10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[ x ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

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

Commission File Number: 0-18805

ELECTRONICS FOR IMAGING, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 94-3086355
(I.R.S. Employer
Identification No.)

303 Velocity Way, Foster City, CA 94404
(Address of principal executive offices, including zip code)

(650) 357 - 3500
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]. No [  ]

The number of shares of Common Stock outstanding as of July 31, 2003 was 52,220,777.

An Exhibit Index can be found on Page 36.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
	ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Income
		Condensed Consolidated Statements of Cash Flows
		Notes to Condensed Consolidated Financial Statements (unaudited)
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4: CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX*
EXHIBIT 4.1
EXHIBIT 4.3
EXHIBIT 21
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

ELECTRONICS FOR IMAGING, INC.

INDEX

		Page No.
PART I – Financial Information
Item 1.    Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets June 30, 2003 and December 31, 2002		3
	Condensed Consolidated Statements of Income Three and Six Months Ended June 30, 2003 and 2002		4
	Condensed Consolidated Statements of Cash Flows Six Months Ended June 30, 2003 and 2002		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3.    Quantitative and Qualitative Disclosures About Market Risk			33
Item 4.    Controls and Procedures			33
PART II – Other Information
Item 1.    Legal Proceedings			34
Item 2.    Changes in Securities and Use of Proceeds			34
Item 3.    Defaults Upon Senior Securities			34
Item 4.    Submission of Matters to a Vote of Security Holders			34
Item 5.    Other Information			34
Item 6.    Exhibits and Reports on Form 8-K			34
Signatures			35

2

PART I           FINANCIAL INFORMATION

     ITEM 1.       CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Electronics for Imaging, Inc.
Condensed Consolidated Balance Sheets

		June 30,			December 31,
		2003			2002
(in thousands, except per share amounts)		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	206,448		$	153,905
Short-term investments			412,718			344,465
Accounts receivable, net			33,094			42,267
Inventories			6,226			4,125
Other current assets			27,037			18,053
Total current assets			685,523			562,815
Restricted marketable securities			69,320			—
Property and equipment, net			51,629			53,187
Restricted investments			43,080			43,080
Goodwill			49,628			43,552
Intangible assets, net			20,329			17,386
Other assets			12,865			7,086
	Total assets	$	932,374		$	727,106
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	13,337		$	13,067
Accrued and other liabilities			43,754			47,353
Income taxes payable			34,843			32,341
Total current liabilities			91,934			92,761
Long-term obligations			240,249			278
Commitments and contingencies (Note10)
Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000 shares authorized; none issued and outstanding			—			—
Common stock, $0.01 par value; 150,000 shares authorized; 52,143 and 54,569 shares issued and outstanding, respectively			598			590
Additional paid-in capital			283,423			272,456
Treasury stock, at cost, 7,613 and 4,478 shares, respectively			(158,150	)		(99,959	)
Accumulated other comprehensive income			1,978			1,991
Retained earnings			472,342			458,989
Total stockholders’ equity			600,191			634,067
	Total liabilities and stockholders’ equity	$	932,374		$	727,106

See accompanying notes to condensed consolidated financial statements.

3

Electronics for Imaging, Inc.
Condensed Consolidated Statements of Income
(unaudited)

			Three Months Ended						Six Months Ended
			June 30,						June 30,
(In thousands, except per share amounts)			2003			2002			2003			2002
Revenue			$	88,689		$	83,931		$	174,404		$	166,824
	Cost of revenue			35,259			41,324			71,487			83,427
Gross profit				53,430			42,607			102,917			83,397
	Operating expenses:
		Research and development		23,272			23,021			46,082			45,424
		Sales and marketing		15,183			12,461			29,913			24,750
		General and administrative		5,001			5,509			9,992			10,934
		Amortization of identified intangibles and other acquisition-related expense		1,333			1,098			3,878			2,102
	Total operating expenses			44,789			42,089			89,865			83,210
Income from operations				8,641			518			13,052			187
	Interest and other income, net			2,662			3,003			5,240			6,224
Income before income taxes				11,303			3,521			18,292			6,411
	Provision for income taxes			(3,052	)		(1,056	)		(4,939	)		(1,923	)
Net income			$	8,251		$	2,465		$	13,353		$	4,488
Net income per basic common share			$	0.15		$	0.05		$	0.25		$	0.08
Shares used in per-share calculation				54,028			54,203			54,367			54,105
Net income per diluted common share			$	0.15		$	0.05		$	0.24		$	0.08
Shares used in per-share calculation				54,906			54,748			55,054			54,878

See accompanying notes to condensed consolidated financial statements.

4

Electronics for Imaging, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)

				Six Months Ended June 30,
(In thousands)				2003			2002
Cash flows from operating activities:
Net income				$	13,353		$	4,488
Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			7,707			7,441
		In-process research and development expense			1,220			—
		Bad debt reserve			(142	)		(97	)
		Deferred income tax			(2,494	)		164
	Changes in operating assets and liabilities:
		Accounts receivable			10,422			2,632
		Inventories			(1,962	)		2,560
		Receivable from subcontract manufacturers			(1,092	)		(838	)
		Other current assets			(7,174	)		548
		Accounts payable and accrued liabilities			(5,401	)		(5,281	)
		Income taxes payable			2,520			3,007
			Net cash provided by operating activities		16,957			14,624
Cash flows from investing activities:
	Purchases and sales/maturities of short-term investments, net				(69,258	)		(35,040	)
	Net purchases of restricted investments				—			(2,945	)
	Reclassification of cash & short-term investments to restricted marketable securities				(69,320	)
	Investment in property and equipment, net				(3,280	)		(7,032	)
	Acquisition of subsidiary				(9,255	)		(1,870	)
	Change in other assets				180			452
			Net cash used for investing activities		(150,933	)		(46,435	)
Cash flows from financing activities:
	Repayment of long-term obligation				(29	)		(24	)
	Issuance of long-term debt, net				233,738			—
	Issuance of common stock				10,976			4,549
	Repurchase of common stock				(58,191	)		—
			Net cash provided by financing activities		186,494			4,525
Effect of exchange rate changes on cash and cash equivalents					25			—
Increase (decrease) in cash and cash equivalents					52,543			(27,286	)
Cash and cash equivalents at beginning of year					153,905			190,816
Cash and cash equivalents at end of period				$	206,448		$	163,530

See accompanying notes to condensed consolidated financial statements.

5

Electronics for Imaging, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

1. Basis of Presentation

The unaudited interim condensed consolidated financial statements of Electronics for Imaging, Inc., a Delaware corporation (the “Company”), as of and for the interim periods ended June 30, 2003, have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2002, contained in the Company’s Annual Report to Stockholders. In the opinion of management, the unaudited interim condensed consolidated financial statements of the Company include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Company and the results of its operations and cash flows, in accordance with accounting principles generally accepted in the United States of America. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements referred to above and the notes thereto. Certain prior year balances have been reclassified to conform with the current year presentation.

The preparation of the interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

The interim results of the Company are subject to fluctuation. As a result, the Company believes the results of operations for the interim periods ended June 30, 2003 are not necessarily indicative of the results to be expected for any other interim period or the full year.

2. Recent Accounting Pronouncements

SFAS 148

In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure. This Statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure provisions of this Standard are effective for fiscal years and interim periods beginning after December 15, 2002.

		Three months ended						Six months ended
		June 30,						June 30,
(in thousands, except per share amounts)		2003			2002			2003			2002
Net income	As reported	$	8,251		$	2,465		$	13,353		$	4,488
Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects			(3,647	)		(9,654	)		(7,510	)		(13,894	)
Net income (loss)	Pro forma	$	4,604		$	(7,189	)	$	5,843		$	(9,406	)
Earnings (loss) per basic common share	As reported	$	0.15		$	0.05		$	0.25		$	0.08
	Pro forma	$	0.09		$	(0.13	)	$	0.11		$	(0.17	)
Earnings (loss) per diluted common share	As reported	$	0.15		$	0.05		$	0.24		$	0.08
	Pro forma	$	0.08		$	(0.13	)	$	0.11		$	(0.17	)

SFAS 149

In December 2002, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This Statement amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,

6

to provide clarification on the financial accounting and reporting of derivative instruments and hedging activities. We do not anticipate that SFAS No. 149 will have a material impact on our financial condition or results of operation.

SFAS 150

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards on the classification and measurement of financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, or otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We are in the process of assessing the effect of SFAS No. 150 and do not expect the implementation of the pronouncement to have a material impact on our financial condition or results of operations.

FASB Interpretation No. 46

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”). The primary objectives of FIN 46 are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights (“variable interest entities” or “VIEs”) and how to determine when and which business enterprise should consolidate the VIE (the “primary beneficiary”). This new model for consolidation applies to an entity in which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is sufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures regarding the nature, purpose, size and activities of the VIE and the enterprise’s maximum exposure to loss as a result of its involvement with the VIE. The interpretation is effective immediately for any VIEs created after January 31, 2003 and for VIEs in which an enterprise obtains an interest after that date. The interpretation is effective for interim or annual periods commencing after June 15, 2003 for pre-existing VIEs. Based upon our analysis, we do not believe the interpretation will have any material impact on our financial statements.

3. Accounting for Derivative Instruments and Hedging

SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities—Deferral of the Effective Date of FASB Statement No. 133, and SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment of SFAS No. 133 requires companies to reflect the fair value of all derivative instruments, including those embedded in other contracts, as assets or liabilities in an entity’s balance sheet. Other than the derivative related to the contingent interest feature of the Company’s $240.0 million convertible debentures, the Company had no such derivative or hedging instruments outstanding as of June 30, 2003. As of June 30, 2003, the derivative related to the debt had no material fair value.

4. Earnings Per Share

The following table represents unaudited disclosures of basic and diluted earnings per share for the periods presented below:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in thousands, except per share amounts, unaudited)		2003		2002		2003		2002
Net income available to common shareholders		$	8,251	$	2,465	$	13,353	$	4,488
Shares
	Basic shares		54,028		54,203		54,367		54,105
	Effect of dilutive securities		878		545		687		773
Diluted Shares			54,906		54,748		55,054		54,878
Earnings per common share
	Basic EPS	$	0.15	$	0.05	$	0.25	$	0.08
	Diluted EPS	$	0.15	$	0.05	$	0.24	$	0.08

7

Anti-dilutive weighted average shares of common stock of 4,545,069 and 5,399,758 as of June 30, 2003 and 2002, respectively, have been excluded from the effect of dilutive securities because the options’ exercise prices were greater than the average market price of the common stock for the periods then ended. The convertible debentures issued June 4, 2003 are considered contingent convertible securities and were excluded from the earnings per share calculations for any period presented. The debentures represent 9,084,192 potential shares upon conversion.

5.

Comprehensive Income

The Company’s comprehensive income, which encompasses net income, market valuation adjustments and currency translation adjustments, is as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In thousands, unaudited)	2003			2002		2003			2002
Net income	$	8,251		$	2,465	$	13,353		$	4,488
Market valuation of investments		(721	)		1,216		(1,005	)		313
Currency translation adjustment		710			49		992			20
Comprehensive Income	$	8,240		$	3,730	$	13,340		$	4,821

6. Acquisitions

In January 2003 the Company acquired Best GmbH, a German-based software company that provides proofing products for worldwide print and publishing markets for approximately $9.3 million in cash. The acquisition was accounted for as a purchase business combination and accordingly, the purchase price has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values on the date of acquisition. The following table summarizes the allocation of the purchase price to assets acquired and liabilities assumed:

(in thousands)
Fair value of assets acquired and liabilities assumed	$	36
In-process research and development		1,220
Developed technology		2,080
Trademarks and trade names, license and distributor relationships		2,860
Deferred tax liability related to assets acquired		(1,952	)
Goodwill		5,034
	$	9,278

The intangible assets consist of developed technology, trademarks and trade names, license and distributor relationships. The amount allocated to the purchased in-process research and development (“IPR&D”) was determined using established valuation techniques and was expensed upon acquisition because technological feasibility had not been established and no future alternative uses existed. The value of this IPR&D was determined by estimating the costs to develop the purchased IPR&D into a commercially viable product, estimating the resulting net cash flows from the sale of the products resulting from the completion of the IPR&D and discounting the net cash flows back to their present value at rates ranging from 25% to 30%. The excess of the purchase price over tangible and identifiable intangible assets acquired and liabilities assumed has been recorded as goodwill. The intangible assets are being amortized over estimated useful lives of 5 to 10 years.

8

On February 13, 2003, the Company entered into three agreements with Printcafe Software, Inc. (“Printcafe”) in connection with its proposal to acquire all of the outstanding shares of common stock of Printcafe at a purchase price equal to $2.60 per share of Printcafe common stock, payable in cash or the Company’s stock. The agreements include the following: (1) a standby credit facility in the amount of $11 million plus a working capital facility which will provide up to an additional $3 million under certain circumstances, (2) a stock option agreement granting the Company an option to purchase up to 2,126,574 shares of Printcafe common stock at a purchase price equal to $2.60 per share of common stock which was exercised on June 11, 2003, and (3) a letter agreement that places certain restrictions on Printcafe’s ability to take actions in order to facilitate a business combination with a party other than the Company subject to customary “fiduciary out” provisions. On February 26, 2003, the Company announced that it signed a merger agreement providing for the acquisition of Printcafe for $2.60 per share of Printcafe common stock, or approximately $27.6 million in cash or Company stock for all outstanding shares of Printcafe common stock. The Company and Printcafe filed a S-4 and a Proxy Statement in March 2003 as part of the merger process and are waiting for the SEC’s approval for the statements to become effective. See Note 10, Commitments and Contingencies, for a discussion of the lawsuits filed by Creo, Inc. related to proposed merger.

7. Balance Sheet Components

(in thousands)		June 30, 2003			December 31, 2002
Accounts receivable:
	Accounts receivable	$	34,331		$	43,505
	Less reserves and allowances		(1,237	)		(1,238	)
		$	33,094		$	42,267
Inventories:
	Raw materials	$	3,015		$	2,295
	Finished goods		3,211			1,830
		$	6,226		$	4,125
Other current assets:
	Deferred income taxes, current portion	$	13,956		$	13,260
	Receivable from subcontract manufacturers		2,650			1,559
	Investment in Printcafe		5,529			—
	Other		4,902			3,234
		$	27,037		$	18,053
Property and equipment:
	Land, building and improvements	$	41,679		$	41,349
	Equipment and purchased software		43,512			41,121
	Furniture and leasehold improvements		12,760			12,544
			97,951			95,014
	Less accumulated depreciation and amortization		(46,322	)		(41,827	)
		$	51,629		$	53,187
Other assets:
	Debt issuance costs, net	$	6,262		$	—
	Deferred income taxes, non-current portion		5,915			6,238
	Other		688			848
		$	12,865		$	7,086

9

		June 30, 2003		December 31, 2002
Accrued and other liabilities:
	Accrued compensation and benefits	$	14,253	$	15,585
	Deferred revenue		2,407		3,501
	Accrued warranty provision		2,489		2,515
	Accrued royalty payments		6,518		7,933
	Other accrued liabilities		18,087		17,819
		$	43,754	$	47,353

8. Goodwill and Other Identified Intangible Assets

	June 30, 2003					December 31, 2002
	Gross					Gross
	Carrying		Accumulated			Carrying		Accumulated
(in thousands)	Amount		Amortization			Amount		Amortization
Goodwill	$	59,907	$	(10,279	)	$	53,831	$	(10,279	)
Acquired technology	$	23,171	$	(8,041	)	$	20,800	$	(6,253	)
Trademarks and trade names		6,274		(3,912	)		6,000		(3,161	)
Other intangible assets		2,987		(150	)		—		—
Amortizable intangible assets	$	32,432	$	(12,103	)	$	26,800	$	(9,414	)

No impairments have been recorded against the goodwill account since the adoption of SFAS 142, Goodwill and Other Intangible Assets on January 1, 2002.

Aggregate amortization expense was $1.3 million and $2.6 million for the three and six months ended June 30, 2003, respectively and $1.1 million and $2.1 million for the three and six months ended June 30, 2002, respectively. As of June 30, 2003 future estimated amortization expense related to intangible assets is estimated to be:

	(in thousands)
2003	$	2,640
2004		4,936
2005		3,905
2006		3,805
2007		2,837

9. Long-term Debt

On June 4, 2003 the Company issued $240.0 million convertible senior debentures due in 2023 (the “Debentures”). The Debentures were offered only to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A. The Debentures are unsecured senior obligations of the Company, paying interest semi-annually in arrears at an annual rate of 1.50%. Additional interest at a rate of 0.35% per annum will be paid under certain conditions, beginning in the sixth year after issuance. The Debentures are convertible before maturity into shares of EFI common stock at a conversion price of approximately $26.42 per share of common stock but only upon the stock trading at or above $31.70 per share or the occurrence of certain other specified events. The Company may redeem the Debentures at its option, on or after June 1, 2008 at a redemption price equal to par plus accrued interest, if any. In addition, holders of the Debentures may require the Company to repurchase all or some of the Debentures on June 1, 2008, 2013 and 2018 at a price equal to

10

100% of the principal amount plus accrued interest, including contingent interest, if any. The Company will pay the repurchase price for any debentures repurchased on June 1, 2008 in cash, but may choose to pay the repurchase price in cash, common stock of the Company, or any combination thereof in 2013 and 2018.

(in thousands)	June 30, 2003		December 31, 2002
1.50% convertible debentures due June 1, 2023, with interest payable semi-annually on June 1 and December 1	$	240,000	$	—
Bonds due to City of Foster City, variable interest rate, interest and principal payments due semi-annually		249		278
	$	240,249	$	278

Maturities of long-term debt are approximately $58 thousand per year for the next five years.

10. Commitments and Contingencies

Off-Balance Sheet Financing - Synthetic Lease Arrangement

In 1997, the Company purchased a 35-acre parcel of land in Foster City, California and began development of a corporate campus. In July 1999 the Company completed construction of a ten-story, 295,000 square foot building funded under a lease agreement entered into in 1997 (the “1997 Lease”) and began making rent payments. Also in conjunction with the 1997 Lease, the Company has entered into a separate ground lease with the lessor of the building for approximately 35 years at a nominal rate. If the Company does not renew the 1997 Lease, the ground lease converts to a market rate.

In December 1999 the Company entered into a second lease agreement (the “1999 Lease” and together with the 1997 Lease, the “Leases”) to lease additional buildings, to be constructed adjacent to the first building discussed above. A 165,000 square foot building was completed in December 2001 at a cost of approximately $43.1 million. Rent obligations for the 1999 Lease began in January 2002 and bear a direct relationship to the funded amount, as described below. In connection with the 1999 Lease, the Company entered into a separate ground lease of the related parcels of land in Foster City with the lessor of the buildings at a nominal rate and for a term of 30 years. If the Company does not renew the 1999 Lease, the ground lease converts to a market rate.

Each Lease has an initial term of seven years, with an option to renew subject to certain conditions. The Company may, at its option, purchase the facilities during or at the end of the term of the lease for the amount expended by the respective lessor to construct the facilities ($56.8 million for the 1997 Lease and $43.1 million for the 1999 Lease). The Company has guaranteed to the lessors a residual value associated with the buildings equal to approximately 82% of their funding. The Company may be liable to the lessor for the amount of the residual guarantee if it either fails to renew the lease or does not purchase or locate a purchaser for the leased building at the end of the lease term. During the term of each of the Leases, must meet certain financial covenant requirements related to cash to debt, fixed charge coverage ratio, leverage ratio and consolidated tangible net worth as defined by the underlying agreements. If the Company maintains pledged collateral, then a limited subset of these covenants must be met. The tangible net worth financial covenant requires that the Company maintain a minimum tangible net worth as of the end of each quarter. There are other covenants regarding mergers, liens and judgements, and lines of business. The Company was in compliance with all of the covenants, either directly, or through the existence of the pledged collateral as of June 30, 2003. The pledged collateral under the 1997 Lease ($69.3 million at June 30, 2003) has been classified as restricted marketable securities. The Company is liable to the lessor for the full purchase amount of the buildings if it defaults on its covenants ($56.8 million for the 1997 Lease and $43.1 million for the 1999 Lease). The Company could be required to purchase the building if (1) it defaulted on any indebtedness in excess of $10.0 million, (2) it failed to appeal a judgement in excess of $10.0 million, or (3) a creditor has commenced enforcement proceedings on an order for payment of money in excess of $10.0 million. In addition, the Company has pledged certain marketable securities, which are in proportion to the amount drawn under each lease. The funds pledged under the 1999 Lease (approximately $43.1 million at June 30, 2003) are in a LIBOR-based interest bearing account and are restricted as to withdrawal at all times. The Company is considered a

11

Tranche A lender of $35.3 million of the $43.1 million, while the lessor is considered a Tranche B lender for the remaining $7.8 million.

