn any public or private sale from time to time by
     announcement at the time and place fixed therefor, and such sale may,
     without further notice, be made at the time and place to which it was so
     adjourned.

               (b)    Any cash held by or on behalf of the Trustee and all cash
     proceeds received by or on behalf of the Trustee in respect of any sale of,
     collection from, or other realization upon all or any part of the
     Collateral may, in the discretion of the Trustee, be held by the Trustee as
     collateral for, and/or then or at any time thereafter applied (after
     payment of any amounts payable to the Trustee pursuant to Section 14) in
     whole or in part by the Trustee for the ratable benefit of the Holders of
     the Notes against, all or any part of the Secured Obligations, in such
     order as the Trustee shall elect. Any surplus of such cash or cash proceeds
     held by the Trustee and remaining after payment in full of all the Secured
     Obligations shall be paid over to the Pledgor or to whomsoever may be
     lawfully entitled to receive such surplus.

               (c)    The Trustee may, without notice to the Pledgor except as
     required by law and at any time after the occurrence of an Event of
     Default, charge, set-off and otherwise apply all or any part of the Secured
     Obligations against any funds held with respect to the Pledged Account or
     any part thereof.

                                       10


               (d)    The Pledgor further agrees to do or cause to be done all
     such other acts as may be necessary to make such sale or sales of all or
     any portion of the Collateral pursuant to this Section 13 valid and binding
     and in compliance with applicable law. The Pledgor further agrees that a
     breach of any of the covenants contained in this Section 13 will cause
     irreparable injury to the Trustee and the Holders of the Notes, that the
     Trustee and the Holders of the Notes have no adequate remedy at law in
     respect of such breach and, as a consequence, that each and every covenant
     contained in this Section 13 shall be specifically enforceable against the
     Pledgor, and the Pledgor hereby waives and agrees not to assert any
     defenses against an action for specific performance of such covenants
     except for a defense that no Event of Default has occurred and is
     continuing.

          Section 14. INDEMNITY AND EXPENSES

               (a)    The Pledgor agrees to indemnify, defend and save and hold
     harmless the Trustee and its Affiliates and their respective officers,
     directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY")
     from and against, and shall pay on demand, any and all claims, damages,
     losses, liabilities and expenses (including, without limitation, reasonable
     fees and expenses of counsel) that may be incurred by or asserted or
     awarded against any Indemnified Party, in each case arising out of or in
     connection with or resulting from this Agreement (including, without
     limitation, enforcement of this Agreement), except to the extent such
     claim, damage, loss, liability or expense is found in a final,
     non-appealable judgment by a court of competent jurisdiction to have
     resulted from such Indemnified Party's gross negligence or willful
     misconduct.

               (b)    The Pledgor will upon demand pay to the Trustee the amount
     of any and all reasonable expenses, including, without limitation, the
     reasonable fees and expenses of its counsel and of any experts and agents,
     that the Trustee may incur in connection with (i) the administration of
     this Agreement, (ii) the custody, preservation, use or operation of, or the
     sale of, collection from or other realization upon, any of the Collateral,
     (iii) the exercise or enforcement of any of the rights of the Trustee or
     the Holders of the Notes hereunder or (iv) the failure by the Pledgor to
     perform or observe any of the provisions hereof.

               (c)    Additionally, in acting hereunder the Trustee is entitled
     to all rights, privileges, protections, benefits and immunities provided to
     it under Section 7.02 of the Indenture.

          Section 15. SECURITY INTEREST ABSOLUTE

          The obligations of the Pledgor under this Agreement are independent of
the Secured Obligations or any other Obligations of the Pledgor under or in
respect of the Indenture or the Notes, and a separate action or actions may be
brought and prosecuted against the Pledgor to enforce this Agreement. All rights
of the Trustee and the Holders of the Notes and the pledge, assignment and
security interest hereunder, and all obligations of the Pledgor hereunder, shall
be irrevocable, absolute and unconditional irrespective of, and the Pledgor
hereby irrevocably waives (to the maximum extent permitted by applicable law)
any defenses it may now have or may hereafter acquire in any way relating to,
any or all of the following:

                                       11


               (a)    any lack of validity or enforceability of any of this
     Agreement, the Indenture or the Notes or any other agreement or instrument
     relating thereto;

               (b)    any change in the time, manner or place of payment of, or
     in any other term of, all or any of the Secured Obligations or any other
     amendment or waiver of or any consent to any departure from any the
     Indenture or Notes or any other agreement or instrument relating thereto;

               (c)    any taking, exchange, release or non-perfection of any
     Collateral or any other collateral, for all or any of the Secured
     Obligations;

               (d)    any manner of application of any Collateral or any other
     collateral, or proceeds thereof, to all or any of the Secured Obligations,
     or any manner of sale or other disposition of any Collateral or any other
     collateral for all or any of the Secured Obligations or any other assets of
     the Pledgor;

               (e)    any change, restructuring or termination of the corporate
     structure or existence of the Pledgor;

               (f)    any other circumstance (including, without limitation, any
     statute of limitations) or any existence of or reliance on any
     representation by the Trustee or any Holder of the Notes that might
     otherwise constitute a defense available to, or a discharge of, the
     Pledgor.

          This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by the Trustee or any Holder of the
Notes or by any other Person upon the insolvency, bankruptcy or reorganization
of the Pledgor or otherwise, all as though such payment had not been made.

          Section 16. AMENDMENTS; WAIVERS

               (a)    No amendment or waiver of any provision of this Agreement,
     and no consent to any departure by the Pledgor herefrom, shall in any event
     be effective unless the same shall be in writing and signed by the Trustee,
     and then such waiver or consent shall be effective only in the specific
     instance and for the specific purpose for which given. No failure on the
     part of the Trustee or any Holder of the Notes to exercise, and no delay in
     exercising any right hereunder, shall operate as a waiver thereof; nor
     shall any single or partial exercise of any such right preclude any other
     or further exercise thereof or the exercise of any other right.

          Section 17. NOTICES; ETC.

          All notices and other communications provided for hereunder shall be
either (i) in writing (including telegraphic, telecopier or telex communication)
and mailed, telegraphed, telecopied, telexed or otherwise delivered or (ii) by
electronic mail (if electronic mail addresses are designated as provided below)
confirmed immediately in writing, in the case of the Pledgor

                                       12


or the Trustee, addressed to it at its address specified in the Indenture or, as
to any party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and other communications
shall, when mailed, telegraphed, telecopied, telexed, sent by electronic mail or
otherwise, be effective when deposited in the mails, delivered to the telegraph
company, telecopied, confirmed by telex answerback, sent by electronic mail and
confirmed in writing, or otherwise delivered (or confirmed by a signed receipt),
respectively, addressed as aforesaid; except that notices and other
communications to the Trustee shall not be effective until received by the
Trustee. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement shall be effective as delivery of an
original executed counterpart thereof.