The Company is treated as the owner of these buildings for federal income tax purposes.

Under each Lease, the Company has first loss guarantees to the lessors, which make the Company liable for declines in the value of the buildings up to approximately 82% of the cost of the construction of the buildings. The first loss guarantee requires payment upon the end of the lease. The Company has assessed its exposure in relation to the first loss guarantees for both of the buildings under the Leases and has determined there is no deficiency to the guaranteed value at the current time. The Company will continue to assess the real estate market conditions to evaluate whether it needs to record any reserves under its first loss guarantee obligations.

Purchase Commitments

The Company sub-contracts with other companies to manufacture its products. During the normal course of business the sub-contractors procure components based upon orders placed by the Company. If the Company cancels all or part of the order, they may still be liable to the sub-contractors for the cost of the components purchased by the sub-contractors for placement in its products. The Company periodically reviews the potential liability and the adequacy of the related reserve. The Company’s consolidated financial position and results of operations could be negatively impacted if the Company were required to compensate the sub-contract manufacturers in an amount significantly in excess of the accrued liability.

Product Warranties

The Company adopted FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantors, Including Direct Guarantees of Indebtedness of Others (“FIN 45”) during the fourth quarter of 2002. FIN 45 requires specific disclosures concerning the Company’s obligations under certain guarantees. The Company’s products are generally accompanied by a 12-month warranty, which covers both parts and labor. The warranty provision is based upon historical experience, by product, configuration and geographic region.

Changes in the warranty reserves for the three months ended June 30, 2003 were as follows:

(in thousands)
Balance at March 31, 2003	$	2,515
Provision for warranty during the period		589
Settlements		(615	)
Balance at June 30, 2003	$	2,489

Legal Proceedings

Over the past five years, Mr. Jan R. Coyle, an individual living in Nevada, has repeatedly demanded that the Company buy technology allegedly invented by his company, Kolbet Labs. In December 2001, Mr. Coyle threatened to sue the Company and its customers for allegedly infringing his soon to be issued patent and for misappropriating his alleged trade secrets. The Company believes Mr. Coyle’s claims are without merit and on December 11, 2001, the Company filed a declaratory relief action in the United States District Court for the Northern District of California, asking the Court to declare that the Company and its customers have not breached any nondisclosure agreement with Mr. Coyle or Kolbet Labs, nor has it infringed any alleged patent claims or misappropriated any alleged trade secrets belonging to Mr. Coyle or Kolbet Labs through its sale of Fiery, Splash or EDOX print controllers. The Company also sought an injunction enjoining both Mr. Coyle and Kolbet Labs from bringing or threatening to bring a lawsuit against the Company, its suppliers, vendors, customers and users of its products for breach of contract and misappropriation of trade secrets. On March 26, 2002, the Northern District of California court dismissed the Company’s complaint for lack of jurisdiction over Mr. Coyle. The Company has appealed the Court’s dismissal and on April 11, 2003 argued its appeal before the U.S. Court of Appeals for the Federal Circuit. The ruling of the Court is still pending.

12

On February 26, 2002, Coyle’s company, J & L Electronics, filed a complaint against the Company in the United States District Court for the District of Nevada alleging patent infringement, breach of non-disclosure agreements, misappropriation of trade secrets, violations of federal antitrust law, and related causes of action. The Company denies all of these allegations and management believes this lawsuit is without merit and intends to defend the action vigorously. On April 22, 2002, the Company filed a motion to dismiss the Nevada complaint. On March 28, 2003, the Federal District Judge dismissed the complaint for lack of jurisdiction over the Company. On April 30, 2003, J & L Electronics filed a notice of appeal to the U.S. Court of Appeals for the Federal District Court; the Court has not yet set a date for hearing the appeal. Due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of the litigation. Any unfavorable outcome of the litigation could have an adverse impact on the Company’s financial condition and results of operations.

On September 16, 2002, ArrivalStar, Inc., a Delaware corporation, filed a complaint in the U.S. District Court for the Northern District of Georgia against fourteen defendants, including the Company, alleging that each of the defendants has infringed one or more claims of six identified patents owned by the plaintiff. The named defendants are Delta Air Lines, Inc.; Sabre, Inc.; Travelocity.com, L.L.P.; The City of Atlanta; Worldspan, L.L.P.; Flytecomm Corporation; Centerpost Corporation; Continental Airlines, Inc.; Japan Air Lines Company, Ltd.; American Airlines, Inc.; Roadway Express, Inc.; the Company; American Express Company; and SITA Information Networking Computing USA, Inc. The complaint alleges that the defendants infringe the claims by providing vehicle location communication services, arrival notifications and other related services. The Company believes that the plaintiff’s claims are without merit and intends to vigorously defend itself in this litigation. However, due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of the litigation. Any unfavorable outcome of the litigation could have an adverse impact on the Company’s financial condition and results of operations.

On February 13, 2003, the Company entered into three agreements with Printcafe to facilitate a merger between the two companies. On February 19, 2003, Creo Inc. (a Printcafe shareholder) commenced litigation in the Delaware Court of Chancery against the Company, Printcafe and certain of Printcafe’s principal officers and directors, challenging and seeking to temporarily restrain the use of a newly adopted stockholder rights plan by Printcafe and seeking to restrain the Company and Printcafe from proceeding to enter into any further agreements with respect to a business combination. On February 21, 2003, the Delaware Court of Chancery denied the temporary restraining order sought by Creo. On February 26, 2003 the Company and Printcafe entered into a merger agreement providing for the Company’s acquisition of Printcafe. The merger is subject to regulatory review and approval by Printcafe’s stockholders. This litigation is still pending and, due to the inherent uncertainties of litigation, the Company cannot accurately predict the eventual outcome at this time. Any unfavorable outcome of the litigation could have an adverse impact on the Company’s financial condition and results of operations.

In addition, the Company is involved from time to time in litigation relating to claims arising in the normal course of its business. The Company believes that the ultimate resolution of such claims will not materially affect the Company’s business or financial condition.

13

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Except for the historical information contained herein, the discussion in this Quarterly Report on Form 10-Q contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, beliefs, expectations, forecasts and intentions. The cautionary statements made in this document should be read as applicable to all related forward-looking statements wherever they appear in this document. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include those discussed below in “Factors that Could Adversely Affect Performance,” as well as those discussed elsewhere herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update any forward- looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported. Please see the discussion of critical accounting policies in our Annual Report on Form 10-K/A for the year ended December 31, 2002.

Results of Operations

The following tables set forth items in our consolidated statements of income as a percentage of total revenue for the three and six month periods ended June 30, 2003 and 2002 and the percentage change from 2003 over 2002. These operating results are not necessarily indicative of results for any future period.

		Three Months ended						% change			Six Months ended						% change
		June 30,						2003			June 30,						2003
								over									over
		2003			2002			2002			2003			2002			2002
Revenue			100	%		100	%		6	%		100	%		100	%		5	%
	Cost of revenue		40	%		49	%		(15	)%		41	%		50	%		(14	)%
Gross profit			60	%		51	%		25	%		59	%		50	%		23	%
	Research and development		26	%		27	%		1	%		26	%		27	%		1	%
	Sales and marketing		17	%		15	%		22	%		17	%		15	%		21	%
	General and administrative		6	%		7	%		(9	)%		6	%		7	%		(9	)%
	Amortization of identified intangibles and other acquisition-related expense		2	%		1	%		21	%		2	%		1	%		84	%
	Total operating expenses		51	%		50	%		6	%		51	%		50	%		8	%
Income from operations			9	%		1	%		1,568	%		8	%		0	%		6,880	%
	Interest and other income, net		3	%		3	%		(11	)%		3	%		4	%		(16	)%
Income before income taxes			12	%		4	%		221	%		11	%		4	%		185	%
	Provision for income taxes		(3	)%		(1	)%		189	%		(3	)%		(1	)%		157	%
Net income			9	%		3	%		235	%		8	%		3	%		198	%

14

Revenue

Our revenue is derived from sales of products in four major categories. The first category is made up of stand-alone servers, which connect digital color copiers with computer networks. This category includes the Fiery X, Z, and Q series, the Splash G series, and Edox products and has accounted for a majority of our revenue in the past. The second category consists of embedded desktop controllers, design licensed color solutions, and color software RIPs primarily for the office market. The third category consists of controllers for digital black and white products. Finally, other revenue consists of sales of spares, Best proofing software, Velocity software solutions, and PrintMe. Most of our sales revenue is derived from sales of these products to original equipment manufacturers, or OEMs, who incorporate our products, technologies and solutions into the end product, which they sell to their customers. The remainder of our sales revenue is derived from sales to distribution partners and from direct sales to the end user.

Our revenues increased 6% to $88.7 million in the second quarter of 2003, compared to approximately $83.9 million in the second quarter of 2002, with a 1% increase in unit volume between the two periods. For the six-month periods ended June 30, revenues in 2003 increased 5%, while volumes decreased 2% over 2002. Sales of the Best software products accounted for a significant portion of the increase for both the three- and six-month period comparisons.

The following is a break-down of categories of revenue, both in terms of absolute dollars and as a percentage (%) of total revenue. Also shown is volume as a percentage (%) of total units shipped by product.

		Three months ended June 30,													Six months ended June 30,
		2003					2002					%			2003					2002					%
Revenue		$		%			$		%			Change			$		%			$		%			Change
Stand-alone Color Servers		$	31.6		36	%	$	36.8		44	%		(14	)%	$	70.1		40	%	$	76.4		46	%		(8	)%
Embedded & Design-licensed Color Solutions			33.0		37	%		26.6		32	%		24	%		58.9		34	%		48.3		29	%		22	%
Digital Black and White Solutions			9.6		11	%		10.1		12	%		(5	)%		16.3		9	%		21.4		13	%		(24	)%
Spares, Licensing & Other Misc. Sources			14.5		16	%		10.4		12	%		39	%		29.1		17	%		20.7		12	%		41	%
	Total Revenue	$	88.7		100	%	$	83.9		100	%		6	%	$	174.4		100	%	$	166.8		100	%		5	%

		Three months ended June 30,									Six months ended June 30,
Volume		2003			2002			% Change			2003			2002			% Change
Stand-alone Color Servers			9	%		14	%		(31	)%		12	%		16	%		(27	)%
Embedded & Design-licensed Color Solutions			52	%		43	%		21	%		51	%		43	%		15	%
Digital Black and White Solutions			29	%		36	%		(19	)%		29	%		35	%		(18	)%
Spares, Licensing & Other Misc. Sources			10	%		7	%		44	%		8	%		6	%		38	%
	Total Revenue		100	%		100	%		1	%		100	%		100	%		(2	)%

The category of stand-alone color servers connecting to digital color copiers made up 36% of total revenue and 9% of total unit volume for the three-month period ended June 30, 2003. For the same period a year ago, it made up 44% of total revenue and 14% of total unit volume. This category made up 40% of total revenue and 12% of total unit volume for the six-month period ended June 30, 2003. For the same period a year ago, it made up 46% of total revenue and 16% of total unit volume. We believe the decrease in percentages of revenue and unit volume in this category is due to the focus of our

15

OEM’s on selling newly-introduced color engines as well as the lack of new product offerings in the high-end professional market during the first two quarters of 2003.

The category of embedded and design-licensed color solutions made up 37% of total revenue and 52% of total unit volume in the second quarter of 2003. It made up 32% of total revenue and 43% of total unit volume in the second quarter of 2002. For the six months ended June 30, 2003 and 2002, the category of embedded and design-licensed color solutions made up 34% and 29% of total revenue and 51% and 43% of total volume, respectively. This category is comprised of embedded controllers, design-licensed solutions, and software RIPS. In some cases, our OEM customers have opted to pay royalties for controller designs and our software and manufacture the complete boards themselves, rather than purchase boards manufactured by us. The increase in this category was driven by the launch of new color multifunction products from a number of our OEM partners and the corresponding improved sales of color products for the office environment.

For the three months ended June 30, 2003 and 2002, the digital black and white solution category made up 11% and 12% of total revenue and 29% and 36% of total volume, respectively. It made up 9% of total revenue and 29% of total unit volume in the six-month period ended June 30, 2003 and 13% of total revenue and 35% of total unit volume in the six-month period ended June 30, 2002. The decline in this category can be attributed primarily to a weak economy, the migration to color solutions and customers relying on internally developed products, rather than purchasing products designed by us.

The spares, licensing and other miscellaneous sources category has increased from 12% of total revenue and 7% of total volume in the three-month period ended June 30, 2002 to 16% of total revenue and 10% of total volume in the three month period ended June 20, 2003. In the year over year quarterly periods, revenues from spares increased 3%, while revenues from all other products, excluding the Best inkjet proofing software, grew 5%. For the six months ended June 30, 2003 and 2002, the other revenue category made up 17% and 12% of total revenue and 8% and 6% of total volume, respectively. Sales of spares for the six months ended June 30, 2003, grew 21% in revenues compared to the same period in 2002. During the three months ended June 30, 2003, the revenue from spares has declined as a percentage of this category from approximately 50% in 2002 to approximately 33% in 2003.

To the extent our major product categories do not grow over time in absolute terms, or if we are not able to meet demand for higher unit volumes, it could have a material adverse effect on our operating results. There can be no assurance that any new controller products that we introduce during 2003 will be qualified by all or any of our OEM customers, or that such products will successfully compete, be accepted by the market, or otherwise effectively replace the volume of revenue and/or income from our older products. Market acceptance of our software and other products, such as PrintMe and DocSend, cannot be assured.

We also believe that in addition to the factors described above, price reductions for all of our products will affect revenues in the future. We have previously and may in the future reduce prices for our products. Depending upon the price-elasticity of demand for our products, the pricing and quality of competitive products, and other economic and competitive conditions, such price reductions may have an adverse impact on our revenues and profits. While we have managed to improve gross margins over the last year through the utilization of fewer contract manufacturers and favorable component pricing and an increase in software sales and design license sales, we may not be able to continue this trend. If we are not able to compensate for lower gross margins that result from price reductions with an increased volume of sales, our results of operations could be adversely affected. In addition, if our revenue in the future depends more upon sales of products with relatively lower gross margins (such as embedded controllers for printers, embedded controllers for color and black-and-white copiers, and stand-alone controllers for black-and-white copiers), results of operations may be adversely affected.

16

Revenue and volume by geographic area for the three-month periods ended June 30, 2003 and June 30, 2002 were as follows:

	Three months ended June 30,
	2003								2002
						% of								% of			% of $
(in millions)	$		%			volume			$		%			volume			change
Americas	$	43.8		49	%		32	%	$	41.7		49	%		41	%		5	%
Europe		28.4		32	%		26	%		25.8		31	%		22	%		10	%
Japan		11.2		13	%		23	%		12.4		15	%		25	%		(10	)%
ROW		5.3		6	%		19	%		4.0		5	%		12	%		30	%
Total Revenue	$	88.7		100	%		100	%	$	83.9		100	%		100	%		6	%

	Six months ended June 30,
	2003								2002
						% of								% of			% of $
(in millions)	$		%			volume			$		%			volume			change
Americas	$	86.6		50	%		35	%	$	86.4		52	%		45	%		0	%
Europe		57.1		33	%		27	%		51.4		31	%		25	%		11	%
Japan		20.9		12	%		18	%		21.1		12	%		21	%		(1	)%
ROW		9.8		5	%		20	%		7.9		5	%		9	%		23	%
Total Revenue	$	174.4		100	%		100	%	$	166.8		100	%		100	%		5	%

The Rest-of-World region, which includes the Asia Pacific countries, increased by 23% to $9.8 million in sales during the first six months of 2003 from $7.9 million in the first six months of 2002. Europe also showed a moderate increase in revenue, while Japan showed a slight decline and the Americas were relatively flat.

Shipments to some of our OEM customers are made to centralized purchasing and manufacturing locations which in turn sell through to other locations, making it difficult to obtain accurate geographical shipment data. Accordingly, we believe that export sales of our products into each region may differ from what is reported. We expect that export sales will continue to represent a significant portion of our total revenue.

Substantially all of the revenue for the last three years was attributable to sales of products through our OEM and distribution channels. During 2003, we have continued to work on both increasing the number of OEM customers and expanding the size of existing relationships with OEM customers. For the quarter ended June 30, 2003, three customers - Canon, Minolta, and Xerox provided more than 10% of our revenue individually and 69% of our revenue in aggregate. For the same period ended June 30, 2002 the top two customers were Canon and Xerox each of which accounted for more than 10% of our revenue individually and for 55% of our revenue in aggregate. No assurance can be given that our relationships with these and other significant OEM customers will continue or that we will be successful in increasing the number of our OEM customers or the size of our existing OEM relationships. Several of our OEM customers have reduced or discontinued their purchases from us at various times in the past and any such customer could do so in the future. Such reductions or discontinuations have in the past and could in the future have a significant negative impact on our consolidated financial position and results of operations.

We continue to work on the development of products utilizing the Fiery, Splash, and EDOX architecture and other products and intend to continue to introduce new generations of server and controller products and other new product lines with current and new OEMs and distribution partners in 2003 and beyond. No assurance can be given that the introduction or market acceptance of current or future products will be successful.

17

Gross Margins

For the quarter ended June 30, 2003 our gross margin was 60% compared to 51% for the same period a year ago. The improvement came from increased sales of embedded color products, particularly design licensed solutions and an increase in software sales which traditionally have high gross margins. The improvement driven by the embedded color category was in turn related to new products available from a number of our OEM customers, which fueled an increased demand for digital color printing in multiple markets. Our gross margins were 59% and 50% for the six-month periods ended June 30, 2003 and June 30, 2002, respectively. The improvement came from an increase in the gross margins for the high-end stand-alone color servers and the aforementioned increased sales of design licensed embedded color controllers and software sales. The gross margins for the stand-alone color servers and the embedded color controllers were enhanced by our move to fewer contract manufacturers and improved component pricing. In general, we believe that gross margin will continue to be impacted by a variety of factors. These factors include the market prices that can be achieved on our current and future products, the availability and pricing of key components (including DRAM, Processors, and Postscript interpreter software), third party manufacturing costs, product, channel, and geographic mix, the success of our product transitions and new products, the pace of migration to a design license business model for embedded products, competition with third parties and our OEM customers, and general economic conditions in the United States and abroad. Consequently, we anticipate gross margins will fluctuate from period to period.

Operating Expenses

Operating expenses increased by 6% in the three-month period ended June 30, 2003 compared to the three-month period ended June 30, 2002 and increased by 8% in the six-month period ended June 30, 2003 compared to the same period in 2002. Operating expenses as a percentage of revenue amounted to 51% and 50% for the three-month periods ended June 30, 2003 and 2002, respectively and 51% and 50% for the six-month periods ended June 30, 2003 and 2002, respectively. In January 2003, we completed our acquisition of Best adding additional operating expenses not incurred during the prior periods. In addition, during the first quarter of 2003, we implemented our first employee salary increase in two years, further increasing operating expenses as compared to prior periods. Employees with the rank of vice-president and higher were excluded from this increase. Along with the additional operating expenses incurred due to the acquisition of Best, the additional payroll costs incurred due to the salary increases accounted for a significant portion of the increase in operating expense during the three and six month periods ended June 30, 2003 as compared to the same periods in the prior year. We may experience increased expenses in the future from the translation of costs incurred in currencies such as the euro and the yen if the US dollar weakens relative to those currencies.

The components of operating expenses are detailed below.

Research and Development

Expenses for research and development consist primarily of personnel expenses and, to a lesser extent, consulting, depreciation, and costs of prototype materials. Research and development expenses were 26% and 27% of revenue for the second quarter of 2003 and 2002, respectively. For the six months ended June 30, 2003 and 2002, research and development expenses were 26% and 27%, respectively. In absolute dollars, research and development increased by $0.3 million in the second quarter of 2003 from the second quarter of 2002 and $0.7 million year over year for the six months ended June 30, due to the acquisition of Best in January 2003 and the salary increase, partially offset by a decrease in facility costs. We believe that the development of new products and the enhancement of existing products are essential to our continued success, and intend to continue to devote substantial resources to research and new product development efforts. Accordingly, we expect that our research and development expenses may increase in absolute dollars and also as a percentage of revenue in future quarters.

Sales and Marketing

Sales and marketing expenses include personnel expenses, costs of trade shows, marketing programs, and promotional materials, sales commissions, travel and entertainment expenses, depreciation, and costs associated with sales offices in the United States, Europe, Asia, and other locations around the world. Sales and marketing

18

expenses for the three-month period ended June 30, 2003 were $15.2 million or 17% of revenue compared to $12.5 million or 15% of revenue for the three months ended June 30, 2002. For the six months ended June 30, 2003 sales and marketing expenses were $29.9 million or 17% of revenue and were $24.8 million or 15% of revenue for the same six month period in 2002. The increase in absolute dollars of $2.7 million for the quarter and $5.2 million for the six month period is due to the acquisition of Best, increased tradeshow costs, and increased payroll expense from the salary increases, partially offset by a decrease in facility costs. In addition, sales and marketing expenses, particularly those incurred in Europe, where we have a significant presence, were negatively impacted by the weakening US dollar. While the costs in the local currency may have stayed constant, the translated US dollar costs have increased. We expect that our sales and marketing expenses may increase in absolute dollars as we continue to actively promote our products, introduce new products and services, and continue to build our sales and marketing organization, particularly in Europe and Asia Pacific, and as we grow our software solutions and other new product lines which require greater sales and marketing support from us. We also expect that if the US dollar continues to weaken against the Euro, sales and marketing expenses reported in US dollars will increase.

General and Administrative

General and administrative expenses consist primarily of personnel expenses and, to a lesser extent, depreciation and facility costs, professional fees, and other costs associated with public companies. General and administrative expenses were $5.0 million or 6% of revenue for the quarter ended June 30, 2003, compared to $5.5 million or 7% of revenue for the quarter ended June 30, 2002. General and administrative expenses were $10.0 million or 6% of revenue for the six-month period ended June 30, 2003, compared to $10.9 million or 7% of revenue for the six-month period ended June 30, 2002. The decrease in absolute dollars came from reduced legal costs partially offset with salary increases.

Amortization of Identified Intangibles and other Acquisition-related Expense

Amortization of identified intangibles and other acquisition-related expense for the quarter ending June 30, 2003 was $1.3 million or 2% of revenue compared to $1.1 million or 1% of revenue for the three months ended June 30, 2002. For the six months ended June 30, 2003, amortization of identified intangibles and other acquisition-related expense was $3.9 million or 2% of revenue compared to $2.1 million or 1% of revenue for the six months ended June 30, 2002. The quarter over quarter increase was attributable to the amortization of identified intangibles of $0.2 million related to the Best acquisition while the year over year increase was comprised of the write-off of purchased in-process research and development costs of $1.2 million and amortization of identified intangibles of $0.4 million related to the Best acquisition.

Interest and Other Income, net

Interest and other income relates mainly to interest income and expense, and gains and losses on foreign currency transactions. Interest and other income of $2.7 million for the three-month period ended June 30, 2003 decreased by 11% from $3.0 million for the three-month period ended June 30, 2002. For the six month period ended June 30, 2003, interest and other income decreased 16% to $5.2 million from $6.2 million for the six month period ended June 30, 2002. The decrease is largely the result of the short-term nature of our investments and the fact that reinvestment rates are much lower than the rates on instruments that have reached maturity. The decline was offset in part by an increase in the investment balance. Interest expense and debt issuance costs related to the convertible debentures issued in June 2003 was $0.4 million.

Income Taxes

Our effective tax rate was 27% for the three- and six-month periods ended June 30, 2003 and 30% for the three- and six-month periods ended June 30, 2002. The rate decreased in 2003 due to increased benefits from foreign sales. In each of these periods, we also benefited from tax-exempt interest income and research and development credits in achieving a

19

consolidated effective tax rate lower than that prescribed by the respective Federal and State taxing authorities. We currently anticipate that the tax rate for the remainder of 2003 will remain approximately 27%.

Liquidity and Capital Resources

Cash, cash equivalents and short-term investments increased by $120.8 million to $619.2 million as of June 30, 2003, from $498.4 million as of December 31, 2002. Working capital increased by $123.5 million to $593.6 million as of June 30, 2003, up from $470.1 million as of December 31, 2002. These increases are primarily the result of the sale of $240.0 million in convertible debentures in June 2003, net income, changes in balance sheet components, and the exercise of employee stock options; offset by the cash used to repurchase shares of our common stock, to purchase Best, the exercise of the option to purchase approximately 17.5% of Printcafe and the reclassification of cash pledged on a building lease to restricted marketable securities. (See Off-Balance Sheet Financing - Synthetic Lease Arrangement below.)

Net cash provided by operating activities was $17.0 million for the six-month period ended June 30, 2003. We invest cash in excess of our operating needs in short-term investments. Purchases in excess of sales of short-term investments were $69.3 million for the six-month period ended June 30, 2003. Our capital expenditures generally consist of investments in computers and related peripheral equipment and office furniture for use in our operations. We purchased approximately $3.3 million of equipment and furniture during the six-month period ended June 30, 2003. In January 2003 we acquired Best for $9.3 million, net of cash received in the acquisition. In June 2003 we purchased shares of Printcafe common stock for $5.5 million pursuant to an option agreement related to the merger agreement between us and Printcafe.

Net cash provided by financing activities of $186.5 million in the six-month period ended June 30, 2003, was the result of $233.7 million from the issuance of convertible debentures, net of issuance costs and $11.0 million from the exercises of common stock options and the tax benefits to us associated with those exercises and the issuance of stock under our Employee Stock Purchase Plan, less $58.2 million used for the repurchase of the our common stock.

Off-Balance Sheet Financing - Synthetic Lease Arrangement

In 1997, we purchased a 35-acre parcel of land in Foster City, California and began development of a corporate campus. In July 1999 we completed construction of a ten-story, 295,000 square foot building funded under a lease agreement entered into in 1997 (“1997 Lease”) and began making rent payments. Also in conjunction with the 1997 Lease, we entered into a separate ground lease with the lessor of the building for approximately 35 years. If we do not renew the building lease, the ground lease converts to a market rate.

In December 1999 we entered into a second agreement (“1999 Lease” and together with the 1997 Lease, the “Leases”) to lease additional facilities, to be constructed adjacent to the first building discussed above. A 165,000 square foot building was completed in December 2001 at a cost of approximately $43.1 million. Rent obligations for the additional facilities, which began in January 2002, bear a direct relationship to the funded amount, as described below. In connection with the 1999 Lease, we entered into a separate ground lease of the related parcels of land in Foster City with the lessor of the buildings at a nominal rate and for a term of 30 years. If we do not renew the 1999 Lease, the ground lease converts to a market rate.

Each Lease has an initial term of seven years, with an option to renew subject to certain conditions. We may, at our option, purchase the facilities during or at the end of the term of the lease for the amount expended by the respective lessor to construct the facilities ($56.8 million for the 1997 Lease and $43.1 million for the 1999 Lease). We have guaranteed to the lessors a residual value associated with the buildings equal to approximately 82% of their funding. We may be liable to the lessor for the amount of the residual guarantee if we either fail to renew the lease or do not purchase or locate a purchaser for the leased building at the end of the lease term. During the term of each of the Leases we must meet certain financial covenant requirements related to cash to debt, fixed charge coverage ratio, leverage ratio and consolidated tangible net worth as defined by the underlying agreements. If we maintain pledged collateral, then a limited subset of these covenants must be met. The tangible net worth financial covenant requires that we maintain a minimum tangible net worth as of the end of each quarter. There are other covenants regarding mergers, liens and judgements, and lines of business. We were in compliance with all of the covenants, either directly, or through the existence of the pledged

20

collateral as of June 30, 2003. The pledged collateral under the 1997 Lease ($69.3 million at June 30, 2003) has been classified as restricted marketable securities. We are liable to the lessor for the full purchase amount of the buildings if we default on our covenants ($56.8 million for the 1997 Lease and $43.1 million for the 1999 Lease). We could be required to purchase the building if (1) we defaulted on any indebtedness in excess of $10.0 million, (2) we failed to appeal a judgement in excess of $10.0 million, or (3) a creditor has commenced enforcement proceedings on an order for payment of money in excess of $10.0 million. In addition, we have pledged certain marketable securities, which are in proportion to the amount drawn under each lease. The funds pledged under the 1999 Lease (approximately $43.1 million at June 30, 2003) are in a LIBOR-based interest bearing account and are restricted as to withdrawal at all times. We are considered a Tranche A lender of $35.3 million of the $43.1 million, while the lessor is considered a Tranche B lender for the remaining $7.8 million.

We are treated as the owner of these buildings for federal income tax purposes.

In January 2003 the FASB issued FIN 46. As noted under Note 2 “Recent Accounting Pronouncements” contained in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, the primary objectives of FIN 46 are to provide guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities”) and how to determine when and which business enterprise should consolidate the variable interest entity (“primary beneficiary”). Based upon our analysis, we are not required to consolidate either of the synthetic lease arrangements.

Under both leases we have first loss guarantees to the lessors, which make us liable for declines in the value of these buildings up to approximately 82% of the cost of the construction of the buildings. The first loss guarantee requires payment upon the end of the lease. We have assessed our exposure in relation to the first loss guarantees for both of the facilities under the Leases and have determined there is no deficiency to the guaranteed value at the current time. We will continue to assess the real estate market conditions to evaluate whether it needs to record any reserves under our first loss guarantee obligations.

Inventory

Our inventory consists primarily of memory subsystems, processors and ASICs, which are sold to third-party contract manufacturers responsible for manufacturing our products. Should we decide to purchase components and do our own manufacturing, or should it become necessary for us to purchase and sell components other than the processors, ASICs or memory subsystems for our contract manufacturers, inventory balances and potentially fixed assets would increase significantly, thereby reducing our available cash resources. Further, the inventory we carry could become obsolete thereby negatively impacting our consolidated financial position and results of operations. We also rely on several sole-source suppliers for certain key components and could experience a significant negative impact on our consolidated financial position and results of operations if such supplies were reduced or not available.

Purchase Commitments

We may be required to compensate our sub-contract manufacturers for components purchased for orders subsequently cancelled by us. We periodically review the potential liability and the adequacy of the related reserve. Our financial condition and results of operations could be negatively impacted if we were required to compensate the sub-contract manufacturers in an amount significantly in excess of the accrued liability.

Legal Proceedings

Over the past five years, Mr. Jan R. Coyle, an individual living in Nevada, has repeatedly demanded that we buy technology allegedly invented by his company, Kolbet Labs. In December 2001, Mr. Coyle threatened to sue us and our customers for allegedly infringing his soon to be issued patent and for misappropriating his alleged trade secrets. We believe Mr. Coyle’s claims are without merit and on December 11, 2001, we filed a declaratory relief action in the United States District Court for the Northern District of California, asking the Court to declare that we and our customers have not breached any nondisclosure agreement with Mr. Coyle or Kolbet Labs, nor have we infringed any alleged patent claims or misappropriated any alleged trade secrets belonging to Mr. Coyle or Kolbet Labs through our sale of Fiery, Splash or EDOX print controllers. We also sought an injunction enjoining both Mr. Coyle and Kolbet Labs from bringing or threatening to bring a lawsuit against us, our suppliers, vendors, customers and users of our products for breach of

21

contract and misappropriation of trade secrets. On March 26, 2002, the Northern District of California court dismissed our complaint for lack of jurisdiction over Mr. Coyle. We have appealed the Court’s dismissal and on April 11, 2003 argued our appeal before the U.S. Court of Appeals for the Federal Circuit. The ruling of the Court is still pending.

On February 26, 2002, Coyle’s company, J & L Electronics, filed a complaint against us in the United States District Court for the District of Nevada alleging patent infringement, breach of non-disclosure agreements, misappropriation of trade secrets, violations of federal antitrust law, and related causes of action. We deny all of these allegations and our management believes this lawsuit is without merit and intends to defend the action vigorously. On April 22, 2002, we filed a motion to dismiss the Nevada complaint. On March 28, 2003, the Federal District Judge dismissed the complaint for lack of jurisdiction over us. On April 30, 2003, J & L Electronics filed a notice of appeal to the U.S. Court of Appeals for the Federal District Court; the Court has not yet set a date for hearing the appeal. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the litigation. Any unfavorable outcome of the litigation could have an adverse impact on our financial condition and results of operations.

On September 16, 2002, ArrivalStar, Inc., a Delaware corporation, filed a complaint in the U.S. District Court for the Northern District of Georgia against fourteen defendants, including EFI, alleging that each of the defendants has infringed one or more claims of six identified patents owned by the plaintiff. The named defendants are Delta Air Lines, Inc.; Sabre, Inc.; Travelocity.com, L.L.P.; The City of Atlanta; Worldspan, L.L.P.; Flytecomm Corporation; Centerpost Corporation; Continental Airlines, Inc.; Japan Air Lines Company, Ltd.; American Airlines, Inc.; Roadway Express, Inc.; EFI; American Express Company; and SITA Information Networking Computing USA, Inc. The complaint alleges that the defendants infringe the claims by providing vehicle location communication services, arrival notifications and other related services. We believe that the plaintiff’s claims are without merit and intend to vigorously defend ourselves in this litigation. However, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the litigation. Any unfavorable outcome of the litigation could have an adverse impact on our financial condition and results of operations.

On February 13, 2003, we entered into three agreements with Printcafe to facilitate a merger between the two companies. On February 19, 2003, Creo Inc. (a Printcafe shareholder) commenced litigation in the Delaware Court of Chancery against us, Printcafe and certain of Printcafe’s principal officers and directors, challenging and seeking to temporarily restrain the use of a newly adopted stockholder rights plan by Printcafe and seeking to restrain Printcafe and us from proceeding to enter into any further agreements with respect to a business combination. On February 21, 2003, the Delaware Court of Chancery denied the temporary restraining order sought by Creo. On February 26, 2003 we and Printcafe entered into a merger agreement providing for our acquisition of Printcafe. The merger is subject to regulatory review and stockholder approval by Printcafe’s stockholders. This litigation is still pending and, due to the inherent uncertainties of litigation, we cannot accurately predict the eventual outcome at this time. Any unfavorable outcome of the litigation could have an adverse impact on our financial condition and results of operations.

In addition, we are involved from time to time in litigation relating to claims arising in the normal course of our business. We believe that the ultimate resolution of such claims will not materially affect our business or financial condition.

We believe that our existing capital resources, together with cash generated from continuing operations will be sufficient to fund our operations and meet capital requirements through at least 2004. We have sufficient cash and short-term investments to fund operating expenses through at least 2004.

DISCLOSURES ON STOCK OPTION PROGRAMS

Option Program Description

Our stock option program is a broad-based, long-term retention program that is intended to attract and retain talented employees and align stockholder and employee interests. We consider our option program critical to our operation and productivity and essentially all of our employees participate. The program consists of a broad-based plan under which options may be granted to all employees, directors, and consultants. Option vesting periods range from 2 - 4 years, with an average vesting period of 3.5 years.

22

Distribution and Dilutive Effect of Options

Employee and Executive Option Grants

	For the period ended and as of
	June 30,			December 31,
	2003			2002			2001
Grants during the period as % of outstanding shares		<1	%		2	%		2	%
Grants to listed officers* during the period as % of total options granted		—			28	%		30	%
Grants to listed officers* during the period as % of outstanding shares		—			1	%		1	%
Cumulative options held by listed officers* as % of total options outstanding		14	%		10	%		7	%

*See Executive Options for listed officers; these are defined by the SEC for the proxy as the CEO and each of the four other most highly compensated executive officers. We have only three executive officers, including the CEO.

We have implemented a stock trading program for our Board of Directors, corporate executive officers and other insiders, under Rule 10b5-1 of the Securities and Exchange Act of 1934. When there is no material non-public information available, Rule 10b5-1 allows corporate insiders to establish plans that permit prearranged future sales of his or her securities. Under our trading plan, corporate insiders prepare a written plan to sell shares on a prearranged basis over a set period of time. An independent broker then executes the pre-planned trades, according to the plan’s instructions, without regard to any subsequent non-public information the individual might receive. Once the insider’s plan is in place, he or she cannot influence the broker’s trading activities of EFI stock. Additionally, EFI insiders that participate in the plan are only allowed to sell EFI stock through the plan.

General Option Information

Summary of Option Activity

				As of June 30, 2003
							Options outstanding
				Shares Available
				for Options			Number of Shares			Weighted Average
				(in thousands)			(in thousands)			Exercise Price
			January 1, 2002		4,913			9,376		$	22.96
Grants					(3,172	)		3,172			17.06
Exercises					—			(414	)		11.44
Cancellations					1,006			(1,006	)		25.99
Expirations					(484	)		—			—
	December 31, 2002				2,263			11,128		$	21.25
Additional shares authorized					950
Grants					(227	)		227			16.73
Exercises					—			(562	)		13.60
Cancellations					258			(258	)		23.44
Expirations					(70	)		—			—
		June 30, 2003			3,174			10,535		$	21.71

23

In-the-Money and Out-of-the-Money Option Information

	As of June 30, 2003
	Exercisable				Unexercisable				Total
			Weighted				Weighted				Weighted
			Average				Average				Average
			Exercise				Exercise				Exercise
(Shares in thousands)	Shares		Price		Shares		Price		Shares		Price
In-the-money		3,802	$	15.00		2,505	$	15.42		6,307	$	15.17
Out-of-the-money (1)		3,883	$	32.17		345	$	24.38		4,228	$	31.54
Total Options Outstanding		7,685	$	23.69		2,850	$	16.51		10,535	$	21.71

(1) Out-of-the-money options are those options with an exercise price equal to or above the closing price of $20.20 at the end of the quarter.

Executive Options

No options were granted to the listed officers during the six months ended June 30, 2003.

     Aggregated Option Exercises as of June 30, 2003 and Period End Option Values

									Value of Unexercised
	Shares				Number of				In-the-Money Options
	Acquired				Unexercised Options				at 6/30/03 (2)
	on		Value		at 6/30/03
Name	Exercise		Realized(1)		Exercisable		Unexercisable		Exercisable		Unexercisable
Guy Gecht		—		—		363,688		104,750	$	1,090,982	$	496,106
Fred Rosenzweig		—		—		402,902		69,098	$	1,100,173	$	348,415
Joseph Cutts		—		—		126,600		42,250	$	432,392	$	203,456

(1)	Had the officers exercised options during this period, this amount would represent the market value of the underlying securities on the exercise date minus the exercise price of such options.
(2)	This amount represents the market value of the underlying securities relating to “in-the-money” options at June 30, 2003 minus the exercise price of such options.

Factors That Could Adversely Affect Performance

We rely on sales to a relatively small number of OEM customers, and the loss of any of these customers could substantially decrease our revenues.

Our customers primarily consist of a relatively small number of OEMs, including Canon, Xerox and Minolta which accounted for approximately 67% of our 2003 revenues. We expect that we will continue to depend on a relatively small number of OEM customers for a significant portion of our revenues in future periods. If we lose an important OEM and are unable to replace the revenue traditionally generated from such customer with sales to new or existing OEM customers, our revenues will likely decline significantly. With the exception of certain minimum purchase obligations, we typically do not have long-term volume purchase contracts with our customers, including Canon, Xerox and Minolta, and they are not obligated to purchase products from us. Accordingly, our customers could at any time reduce their purchases from us or cease purchasing our products altogether. In the past, some of our OEM customers have elected to

24

develop products on their own, rather than purchase our products, and we expect that customers will continue to make such elections in the future. In addition, since our OEM customers incorporate our products into products they manufacture and sell, any decline in demand for copiers or laser printers, and any other negative developments affecting our major customers or the computer industry in general, is likely to harm our results of operations. For example, several of our customers have in the past experienced serious financial difficulties which led to a decline in sales of our products to these customers. If any significant customers should face such difficulties in the future, our profitability could be harmed through, among other things, decreased sales volumes and write-offs of accounts receivables and inventory related to products we have manufactured for these customers’ products.

Because our printer and copier-related products remain a significant portion of our business and there are a limited number of OEMs producing copiers and printers in sufficient volume to be attractive customers for us, we expect that customer concentration will continue to be a risk for the foreseeable future.

A significant portion of our operating expenses are fixed in advance based on projected sales levels and margins, sales forecasts from our OEM customers and product development programs. A substantial portion of our backlog is scheduled for delivery within 90 days or less and our customers may cancel orders and change volume levels or delivery times for product they have ordered from us without penalty. Accordingly, if sales to our OEM customers are below expectations in any given quarter, the adverse impact of the shortfall in revenues on operating results may be increased by our inability to adjust spending in the short term to compensate for this shortfall.