          Section 18. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE
                      INDENTURE

          This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the earlier of
the payment in full in cash of (i) each of the first six scheduled interest
payments due on the Notes under the terms of the Indenture and (ii) all
obligations due and owing under the Indenture and the Notes in the event such
obligations become due and payable prior to payment of the first six scheduled
interest payment on the Notes; (b) be binding upon the Pledgor, its successors
and assigns and (c) inure, together with the rights and remedies of the Trustee
hereunder, to the benefit of the Trustee and the Holders of the Notes and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Holder may assign or otherwise transfer all or
any portion of its rights under the Indenture and the Notes to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Holder herein or otherwise, in each case as
provided in the Indenture.

          Section 19. TERMINATION

               (a)    Upon the earlier of the payment in full in cash of each of
     the first six scheduled interest payments due on the Notes under the terms
     of the Indenture and all Secured Obligations, the pledge and security
     interest granted hereby shall terminate and all rights to the Collateral
     shall revert to the Pledgor. Upon any such termination, the Trustee will,
     at the Pledgor's expense, execute and deliver to the Pledgor such documents
     as the Pledgor shall reasonably request to evidence such termination.

          Section 20. EXECUTION IN COUNTERPARTS

          This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.

          Section 21. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
                      TRIAL

          This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York. The Pledgor irrevocably waives all right to
trial by jury in any action,

                                       13


proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the actions of the Trustee in
the negotiation, administration, performance or enforcement hereof.

                                       14


          IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                              OSI PHARMACEUTICALS, INC.


                                              By /s/ ROBERT L. VAN NOSTRAND
                                                 --------------------------
                                                 Title: Vice President and
                                                        Chief Financial Officer


                                              THE BANK OF NEW YORK, as Trustee


                                              By /s/ JULIE SALOVITCH-MILLER
                                                 --------------------------
                                                 Title: Vice President

                                       15


                                                               SCHEDULE I TO THE
                                        COLLATERAL PLEDGE AND SECURITY AGREEMENT

                          PLEDGED SECURITY ENTITLEMENTS



          DESCRIPTION OF ASSET                       CUSIP NUMBER           FACE AMOUNT OF ASSET
          --------------------                       ------------           --------------------
                                                                         
US TREASURY BILLS                                     912795KU4                USD 4,000,000
US TREAS NTS SEC STRIPPED                             912833FR6                USD 4,000,000
US TREAS NTS SEC STRIPPED                             912833FS4                USD 4,000,000
UNITED STATES TREAS NT STRIPPED PRIN PMT              912820DJ3                USD 4,000,000
UNITED STATES TREAS NT STRP PRIN PMT                  912820BJ5                USD 4,000,000
US TREASURY BD STRIPPED                               912803AB9                USD 4,000,000


                                       16


                                                              SCHEDULE II TO THE
                                        COLLATERAL PLEDGE AND SECURITY AGREEMENT

                               OSI PHARMACEUTICALS

EX-4.4

                                                                     EXHIBIT 4.4

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

          THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of
February 1, 2002 by and between OSI Pharmaceuticals, Inc., a Delaware
corporation ("the Company"), and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill,
Inc. and Lazard Freres & Co. LLC (collectively, the Initial Purchasers, and each
individually, an "Initial Purchaser") pursuant to the Purchase Agreement, dated
January 28, 2002 (the "Purchase Agreement"), between the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution of this Agreement is a condition to the closing
under the Purchase Agreement.

          The Company agrees with the Initial Purchasers, for its benefit as
Initial Purchasers and for the benefit of the beneficial owners (including the
Initial Purchasers) from time to time of the Registrable Securities (as defined
herein) (each of the foregoing a "Holder" and together the "Holders"), as
follows:

          Section 1.   DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

          "AFFILIATE" means, with respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.

          "AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning specified in
Section 2(d) hereof.

          "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

          "COMMON STOCK" means the shares of Common Stock, $0.01 par value, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.

          "CONVERSION PRICE" has the meaning assigned to that term in the
Indenture.

          "DAMAGES ACCRUAL PERIOD" has the meaning specified in Section 2(e)
hereof.

          "DAMAGES PAYMENT DATE" means each August 1 and February 1 in the case
of Securities and the Underlying Common Stock.



          "DEFERRAL NOTICE" has the meaning specified in Section 3(i) hereof.

          "DEFERRAL PERIOD" has the meaning specified in Section 3(i) hereof.

          "EFFECTIVENESS DEADLINE DATE" has the meaning specified in
Section 2(a) hereof.

          "EFFECTIVENESS PERIOD" means the period of two years from the Issue
Date or such shorter period that will terminate upon the earliest of the
following: (A) when all the Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or when
all shares of Underlying Common Stock have been sold pursuant to the Shelf
Registration Statement and (B) when, in the written opinion of counsel to the
Company, all outstanding Registrable Securities held by persons which are not
affiliates of the Company may be resold without registration under the
Securities Act pursuant to Rule 144(k) under the Securities Act or any successor
provision thereto.

          "EVENT" has the meaning specified in Section 2(e) hereof.

          "EVENT TERMINATION DATE" has the meaning specified in Section 2(e)
hereof.

          "EVENT DATE" has the meaning specified in Section 2(e) hereof.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

          "FILING DEADLINE DATE" has the meaning specified in Section 2(a)
hereof.

          "HOLDER" has the meaning specified in the second paragraph of this
Agreement.

          "INDENTURE" means the Indenture dated as of the date hereof between
the Company and The Bank of New York, as trustee, pursuant to which the
Securities are being issued.

          "INITIAL PURCHASERS" means Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Robertson Stephens, Inc., Adams, Harkness & Hill,
Inc. and Lazard Freres & Co. LLC.

          "INITIAL SHELF REGISTRATION STATEMENT" has the meaning specified in
Section 2(a) hereof.

          "ISSUE DATE" means February 1, 2002.

          "LIQUIDATED DAMAGES AMOUNT" has the meaning specified in Section 2(e)
hereof.

          "MATERIAL EVENT" has the meaning specified in Section 3(i) hereof.

                                        2


          "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Appendix A to the Offering
Memorandum of the Company dated January 28, 2002 relating to the Securities.

          "NOTICE HOLDER" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

          "PRINCIPAL AMOUNT" means, with the respect to the Securities, the
principal amount due on the maturity date as shown on such Securities.

          "PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

          "PURCHASE AGREEMENT" has the meaning specified in the first paragraph
of this Agreement.