We rely on our OEM customers to develop and sell products incorporating our technologies and if they fail to successfully develop and sell these products, or curtail or cease the use of our technologies in their products, our business will be harmed.

We rely upon our OEM customers to develop new products, applications and product enhancements in a timely and cost-effective manner. Our continued success depends upon the ability of these OEMs to meet changing customer needs and respond to emerging industry standards and other technological changes. However, we cannot assure you that our OEMs will effectively meet these technological changes. These OEMs, who are not within our control, have incorporated into their products the technologies of other companies in addition to, or instead of our products and may continue to do so in the future. These OEMs may introduce and support products that are not compatible with our products. We rely on these OEMs to market our products with their products, and if these OEMs do not effectively market our products our sales revenue may be materially and adversely affected. With the exception of certain minimum purchase obligations, these OEMs are not obligated to purchase products from us. We cannot assure you that our OEMs will continue to carry our products.

Our OEMs work closely with us to develop products that are specific to each OEM’s copiers and printers. Many of the products we are developing require that we coordinate development, quality testing, marketing and other tasks with our OEMs. We cannot control our OEMs’ development efforts and coordinating with our OEMs may cause delays that we cannot manage by ourselves. In addition, our sales revenue and results of operations may be adversely affected if we cannot meet our OEMs’ product needs for their specific copiers and printers, as well as successfully manage the additional engineering and support effort and other risks associated with such a wide range of products.

EFI’s three largest customers are not obligated to purchase products from EFI, and the loss of products sales to these customers would substantially harm our business and operating results.

Neither Canon, Xerox nor Minolta, who accounted for 29.2%, 28.0% and 10.0%, respectively, of EFI’s revenue for the year ended December 31, 2002, is contractually obligated to purchase products from EFI. EFI’s continued sales of product to these customers in future periods are solely dependent upon each customer’s decision to make purchases from EFI. Such purchases are typically made on a purchase order basis. Generally, the customers are not obligated to make any such purchases, and EFI has no legal recourse if any of these customers choose not to place orders for future products. EFI’s business, financial position and results of operations would be substantially harmed if these customers decided not to order EFI’s products in future periods.

We face the risk of decreased revenue as a result of ongoing economic uncertainty.

The revenue growth and profitability of our business depends significantly on the overall demand for information technology products such as ours that enable printing of digital data. Softening demand for these products caused by ongoing economic uncertainty and reduced spending in the United States and other regions where we conduct business has resulted, and may further result, in inventory write downs and decreased revenues, earnings levels, or growth rates. The United States and global economy, and particularly the markets for our products have weakened substantially over the past two years and market conditions continue to be challenging. This has resulted in individuals and companies delaying or reducing expenditures, including information technology expenditures, which has negatively affected our operating results. Further delays or reductions in information technology spending may continue to lead to a decline in

25

demand for our products and services, and consequently harm our business, operating results, financial condition, prospects and stock price.

Our operating results may fluctuate based upon many factors, which could adversely affect our stock price.

We expect our stock price to vary with our operating results and, consequently, fluctuations in our operating results could adversely affect our stock price. Factors that have caused our operating results to fluctuate in the past and may cause future fluctuations include:

• varying demand for our products, due to seasonality, OEM customer product development and marketing efforts, OEM customer financial and operational condition and general economic conditions;

• success and timing of new product introductions by us and our OEM customers, and the performance of our products generally;

• volatility in foreign exchange rates, changes in interest rates and availability of bank or financing credit to consumers of digital copiers and printers;

• price reductions by us and our competitors, which may be exacerbated by competitive pressures caused by economic conditions generally;

• delay, cancellation or rescheduling of orders or projects;

• availability of key components, including possible delays in deliveries from suppliers, the performance of third-party manufacturers and the status of our relationships with our key suppliers;

• potential excess or shortage of employees;

• changes in our product mix such as shifts from higher revenue products to lower revenue products dependant on higher sales volumes;

• costs associated with complying with any applicable governmental regulations;

• acquisitions and integration of new businesses;

• general economic conditions; and

• other risks described herein.

We face competition from other suppliers as well as our own OEM customers, and if we are not able to compete successfully our business may be harmed.

Our industry is highly competitive and is characterized by rapid technological changes. We compete against a number of other suppliers of imaging products, including our OEM customers themselves. Although we attempt to develop and support innovative products that customers demand, products or technologies developed by competing suppliers could render our products or technologies obsolete or noncompetitive.

While many of our OEM customers sell our products on an exclusive basis, we do not have any formal agreements that prevent these OEMs from offering alternative products. If an OEM offers products from alternative suppliers our market share could decrease, which could reduce our revenue and adversely affect our financial results.

26

Many OEMs in the printer and copier industry, including many of our OEM customers, internally develop and sell products that compete directly with our current products. These OEMs have resources that enable them to develop more quickly than us, products similar to ours that are compatible with their own products. These OEMs have in the past marketed, and may continue in the future to market, their own products in addition to our products, even when their products are technologically inferior, have lower performance or cost more than our products. Given the significant financial, marketing and other resources of our larger OEM customers and other significant OEMs in the imaging industry who are not our customers, we may not be able to successfully compete against similar products developed internally by these OEMs, particularly in the black-and-white and embedded color product markets. If we cannot compete successfully against these OEMs’ internally developed products, we will likely lose sales and market share in those areas where the OEMs choose to compete and our business may be harmed.

If the demand for products that contain our technology that enable color printing of digital data continues to decrease, our sales revenue will likely decrease.

Our products are primarily targeted at enabling the printing of digital data. Demand for networked printers and copiers containing our technology decreased in both 2001 and 2002 due to the global economic downturn. If demand for digital printing products and services containing our technology continues to decline, or if the demand for our OEMs’ specific printers or copiers for which our products are designed continues to decline, our sales revenue will likely decrease. Our products are combined with products, such as digital printers and copiers, that are large capital expenditures as well as discretionary purchase items for our customers. In difficult economic times such as we are now experiencing, spending on information technology typically decreases. As the products in which our products are incorporated are of a more discretionary nature than many other technology products, we may be more adversely impacted by deteriorating general economic conditions than other technology firms outside of our market. The decrease in demand for our products has harmed and could, in the future, continue to harm our results of operations and we do not know whether demand for our products or our customers’ products will increase or improve from current levels.

If we are not able to hire and retain skilled employees, we may not be able to develop products or meet demand for our products in a timely fashion.

We depend upon skilled employees, such as software and hardware engineers, quality assurance engineers and other technical professionals with specialized skills. We are headquartered in the Silicon Valley where competition has historically been intense among companies to hire engineering and technical professionals. In times of professional labor imbalances, it may be difficult for us to locate and hire qualified engineers and technical professionals and for us to retain these people. There are many technology companies located near our corporate offices in the Silicon Valley that may try to hire our employees. The movement of our stock price may also impact our ability to hire and retain employees. If we do not offer competitive compensation, we may not be able to recruit or retain employees. We offer a broad-based equity compensation plan based on granting options from stockholder-approved plans in order to be competitive in the labor market. If stockholders do not approve additional shares for these plans for future grants, it may be difficult for us to hire and retain skilled employees. If we cannot successfully hire and retain employees, we may not be able to develop products or to meet demand for our products in a timely fashion and our results of operations may be harmed.

If we are unable to develop new products, or execute product introductions on a timely basis, our future revenue and operating results may be harmed.

Our operating results depend to a significant extent on our continual improvement of existing technologies and rapid innovation of new products and technologies by us. Our success depends not only on our ability to predict future requirements, but also to develop and introduce new products that successfully address customer needs. Any delays in the launch or availability of new products we are planning could harm our financial results. During transitions from existing products to new products, customers may delay or cancel orders for existing products. Our results of operations may be harmed if we cannot successfully manage product transitions or provide adequate availability of products after they have been introduced.

27

We must continue to make significant investments in research and development in order to enhance performance and functionality of our products, including product lines different than our Fiery, Splash and EDOX servers and embedded controllers. We cannot assure you that we will successfully identify new product opportunities, develop and introduce new products to market in a timely manner, or achieve market acceptance of our products. Also, when we decide to develop new products, our research and development expenses generally increase in the short term without a corresponding increase in revenue, which can harm our operating results. Finally, we cannot assure you that products and technologies developed by our own customers and others will not render our products or technologies obsolete or noncompetitive.

If we enter new markets or distribution channels this could result in higher operating expenses that may not be offset by increased revenue.

We continue to explore opportunities to develop product lines different from our current servers and embedded controllers, such as the Best proofing products and PrintMe Networks, among others. We expect to continue to invest funds to develop new distribution and marketing channels for these and additional new products and services, which will increase our operating expenses. We do not know if we will be successful in developing these channels or whether the market will accept any of our new products or services or if we will generate sufficient revenues from these activities to offset the additional operating expenses we incur. In addition, even if we are able to introduce new products or services, the lack of marketplace acceptability of these new products or services may adversely impact our operating results.

We license software used in most of our products from Adobe Systems Incorporated, and the loss of this license would prevent us from shipping these products.

Most of our current products include software that we must license from Adobe. Specifically, under our license agreements, we are required to obtain a separate license from Adobe for the right to use Adobe Postscript ™ software in each type of copier or printer used with a Fiery Server or Controller. Although to date we have successfully obtained licenses to use Adobe’s PostScript™ software for our products, where required, we cannot be certain that Adobe will continue to grant future licenses to Adobe PostScript™ software on reasonable terms, in a timely manner, or at all. In addition, in order to obtain licenses from Adobe, Adobe requires that we obtain from them quality assurance approvals for our products using Adobe software. Although to date we have successfully obtained such quality assurances from Adobe, we cannot be certain Adobe will grant us such approvals in the future. If Adobe does not grant us such licenses or approvals, if the Adobe license agreements are terminated, or if our relationship with Adobe is otherwise materially impaired, we would likely be unable to sell products that incorporate Adobe PostScript™ software, and our financial condition and results of operations would be significantly harmed. In some products we have introduced substitute software developed internally that does not require any license from Adobe. The costs to continue to develop software internally could increase our research and development expenditures and we may not be able to recapture those costs through increased sales. While we plan on expanding the number of products using internally developed software, there can be no assurance that these products will be accepted in the market.

We depend upon a limited group of suppliers for key components in our products.

Certain components necessary for the manufacture of our products are obtained from a sole supplier or a limited group of suppliers. These include processors from Intel and other related semiconductor components. We do not maintain long-term agreements with any of our component suppliers. Because the purchase of certain key components involves long lead times, in the event of unanticipated volatility in demand for our products, we have been in the past and may in the future be unable to manufacture certain products in a quantity sufficient to meet end user demand. Similarly, as has occurred in the past, in the event that anticipated demand does not materialize, we may hold excess quantities of inventory that could become obsolete. In order to meet projected demand, we maintain an inventory of components for which we are dependent upon sole or limited source suppliers and components with prices that fluctuate significantly. As a result, we are subject to a risk of inventory obsolescence, which could adversely affect our operating results and financial condition. Additionally, the market prices and availability of certain components, particularly memory, and Intel designed components, which collectively represent a substantial portion of the total manufactured cost of our products, have fluctuated significantly in the past. Such fluctuations in the future could have a material adverse effect on our operating results and financial condition including a reduction in gross margins.

28

We are dependent on subcontractors to manufacture and deliver products to our customers.

We subcontract with other companies to manufacture our products. We rely on the ability of our subcontractors to produce products to be sold to our customers, and while we closely monitor our subcontractors performance we cannot assure you that such subcontractors will continue to manufacture our products in a timely and effective manner. The weakened economy has led to the dissolution, bankruptcies and consolidations of some of the subcontractors who are able to manufacture our products, decreasing the available number of subcontractors. If the available number of subcontractors continues to decrease, it is possible that we will not be able to secure appropriate subcontractors to fulfill our demand in a timely manner or at all, particularly if demand for our products increases, or if we lose one or more of our current subcontractors. Fewer subcontractors may reduce our negotiating leverage regarding product costs. Difficulties experienced by our subcontractors, including financial problems, and the inability to make or ship our products or fix quality assurance problems, could harm our business, operating results and financial condition. If we decide to change subcontractors, we could experience delays in setting up new subcontractors which would result in delay in delivery of our products. We have a high concentration of our products manufactured at a single subcontractor location, Sanmina-SCI in Colorado. Should Sanmina-SCI experience any inability to manufacture or deliver product from this location our business, financial condition and operations could be harmed. We do not maintain long-term agreements with our subcontractors.

Seasonal purchasing patterns of our OEM customers have historically caused lower fourth quarter revenue, which may negatively impact our results of operations.

Our results of operations have typically followed a seasonal pattern reflecting the buying patterns of our large OEM customers. In the past, our fiscal fourth quarter (the quarter ending December 31) results have been adversely affected because some or all of our OEM customers decrease, or otherwise delay, fourth quarter orders. This impact has been increasingly mitigated, as our OEM customers have lowered channel inventories throughout the year pushing this effect into the first quarter when our OEM customers typically have lower sales. In addition, the first fiscal quarter traditionally has been a weaker quarter because our OEM customers focus on training their sales forces and have reduced sales to their customers. The primary reasons for this seasonal pattern are:

• our OEM customers have historically sought to minimize year-end inventory investment (including the reduction in demand following introductory “channel fill” purchases);

• the timing of new product releases and training by our OEM customers in the first and fourth quarters; and

• certain of our OEM customers typically achieve their yearly sales targets before year end and consequently delay further purchases into the next fiscal year (we do not know when our customers reach these sales targets as they generally do not disclose them to us).

As a result of these factors, we believe that period to period comparisons of our operating results are not meaningful, and you should not rely on such comparisons to predict our future performance. We anticipate that future operating results may fluctuate significantly due to the continuation or changes in this seasonal demand pattern.

Acquisitions we may make involve numerous risks.

We seek to develop new technologies and products from both internal and external sources. As part of this effort, we have in the past made, and will likely continue to make, acquisitions of other companies or other companies’ assets. Acquisitions involve numerous risks, such as:

• difficulties in integration of operations, employees, technologies, or products and the related diversion of management time and effort to accomplish successful integration;

• risks of entering markets in which we have little or no prior experience, or entering markets where competitors have stronger market positions;

29

• possible write-downs of impaired assets;

• potential loss of key employees of the acquired company;

• possible expense overruns;

• an adverse reaction by customers, suppliers or partners of the acquired company or EFI;

• the risk of changes in ratings by stock analysts;

• potential litigation surrounding transactions;

• the inability to protect or secure technology rights; and

• an increase in operating costs.

Mergers and acquisitions of companies are inherently risky, and we cannot assure you that our previous or future acquisitions will be successful or will not harm our business, operating results, financial condition, or stock price.

We recently announced an agreement to acquire Printcafe. There can be no assurance that the Printcafe acquisition will be consummated, or if consummated, will prove to be successful.

We face risks from our international operations and from currency fluctuations.

Approximately 50% and 48% of our revenue from the sale of products for the six-month periods ended June 30, 2003 and 2002, respectively, came from sales outside North America, primarily to Europe and Japan. We expect that sales outside North America will continue to be a significant portion of our total revenue. We are subject to certain risks because of our international operations. These risks include the regulatory requirements of foreign governments which may apply to our products, as well as requirements for export licenses which may be required for the export of certain technologies. The necessary export licenses may be delayed or difficult to obtain, which could cause a delay in our international sales and hurt our product revenue. Other risks include trade protection measures, natural disasters, and political or economic conditions in a specific country or region.

Given the significance of our non-U.S. sales to our total product revenue, we face a continuing risk from the fluctuation of the U.S. dollar versus the Japanese yen, the Euro and other major European currencies, and numerous Southeast Asian currencies. We typically invoice our customers in U.S. dollars and this may result in our products becoming more expensive in the local currency of our customers, thereby reducing our ability to sell our products. When we do invoice our customers in local currencies, our cash flows and earnings are exposed to fluctuations in interest rates and foreign currency exchange rates between the currency of the invoice and the U.S. dollar. In January 2003, we acquired Best GmbH, whose sales are principally denominated in the Euro. Sales from this subsidiary increase our exposure to currency fluctuations. In the past we have attempted to limit or hedge these exposures through operational strategies and financial market instruments where we consider it appropriate. We generally used forward contracts to reduce our risk from interest rate and currency fluctuations. We currently do not have a hedging program in place. Our efforts to reduce the risk from our international operations and from fluctuations in foreign currencies or interest rates may not be successful, which could harm our financial condition and operating results.

We may be unable to adequately protect our proprietary information and may incur expenses to defend our proprietary information.

We rely on a combination of copyright, patent, trademark and trade secret protection, nondisclosure agreements, and licensing and cross-licensing arrangements to establish, maintain and protect our intellectual property rights, all of which

30

afford only limited protection. We have patent applications pending in the United States and in various foreign countries. There can be no assurance that patents will issue from these pending applications or from any future applications, or that, if issued, any claims allowed will be sufficiently broad to protect our technology. Any failure to adequately protect our proprietary information could harm our financial condition and operating results. We cannot be certain that any patents that may be issued to us, or which we license from third parties, or any other of our proprietary rights will not be challenged, invalidated or circumvented. In addition, we cannot be certain that any rights granted to us under any patents, licenses or other proprietary rights will provide adequate protection of our proprietary information.

Litigation has been and may continue to be necessary to defend and enforce our proprietary rights. Such litigation, whether or not concluded successfully for us, could involve significant expense and the diversion of our attention and other resources, which could harm our financial condition and operating results.

We face risks from third party claims of infringement and potential litigation.

Third parties have claimed in the past and may claim in the future that our products infringe, or may infringe, their proprietary rights. Such claims could result in lengthy and expensive litigation. Such claims and any related litigation, whether or not we are successful in the litigation, could result in substantial costs and diversion of our resources, which could harm our financial condition and operating results. Although we may seek licenses from third parties covering intellectual property that we are allegedly infringing, we cannot assure you that any such licenses could be obtained on acceptable terms, if at all.

Our products may contain defects which are not discovered until after shipping.

Our products consist of hardware and software developed by ourselves and others. Our products may contain undetected errors and we have in the past discovered software and hardware errors in certain of our products after their introduction. There can be no assurance that errors would not be found in new versions of our products after commencement of commercial shipments, or that any such errors would not result in a loss or delay in market acceptance and thus harm our reputation and revenues. In addition, errors in our products (including errors in licensed third party software) detected prior to new product releases could result in delays in the introduction of new products and our incurring additional expense, which could harm our operating results.

The location and concentration of our facilities subjects us to the risk of earthquakes, floods or other natural disasters.

Our corporate headquarters, including most of our research and development facilities and manufacturing operations, are located in the San Francisco Bay Area, an area known for seismic activity. This area has also experienced flooding in the past. In addition, many of the components necessary to supply our products are purchased from suppliers based in areas including the San Francisco Bay Area, Taiwan, and Japan and are therefore subject to risk from natural disasters,. A significant natural disaster, such as an earthquake or a flood, could harm our business, financial condition, and operating results.

We have employees, suppliers and customers located worldwide. We face the risk that our employees, suppliers, or customers, either through travel or contact with other individuals, could become exposed to contagious diseases such as severe acute respiratory syndrome, or SARS. In addition, governments in those regions have from time-to-time imposed quarantines and taken other actions in response to contagious diseases that could affect our operations. If a significant number of employees, suppliers, or customers were unable to fulfil their obligations, due to contagious diseases, actions taken in response to contagious diseases, or other reasons, our business, financial condition, and operating results could be harmed.

The value of our investment portfolio will decrease if interest rates increase.

We have an investment portfolio of mainly fixed income securities classified as available-for-sale securities. As a result, our investment portfolio is subject to interest rate risk and will fall in value if market interest rates increase. We attempt to limit this exposure to interest rate risk by investing in securities with maturities of less than three years; however, we may

31

be unable to successfully limit our risk to interest rate fluctuations and this may cause our investment portfolio to decrease in value.

Our stock price has been volatile historically and may continue to be volatile.

The market price for our common stock has been and may continue to be volatile. For example, during the 52-week period ended June 30, 2003, the closing prices of our common stock as reported on the Nasdaq National Market ranged from a high of $21.51 to a low of $13.50. We expect our stock price to be subject to fluctuations as a result of a variety of factors, including factors beyond our control. These factors include:

• actual or anticipated variations in our quarterly operating results;

• announcements of technological innovations or new products or services by us or our competitors;

• announcements relating to strategic relationships, acquisitions or investments;

• changes in financial estimates or other statements by securities analysts;

• changes in general economic conditions;

• terrorist attacks, and the effects of military engagements;

• changes in the rating of our debentures or other securities; and

• changes in the economic performance and/or market valuations of other software and high-technology companies.

Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts from time-to-time, and the trading prices of our securities could decline as a result. In addition, the stock market has experienced significant price and volume fluctuations that have particularly affected the trading prices of equity securities of many high-technology companies. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies. Any negative change in the public’s perception of high-technology companies could depress our stock price regardless of our operating results.

Our debt service obligations may adversely affect our cash flow.

On June 4, 2003, we issued $240.0 million in senior convertible debentures. During the period the debentures are outstanding, we will have debt service obligations on the debentures of approximately $3.6 million per year in interest payments. If we issue other debt securities in the future, our debt service obligations will increase. We intend to fulfill our debt service obligations from cash generated by our operations, if any, and from our existing cash and investments. If we are unable to generate sufficient cash to meet these obligations and must instead use our existing cash or investments, we may have to reduce, curtail or terminate other activities of our business. To finance capital expenditures in the future we may add lines of credit and obtain other long-term debt and mortgage financing.

Our indebtedness could have significant negative consequences. For example, it could: increase our vulnerability to general adverse economic and industry conditions; limit our ability to obtain additional financing; require the dedication of a substantial portion of any cash flow from operations to the payment of principal of, and interest on, our indebtedness, thereby reducing the availability of such cash flow to fund our growth strategy, working capital, capital expenditures and other general corporate purposes; limit our flexibility in planning for, or reacting to, changes in our business and our industry; and place us at a competitive disadvantage relative to our competitors with less debt.

32

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

We are exposed to various market risks, including changes in foreign currency exchange rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and interest rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes. We may enter into financial instrument contracts to manage and reduce the impact of changes in foreign currency exchange rates. The counterparties to such contracts are major financial institutions. We had no forward foreign exchange contracts outstanding as of June 30, 2003.

Interest Rate Risk

We maintain an investment portfolio of various holdings, types, and maturities. These securities are generally classified as available for sale and consequently, are recorded on the balance sheet at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (loss). At any time, a sharp rise in interest rates could have a material adverse impact on the fair value of our investment portfolio. Conversely, declines in interest rates could have a material impact on interest earnings for our portfolio. We do not currently hedge these interest rate exposures.

The following table presents the hypothetical change in fair values in the financial instruments we held at June 30, 2003 that are sensitive to changes in interest rates. The modeling technique used measures the change in fair values arising from selected potential changes in interest rates. Market changes reflect immediate hypothetical parallel shifts in the yield curve of plus or minus 100 basis points (BPS) over a twelve-month time horizon.

This table estimates the fair value of the portfolio at a twelve month time horizon:

	Valuation of securities given				Valuation of securities
	an interest rate decrease of		No change in		given an interest rate
(in thousands)	100 basis points		interest rates		increase of 100 basis points
Total Fair
Market Value	$	537,546	$	534,449	$	531,397

The fair value of our long-term debt, including current maturities, was estimated to be $240.2 million as of June 30, 2003, and equaled the carrying value.

ITEM 4: CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of tour management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

33

PART II OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS

The information set forth under Note 10 in the notes to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q is incorporated herein by reference.

     ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

Not applicable.

     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

     ITEM 5. OTHER INFORMATION

Not applicable.

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)       Exhibits*

No.	Description
4.1	Indenture dated as of June 4, 2003 between the Registrant and U.S. Bank National Association, as Trustee, relating to convertible senior debentures due 2023.
4.2	Form of Convertible Senior Debenture due 2023 (Exhibit A to Indenture filed as Exhibit 4.1 above).
4.3	Registration Rights Agreement, dated as of June 4, 2003, among the Registrant, UBS Warburg LLC, C.E. Unterberg, Towbin and Morgan Stanley & Co. Incorporated.
21	List of Subsidiaries
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1	Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002.
32.2	Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002.

* Exhibits to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2002 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 are incorporated herein by reference.

(b)  Reports on Form 8-K

34

A report on Form 8-K filed April 16, 2003, reporting under Item 5 the announcement that on April 16, 2003, Electronics for Imaging, Inc. issued a press release regarding its financial results for its first quarter of fiscal year 2003 ended March 31, 2003. On May 6, 2003, this Form 8-K was amended to change the reporting from under Item 5, corrected to be furnished under Item 12 Results of Operations and Financial Condition and Item 9 in accordance with SEC Release Nos. 33-8216.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ELECTRONICS FOR IMAGING, INC.
Date: August 14, 2003		/s/ Guy Gecht
		Guy Gecht
		Chief Executive Officer
		(Principal Executive Officer)
		/s/ Joseph Cutts
		Joseph Cutts
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EXHIBIT INDEX*

No.	Description
4.1	Indenture dated as of June 4, 2003 between the Registrant and U.S. Bank National Association, as Trustee, relating to convertible senior debentures due 2023.
4.2	Form of Convertible Senior Debenture due 2023 (Exhibit A to Indenture filed as Exhibit 4.1 above).
4.3	Registration Rights Agreement, dated as of June 4, 2003, among the Registrant, UBS Warburg LLC, C.E. Unterberg, Towbin and Morgan Stanley & Co. Incorporated.
21	List of Subsidiaries
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1	Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002.
32.2	Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002.

* Exhibits to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2002 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 are incorporated herein by reference.

35 EX-4.1 3 f91955exv4w1.txt EXHIBIT 4.1 EXHIBIT 4.1 ELECTRONICS FOR IMAGING, INC. AS ISSUER ------------------------------ U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE ------------------------------ UP TO $240,000,000 AGGREGATE PRINCIPAL AMOUNT OF 1.50% CONVERTIBLE SENIOR DEBENTURES DUE 2023 ------------------------------ INDENTURE DATED AS OF JUNE 4, 2003 ------------------------------ TABLE OF CONTENTS

PAGE ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE............................................................. 1 Section 1.1. Definitions........................................................................... 1 Section 1.2. Incorporation by Reference of Trust Indenture Act..................................... 8 Section 1.3. Rules of Construction................................................................. 9 Section 1.4. Acts of Holders....................................................................... 9 ARTICLE II THE SECURITIES........................................................................................ 10 Section 2.1. Form and Dating....................................................................... 10 Section 2.2. Execution and Authentication.......................................................... 11 Section 2.3. Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent.................. 12 Section 2.4. Paying Agent to Hold Cash and Securities in Trust..................................... 13 Section 2.5. Securityholder Lists.................................................................. 13 Section 2.6. Transfer and Exchange................................................................. 14 Section 2.7. Replacement Securities................................................................ 15 Section 2.8. Outstanding Securities; Determinations of Holders' Action............................. 15 Section 2.9. Temporary Securities.................................................................. 16 Section 2.10. Cancellation.......................................................................... 17 Section 2.11. Persons Deemed Owners................................................................. 17 Section 2.12. Additional Transfer and Exchange Requirements......................................... 17 Section 2.13. CUSIP Numbers......................................................................... 24 Section 2.14. Ranking............................................................................... 25 ARTICLE III REDEMPTION........................................................................................... 25 Section 3.1. The Company's Right to Redeem; Notice to Trustee...................................... 25 Section 3.2. Selection of Securities to Be Redeemed................................................ 26 Section 3.3. Notice of Redemption.................................................................. 26 Section 3.4. Effect of Notice of Redemption........................................................ 27 Section 3.5. Deposit of Redemption Price........................................................... 27 Section 3.6. Securities Redeemed in Part........................................................... 28 Section 3.7. Repayment to the Company.............................................................. 28 ARTICLE IV REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS ON SPECIFIC DATES................................... 28 Section 4.1. Optional Put.......................................................................... 28 Section 4.2. The Company's Right to Elect Manner of Payment of Repurchase Price.................... 31 Section 4.3. Effect of Repurchase Notice........................................................... 33 Section 4.4. Deposit of Repurchase Price........................................................... 34