          "RECORD HOLDER" means, with respect to any Damages Payment Date
relating to any Securities or Underlying Common Stock as to which any Liquidated
Damages Amount has accrued, the registered holder of such Securities or
Underlying Common Stock, as the case may be, 17 days prior to the next
succeeding Damages Payment Date.

          "REGISTRABLE SECURITIES" means the Securities, until such Securities
have been converted or exchanged, and the Underlying Common Stock and any
securities into or for which such securities have been converted or exchanged,
and any security issued with respect thereto upon any stock dividend, split or
similar event until, in the case of any such security, the earliest of (i) its
effective registration under the Securities Act and resale in accordance with
the Registration Statement covering it, (ii) expiration of the holding period
that would be applicable thereto under Rule 144(k) were it not held by an
Affiliate of the Company or (iii) its sale to the public pursuant to Rule 144.

          "REGISTRATION EXPENSES" has the meaning specified in Section 5 hereof.

          "REGISTRATION STATEMENT" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

          "RESTRICTED SECURITIES" has the meaning assigned to that term in Rule
144.

                                        3


          "RULE 144" means Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

          "RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

          "SEC" means the U.S. Securities and Exchange Commission and any
successor agency.

          "SECURITIES" means the 4% Convertible Senior Subordinated Notes due
2009 of the Company to be purchased pursuant to the Purchase Agreement.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

          "SHELF REGISTRATION STATEMENT" has the meaning specified in Section
2(a) hereof.

          "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning specified in
Section 2(b) hereof.

          "TIA" means the Trust Indenture Act of 1939, as amended.

          "TRUSTEE" means The Bank of New York (or any successor entity), the
Trustee under the Indenture.

          "UNDERLYING COMMON STOCK" The Common Stock into which the Securities
are convertible or issued upon any such conversion.

          Section 2.   SHELF REGISTRATION.

          (a) The Company shall prepare and file or cause to be prepared and
filed with the SEC, as soon as practicable but in any event by the date (the
"Filing Deadline Date") ninety (90) days after the Issue Date, a Registration
Statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration Statement") registering
the resale from time to time by Holders thereof of all of the Registrable
Securities (the "Initial Shelf Registration Statement"). The Initial Shelf
Registration Statement shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
reasonable best efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in
any event by the date (the "Effectiveness Deadline Date") that is one hundred
and eighty (180) days after the Issue Date, and to keep the Initial Shelf
Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period; PROVIDED, HOWEVER, that no Holder shall be entitled to
have the Registrable Securities held by it covered by such Shelf Registration
Statement unless such Holder shall have provided a Notice and Questionnaire in
accordance with Section 2(d) and is in compliance with Section 4. None of

                                        4


the Company's security holders (other than the Holders of Registrable
Securities) shall have the right to include any of the Company's securities in
the Shelf Registration Statement.

          (b)   If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at any time
during the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use all
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use all
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

          (c)   The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or, to the extent to which the Company does
not reasonably object, as reasonably requested by the Initial Purchasers or by
the Trustee on behalf of the registered Holders.

          (d)   Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as is practicable after the date a Notice and Questionnaire is
delivered, and in any event within five (5) Business Days after such date, (i)
if required by applicable law, file with the SEC a post-effective amendment to
the Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling security holder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use all reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "Amendment Effectiveness Deadline
Date") that is thirty (30) days after the date such post-effective amendment is
required by this clause to be filed; (ii) provide such Holder copies of any
documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as
promptly as practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i);

                                        5


PROVIDED that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with
Section 3(i), PROVIDED, FURTHER, that if under applicable law the Company has
more than one option as to the type or manner of making any such filing, it will
make the required filing or filings in the manner or of a type that is
reasonably expected to result in the earliest availability of the Prospectus for
effecting resales of Registrable Securities. Notwithstanding anything contained
herein to the contrary, the Company shall be under no obligation to name any
Holder that is not a Notice Holder as a selling security holder in any
Registration Statement or related Prospectus; provided, however, that any Holder
that becomes a Notice Holder pursuant to the provisions of Section 2(d) of this
Agreement (whether or not such Holder was a Notice Holder at the time the
Registration Statement was declared effective) shall be named as a selling
security holder in the Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(d).

          (e)   The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date, (ii) the
Initial Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) hereof within
the time period required therein, (iv) the aggregate duration of Deferral
Periods in any period exceeds the number of days permitted in respect of such
period pursuant to Section 3(i) hereof or (v) the number of Deferral Periods in
any period exceeds the number permitted in respect of such period pursuant to
Section 3(i) (each of the events of a type described in any of the foregoing
clauses (i) through (v) are individually referred to herein as an "Event," and
the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline
Date in the case of clause (ii), the date by which the Company is required to
perform its obligations set forth in Section 2(d) in the case of clause (iii)
(including the filing of any post-effective amendment prior to the Amendment
Effectiveness Deadline Date), the date on which the aggregate duration of
Deferral Periods in any period exceeds the number of days permitted by
Section 3(i) hereof in the case of clause (iv), and the date of the commencement
of a Deferral Period that causes the limit on the number of Deferral Periods in
any period under Section 3(i) hereof to be exceeded in the case of clause (v),
being referred to herein as an "Event Date"). Events shall be deemed to continue
until the "Event Termination Date," which shall be the following dates with
respect to the respective types of Events: the date the Initial Shelf
Registration Statement is filed in the case of an Event of the type described in
clause (i), the date the Initial Shelf Registration Statement is declared
effective under the Securities Act in the case of an Event of the type described
in clause (ii), the date the Company performs its obligations set forth in
Section 2(d) in the case of an Event of the type described in clause (iii)
(including, without limitation, the date the relevant post-effective amendment
to the Shelf Registration Statement is declared effective under the Securities
Act), termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(i) to be
exceeded in the case of the commencement of an Event of the type described in
clause (iv), and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods in a period permitted by Section 3(i) to
be exceeded in the case of an Event of the type described in clause (v).