i Section 4.5. Securities Repurchased in Part........................................................ 35 Section 4.6. Covenant to Comply With Securities Laws Upon Repurchase of Securities................. 35 Section 4.7. Repayment to the Company.............................................................. 35 ARTICLE V REPURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE.......................................... 36 Section 5.1. Fundamental Change Put................................................................ 36 Section 5.2. The Company's Right to Elect Manner of Payment of Fundamental Change Repurchase Price. 40 Section 5.3. Effect of Fundamental Change Repurchase Notice........................................ 42 Section 5.4. Deposit of Fundamental Change Repurchase Price........................................ 43 Section 5.5. Securities Repurchased in Part........................................................ 43 Section 5.6. Covenant to Comply With Securities Laws Upon Repurchase of Securities................. 44 Section 5.7. Repayment to the Company.............................................................. 44 ARTICLE VI COVENANTS............................................................................................. 44 Section 6.1. Payment of Securities................................................................. 44 Section 6.2. SEC and Other Reports to the Trustee.................................................. 46 Section 6.3. Compliance Certificate................................................................ 46 Section 6.4. Further Instruments and Acts.......................................................... 46 Section 6.5. Maintenance of Office or Agency of the Trustee, Registrar, Paying Agent and Conversion Agent. .................................................................... 46 Section 6.6. Delivery of Information Required Under Rule 144A...................................... 47 Section 6.7. Waiver of Stay, Extension or Usury Laws............................................... 47 Section 6.8. Statement by Officers as to Default................................................... 48 ARTICLE VII SUCCESSOR CORPORATION................................................................................ 48 Section 7.1. When Company May Merge or Transfer Assets............................................. 48 Section 7.2. Successor Corporation Substituted..................................................... 48 ARTICLE VIII DEFAULTS AND REMEDIES............................................................................... 49 Section 8.1. Events of Default..................................................................... 49 Section 8.2. Acceleration.......................................................................... 50 Section 8.3. Other Remedies........................................................................ 51 Section 8.4. Waiver of Past Defaults............................................................... 51 Section 8.5. Control by Majority................................................................... 52 Section 8.6. Limitation on Suits................................................................... 52 Section 8.7. Rights of Holders to Receive Payment or to Convert.................................... 52 Section 8.8. Collection Suit by Trustee............................................................ 53 Section 8.9. Trustee May File Proofs of Claim...................................................... 53 Section 8.10. Priorities............................................................................ 54 Section 8.11. Undertaking for Costs................................................................. 54 ii Section 8.12. Restoration of Rights and Remedies.................................................... 54 ARTICLE IX TRUSTEE............................................................................................... 55 Section 9.1. Duties of Trustee..................................................................... 55 Section 9.2. Rights of Trustee..................................................................... 56 Section 9.3. Individual Rights of Trustee.......................................................... 57 Section 9.4. Trustee's Disclaimer.................................................................. 57 Section 9.5. Notice of Defaults.................................................................... 58 Section 9.6. Reports by Trustee to Holders......................................................... 58 Section 9.7. Compensation and Indemnity............................................................ 58 Section 9.8. Replacement of Trustee................................................................ 59 Section 9.9. Successor Trustee by Merger........................................................... 60 Section 9.10. Eligibility; Disqualification......................................................... 60 Section 9.11. Preferential Collection of Claims Against Company..................................... 60 ARTICLE X DISCHARGE OF INDENTURE................................................................................. 60 Section 10.1. Discharge of Liability on Securities.................................................. 60 Section 10.2. Repayment to the Company.............................................................. 61 ARTICLE XI AMENDMENTS............................................................................................ 61 Section 11.1. Without Consent of Holders............................................................ 61 Section 11.2. With Consent of Holders............................................................... 62 Section 11.3. Compliance with Trust Indenture Act................................................... 64 Section 11.4. Revocation and Effect of Consents, Waivers and Actions................................ 64 Section 11.5. Notation on or Exchange of Securities................................................. 64 Section 11.6. Trustee to Sign Supplemental Indentures............................................... 64 Section 11.7. Effect of Supplemental Indentures..................................................... 64 ARTICLE XII CONVERSION........................................................................................... 65 Section 12.1. Conversion Privilege.................................................................. 65 Section 12.2. Conversion Procedure; Conversion Rate; Fractional Shares.............................. 66 Section 12.3. Adjustment of Conversion Rate for Common Stock........................................ 68 Section 12.4. Consolidation or Merger of the Company................................................ 76 Section 12.5. Notice of Adjustment.................................................................. 77 Section 12.6. Notice in Certain Events.............................................................. 77 Section 12.7. Company To Reserve Stock: Registration; Listing....................................... 78 Section 12.8. Taxes on Conversion................................................................... 79 Section 12.9. Conversion After Record Date.......................................................... 79 Section 12.10. Company Determination Final........................................................... 80 Section 12.11. Responsibility of Trustee for Conversion Provisions................................... 80 Section 12.12. Unconditional Right of Holders to Convert............................................. 80 iii ARTICLE XIII TAX TREATMENT....................................................................................... 80 Section 13.1. Tax Treatment......................................................................... 80 Section 13.2. Comparable Yield and Projected Payment Schedule....................................... 81 ARTICLE XIV MISCELLANEOUS........................................................................................ 82 Section 14.1. Trust Indenture Act Controls.......................................................... 82 Section 14.2. Notices............................................................................... 82 Section 14.3. Communication by Holders with Other Holders........................................... 83 Section 14.4. Certificate and Opinion as to Conditions Precedent.................................... 83 Section 14.5. Statements Required in Certificate or Opinion......................................... 83 Section 14.6. Separability Clause................................................................... 83 Section 14.7. Rules by Trustee, Paying Agent, Conversion Agent and Registrar........................ 84 Section 14.8. Legal Holidays........................................................................ 84 Section 14.9. Governing Law; Submission to Jurisdiction; Service of Process......................... 84 Section 14.10. No Recourse Against Others............................................................ 84 Section 14.11. Successors............................................................................ 84 Section 14.12. Multiple Originals.................................................................... 85 Section 14.13. Benefits of Indenture................................................................. 85 ANNEX 1 Projected Payment Schedule EXHIBIT A Form of Security EXHIBIT B Form of Restrictive Legend for shares of Common Stock Issued Upon Conversion EXHIBIT C Form of Fundamental Change Repurchase Notice iv INDENTURE dated as of June 4, 2003 between ELECTRONICS FOR IMAGING, INC., a Delaware corporation (the "COMPANY"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's 1.50% Convertible Senior Debentures due 2023: ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.1. Definitions. "ADDITIONAL INTEREST AMOUNTS" has the meaning set forth in the Registration Rights Agreement. All references herein or in the Securities to interest accrued or payable as of any date shall include any Additional Interest Amounts accrued or payable as of such date as provided in the Registration Rights Agreement. "AFFILIATE" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AGENT MEMBERS" has the meaning set forth in Section 2.1(b). "APPLICABLE PROCEDURES" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, in each case to the extent applicable to such transaction and as in effect from time to time. "APPLICABLE STOCK" means the shares of Common Stock; provided, that, in the event of a Fundamental Change occurring prior to June 1, 2008 in which the Company is not the surviving Person, the term "APPLICABLE STOCK" shall mean the Capital Stock or ordinary shares or American Depositary Shares of such surviving Person or its direct or indirect parent. "BANKRUPTCY LAW" means Title 11, United States Code, or any similar federal or State law for the relief of debtors. "BID SOLICITATION AGENT" has the meaning set forth in Section 2.3. "BOARD OF DIRECTORS" means either the board of directors of the Company or any duly authorized committee of such board. "BOARD RESOLUTION" means a resolution of the Board of Directors. "BUSINESS DAY" means each day of the year other than a Saturday or a Sunday or other day on which banking institutions in The City of New York are required or authorized by law or regulation to close. "CAPITAL STOCK" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity issued by that Person. "CASH" means such coin or currency of the United States as at any time of payment is legal tender for the payment of public and private debts. "CERTIFICATED SECURITIES" means Securities that are in substantially the form attached hereto as Exhibit A and that do not include the information called for by footnotes 1 and 3 thereof. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMON STOCK" means the common stock, $0.01 par value per share, of the Company as that stock exists on the date of this Indenture or any other shares of Capital Stock of the Company into which such 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 such subsequent 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, at least one of whom is the Chief Executive Officer, the President, the Chief Financial Officer, an Executive Vice President or a Senior Vice President. "CONTINGENT INTEREST" has the meaning set forth in the Securities. "CONTINGENT INTEREST PERIOD" has the meaning set forth in the Securities. "CONVERSION AGENT" has the meaning set forth in Section 2.3. "CONVERSION NOTICE" has the meaning set forth in Section 12.2(b). "CONVERSION PRICE" means, at any time, $1,000 divided by the Conversion Rate in effect at such time rounded to two decimal places (rounded up if the third decimal place thereof is 5 or more and otherwise rounded down). "CONVERSION RATE" means initially 37.8508 shares per $1,000 principal amount of Securities, subject to adjustment as set forth herein. 2 "CONVERSION VALUE" means, at any time, the amount equal to the product of the Sales Price at such time multiplied by the then current Conversion Rate. "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 of the execution of this Indenture is located at 180 East Fifth St., St. Paul, Minnesota 55101, Attention: Corporate Trust Department (Electronics For Imaging, Inc. - 1.50% Convertible Senior Debentures due 2023), 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). "CURRENT MARKET PRICE" has the meaning set forth in Section 12.3(f). "CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. "DEFAULT" means, when used with respect to the Securities, any event which is, or after notice or passage of time or both would be, an Event of Default. "DEPOSITARY" means, with respect to any Global Securities, a clearing agency that is registered as such under the Exchange Act and is designated by the Company to act as Depositary for such Global Securities (or any successor securities clearing agency so registered), which shall initially be DTC. "DIRECTOR" means a member of the Board of Directors. "DISTRIBUTED ASSETS" has the meaning set forth in Section 12.3(d). "DTC" means The Depository Trust Company, a New York corporation. "EVENT OF DEFAULT" has the meaning set forth in Section 8.1. "EXCESS AMOUNT" has the meaning set forth in Section 12.3(e). "EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as amended. "EX-DIVIDEND DATE" means, with respect to any issuance or distribution on shares of Common Stock, the first Trading Day on which the shares of Common Stock trade regular way on the principal securities market on which the shares of Common Stock are then traded without the right to receive such issuance or distribution. "FAIR MARKET VALUE" has the meaning set forth in Section 12.3(f). "FUNDAMENTAL CHANGE" has the meaning set forth in Section 5.1(a). 3 "FUNDAMENTAL CHANGE COMPANY NOTICE" has the meaning set forth in Section 5.1(b). "FUNDAMENTAL CHANGE REPURCHASE DATE" has the meaning set forth in Section 5.1(a). "FUNDAMENTAL CHANGE REPURCHASE NOTICE" has the meaning set forth in Section 5.1(c). "FUNDAMENTAL CHANGE REPURCHASE PRICE" has the meaning set forth in Section 5.1(a). "GLOBAL SECURITIES" means Securities that are in substantially the form attached hereto as Exhibit A and that include the information called for by footnotes 1 and 3 thereof and that are deposited with the Depositary or its custodian and registered in the name of, the Depositary or its nominee. "HOLDER" OR "SECURITYHOLDER" means a person in whose name a Security is registered on the Registrar's books. "INDEBTEDNESS" has the meaning set forth in Section 2.14. "INDENTURE" means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof, including the provisions of the TIA that are explicitly incorporated in this Indenture by reference to the TIA. "INITIAL PURCHASERS" mean UBS Warburg LLC, C.E. Unterberg, Towbin (a California limited partnership) and Morgan Stanley & Co. Incorporated. "INTEREST PAYMENT DATE" has the meaning set forth in the Securities. "ISSUE DATE" of any Security means the date on which such Security was originally issued or deemed issued as set forth on the face of the Security. "LEGAL HOLIDAY" means any day other than a Business Day. "MARKET PRICE" means: (a) with respect to Securities, as of any date of determination, the average of the secondary market bid quotations per $1,000 principal amount of Securities obtained by the Bid Solicitation Agent (which shall initially be the Trustee) for $1,000,000 principal amount of Securities at approximately 4:00 p.m., New York City time, on such date of determination from three securities dealers (none of which shall be an Affiliate of the Company) selected by the Company, which may include any of the Initial Purchasers, provided, that if at least three such bids cannot be reasonably obtained by the Bid Solicitation Agent, but two bids are obtained, then the average of the two bids shall be used, and if only one such bid can be reasonably obtained by the Bid Solicitation Agent, this one bid will be used; provided, however, if (a) the Bid Solicitation Agent, 4 through the exercise of reasonable efforts, is unable to obtain at least one bid from a securities dealer, or (b) in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Securities as of such date of determination, then the Market Price of a Security for such date of determination shall equal (1) the Conversion Rate in effect as of such date of determination multiplied by (2) the average Sale Price of a share of Common Stock for the five Trading Days ending on such date of determination; (b) with respect to Common Stock, the average of the Sale Price of one share of Common Stock for the 20-Trading Day period immediately preceding and including the third Business Day immediately preceding the applicable Repurchase Date (or if the third Business Day immediately preceding the relevant date of determination is not a Trading Day, then on the last Trading Day immediately preceding such third Business Day). (c) with respect to Applicable Stock, the average of the Sale Price of one share of Applicable Stock for the 20-Trading Day period immediately preceding and including the third Business Day immediately preceding the Fundamental Change Repurchase Date (or if the third Business Day immediately preceding the relevant date of determination is not a Trading Day, then on the last Trading Day immediately preceding such third Business Day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of such Trading Days during such 20-Trading Day period and ending on the date of determination, as the case may be, of any event described in Sections 12.3 or 12.4. "MEASUREMENT PERIOD" means the last 30 consecutive Trading Days in a fiscal quarter, beginning with the second fiscal quarter of 2003. "NON-ELECTING SHARE" has the meaning set forth Section 12.4. "NON-RECOURSE INDEBTEDNESS" means indebtedness the terms of which provide that the lender's claim for repayment of such indebtedness is limited solely to a claim against the property which secures such indebtedness. "NOTICE OF DEFAULT" has the meaning set forth in Section 8.1. "NYSE" means The New York Stock Exchange, Inc. "OFFICER" means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, the Controller, the Secretary, any Assistant Treasurer or Assistant Secretary of the Company. "OFFICERS' CERTIFICATE" means a written certificate containing the information specified in Sections 14.4 and 14.5, signed in the name of the Company by any two Officers, at least one of whom is the Chief Executive Officer, the President, the Chief Financial Officer, an Executive Vice President or a Senior Vice President and delivered to the Trustee. An Officers' Certificate given pursuant to Section 6.3 shall be signed by the principal financial or accounting Officer of the Company and one other Officer. 5 "OPINION OF COUNSEL" means a written opinion containing the information specified in Sections 14.4 and 14.5, from legal counsel. The counsel may be an employee of, or counsel to, the Company. "PAYING AGENT" has the meaning set forth in Section 2.3. "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. "PURCHASE AGREEMENT" means the Purchase Agreement dated as of May 29, 2003 among the Company and the Initial Purchasers. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "RECORD DATE" has the meaning set forth in Section 12.3(f). "REDEMPTION DATE" means, when used with respect to any Security to be redeemed, the date fixed for redemption pursuant to this Indenture. "REDEMPTION PRICE" has the meaning set forth in Section 3.1. "REFERENCE PERIOD" has the meaning set forth in Section 12.3(d). "REGISTRAR" has the meaning set forth in Section 2.3. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of June 4, 2003, between the Company and the Initial Purchasers. "REGULAR RECORD DATE" has the meaning set forth in the Securities. "REPURCHASE DATE" has the meaning set forth in Section 4.1(a). "REPURCHASE NOTICE" has the meaning set forth in Section 4.1(c). "REPURCHASE PRICE" has the meaning set forth in Section 4.1(a). "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 or assistant treasurer 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 and who shall have direct responsibility for the administration of this Indenture. "RESTRICTED CERTIFICATED SECURITY" means a Certificated Security which is a Transfer Restricted Security. 6 "RESTRICTED GLOBAL SECURITY" means a Global Security that is a Transfer Restricted Security. "RESTRICTED SECURITY" means a Restricted Certificated Security or a Restricted Global Security. "RULE 144A" means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time. "SALE PRICE" of one share of Common Stock or one share of Applicable Stock on any date means the closing per share sale price of such Common Stock or Applicable Stock, as applicable (or, if no closing sale price is reported, the average of the bid and ask prices or, if there is more than one bid or ask price, the average of the average bid and the average ask prices) on such date as reported in composite transactions on the Nasdaq National Market or, if the shares of Applicable Stock are not quoted on the Nasdaq National Market, as reported on a U.S. national or regional securities exchange, or if not listed on a U.S. 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 a quotation, the Board of Directors of the Company shall be entitled to make a good faith determination of the sale price on the basis it considers appropriate. "SEC" means the United States Securities and Exchange Commission. "SECURITY" OR "SECURITIES" means any of the Company's 1.50% Convertible Senior Debentures due 2023, as amended or supplemented from time to time, issued under this Indenture. "SECURITIES ACT" means the United States Securities Act of 1933, as amended. "SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02(w) of Regulation S-X. "SPECIAL RECORD DATE" has the meaning set forth in Exhibit A attached hereto. "SPIN-OFF" has the meaning set forth in Section 12.3(d). "STATED MATURITY", when used with respect to any Security, means June 1, 2023. "SUBSIDIARY" means any Person of which at least a majority of the outstanding voting stock shall at the time directly or indirectly be owned by the Company or by one or more Subsidiaries thereof or by the Company and one or more Subsidiaries. "TIA" means the United States Trust Indenture Act of 1939 as in effect on the date of this Indenture, provided, however, that in the event the TIA is amended after such date, TIA means, to the extent required by any such amendment, the TIA as so amended. "TRADING DAY" means: 7 (a) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made on the Nasdaq National Market; (b) if the applicable security is listed or admitted for trading on the quoted on the NYSE, a day on which the NYSE is open for business; or (c) if the applicable security is not so listed or admitted for trading on the NYSE and not so quoted on the Nasdaq National Market, a day on which the principal U.S. national or regional exchange on which the applicable security is listed or admitted for trading is open for business. "TRANSFER CERTIFICATE" has the meaning set forth in Section 2.12(f). "TRANSFER RESTRICTED SECURITY" has the meaning set forth in Section 2.12(f). "TRIGGER EVENT" has the meaning set forth in Section 12.3(d). "TRUSTEE" means the party named as the "Trustee" in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture and, thereafter, shall mean such successor. The foregoing sentence shall likewise apply to any subsequent such successor or successors. "UNRESTRICTED CERTIFICATED SECURITY" means a Certificated Security that is not a Transfer Restricted Security. "UNRESTRICTED GLOBAL SECURITY" means a Global Security that is not a Transfer Restricted Security. Section 1.2. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "COMMISSION" means the SEC. "INDENTURE SECURITIES" means the Securities. "INDENTURE SECURITY HOLDER" means a Securityholder. "INDENTURE TO BE QUALIFIED" means this Indenture. "INDENTURE TRUSTEE" or "institutional trustee" means the Trustee. "OBLIGOR" on the indenture securities means the Company. All other TIA terms used but not defined in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. 8 Section 1.3. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with accounting principles generally accepted in the United States as in effect from time to time; (c) "or" is not exclusive; (d) "including" means including, without limitation; and (e) words in the singular include the plural, and words in the plural include the singular. Section 1.4. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company, as described in Section 14.2. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of 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, if it so states. The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The principal amount and serial number of any Security and the ownership of Securities shall be proved by the register maintained by the Registrar for the Securities. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the 9 Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (e) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. ARTICLE II THE SECURITIES Section 2.1. Form and Dating. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A attached hereto, which is a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage (provided that any such notation, legend or endorsement required by usage is in a form acceptable to the Company). The Company shall provide any such notations, legends or endorsements to the Trustee in writing. Each Security shall be dated the date of its authentication. (a) Restricted Global Securities. All of the Securities are being offered and sold to QIBs in reliance on Rule 144A and shall be issued initially in the form of one or more Restricted Global Securities, which shall be deposited with the Trustee at its Corporate Trust Office, as custodian for the Depositary and registered in the name of DTC or the nominee thereof, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Restricted Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary as hereinafter provided. (b) Global Securities in General. Each Global Security shall represent such of the outstanding Securities as shall be specified therein and each shall provide that it shall initially represent the aggregate amount of outstanding Securities stated thereon, but that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, redemptions, repurchases and conversions of such Securities. 10 Any adjustment of the aggregate principal amount of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee in accordance with instructions given by the Holder thereof as required by Section 2.12 and shall be made on the records of the Trustee and the Depositary. Neither any members of, or participants in, the Depositary (collectively, the "AGENT MEMBERS") nor any other persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Security registered in the name of the Depositary or any nominee thereof, or under any such Global Security, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing contained herein shall (A) prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or (B) impair, as between the Depositary, its Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Security. (c) Certificated Securities. Certificated Securities will be issued only under the limited circumstances provided in Section 2.12(a)(i). Section 2.2. Execution and Authentication. The Securities shall be executed on behalf of the Company by any Officer. The signature of the Officer on the Securities may be manual or facsimile. A Security bearing the manual or facsimile signature of an individual who was at the time of the execution of the Security an Officer shall bind the Company, notwithstanding that such individual has ceased to hold such office(s) prior to the authentication and delivery of such Securities or did not hold such office(s) at the date of authentication of such Securities. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein duly executed by the Trustee by manual signature of an authorized signatory, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. The Trustee shall authenticate and deliver the Securities for original issue in an aggregate principal amount of up to $200,000,000 (up to $240,000,000 aggregate principal amount if the Initial Purchasers' option set forth in the Purchase Agreement is exercised in full) upon one or more Company Orders without any further action by the Company (other than as contemplated in Section 14.4 and Section 14.5). Subject to the preceding sentence, at any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication. Except as otherwise provided in this Article Three, the Trustee shall thereupon authenticate and make available for delivery said Securities to or upon Company Order. The aggregate principal amount of the Securities due at the Stated Maturity thereof outstanding at any time may not 11 exceed the amount set forth in this paragraph except as provided in Section 2.7. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall receive and shall be fully protected in relying upon: (a) a copy of the Board Resolution in or pursuant to which the terms and form of the Securities were established, the issuance and sale of the Securities was authorized, this Indenture was authorized and specified Officers were authorized to establish the form and determine the terms of the Securities and the form of this Indenture, to execute the Securities and this Indenture on behalf of the Company and to take any other necessary actions relating thereto and evidence of any actions taken by authorized Officers pursuant to that Board Resolution, each certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors or taken by any authorized Officer and to be in full force and effect as of the date of such certificate; (b) an Officers' Certificate delivered in accordance with Sections 14.4 and 14.5; and (i) an Opinion of Counsel reasonably satisfactory to the Trustee. The Trustee shall act as the initial authenticating agent. Thereafter, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. The Securities shall be issued only in registered form without coupons and only in denominations of $1,000 of principal amount and any multiple of $1,000. Section 2.3. Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("REGISTRAR"), an office or agency where Securities may be presented for redemption, repurchase or payment ("PAYING AGENT"), an office or agency where Securities may be presented for conversion ("CONVERSION AGENT") and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company shall also appoint a bid solicitation agent ("BID SOLICITATION AGENT") to act as set forth in Section 1 of the Securities. Pursuant to Section 6.5, the Company will at all times maintain a Registrar, Paying Agent, Conversion Agent, and Bid Solicitation Agent and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served in the Borough of Manhattan, New York City. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars, one or more additional paying agents, one or more additional conversion agents and one or more additional Bid Solicitation 12 Agents. The term Paying Agent includes any additional paying agent, including any named pursuant to Section 6.5. The term Conversion Agent includes any additional conversion agent, including any named pursuant to Section 6.5. The Company shall enter into an appropriate limited agency agreement with any Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or co-registrar (in each case, if such Person is a Person 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, Conversion Agent or Bid Solicitation Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 9.7. The Company or any Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar, Conversion Agent or co-registrar. None of the Company or any Subsidiary or any Affiliate of any of them may act as Bid Solicitation Agent. The Company hereby initially appoints the Trustee as Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent in connection with the Securities. Section 2.4. Paying Agent to Hold Cash and Securities in Trust. Except as otherwise provided herein, prior to 10:00 a.m., New York City time, on each due date of payments in respect of any Security, the Company shall deposit with the Paying Agent Cash (in immediately available funds if deposited on the due date) or number of shares of Common Stock and/or Applicable Stock sufficient to make such payments when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all Cash, Common Stock and Applicable Stock held by the Paying Agent for the making of payments in respect of the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company, a Subsidiary or an Affiliate of any of them acts as Paying Agent, it shall segregate the money, Common Stock and Applicable Stock held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all Cash, Common Stock and Applicable Stock held by it to the Trustee, and to account for any funds and Common Stock or Applicable Stock disbursed by it, and the Trustee may at any time during the continuance of any such default, upon the written request to the Paying Agent, require such Paying Agent to forthwith pay to the Trustee all Cash, Common Stock and Applicable Stock so held in trust. Upon doing so, the Paying Agent shall have no further liability for the Cash, Common Stock or Applicable Stock. Section 2.5. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall cause to be furnished to the Trustee on or before each semiannual interest payment date and at such other times as the Trustee may request in writing a 13 list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. Section 2.6. Transfer and Exchange. (a) Subject to compliance with any applicable additional requirements contained in Section 2.12, when a Security is presented to the Registrar with a request to register a transfer thereof or to exchange such Security for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested; provided, however, that every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by an assignment form and, if applicable, a transfer certificate, each in the form included in Exhibit A attached hereto and in form satisfactory to the Registrar and each duly executed by the Holder thereof or its attorney duly authorized in writing. To permit registration of transfers and exchanges, upon surrender of any Security for registration of transfer or exchange at an office or agency maintained for such purpose pursuant to Section 2.3, the Company shall execute, and the Trustee shall authenticate Securities of a like aggregate principal amount at the Registrar's request. Any transfer or exchange shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of the Securities from the Securityholder requesting such transfer or exchange. Neither the Company, the Registrar nor the Trustee shall be required to exchange or register a transfer of (i) any Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed), (ii) any Securities in respect of which a Repurchase Notice or a Fundamental Change 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 Securities to be repurchased in part, the portion thereof not to be repurchased) or (iii) any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed. All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. (b) Any Registrar appointed pursuant to Section 2.3 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such Registrar of Securities upon transfer or exchange of Securities. (c) Each Holder of a Security agrees to indemnify the Company, the Registrar and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Security in violation of any provision of this Indenture and/or applicable United States federal or state securities law. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between 14 or among Agent Members or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. Section 2.7. Replacement Securities. If (a) any mutilated Security is surrendered to the Company, the Registrar or the Trustee, or (b) the Company, the Registrar and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company, the Registrar and the Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company, the Registrar or the Trustee that such Security has been acquired by a bona fide or protected purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a certificate number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, or is about to be redeemed by the Company pursuant to Article III or repurchased by the Company pursuant to Article IV or V, the Company in its discretion may, instead of issuing a new Security, pay, redeem or repurchase such Security, as the case may be. Upon the issuance of any new Securities under this Section 2.7, the Company may require the payment of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee or the Registrar) connected therewith. Every new Security issued pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 2.8. Outstanding Securities; Determinations of Holders' Action. Securities outstanding at any time are all the Securities authenticated by the Trustee, except for those cancelled by it, those paid, redeemed or repurchased pursuant to Section 2.7, those delivered to it for cancellation and those described in this Section 2.8 as not outstanding. 15 A Security does not cease to be outstanding because the Company or an Affiliate thereof holds the Security; provided, however, that in determining whether the Holders of the requisite principal amount of Securities have given or concurred in any request, demand, authorization, direction, notice, consent, waiver, or other Act hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other Act, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time of such determination shall be considered in any such determination. If a Security is replaced pursuant to Section 2.7, the replaced Security ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide or protected purchaser unaware that such Security has been replaced. If the Paying Agent holds, in accordance with the terms of this Indenture, prior to 10:00 a.m., New York City time, on the Stated Maturity or a Redemption Date or on the Business Day immediately following a Repurchase Date or a Fundamental Change Repurchase Date, as the case may be, Cash or securities, if permitted hereunder, sufficient to pay Securities payable, then immediately after such Stated Maturity, Redemption Date, Repurchase Date or Fundamental Change Repurchase Date, as the case may be, such Securities shall cease to be outstanding and interest and Additional Interest Amounts, if any, on such Securities shall cease to accrue. If a Security is converted in accordance with Article XII, then from and after the time of conversion on the date of conversion, such Security shall cease to be outstanding and interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on such Security shall cease to accrue. Section 2.9. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as conclusively evidenced by their execution of such Securities. If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for such purpose pursuant to Section 2.3, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized 16 denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. Section 2.10. Cancellation. All Securities surrendered for payment, repurchase by the Company pursuant to Articles IV or V, conversion, redemption or registration of transfer or exchange shall, if surrendered to any person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. The Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation or that any Holder has converted pursuant to Article XII. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of by the Trustee in accordance with the Trustee's customary procedure. Section 2.11. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment (whether in Cash, Common Stock or Applicable Stock) of principal of, Redemption Price, Repurchase Price or Fundamental Change Repurchase Price, and interest and Additional Interest Amounts, if any, on, the Security, for the purpose of receiving Cash, Common Stock or Applicable Stock upon conversion and for all other purposes whatsoever, whether or not such Security is overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 2.12. Additional Transfer and Exchange Requirements. (a) Transfer and Exchange of Global Securities. (i) Certificated Securities shall be issued in exchange for interests in the Global Securities only if (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Securities or if it at any time ceases to be a "clearing agency" registered under the Exchange Act, if so required by applicable law or regulation and a successor Depositary is not appointed by the Company within 90 days, (y) the Company decides to discontinue use of the system of book-entry transfer through DTC (or any successor depositary) or (z) an Event of Default has occurred and is continuing. In either case, the Company shall execute, and the Trustee shall, upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver Certificated Securities in an aggregate principal amount equal to the principal amount of such Global Securities in exchange therefor. Only Restricted Certificated Securities shall be issued in exchange for beneficial interests in Restricted Global Securities, and only Unrestricted Certificated Securities shall be issued in exchange for 17 beneficial interests in Unrestricted Global Securities. Certificated Securities issued in exchange for beneficial interests in Global Securities shall be registered in such names and shall be in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver or cause to be delivered such Certificated Securities to the Persons in whose name such Securities are so registered. Such exchange shall be effected in accordance with the Applicable Procedures. (ii) Notwithstanding any other provisions of this Indenture other than the provisions set forth in Section 2.12(a)(i), a Global Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. (b) Transfer and Exchange of Certificated Securities. In the event that Certificated Securities are issued in exchange for beneficial interests in Global Securities in accordance with Section 2.12(a)(i), and, on or after such event, Certificated Securities are presented by a Holder to the Registrar with a request: (x) to register the transfer of the Certificated Securities to a person who will take delivery thereof in the form of Certificated Securities only; or (y) to exchange such Certificated Securities for an equal principal amount of Certificated Securities of other authorized denominations, such Registrar shall register the transfer or make the exchange as requested; provided, however, that the Certificated Securities presented or surrendered for register of transfer or exchange: (i) shall be duly endorsed or accompanied by a written instrument of transfer in accordance with the proviso to the first paragraph of Section 2.6; and (ii) in the case of a Restricted Certificated Security, such request shall be accompanied by the following additional information and documents, as applicable: (A) if such Restricted Certificated Security is being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, or such Restricted Certificated Security is being transferred to the Company or a Subsidiary of the Company, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); (B) if such Restricted Certificated Security is being transferred to a person the Holder reasonably believes is a QIB in accordance with Rule 144A, or pursuant to an effective registration statement under the Securities Act or in compliance with Rule 904 under the Securities Act, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); 18 (C) if such Restricted Certificated Security is being issued to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), a certificate to that effect from the Holder (in substantially the form set forth in the Transfer Certificate) and a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities in the form obtained from the Trustee; (D) if such Restricted Certificated Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 pursuant to and in compliance with an exemption from the registration requirements under the Securities Act, a certification to that effect from the Holder (in substantially the form set forth in the Transfer Certificate) and if the Company or the Registrar so requests, a customary Opinion of Counsel, certificates and other information reasonably acceptable to the Company and the Registrar to the effect that such transfer does not require registration under the Securities Act. (c) Transfer of a Beneficial Interest in a Restricted Global Security for a Beneficial Interest in an Unrestricted Global Security. Any person having a beneficial interest in a Restricted Global Security may upon request, subject to the Applicable Procedures, transfer such beneficial interest to a person who is required or permitted to take delivery thereof in the form of an Unrestricted Global Security. Upon receipt by the Trustee of written instructions, or such other form of instructions as is customary for the Depositary, from the Depositary or its nominee on behalf of any person having a beneficial interest in a Restricted Global Security and the following additional information and documents in such form as is customary for the Depositary from the Depositary or its nominee on behalf of the person having such beneficial interest in the Restricted Global Security (all of which may be submitted by facsimile or electronically): (i) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certification to that effect from the Holder (in substantially the form set forth in the Transfer Certificate); or (ii) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certification to that effect from the Holder (in substantially the form set forth in the Transfer Certificate) and, if the Company or the Trustee so requests, a customary Opinion of Counsel, certificates and other information reasonably acceptable to the Company and the Register to the effect that such transfer does not require registration under the Securities Act, the Registrar shall reduce or cause to be reduced the aggregate principal amount of the Restricted Global Security by the appropriate principal amount and shall increase or cause to be increased the aggregate principal amount of the Unrestricted Global Security by a like principal amount. Such transfer shall otherwise be effected in accordance with the Applicable Procedures. If no Unrestricted Global Security is then outstanding, the Company shall execute and the Trustee 19 shall, upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver an Unrestricted Global Security. (d) Transfer of a Beneficial Interest in an Unrestricted Global Security for a Beneficial Interest in a Restricted Global Security. Any person having a beneficial interest in an Unrestricted Global Security may upon request, subject to the Applicable Procedures, transfer such beneficial interest to a person who is required or permitted to take delivery thereof in the form of a Restricted Global Security (it being understood that only QIBs may own beneficial interests in Restricted Global Securities). Upon receipt by the Trustee of written instructions, or such other form of instructions as is customary for the Depositary, from the Depository or its nominee on behalf of any person having a beneficial interest in an Unrestricted Global Security and the following additional information and documents in such form as is customary for the Depositary, from the Depositary or its nominee on behalf of the person having such beneficial interest in the Unrestricted Global Security (all of which may be submitted by facsimile or electronically): (i) a certification from the Holder (in substantially the form set forth in the Transfer Certificate) to the effect that such beneficial interest is being transferred to a person that the transferor reasonably believes is a QIB in accordance with Rule 144A; or (ii) a certification from the Holder (in substantially the form set forth in the Transfer Certificate) to the effect that such beneficial interest is being transferred in compliance with Rule 904 under the Act; or (iii) a certification from the Holder (in substantially the form set forth in the Transfer Certificate) to the effect that such beneficial interest is being transferred to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities in the form obtained from the Trustee. The Registrar shall reduce or cause to be reduced the aggregate principal amount of the Unrestricted Global Security by the appropriate principal amount and shall increase or cause to be increased the aggregate principal amount of the Restricted Global Security by a like principal amount. Such transfer shall otherwise be effected in accordance with the Applicable Procedures. If no Restricted Global Security is then outstanding, the Company shall execute and the Trustee shall, upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver a Restricted Global Security. (e) Transfers of Certificated Securities for Beneficial Interest in Global Securities. In the event that Certificated Securities are issued in exchange for beneficial interests in Global Securities and, thereafter, the events or conditions specified in Section 2.12(a)(i) which required such exchange shall cease to exist, the Company shall mail notice to the Trustee and to the Holders stating that Holders may exchange Certificated Securities or interests in Global Securities by complying with the procedures set forth in this Indenture and briefly describing 20 such procedures and the events or circumstances requiring that such notice be given. Thereafter, if Certificated Securities are presented by a Holder to a Registrar with a request: (x) to register the transfer of such Certificated Securities to a person who will take delivery thereof in the form of a beneficial interest in a Global Security, which request shall specify whether such Global Security will be a Restricted Global Security or an Unrestricted Global Security, or (y) to exchange such Certificated Securities for an equal principal amount of beneficial interests in a Global Security, which beneficial interests will be owned by the Holder transferring such Certificated Securities (provided that in the case of such an exchange, Restricted Certificated Securities may be exchanged only for Restricted Global Securities and Unrestricted Certificated Securities may be exchanged only for Unrestricted Global Securities), the Registrar shall register the transfer or make the exchange as requested by canceling such Certificated Security and causing the aggregate principal amount of the applicable Global Security to be increased accordingly and, if no such Global Security is then outstanding, the Company shall issue and the Trustee shall, upon receipt of a Company Order (which the Company agrees to deliver promptly) authenticate and deliver a new Global Security; provided, however, that the Certificated Securities presented or surrendered for registration of transfer or exchange: (1) shall be duly endorsed or accompanied by a written instrument of transfer in accordance with the proviso to Section 2.6(a); (2) in the case of a Restricted Certificated Security to be transferred for a beneficial interest in an Unrestricted Global Security, such request shall be accompanied by the following additional information and documents, as applicable: (i) if such Restricted Certificated Security is being transferred pursuant to an effective registration statement under the Securities Act, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); or (ii) if such Restricted Certificated Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate) and, if the Company or the Registrar so requests, a customary Opinion of Counsel, certificates and other information reasonably acceptable to the Company and the Trustee to the effect that such transfer does not require registration under of the Securities Act; 21 (3) in the case of a Restricted Certificated Security to be transferred or exchanged for a beneficial interest in a Restricted Global Security, such request shall be accompanied by the following information and documents, as applicable: (i) if such Restricted Certificated Security is being transferred to a person the Holder reasonably believes is a QIB (which, in the case of an exchange, shall be such Holder) in accordance with Rule 144A, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); or (ii) if such Restricted Certificated Security is being transferred in compliance with Rule 904 under the Act, certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); or (iii) if such Restricted Certificated Security is being transferred to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate) and a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities in the form obtained from the Trustee; (4) in the case of an Unrestricted Certificated Security to be transferred or exchanged for a beneficial interest in an Unrestricted Global Security, such request need not be accompanied by any additional information or documents; and (5) in the case of an Unrestricted Certificated Security to be transferred or exchanged for a beneficial interest in a Restricted Global Security, such request shall be accompanied by the following additional information and documents, as applicable: (i) if such Unrestricted Certificated Security is being transferred to a person the Holder reasonably believes is a QIB (which, in the case of an exchange, shall be such Holder) in accordance with Rule 144A, a certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); or 22 (ii) if such Unrestricted Certificated Security is being transferred in compliance with Rule 904 under the Act, certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate); or (iii) if such Unrestricted Certificated Security is being transferred to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), certification to that effect from such Holder (in substantially the form set forth in the Transfer Certificate) and a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities in the form obtained from the Trustee; (f) Legends. (1) Except as permitted by the following paragraphs (2), (3) and (4), each Global Security and Certificated Security (and all Securities issued in exchange therefor or upon registration of transfer or replacement thereof) shall bear a legend in substantially the form called for by footnote 2 to Exhibit A attached hereto (each a "TRANSFER RESTRICTED SECURITY"), for so long as it is required by this Indenture to bear such legend. Each Transfer Restricted Security shall have attached thereto a certificate (a "TRANSFER CERTIFICATE") in substantially the form called for by footnote 5 to Exhibit A attached hereto. (2) Upon any sale or transfer of a Transfer Restricted Security (x) after the expiration of the holding period applicable to sales of the Securities under Rule 144(k) of the Securities Act, (y) pursuant to Rule 144 or (z) pursuant to an effective registration statement under the Securities Act: (i) in the case of any Restricted Certificated Security, any Registrar shall permit the Holder thereof to exchange such Restricted Certificated Security for an Unrestricted Certificated Security, or (under the circumstances described in Section 2.12(e)) to transfer such Restricted Certificated Security to a transferee who shall take such Security in the form of a beneficial interest in an Unrestricted Global Security, and in each case shall rescind any restriction on the transfer of such Security; provided, however, that the Holder of such Restricted Certificated Security shall, in connection with such exchange or transfer, comply with the other applicable provisions of this Section 2.12; and 23 (ii) in the case of any beneficial interest in a Restricted Global Security, the Trustee shall permit the beneficial owner thereof to transfer such beneficial interest to a transferee who shall take such interest in the form of a beneficial interest in an Unrestricted Global Security and shall rescind any restriction on transfer of such beneficial interest; provided, however, that such Unrestricted Global Security shall continue to be subject to the provisions of Section 2.12(a)(ii); and provided, further, that the owner of such beneficial interest shall, in connection with such transfer, comply with the other applicable provisions of this Section 2.12. (3) Upon the exchange, registration of transfer or replacement of Securities not bearing the legend described in paragraph (1) above, the Company shall execute, and the Trustee shall authenticate and deliver, Securities that do not bear such legend and that do not have a Transfer Certificate attached thereto. (4) After the expiration of the holding period pursuant to Rule 144(k) of the Securities Act, the Company may with the consent of the Holder of a Restricted Global Security or a Restricted Certificated Security, remove any restriction of transfer on such Security, and the Company shall execute, and the Trustee shall authenticate and deliver, Securities that do not bear such legend and that do not have a Transfer Certificate attached thereto. (5) Until the expiration of the holding period applicable to sales of the Securities under Rule 144(k) of the Securities Act or a transfer pursuant to Rule 144 or pursuant to an effective registration statement under the Securities Act, the shares of Common Stock issued upon conversion of the Securities shall bear the legend in substantially the form called for by Exhibit B attached hereto. (g) Transfers to the Company. Nothing contained in this Indenture or in the Securities shall prohibit the sale or other transfer of any Securities (including beneficial interests in Global Securities) to the Company or any of its Subsidiaries, which Securities shall thereupon be cancelled in accordance with Section 2.10. Section 2.13. CUSIP Numbers. The Company may issue the Securities with one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be 24 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. Ranking. The indebtedness of the Company arising under or in connection with this Indenture and every outstanding Security issued under this Indenture from time to time constitutes and will constitute a senior unsecured general obligation of the Company, ranking equally with other existing and future senior unsecured Indebtedness of the Company and ranking senior in right of payment to any future Indebtedness of the Company that is expressly made subordinate to the Securities by the terms of such Indebtedness. For purposes of this Section 2.14 only, "INDEBTEDNESS" means, without duplication, the principal or face amount of: (a) all obligations for borrowed money; (b) all obligations evidenced by notes or other similar instruments; (c) all obligations in respect of letters of credit or bankers acceptances or similar instruments (or reimbursement obligations with respect thereto); (d) all obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business; (e) all obligations as lessee which are capitalized in accordance with generally accepted accounting principles; and (f) all Indebtedness of others guaranteed by the Company or any of its Subsidiaries or for which the Company or any of its Subsidiaries is legally responsible or liable (whether by agreement to purchase indebtedness of, or to supply funds or to invest in, others). ARTICLE III REDEMPTION Section 3.1. The Company's Right to Redeem; Notice to Trustee. Prior to June 1, 2008, the Securities will not be redeemable at the Company's option. Beginning on June 1, 2008, the Company, at its option, may redeem the Securities in accordance with this Article III for Cash at any time as a whole, or from time to time in part, at a redemption price equal to 100% of the principal amount of Securities to be redeemed plus any accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on those Securities to, but not including, the Redemption Date (the "REDEMPTION PRICE"). In the event that the Company elects to redeem the Securities on a date that is on or after any Regular Record Date but before the corresponding Interest Payment Date, the Company shall be required to pay any accrued and unpaid interest (including Contingent Interest, 25 if any) and Additional Interest Amounts, if any, to the same Holder to whom the Company pays the principal of such Security regardless of whether such Holder was the registered Holder on the Regular Record Date immediately preceding such Redemption Date. If the Company elects to redeem Securities, it shall notify the Trustee in writing of the Redemption Date, the principal amount of Securities to be redeemed and the Redemption Price. The Company shall give this notice to the Trustee by a Company Order at least 40 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee). Section 3.2. Selection of Securities to Be Redeemed. If fewer than all of the outstanding Securities are to be redeemed, unless the procedures of the Depositary provide otherwise, the Trustee shall select the Securities to be redeemed by lot or on a pro rata basis. The Trustee shall make the selection within five Business Days after it receives the notice provided for in Section 3.1 from outstanding Securities not previously called for redemption. Securities and portions of Securities that the Trustee selects shall be in principal amounts of $1,000 or a multiple of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of the Securities to be redeemed. Securities and portions of Securities that are to be redeemed are convertible by the Holder until 5:00 p.m., New York City time, on the Business Day immediately preceding the Redemption Date. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection. Section 3.3. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first-class mail, postage prepaid, to each Holder of Securities to be redeemed. The notice of redemption shall identify the Securities to be redeemed and shall state: (a) the Redemption Date; (b) the Redemption Price; (c) the Conversion Rate; (d) the name and address of the Paying Agent and Conversion Agent; 26 (e) that Securities called for redemption may be converted at any time prior to 5:00 p.m., New York City time, on the Business Day preceding the Redemption Date; (f) that Holders who want to convert their Securities must satisfy the requirements set forth in Article XII; (g) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (h) in the case of any Security redeemed in part, that the Holder of such Security will receive a new Security or Securities, of authorized denominations for the principal amount thereof remaining unredeemed; (i) if fewer than all of the outstanding Securities are to be redeemed, the certificate numbers, if any, and principal amounts of the particular Securities to be redeemed; (j) that, unless the Company defaults in making payment of such Redemption Price, interest and Additional Interest Amounts, if any, on Securities called for redemption will cease to accrue on and after the Redemption Date; (k) the CUSIP number(s) of the Securities; and (l) any other information the Company wants to present. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided, however, that the Company makes such request at least five Business Days (unless a shorter period shall be satisfactory to the Trustee) prior to the date by which such notice of redemption must be given to Holders in accordance with this Section 3.3; provided, further, that the text of the notice of redemption shall be prepared by the Company. Section 3.4. Effect of Notice of Redemption. Once notice of redemption is given, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price, except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price. Section 3.5. Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on the applicable Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an amount of Cash (in immediately available funds if deposited on the Redemption Date) sufficient to pay the aggregate Redemption Price of all Securities or portions thereof which are to be redeemed as of such Redemption Date other than Securities or portions of Securities called for redemption which on or prior thereto have been delivered by the Company to the Trustee for cancellation or have been converted. 