                                        6


          Accordingly, commencing on (and including) any Event Date and ending
on (but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders, accruing for
each portion of such Damages Accrual Period beginning on and including a Damages
Payment Date (or, in respect of the first time that the Liquidation Damages
Amount is to be paid to Holders on a Damages Payment Date as a result of the
occurrence of any particular Event, from the Event Date) and ending on but
excluding the first to occur of (A) the date of the end of the Damages Accrual
Period or (B) the Next Damages Payment Date, at a rate per annum equal to
one-quarter of one percent (0.25%) for the first 90-day period from the Event
Date, and thereafter at a rate per annum equal to one-half of one percent
(0.5%), of the aggregate Principal Amount of such Securities or, if the Holder
has converted such Securities into Underlying Common Stock and such shares of
Common Stock then constitute Registrable Securities, the Conversion Price of
such Securities in effect at the time of such conversion, in each case,
determined as of the Business Day immediately preceding the next Damages Payment
Date; provided, that any Liquidated Damages Amount accrued with respect to any
Securities or portion thereof called for redemption on a redemption date or
converted into Underlying Common Stock on a conversion date prior to the Damages
Payment Date, shall, in any such event, be paid instead to the Holder who
submitted such Securities or portion thereof for redemption or conversion on the
applicable redemption date or conversion date, as the case may be, on such date
(or promptly following the conversion date, in the case of conversion).
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount per
year shall not exceed the 0.5% notwithstanding the occurrence of multiple
concurrent Events. Following the cure of all Events requiring the payment by the
Company of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages Amounts will cease
(without in any way limiting the effect of any subsequent Event requiring the
payment of Liquidated Damages Amount by the Company).

          The Trustee shall be entitled, on behalf of Holders of Securities or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Nothing shall preclude a Notice Holder or Holder of Registrable Securities from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement.

          All of the Company's obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

          The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or

                                        7


declared effective or available for effecting resales of Registrable Securities
in accordance with the provisions hereof.

          Section 3.   REGISTRATION PROCEDURES. In connection with the
registration obligations of the Company under Section 2 hereof, the Company
shall:

          (a)   Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to the Initial
Purchasers copies of all such documents proposed to be filed and use reasonable
efforts to reflect in each such document when so filed with the SEC such
comments as the Initial Purchasers reasonably shall propose within three (3)
Business Days of the delivery of such copies to the Initial Purchasers.

          (b)   Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2(a); cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and use all reasonable efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Registration Statement during the Effectiveness Period in accordance
with the intended methods of disposition by the sellers thereof set forth in
such Registration Statement as so amended or such Prospectus as so supplemented.

          (c)   As promptly as practicable give notice to the Notice Holders and
the Initial Purchasers (i) when any Prospectus, Prospectus supplement,
Registration Statement or post-effective amendment to a Registration Statement
has been filed with the SEC and, with respect to a Registration Statement or any
post-effective amendment, when the same has been declared effective, (ii) of any
request, following the effectiveness of the Initial Shelf Registration Statement
under the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to any Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of any Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of (but not the nature of or details concerning)
a Material Event (provided, however, that no notice by the Company shall be
required pursuant to this clause (v) in the event that the Company either
promptly files a Prospectus supplement to update the Prospectus or a Form 8-K or
other appropriate Exchange Act report that is incorporated by reference into the
Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading) and (vi) of the determination by the Company
that a post-effective amendment to a Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in which
event the provisions of Section 3(i) shall apply.

                                        8


          (d)   Use all reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment.

          (e)   If reasonably requested by the Initial Purchasers or any Notice
Holder, promptly as reasonably practicable incorporate in a Prospectus
supplement or post-effective amendment to a Registration Statement such
information as the Initial Purchasers or such Notice Holder shall, on the basis
of an opinion of nationally-recognized counsel experienced in such matters,
determine to be required to be included therein by applicable law and make any
required filings of such Prospectus supplement or such post-effective amendment;
provided, that the Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable opinion of counsel for the Company,
in compliance with applicable law.

          (f)   As promptly as practicable furnish to each Notice Holder and the
Initial Purchasers, upon their request and without charge, at least one (1)
conformed copy of the Registration Statement and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing to the Company by such Notice Holder or the Initial
Purchasers, as the case may be).

          (g)   During the Effectiveness Period, deliver to each Notice Holder
in connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and the Company hereby consents (except during such periods that a
Deferral Notice is outstanding and has not been revoked) to the use of such
Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.

          (h)   Prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use all reasonable efforts to
register or qualify or cooperate with the Notice Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use all
reasonable efforts to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period in connection with such
Notice Holder's offer and sale of Registrable Securities pursuant to such
registration or qualification (or exemption therefrom) and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the
relevant Registration Statement and the related Prospectus; provided, that the
Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would

                                        9


subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.

          (i)   Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the discretion of the Company,
makes it appropriate to suspend the availability of the Shelf Registration
Statement and the related Prospectus, (i) in the case of clause (B) above,
subject to the next sentence, as promptly as practicable prepare and file a
post-effective amendment to such Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document that would be incorporated by reference into such
Registration Statement and Prospectus so that such Registration Statement does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement,
subject to the next sentence, use all reasonable efforts to cause it to be
declared effective as promptly as is reasonably practicable, and (ii) give
notice to the Notice Holders that the availability of the Shelf Registration
Statement is suspended (a "Deferral Notice") and, upon receipt of any Deferral
Notice, each Notice Holder agrees not to sell any Registrable Securities
pursuant to the Registration Statement until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in clause (i)
above, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The
Company will use all reasonable efforts to ensure that the use of the Prospectus
may be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as reasonably practicable
thereafter and (z) in the case of clause (C) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate. The period
during which the availability of the Registration Statement and any Prospectus
is suspended (the "Deferral Period") shall, without the Company incurring any
obligation to pay liquidated damages pursuant to Section 2(e), not exceed thirty
(30) days in any three (3) month period or ninety (90) days in any twelve (12)
month period.

          (j)   If reasonably requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration Statement, make
reasonably available for

                                       10


inspection during normal business hours by a representative for the Notice
Holders of such Registrable Securities and any broker-dealers, attorneys and
accountants retained by such Notice Holders, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate executive officers, directors and
designated employees of the Company and its subsidiaries to make reasonably
available for inspection during normal business hours all relevant information
reasonably requested by such representative for the Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall first agree in writing with the Company that
any information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information shall be
kept confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement; and
PROVIDED FURTHER, that the foregoing inspection and information gathering shall,
to the greatest extent possible, be coordinated on behalf of all the Notice
Holders and the other parties entitled thereto by the counsel referred to in
Section 5.

          (k)   Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.

          (l)   Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Registration Statement, and cause such Registrable Securities
to be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two Business
Days prior to any sale of such Registrable Securities.

          (m)   Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee for the Securities and the
transfer agent for the Common Stock with printed certificates for the
Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.

          (n)   Make a reasonable effort to provide such information as is
required for any filings required to be made with the National Association of
Securities Dealers, Inc.

                                       11


          (o)   Upon (i) the filing of the Initial Shelf Registration Statement
and (ii) the effectiveness of the Initial Shelf Registration Statement, announce
the same, in each case by release to Reuters Economic Services and Bloomberg
Business News.

          (p)   Enter into such customary agreements and take all such other
reasonable necessary actions in connection therewith (including those reasonably
requested by the holders of a majority of the Registrable Securities being sold)
in order to expedite or facilitate disposition of such Registrable Securities.

          (q)   Cause the Indenture to be qualified under the TIA not later than
the effective date of any Registration Statement; and in connection therewith,
cooperate with the Trustee to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use all reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner.

          Section 4.   HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition
of the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next sentence.
Each Notice Holder agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information
regarding such Notice Holder and the distribution of such Registrable Securities
as may be required to be disclosed in the Registration Statement under
applicable law.

          Section 5.   REGISTRATION EXPENSES. The Company shall bear all fees
and expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the counsel specified
in the next sentence in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Registration Statement may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of
counsel for the Company in connection with the Shelf Registration Statement, and
(v) reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock. In addition, the Company
shall bear or reimburse the Notice Holders for the reasonable fees and
disbursements of one firm of legal counsel for the Holders, which shall

                                       12


initially be Shearman & Sterling, but which may, upon the written consent of the
Initial Purchasers (which shall not be unreasonably withheld), be another
nationally recognized law firm experienced in securities law matters designated
by the Company. In addition, the Company shall pay the internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange on which similar securities of
the Company are then listed and the fees and expenses of any person, including
special experts, retained by the Company.

          Section 6.   INDEMNIFICATION; CONTRIBUTION.

          (a)   The Company agrees to indemnify and hold harmless the Initial
Purchasers and each holder of Registrable Securities and each person, if any,
who controls the Initial Purchasers or any holder of Registrable Securities
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, as follows:

          (i)   against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, arising out of any untrue statement or alleged
     untrue statement of a material fact contained in the Registration Statement
     (or any amendment thereto), or the omission or alleged omission therefrom
     of a material fact necessary in order to make the statements therein, in
     light of the circumstances under which they were made, not misleading or
     arising out of any untrue statement or alleged untrue statement of a
     material fact included in any preliminary prospectus or the Prospectus (or
     any amendment or supplement thereto), or the omission or alleged omission
     therefrom of a material fact necessary in order to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading;

          (ii)  against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, to the extent of the aggregate amount paid in
     settlement of any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission, provided that (subject to Section
     6(d) below) any such settlement is effected with the prior written consent
     of the Company; and

          (iii) against any and all expense whatsoever, as incurred (including
     the fees and disbursements of counsel), reasonably incurred in
     investigating, preparing or defending against any litigation, or any
     investigation or proceeding by any governmental agency or body, commenced
     or threatened, or any claim whatsoever based upon any such untrue statement
     or omission, or any such alleged untrue statement or omission, to the
     extent that any such expense is not paid under (i) or (ii) above;

PROVIDED, HOWEVER, that this indemnity shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by each and any Initial
Purchaser or such holder of Registrable Securities (which also

                                       13


acknowledges the indemnity provisions herein) and each person, if any, who
controls any such Initial Purchaser or any such holder of Registrable Securities
expressly for use in the Registration Statement (or any amendment thereto), or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).

          (b)   In connection with any Shelf Registration in which a holder,
including, without limitation, each Initial Purchaser, of Registrable Securities
is participating, in furnishing information relating to such holder of
Registrable Securities to the Company expressly for use in such Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto, the holders of such Registrable Securities agree, severally
and not jointly, to indemnify and hold harmless each Initial Purchaser and each
person, if any, who controls any Initial Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act and the
Company, and each person, if any, who controls the Company within the meaning of
either such Section, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such holder of Registrable Securities
(which also acknowledges the indemnity provisions herein) and each person, if
any, who controls any such holder of Registrable Securities expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

          Each of the Initial Purchasers agrees to indemnify and hold harmless
the Company, the holders of Registrable Securities, and each person, if any, who
controls the Company or any holder of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with information furnished to the
Company by such Initial Purchaser expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).

          (c)   Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any such action;
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or

                                       14


related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

          (d)   If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request for fees and expenses prior to the date of such settlement.

          (e)   If the indemnification provided for in this Section 6 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

          The relative fault of the Company on the one hand and the holders of
the Registrable Securities or such Initial Purchaser on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
holder of the Registrable Securities or such Initial Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 6(e). The
aggregate amount of losses, liabilities, claims, damages, and expenses incurred
by an indemnified party and referred to above in this Section 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

                                       15


          Notwithstanding the provisions of this Section 6, neither the holder
of any Registrable Securities nor any Initial Purchaser, shall be required to
indemnify or contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such holder of Registrable
Securities or unwritten by such Initial Purchaser, as the case may be, and
distributed to the public were offered to the public exceeds the amount of any
damages that such holder of Registrable Securities or such Initial Purchaser
have otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

          No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

          For purposes of this Section 6(e), each person, if any, who controls
any Initial Purchaser or any holder of Registrable Securities within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Initial Purchaser or such holder, and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.

          Section 7.   INFORMATION REQUIREMENTS. The Company covenants that, if
at any time before the end of the Effectiveness Period the Company is not
subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
required to be filed and filed pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities (other than
Common Stock) under any section of the Exchange Act.

          Section 8.   MISCELLANEOUS.

          (a)   NO CONFLICTING AGREEMENTS. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.

          (b)   AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or

                                       16


consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of Holders of a majority of the then
outstanding Underlying Common Stock constituting Registrable Securities (with
Holders of Securities deemed to be the Holders, for purposes of this Section, of
the number of outstanding shares of Underlying Common Stock into which such
Securities are or would be convertible or exchangeable as of the date on which
such consent is requested). Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders pursuant to such Registration Statement; provided, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

          (c)   NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

          (w)   if to a Holder of Registrable Securities that is not a Notice
     Holder, at the address for such Holder then appearing in the Registrar (as
     defined in the Indenture);

          (x)   if to a Notice Holder, at the most current address given by such
     Holder to the Company in a Notice and Questionnaire or any amendment
     thereto;

          (y)   if to the Company, to:

          OSI Pharmaceuticals, Inc.
          58 South Service Road, Suite 110
          Melville, NY 11747
          Attention: Barbara Wood, General Counsel

          Telephone No.: (631) 962-2000
          Telecopy No.: (631) 752-3880

          and

          (z)   if to the Initial Purchasers, to:

          Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
          Incorporated

                                       17


          World Financial Center
          North Tower
          250 Vesey Street
          New York, New York 10080
          Attention: Syndicate Department

          Telecopy No.: (212) 449-1000

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

          (d)   APPROVAL OF HOLDERS. Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder, the
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

          (e)   SUCCESSORS AND ASSIGNS. Any person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of such Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

          (f)   COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

          (g)   HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (h)   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.

          (i)   SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

                                       18


          (j)   ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights.

          (k)   TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the expiration of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                [Remainder of this page intentionally left blank]

                                       19


          IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                              OSI PHARMACEUTICALS, INC.

                                              By: /s/ ROBERT L. VAN NOSTRAND
                                                  ------------------------------
                                              Name:   Robert L. Van Nostrand
                                              Title:  Vice President and
                                                      Chief Financial Officer

Confirmed and accepted as
of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED
ROBERTSON STEPHENS, INC.
ADAMS, HARKNESS & HILL, INC.
LAZARD FRERES & CO. LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED

By: /s/ ANTHONY GIBNEY
    -----------------------
        Authorized Signatory

                                       20

EX-4.5

                                                                    EXHIBIT 4.5

                                                                  EXECUTION COPY

                            ACCOUNT CONTROL AGREEMENT

          ACCOUNT CONTROL AGREEMENT (this "AGREEMENT") dated as of February 1,
2002, among OSI Pharmaceuticals, Inc., a Delaware corporation (the "PLEDGOR"),
The Bank of New York, a New York banking corporation, as Trustee (the "SECURED
PARTY"), and The Bank of New York, a New York banking corporation, as securities
intermediary and depository bank (the "ACCOUNT HOLDER").

PRELIMINARY STATEMENTS:

          (1)   The Pledgor has granted the Secured Party a security interest
(the "SECURITY INTEREST") in certain security entitlements (the "PLEDGED
SECURITY ENTITLEMENTS") with respect to certain U.S. Treasury securities (the
"PLEDGED FINANCIAL ASSETS") identified on Schedule I attached hereto maintained
by the Pledgor with the Account Holder and carried from time to time in an
account with the Account Holder, ABA No. 021000018, Account No. 341431 at its
office at 101 Barclay Street, New York, New York 10286, in the name of "OSI
Pharmaceuticals Pledge Account" (the "ACCOUNT") and all additions thereto and
substitutions and proceeds thereof, pursuant to, and as more particularly
described in, a Collateral Pledge and Security Agreement dated as of February 1,
2002, among the Pledgor and the Trustee (as the same may hereafter be amended,
supplemented or otherwise modified from time to time, the "PLEDGE AGREEMENT";
terms defined in the Pledge Agreement and not otherwise defined herein being
used herein as therein defined). The Pledgor acknowledges having received value
for such pledge.

          (2)   Terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York ("N.Y. UNIFORM COMMERCIAL CODE") are used in
this Agreement as such terms are defined in such Article 8 or 9.

          (3)   The Pledgor, the Trustee and the Account Holder are delivering
this Agreement pursuant to the terms of Section 4(f) of the Pledge Agreement.

          NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:

          SECTION 1. THE ACCOUNTS. The Account Holder represents and warrants
to, and agrees with, the Secured Party that:

          (a)   The Account Holder maintains the Account for the Pledgor, and
     all the Pledged Financial Assets and all additions thereto and
     substitutions and proceeds thereof held by the Account Holder for the
     account of the Pledgor are, and will continue to be, credited to the
     Account.



          (b)   To the extent that funds are credited to the Account, the
     Account is a deposit account; and to the extent that financial assets are
     credited to the Account, the Account is a securities account. The Account
     Holder is (i) the bank with which the Account is maintained and (ii) the
     securities intermediary with respect to financial assets held in the
     Account. The Pledgor is (x) the Account Holder's customer with respect to
     the Account and (y) the entitlement holder with respect to financial assets
     credited from time to time to the Account.

          (c)   Notwithstanding any other agreement to the contrary, the Account
     Holder's jurisdiction with respect to the Account for purposes of the N.Y.
     Uniform Commercial Code is, and will continue to be for so long as the
     Security Interest shall be in effect, the State of New York.

          (d)   Attached as Exhibit A hereto is the statement of the Account as
     of the date hereof showing the property credited to the Account.

          (e)   The Account Holder does not know of any claim to or interest in
     the Account or any property (including, without limitation, funds and
     financial assets) credited to the Account, except for claims and interests
     of the parties referred to in this Agreement.

          SECTION 2. CONTROL BY SECURED PARTY. The Account Holder will comply
with (i) all instructions directing disposition of the funds in the Account,
(ii) all notifications and entitlement orders that the Account Holder receives
directing it to transfer or redeem any financial asset in the Account, and (iii)
all other directions concerning the Account, including, without limitation,
directions to distribute to the Secured Party proceeds of any such transfer or
redemption or interest or dividends on property in the Account (any such
instruction, notification or direction referred to in clause (i), (ii) or (iii)
above being an "ACCOUNT DIRECTION"), in each case of clauses (i), (ii) and (iii)
above originated by the Secured Party without further consent by the Pledgor or
any other Person. The Account Holder will comply with Account Directions and
other directions concerning the Account originated by, and only by, the Secured
Party. The Account Holder acknowledges that the Secured Party has exclusive
control over the Account and all Pledged Financial Assets contained therein from
time to time.

          SECTION 3. PRIORITY OF SECURED PARTY'S SECURITY INTEREST.

          (a)   The Account Holder (i) subordinates to the Security Interest and
     in favor of the Secured Party any security interest, lien, or right of
     recoupment or setoff that the Account Holder may have, now or in the
     future, against the Account or any property (including, without limitation,
     any funds and financial assets) credited to the Account, and (ii) agrees
     that it will not exercise any right in respect of any such security
     interest or lien or any such right of recoupment or setoff until the
     Security Interest is terminated, EXCEPT that the Account Holder (A) will
     retain its prior security interest and lien on property credited to
     the Account, (B) may exercise any right in respect of such security
     interest or lien, and (C) may exercise any right of recoupment or setoff
     against the Account, in the case of clauses (A), (B) and (C) above, to
     secure or to satisfy, and only to secure or to satisfy, payment (x) for
     such property, (y) for its customary fees and

                                        2


     expenses for the routine maintenance and operation of the Account, and (z)
     if the Account is a deposit account, for the face amount of any items that
     have been credited to the Account but are subsequently returned unpaid
     because of uncollected or insufficient funds.

          (b)   The Account Holder will not enter into any other agreement with
     any Person relating to Account Directions or other directions with respect
     to the Account.

          SECTION 4. STATEMENTS, CONFIRMATIONS, AND NOTICES OF ADVERSE CLAIMS.

          (a)   The Account Holder will send copies of all statements and
     confirmations for the Account simultaneously to the Secured Party and the
     Pledgor.

          (b)   When the Account Holder knows of any claim or interest in the
     Account or any property (including, without limitation, funds and financial
     assets) credited to the Account other than the claims and interests of the
     parties referred to in this Agreement, the Account Holder will promptly
     notify the Secured Party and the Pledgor of such claim or interest.

          SECTION 5. THE ACCOUNT HOLDER'S RESPONSIBILITY.

          (a)   The Account Holder will be liable to the Secured Party for
     complying with Account Directions or other directions concerning the
     Account from the Pledgor or any Person other than the Secured Party.

          (b)   The Account Holder will not be liable to the Pledgor or the
     Secured Party for complying with an Account Direction or other direction
     concerning the Account originated by the Secured Party, even if the Pledgor
     notifies the Account Holder that the Secured Party is not legally entitled
     to issue the Account Direction or such other direction unless the Account
     Holder takes the action after it is served with an injunction, restraining
     order, or other legal process enjoining it from doing so, issued by a court
     of competent jurisdiction, and had a reasonable opportunity to act on the
     injunction, restraining order or other legal process.

          (c)   This Agreement does not create any obligation of the Account
     Holder except for those expressly set forth in this Agreement and, to the
     extent that the Account is a securities account, in Part 5 of Article 8 of
     the N.Y. Uniform Commercial Code and, to the extent that the Account is a
     deposit account, in Article 4 of the N.Y. Uniform Commercial Code. In
     particular, the Account Holder need not investigate whether the Secured
     Party is entitled under the Secured Party's agreements with the Pledgor to
     give an Account Direction or other direction concerning the Account. The
     Account Holder may rely on notices and communications it believes given by
     the appropriate party.

          SECTION 6. INDEMNITY. The Pledgor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross

                                        3


negligence or willful misconduct as found by a court of competent jurisdiction
in a final, non-appealable judgment.

          SECTION 7. TERMINATION; SURVIVAL.

          (a)   This Agreement shall terminate automatically upon receipt by the
     Account Holder of written notice executed by two officers of the Trustee
     that all of the Secured Obligations have been paid in full in cash or
     otherwise satisfied or all of the Collateral has been released, which ever
     is earlier, and the Account Holder shall thereafter be relieved of all
     duties and obligations hereunder.

          (b)   The Account Holder may terminate this Agreement on 60 days'
     prior notice to the Secured Party and the Pledgor, PROVIDED that before
     such termination the Account Holder and the Pledgor shall make arrangements
     to transfer the property (including, without limitation, all funds and
     financial assets) credited to the Account to another Account Holder that
     shall have executed, together with the Pledgor, a control agreement in
     favor of the Secured Party in respect of such property in substantially the
     form of this Agreement or otherwise in form and substance satisfactory to
     the Secured Party.

          (c)   Sections 5 and 6 will survive termination of this Agreement.

          SECTION 8. GOVERNING LAW. This Agreement and the Account will be
governed by the law of the State of New York. The Account Holder and the Pledgor
may not change the law governing the Account without the Secured Party's express
prior written agreement.

          SECTION 9. ENTIRE AGREEMENT. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.

          SECTION 10. AMENDMENTS. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.

          SECTION 11. FINANCIAL ASSETS. The Account Holder agrees with the
Secured Party and the Pledgor that, to the fullest extent permitted by
applicable law, all property (other than funds) credited from time to time to
the Account will be treated as financial assets under Article 8 of the N.Y.
Uniform Commercial Code.

          SECTION 12. NOTICES. A notice or other communication to a party under
this Agreement will be in writing (except that Account Directions may be given
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.

          SECTION 13. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Pledgor, the Secured Party and the Account
Holder, and thereafter shall be binding upon and inure to the benefit of the
Pledgor, the Secured Party and the Account Holder and their respective
successors and assigns.

                                        4


          SECTION 14. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.

                                        5


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                       OSI PHARMACEUTICALS, INC.


                                       By /s/ ROBERT L. VAN NOSTRAND
                                          --------------------------
                                          Name:    Robert L. Van Nostrand
                                          Title:   Vice President and
                                                   Chief Financial Officer

                                       Address:
                                       58 South Service Road
                                       Melville, NY 11747

                                       THE BANK OF NEW YORK, as Trustee


                                       By /s/ JULIE SALOVITCH-MILLER
                                          --------------------------
                                          Name:    Julie Salovitch-Miller
                                          Title:   Vice President

                                       Address:
                                       5 Penn Plaza, 13th Floor
                                       New York, NY 10001

                                       THE BANK OF NEW YORK


                                       By /s/ GEOVANNI BARRIS
                                          Name:    Geovanni Barris
                                          Title:   Vice President

                                       Address:
                                       5 Penn Plaza, 13th Floor
                                       New York, NY 10001

                                        6


                                    EXHIBIT A



                                                                   FACE AMOUNT
DESCRIPTION OF ASSET                          CUSIP NUMBER         OF ASSET
- --------------------                          ------------         -----------
                                                             
US TREASURY BILLS                               912795KU4          USD 4,000,000
US TREAS NTS SEC STRIPPED                       912833FR6          USD 4,000,000
US TREAS NTS SEC STRIPPED                       912833FS4          USD 4,000,000
UNITED STATES TREAS NT STRIPPED PRIN PMT        912820DJ3          USD 4,000,000
UNITED STATES TREAS NT STRP PRIN PMT            912820BJ5          USD 4,000,000
US TREASURY BD STRIPPED                         912803AB9          USD 4,000,000

EX-5.1

                                                                     EXHIBIT 5.1


                           [SAUL EWING LLP LETTERHEAD]


                                                       April 19, 2002


OSI Pharmaceuticals, Inc.
58 South Service Road, Suite 110
Melville, NY 11747

Ladies and Gentlemen:

     We refer to the Registration Statement on Form S-3 (collectively with any
amendments thereto, the "Registration Statement") of OSI Pharmaceuticals, Inc.,
a Delaware corporation, which will be filed with the Securities and Exchange
Commission covering the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of up to $200,000,000 aggregate principal amount
of 4% Convertible Senior Subordinated Notes due February 1, 2009 (the "Notes")
and 4,000,000 shares of common stock, par value $.01 per share, issuable upon
conversion of the Notes (the "Shares" and together with the Notes, the
"Securities").

     We have examined the Registration Statement and such records, certificates
and other documents as we have considered necessary or appropriate for the
purposes of this opinion.

     Based on the foregoing, it is our opinion that the Securities, when sold
and issued in accordance with the Registration Statement and related Prospectus,
will be validly issued, fully paid and non-assessable.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus contained therein. In giving this consent, we
do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Securities and Exchange Commission thereunder.



                                              Very truly yours,


                                              /s/ SAUL EWING LLP

EX-12.1

                            OSI PHARMACEUTICALS, INC.
               COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES



                                         Three months
                                            ended                        Years ended September 31,
                                         12/31/2001       2001         2000        1999         1998         1997
- -                                        ----------       ----         ----        ----         ----         ----
                                                                                        
Loss before cumulative effect
 of accounting change and loss
 from equity investee                    (142,382,066) (20,886,979) (15,999,749) (9,598,437)  (9,183,387) (8,557,226)
Add: Fixed Charges                            321,417      745,678      688,935     535,370      383,481     387,452
                                        -----------------------------------------------------------------------------
Loss before cumulative effect
 of accounting change and loss
 from equity investee as adjusted        (142,060,649) (20,141,301) (15,310,814) (9,063,067)  (8,799,906) (8,169,774)
                                        =============================================================================

Fixed Charges:
    Interest expense                           79,745       50,011       32,268      24,370       20,148      27,119
    Estimated interest component of rent      241,672      695,667      656,667     511,000      363,333     360,333
                                        -----------------------------------------------------------------------------
Total Fixed charges                           321,417      745,678      688,935     535,370      383,481     387,452
                                        -----------------------------------------------------------------------------
    Ratio                                      (1)           (1)          (1)          (1)         (1)          (1)


    (1) Earnings (as defined) for the period were insufficient to cover fixed
    charges by an amount equal to the loss before cumulative effect of
    accounting change and loss from equity investee for the period.

EX-23.1

                                                                    EXHIBIT 23.1


                          INDEPENDENT AUDITORS' CONSENT


The Board of Directors
OSI Pharmaceuticals, Inc.:


We consent to the use of our report dated December 7, 2001, with respect to the
consolidated balance sheets of OSI Pharmaceuticals, Inc. and subsidiaries as of
September 30, 2001 and 2000, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended September 30, 2001, incorporated herein by reference,
and to the reference to our firm under the heading "Experts" in the prospectus.

Our report refers to a change in the method of revenue recognition for certain
upfront non-refundable fees in 2001.


                                               /s/ KPMG LLP

Melville, New York
April 17, 2002

EX-23.2

                                                                    EXHIBIT 23.2


               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of OSI Pharmaceuticals,
Inc. for the registration of $200,000,000 4% Convertible Senior Subordinated
Notes due 2009 and 4,000,000 shares of its common stock and to the incorporation
by reference therein of our report dated February 1, 2002, with respect to the
financial statements of the Oncology Related Assets, Liabilities and Activities
of Gilead Sciences, Inc. included in the Current Report on Form 8-K/A of OSI
Pharmaceuticals, Inc. filed with the Securities and Exchange Commission on
March 6, 2002.

                                              /s/ ERNST & YOUNG LLP


Palo Alto, California
April 17, 2002

EX-25.1

                                                                    EXHIBIT 25.1

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|

                           ---------------------------

                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

       New York                                      13-5160382
 (State of incorporation                           (I.R.S. employer
if not a U.S. national bank)                      identification no.)

    One Wall Street, New York, N.Y.                     10286
(Address of principal executive offices)              (Zip code)

                           ---------------------------

                            OSI PHARMACEUTICALS, INC.
               (Exact name of obligor as specified in its charter)

          Delaware                                      13-3159796
(State or other jurisdiction of                      (I.R.S. employer
 incorporation or organization)                     identification no.)

       58 South Service Road
             Suite 110
         Melville, New York                                11747
(Address of principal executive offices)                (Zip code)


                4% Convertible Senior Subordinated Notes due 2009
                       (Title of the indenture securities)


= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =




1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (a)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
          IT IS SUBJECT.



     --------------------------------------------------------------------------------------
             Name                                           Address
     --------------------------------------------------------------------------------------
                                                
     Superintendent of Banks of the State of       2 Rector Street, New York, N.Y. 10006,
     New York                                      and Albany, N.Y. 12203
     Federal Reserve Bank of New York              33 Liberty Plaza, New York, N.Y. 10045
     Federal Deposit Insurance Corporation         Washington, D.C. 20429
     New York Clearing House Association           New York, New York 10005



     (b)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

           Yes.

2. AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16. LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(d).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 33-29637.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 33-31019.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          33-44051.)

     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.

                                       2



                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 9th day of April, 2002.


                                          THE BANK OF NEW YORK


                                          By: /s/ MARY LAGUIMINA
                                              ---------------------------
                                              Name:  MARY LAGUIMINA
                                              Title: VICE PRESIDENT

                                       3


                                                                       EXHIBIT 7

- -------------------------------------------------------------------------------

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
2001, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.



                                                              Dollar Amounts
                                                               In Thousands
                                                              --------------
                                                         
ASSETS
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin .        $ 3,238,092
   Interest-bearing balances ..........................          5,255,952
Securities:
   Held-to-maturity securities ........................            127,193
   Available-for-sale securities ......................         12,143,488
Federal funds sold and Securities purchased under
   agreements to resell ...............................            281,677
Loans and lease financing receivables:
   Loans and leases held for sale .....................                786
   Loans and leases, net of unearned income ....  46,206,726
   LESS: Allowance for loan and lease losses ...     607,115
   Loans and leases, net of unearned
     income and allowance .............................         45,599,611
Trading Assets ........................................          9,074,924
Premises and fixed assets (including capitalized
   leases) ............................................            783,165
Other real estate owned ...............................                935
Investments in unconsolidated subsidiaries and
   associated companies ...............................            200,944
Customers' liability to this bank on acceptances
   outstanding ........................................            311,521
Intangible assets
   Goodwill ...........................................          1,546,125
   Other intangible assets ............................              8,497
Other assets ..........................................          8,761,129
                                                               -----------
Total assets ..........................................        $87,334,039
                                                               ===========
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                                                              Dollar Amounts
                                                               In Thousands
                                                              --------------
                                                         
LIABILITIES
Deposits:
   In domestic offices ................................        $28,254,986
   Noninterest-bearing .........................  10,843,829
   Interest-bearing ............................  17,411,157
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...........................         31,999,406
   Noninterest-bearing .........................   1,006,193
   Interest-bearing ............................  30,993,213
Federal funds purchased and securities sold under
   agreements to repurchase ...........................          6,004,678
Trading liabilities ...................................          2,286,940
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..........................          1,845,865
Bank's liability on acceptances executed and
   outstanding ........................................            440,362
Subordinated notes and debentures .....................          2,196,000
Other liabilities .....................................          7,606,565
                                                               -----------
Total liabilities .....................................        $80,634,802
                                                               ===========
EQUITY CAPITAL
Common stock ..........................................          1,135,284
Surplus ...............................................          1,050,729
Retained earnings .....................................          4,436,230
Accumulated other comprehensive income ................             76,292
Other equity capital components .......................                  0
                                                               -----------
Total equity capital ..................................          6,698,535
                                                               -----------
Total liabilities and equity capital ..................        $87,334,039
                                                               ===========



     I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller


     We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief

                                       5


has been prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.

Thomas A. Renyi    )
Gerald L. Hassell  )            Directors
Alan R. Griffith   )



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