27 If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the applicable Redemption Date, Cash sufficient to pay the Redemption Price of any Securities for which notice of redemption is given, then, on such Redemption Date, such Securities will cease to be outstanding and interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on such Securities will cease to accrue, whether or not such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Redemption Price upon delivery of such Securities). Section 3.6. Securities Redeemed in Part. Any Certificated Security which is to be redeemed only in part shall be surrendered at the office of the Paying Agent and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to the unredeemed portion of the Security surrendered. Section 3.7. Repayment to the Company. To the extent that the aggregate amount of Cash deposited by the Company pursuant to Section 3.5 exceeds the aggregate Redemption Price of the Securities or portions thereof which the Company is redeeming as of the Redemption Date, then, promptly after the Redemption Date, the Paying Agent shall return any such excess to the Company. ARTICLE IV REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS ON SPECIFIC DATES Section 4.1. Optional Put. (a) Securities shall be repurchased by the Company, at the option of the Holder thereof, on June 1, 2008, June 1, 2013 and June 1, 2018 (each, a "REPURCHASE DATE"), at a repurchase price equal to 100% of the principal amount of those Securities plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, to, but not including, such Repurchase Date (the "REPURCHASE PRICE"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 4.1(c). (b) No later than 20 Business Days prior to each Repurchase Date, the Company shall mail a written notice of the repurchase right by first class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The notice shall include a form of Repurchase Notice to be completed by the Holder and shall briefly state, as applicable: (i) the date by which the Repurchase Notice must be delivered to the Paying Agent in order for a Holder to exercise the repurchase right; (ii) the Repurchase Date; 28 (iii) the Repurchase Price; (iv) whether the Repurchase Price will be paid in Cash or, if permitted hereunder, in shares of Common Stock, or a combination thereof and, in the case of a combination, the percentage of each; (v) if the Company elects to pay the Repurchase Price in shares of Common Stock or a combination of Cash and shares of Common Stock, that the number of shares of Common Stock each Holder will receive will equal the portion of the Repurchase Price to be paid in shares of Common Stock divided by the Market Price of one share of Common Stock; (vi) if the Company elects to pay the Repurchase Price in shares of Common Stock or a combination of Cash and shares of Common Stock, the method of calculating the Market Price of the shares of Common Stock; (vii) that because the Market Price of one share of Common Stock will be determined prior to the Repurchase Date, Holders of the Securities will bear the market risk that the shares of Common Stock to be received will decline in value between the date such Market Price is determined and the Repurchase Date; (viii) the name and address of the Paying Agent and the Conversion Agent; (ix) the Conversion Rate and any adjustments thereto; (x) that the Securities as to which a Repurchase Notice has been given may be converted if they are otherwise convertible pursuant to Article XII only if the Repurchase Notice has been withdrawn in accordance with the terms of this Indenture; (xi) that the Securities must be surrendered to the Paying Agent to collect payment; (xii) that the Repurchase Price for any Security as to which a Repurchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Repurchase Date and the time of surrender of such Security; (xiii) the procedures the Holder must follow to exercise its put right under this Section 4.1; (xiv) the conversion rights, if any, of the Securities; (xv) the procedures for withdrawing a Repurchase Notice; (xvi) that, unless the Company defaults in making payment of such Repurchase Price, interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on Securities surrendered for repurchase by the Company will cease to accrue on and after the Repurchase Date; and 29 (xvii) the CUSIP number(s) of the Securities. At the Company's request, the Trustee shall give the notice of repurchase right in the Company's name and at the Company's expense; provided, however, that the Company makes such request at least three Business Days (unless a shorter period shall be satisfactory to the Trustee) prior to the date by which such notice of repurchase right must be given to the Holder in accordance with this Section 4.1(b); provided, further, that the text of the notice of repurchase right shall be prepared by the Company. (c) A Holder may exercise its right specified in Section 4.1(a) upon delivery of a written notice of repurchase (a "REPURCHASE NOTICE") to the Paying Agent at any time during the period beginning at 9:00 a.m., New York City time, on the date that is 20 Business Days immediately preceding the relevant Repurchase Date until 5:00 p.m., New York City time, on the Business Day immediately preceding such Repurchase Date, stating: (i) the certificate number of the Security which the Holder will deliver to be repurchased or the appropriate Depositary procedures if Certificated Securities have not been issued; (ii) the portion of the principal amount of the Security which the Holder will deliver to be repurchased, which portion must be in principal amounts of $1,000 or a multiple of $1,000; (iii) that such Security shall be repurchased by the Company as of the Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture; and (iv) in the event the Company elects, pursuant to Section 4.2(b), to pay the Repurchase Price, in whole or in part, in shares of Common Stock but such portion of the Repurchase Price shall ultimately be paid to such Holder entirely in Cash because any of the conditions to payment of the Repurchase Price in shares of Common Stock is not satisfied prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the relevant Repurchase Date, as set forth in Section 4.2(b), whether such Holder elects to (A) withdraw such Repurchase Notice as to some or all of the Securities to which such Repurchase Notice relates (stating the principal amount and certificate numbers, if any or the appropriate Depositary procedures, if applicable, of the Securities as to which such withdrawal shall relate), or (B) receive Cash in respect of the entire Repurchase Price for all Securities (or portions thereof) to which such Repurchase Notice relates. The delivery of such Security to the Paying Agent with, or at any time after delivery of, the Repurchase Notice (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Repurchase Price therefor; provided, however, that such Repurchase Price shall be so paid pursuant to this Section 4.1 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Repurchase Notice. 30 If a Holder, in such Holder's Repurchase Notice and in any written notice of withdrawal delivered by such Holder pursuant to the terms of Section 4.3, fails to indicate such Holder's choice with respect to the election set forth in Section 4.1(c)(iv), such Holder shall be deemed to have elected to receive Cash in respect of the entire Repurchase Price for all Securities subject to such Repurchase Notice in the circumstances set forth in such Section 4.1(c)(iv). The Company shall repurchase from the Holder thereof, pursuant to this Section 4.1, a portion of a Security, so long as the principal amount of such portion is $1,000 or a multiple of $1,000. Provisions of this Indenture that apply to the repurchase of all of a Security also apply to the repurchase of such portion of such Security. Any repurchase by the Company contemplated pursuant to the provisions of this Section 4.1 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Repurchase Date and the time of delivery of the Security. Notwithstanding anything contained herein to the contrary, any Holder delivering to the Paying Agent the Repurchase Notice contemplated by this Section 4.1(c) shall have the right to withdraw such Repurchase Notice at any applicable time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 4.3. The Paying Agent shall promptly notify the Company of the receipt by it of any Repurchase Notice or written notice of withdrawal thereof. Section 4.2. The Company's Right to Elect Manner of Payment of Repurchase Price. (a) If the Securities are to be repurchased on June 1, 2008 pursuant to Section 4.1(a), the Repurchase Price must be paid in Cash. If the Securities to be repurchased on June 1, 2013 or June 1, 2018, pursuant to Section 4.1(a), the Repurchase Price may be paid for at the election of the Company, in Cash or shares of Common Stock, or in any combination of Cash and shares of Common Stock, subject to the conditions set forth in Section 4.2(b). The Company shall designate, in the notice of repurchase right delivered pursuant to Section 4.1(b), whether the Company will repurchase the Securities for Cash or, if permitted hereunder, shares of Common Stock, or, if a combination thereof, the percentages of the Repurchase Price in respect of which it will pay in Cash or shares of Common Stock; provided, however, that the Company will pay Cash for fractional interests in a share of Common Stock. For purposes of determining the existence of potential fractional interests, all Securities subject to repurchase by the Company held by a Holder shall be considered together (no matter how many separate certificates are to be presented). Each Holder whose Securities are repurchased pursuant to Section 4.1 shall receive the same percentage of Cash or, if permitted hereunder, shares of Common Stock in payment of the Repurchase Price for such Securities, (i) except as provided in this Section 4.2(a) with regard to the payment of Cash in lieu of fractional shares of Common Stock, (ii) in the event that the Company is unable to purchase the Securities of the Holder or Holders for shares of Common Stock because any necessary qualifications or registration of the shares of Common Stock under 31 applicable securities laws cannot be obtained, the Company may purchase the Securities of such Holder or Holders for Cash. The Company may not change its election with respect to the consideration (or components or percentages of components thereof) to be paid once the Company has given its notice of repurchase right to Holders except in the event of a failure to satisfy, prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Repurchase Date, any condition to the payment of the Repurchase Price in whole or in part, in shares of Common Stock. (b) If the Company elects to pay all or a portion of the Repurchase Price of Securities in respect of which a Repurchase Notice pursuant to Section 4.1(c) has been given in shares of Common Stock, the number of shares of Common Stock to be issued shall be equal to the portion of the Repurchase Price to be paid in shares of Common Stock divided by the Market Price of one share of Common Stock, subject to satisfaction of the conditions set forth in the second succeeding paragraph. The Company will not issue any fraction of a share of Common Stock in payment of the Repurchase Price. Instead, the Company will make a Cash payment (calculated to the nearest cent) equal to such fraction multiplied by the Market Price of one share of Common Stock. If a Holder elects to have more than one Security purchased, the number of shares of Common Stock shall be based on the aggregate amount of Securities to be purchased. The Company's right to exercise its election to repurchase Securities through the issuance of shares of Common Stock shall be conditioned upon: (i) the registration of such shares of Common Stock under the Securities Act and the Exchange Act, in each case, if required; (ii) any qualification or registration of such shares of Common Stock under applicable state securities laws, if necessary, or the availability of an exemption from such qualification and registration; (iii) the listing of such shares of Common Stock on a United States national securities exchange or the quotation of such shares of Common Stock in an inter-dealer quotation system of any registered United States national securities association; and (iv) the receipt by the Trustee of an Officers' Certificate stating: (A) that the terms of the issuance of the shares of Common Stock are in conformity with this Indenture; (B) that the shares of Common Stock to be issued in payment of the Repurchase Price in respect of Securities have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the Repurchase Price in respect of Securities, will be validly issued, fully paid, non-assessable and free from preemptive rights; (C) that the conditions above, the conditions in clauses (i)-(iii) above and the condition set forth in the second succeeding sentence regarding issuance of a press release have been satisfied in all material respects; and (D) the number of shares of Common Stock to be issued for each $1,000 principal amount of Securities and the Sale Price of a share of Common Stock on each Trading Day during the period commencing 32 on the first Trading Day of the PERIOD during which the Market Price is calculated and ending on the Trading Day immediately preceding the Repurchase Date; and (v) the receipt by the Trustee of an Opinion of Counsel stating that: (A) the shares of Common Stock to be issued in payment of the Repurchase Price in respect of Securities have been duly authorized, and when issued and delivered pursuant to the terms of this Indenture in payment of the Repurchase Price in respect of Securities, will be validly issued, fully paid and non-assessable and, to the best of such counsel's knowledge, free from preemptive rights; and (B) the conditions in clauses (i) through (iii) above have been satisfied in all material respects. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Repurchase Date, and the Company has elected to repurchase the Securities pursuant to this Section 4.2 through the issuance of Common Stock, the Company shall pay the entire Repurchase Price of the Securities of such Holder or Holders in Cash. Upon determination of the actual number of shares of Common Stock to be issued upon repurchase of Securities, the Company shall be required to disseminate a press release through a public medium as is customary for such a press release. (c) Covenants of the Company. All shares of Common Stock delivered upon repurchase of the Securities shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. (d) Taxes. If a Holder of a repurchased Security is paid in shares of Common Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on such issue of shares of Common Stock. However, the Holder shall pay any such tax which is due because the Holder requests the shares of Common Stock to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder's name until the Paying Agent receives a sum sufficient to pay any tax which will be due because the shares of Common Stock are to be issued in a name other than the Holder's name. Nothing contained herein shall preclude any income tax withholding required by law or regulations. Section 4.3. Effect of Repurchase Notice. Upon receipt by the Paying Agent of the Repurchase Notice specified in Section 4.1(c), the Holder of the Security in respect of which such Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Repurchase Price with respect to such Security. Such Repurchase Price shall be paid to such Holder, subject to receipts of Cash and/or securities by the Paying Agent, promptly following the later of (a) the Repurchase Date with respect to such Security (provided the conditions in Section 4.1 (c) have been satisfied) and (b) the time of delivery of such Security to the Paying Agent by the Holder 33 thereof in the manner required by Section 4.1(c). Securities in respect of which a Repurchase Notice has been given by the Holder thereof may not be converted pursuant to Article XII on or after the date of the delivery of such Repurchase Notice unless such Repurchase Notice has first been validly withdrawn as specified in the following paragraph. A Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Repurchase Date, specifying: (a) the certificate number, if any, or the appropriate Depositary procedures, if applicable, of the Security in respect of which such notice of withdrawal is being submitted; (b) the principal amount of the Security with respect to which such notice of withdrawal is being submitted; and (c) the principal amount, if any, of such Security which remains subject to the original Repurchase Notice and which has been or will be delivered for repurchase by the Company. Section 4.4. Deposit of Repurchase Price. Prior to 10:00 a.m., New York City time, on the applicable Repurchase Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an amount of Cash (in immediately available funds if deposited on such Business Day) and/or shares of Common Stock, if permitted hereunder, sufficient to pay the aggregate Repurchase Price of all the Securities or portions thereof which are to be repurchased on such Repurchase Date. If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the Business Day immediately following the applicable Repurchase Date, Cash and/or shares of Common Stock, if permitted hereunder, sufficient to pay the Repurchase Price of any Securities for which a Repurchase Notice has been tendered and not withdrawn pursuant to Section 4.3, then, immediately after such Repurchase Date, such Securities will cease to be outstanding and interest (including, Contingent Interest, if any) and Additional Interest Amounts, if any, on such Securities will cease to accrue, whether or not such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Repurchase Price upon delivery of such Securities). As soon as practicable on and after the Repurchase Date, the Company shall deliver to each Holder entitled to receive shares of Common Stock through the Paying Agent, a certificate (other than in the case of Holders of Securities in book-entry form with DTC, which shares shall be delivered in accordance with DTC customary practices) for the number of full shares of Common Stock issuable in payment of the Repurchase Price and Cash in lieu of any fractional interests. The person in whose name the certificate for the shares of Common Stock is registered shall be treated as a holder of record of shares of Common Stock on the Repurchase Date. No payment or adjustment will be made for dividends on the shares of Common Stock the record date for which occurred on or prior to the Repurchase Date. 34 Section 4.5. Securities Repurchased in Part. Any Certificated Security 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 Security, without charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered which is not repurchased. Section 4.6. Covenant to Comply With Securities Laws Upon Repurchase of Securities. When complying with the provisions of Section 4.1 hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemptions available under applicable law, the Company shall: (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act; and (c) otherwise comply with all federal and state securities laws so as to permit the rights and obligations under Article IV to be exercised in the time and in the manner specified therein. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Article IV, the Company's compliance with such laws and regulations shall not in and of itself cause a breach of its obligations under this Article IV. Section 4.7. Repayment to the Company. To the extent that the aggregate amount of Cash or shares of Common Stock deposited by the Company pursuant to Section 4.4 exceeds the aggregate Repurchase Price of the Securities or portions thereof which the Company is obligated to repurchase on the Repurchase Date, then, promptly after the Repurchase Date, the Paying Agent shall return any such excess to the Company. 35 ARTICLE V REPURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE Section 5.1. Fundamental Change Put. (a) General. If a Fundamental Change occurs at any time prior to June 1, 2008, the Securities not previously repurchased by the Company shall be repurchased by the Company at the option of the Holder thereof at a repurchase price equal to 100% of the principal amount of the Securities to be repurchased, plus accrued and unpaid interest, including Contingent Interest, if any, and Additional Interest Amounts, if any, on those notes to, but not including, the Fundamental Change Repurchase Date (the "FUNDAMENTAL CHANGE REPURCHASE PRICE"), subject to satisfaction by or on behalf of any Holder of the requirements set forth in Section 5.2(c). The fundamental change repurchase date must be within 30 days after the date of the mailing of the Fundamental Change Company Notice under Section 5.1 (b) (the "FUNDAMENTAL CHANGE REPURCHASE DATE"). No Holder shall have the right to require the Company to repurchase its Securities under this Article V if a Fundamental Change occurs on or after June 1, 2008. A "FUNDAMENTAL CHANGE" is any transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which any of the following occur: (i) any "person" or "group" is or becomes the "beneficial owner," directly or indirectly, of shares of the Company's voting stock representing 50% or more of the total voting power of all outstanding classes of the Company's stock or has the power, directly or indirectly, to elect a majority of the members of the Board of Directors; (ii) the holders of the Company's capital stock approve any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with this Indenture); or (iii) all or substantially all of the Common Stock is exchanged for, converted into, acquired for or constitutes solely the right to receive, consideration (excluding cash payments for fractional shares) which is not all or substantially all common stock that is listed on, or immediately after the transaction or event will be listed on, a United States national securities exchange, or is approved, or immediately after the transaction or event will be approved, for quotation on the Nasdaq National Market or any similar United States system of automated dissemination of quotations of securities prices. (b) Notice of Fundamental Change. No later than 30 days after the occurrence of a Fundamental Change that occurs prior to June 1, 2008, the Company shall mail a written notice of Fundamental Change (the "FUNDAMENTAL CHANGE COMPANY NOTICE") by first class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable 36 law). The notice shall include a form of Fundamental Change Repurchase Notice to be completed by the Holder and shall briefly state, as applicable: (i) the events causing a Fundamental Change and the date of such Fundamental Change; (ii) that the Holder has a right to require the Company to repurchase the Holder's Securities; (iii) the date by which the Fundamental Change Repurchase Notice must be delivered to the Paying Agent in order for a Holder to exercise the Fundamental Change repurchase right; (iv) the Fundamental Change Repurchase Date; (v) the Fundamental Change Repurchase Price; (vi) whether the Fundamental Change Repurchase Price will be paid in Cash or shares of Applicable Stock, or a combination thereof and, in the case of a combination, the percentage of each; (vii) if the Company elects to pay the Fundamental Change Repurchase Price in shares of Applicable Stock or a combination of Cash and shares of Applicable Stock, that the number of shares of Applicable Stock each Holder will receive will equal the portion of the Fundamental Change Repurchase Price to be paid in shares of Applicable Stock divided by the Market Price of one share of Applicable Stock; (viii) if the Company elects to pay the Fundamental Change Repurchase Price in shares of Applicable Stock or a combination of Cash and shares of Applicable Stock, the method of calculating the Market Price of the shares of Applicable Stock; (ix) that because the Market Price of one share of Applicable Stock will be determined prior to the Fundamental Change Repurchase Date, Holders of the Securities will bear the market risk that the shares of Applicable Stock to be received will decline in value between the date such Market Price is determined and the Fundamental Change Repurchase Date; (x) the name and address of the Paying Agent and the Conversion Agent; (xi) the Conversion Rate applicable on the Fundamental Change Company Notice Date; (xii) that the Securities as to which a Fundamental Change Repurchase Notice has been given may be converted if they are otherwise convertible pursuant to Article XII only if the Fundamental Change Repurchase Notice has been withdrawn in accordance with the terms of this Indenture; 37 (xiii) that the Securities must be surrendered to the Paying Agent to collect payment; (xiv) that the Fundamental Change Repurchase Price for any Security as to which a Fundamental Change Repurchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Fundamental Repurchase Date and the time of surrender of such Security; (xv) the procedures the Holder must follow to exercise its put right under this Section 5.1; (xvi) the conversion rights, if any, of the Securities; (xvii) the procedures for withdrawing a Fundamental Change Repurchase Notice; (xviii) that, unless the Company defaults in making payment of such Fundamental Change Repurchase Price, interest and Additional Interest Amounts, if any, on Securities surrendered for repurchase by the Company will cease to accrue on and after the Fundamental Change Repurchase Price; and (xix) the CUSIP number(s) of the Securities. At the Company's request, the Trustee shall give the Fundamental Change Company Notice in the Company's name and at the Company's expense; provided, however, the Company makes such request at least three Business Days (unless a shorter period shall be satisfactory to the Trustee) prior to the date by which such Fundamental Change Company Notice must be given to the Holders in accordance with this Section 5.1(b); provided, further, that the text of the Fundamental Change Company Notice shall be prepared by the Company. (c) Fundamental Change Repurchase Notice. A Holder may exercise its right specified in Section 5.1 (a) upon delivery of a written notice of repurchase (a "FUNDAMENTAL CHANGE REPURCHASE NOTICE"), substantially in the form of EXHIBIT C hereto, to the Paying Agent at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, stating: (i) the certificate number of the Security which the Holder will deliver to be repurchased or the appropriate depositary procedures if Certificated Securities have not been issued; (ii) the portion of the principal amount of the Security which the Holder will deliver to be repurchased, which portion must be $1,000 or a multiple of $1,000; (iii) that such Security shall be repurchased on the Fundamental Change Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture; and 38 (iv) in the event the Company elects, pursuant to Section 5.2, to pay the Fundamental Change Repurchase Price, in whole or in part, in shares of Applicable Stock but such portion of the Fundamental Change Repurchase Price shall ultimately be paid to such Holder entirely in Cash because any of the conditions to payment of the Fundamental Change Repurchase Price in shares of Applicable Stock is not satisfied prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, as set forth in Section 5.2(b), whether such Holder elects to (A) withdraw such Fundamental Change Repurchase Notice as to some or all of the Securities to which such Fundamental Change Repurchase Notice relates (stating the principal amount and certificate numbers, if any, or the appropriate Depositary procedures, if applicable, of the Securities as to which such withdrawal shall relate), or (B) receive Cash in respect of the entire Fundamental Change Repurchase Price for all Securities (or portions thereof) to which such Fundamental Change Repurchase Notice relates. The delivery of such Security to the Paying Agent with, or at any time after delivery of, the Fundamental Change Repurchase Notice (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Fundamental Change Repurchase Price therefor; provided, however, that such Fundamental Change Repurchase Price shall be so paid pursuant to this Section 5.1 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof set forth in the related Fundamental Change Repurchase Notice. If a Holder, in such Holder's Fundamental Change Repurchase Notice and in any written notice of withdrawal delivered by such Holder pursuant to the terms of Section 5.3, fails to indicate such Holder's choice with respect to the election set forth in Section 5.1(c)(iv), such Holder shall be deemed to have elected to receive Cash in respect of the entire Fundamental Change Repurchase Price for all Securities subject to such Fundamental Change Repurchase Notice in the circumstances set forth in such Section 5.1 (c) (iv). The Company shall repurchase from the Holder thereof, pursuant to this Section 5.1, a portion of a Security, so long as the principal amount of such portion is $1,000 or a multiple of $1,000. Provisions of this Indenture that apply to the repurchase of all of a Security also apply to the repurchase of such portion of such Security. Any repurchase by the Company contemplated pursuant to the provisions of this Section 5.1 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Fundamental Change Repurchase Date and the time of delivery of the Security. Notwithstanding anything contained herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 5.1(c) shall have the right to withdraw such Fundamental Change Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 5.3. 39 The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof. Section 5.2. The Company's Right to Elect Manner of Payment of Fundamental Change Repurchase Price. (a) The Securities to be repurchased with respect to any Fundamental Change Repurchase Date pursuant to Section 5.1(a) may be paid for at the election of the Company in Cash or shares of Applicable Stock, or in any combination of Cash and shares of Applicable Stock, subject to the conditions set forth in Section 5.2(b). The Company shall designate, in the Fundamental Change Company Notice delivered pursuant to Section 5.1(b), whether the Company will repurchase the Securities for Cash or shares of Applicable Stock, or, if a combination thereof, the percentages of the Fundamental Change Repurchase Price in respect of which it will pay in Cash or shares of Applicable Stock; provided, however, that the Company will pay Cash for fractional interests in shares of Applicable Stock. For purposes of determining the existence of potential fractional interests, all Securities subject to repurchase by the Company held by a Holder shall be considered together (no matter how many separate certificates are to be presented). Each Holder whose Securities are repurchased pursuant to Section 5.1 shall receive the same percentage of Cash or shares of Applicable Stock in payment of the Fundamental Change Repurchase Price for such Securities, except (i) as provided in this Section 5.2(a) with regard to the payment of Cash in lieu of fractional shares of Applicable Stock and (ii) in the event that the Company is unable to purchase the Securities of a Holder or Holders for shares of Applicable Stock because any necessary qualifications or registrations of the shares of Applicable Stock under applicable securities laws cannot be obtained, the Company may purchase the Securities of such Holder or Holders for Cash. The Company may not change its election with respect to the consideration (or components or percentages of components thereof) to be paid once the Company has given its Fundamental Change Company Notice to Holders except in the event of a failure to satisfy, prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, any condition to the payment of the Fundamental Change Repurchase Price in whole or in part, in shares of Applicable Stock. (b) If the Company elects to pay all or a portion of the Fundamental Change Repurchase Price of Securities in respect of which a Fundamental Change Repurchase Notice pursuant to Section 5.1(c) has been given in Applicable Stock, the number of shares of Applicable Stock to be issued shall be equal to (i) the portion of the Fundamental Change Repurchase Price to be paid in Applicable Stock divided by (ii) the Market Price of one share of Applicable Stock, subject to satisfaction of the conditions set forth in the second succeeding paragraph. The Company will not issue any fraction of a share of Applicable Stock in payment of the Fundamental Change Repurchase Price. Instead, the Company will make a Cash payment (calculated to the nearest cent) equal to such fraction multiplied by the Market Price of one share of Applicable Stock on or prior to the Fundamental Change Repurchase Date. If a Holder elects to have more than one Security purchased, the number of shares of Applicable Stock shall be based on the aggregate amount of Securities to be purchased. 40 The Company's right to exercise its election to repurchase Securities through the issuance of shares of Applicable Stock shall be conditioned upon: (i) the registration of such shares of Applicable Stock under the Securities Act and the Exchange Act, in each case, if required; and (ii) any qualification or registration of such shares of Applicable Stock under applicable state securities laws, if necessary, or the availability of an exemption from such qualification and registration; (iii) the listing of such shares of Applicable Stock on a United States national securities exchange or the quotation of such shares of Applicable Stock in an inter-dealer quotation system of any registered United States national securities association; (iv) the receipt by the Trustee of an Officers' Certificate stating (A): that the terms of the issuance of the shares of Applicable Stock are in conformity with this Indenture; (B) that the shares of Applicable Stock to be issued in payment of the Fundamental Change Repurchase Price in respect of Securities have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the Fundamental Change Repurchase Price in respect of Securities, will be validly issued, fully paid, non-assessable and free from preemptive rights; (C) that the conditions above, the conditions in clauses (i)-(iii) above and the condition set forth in the second succeeding sentence regarding issuance of a press release have been satisfied in all material respects; and (D) the number of shares of Applicable Stock to be issued for each $1,000 principal amount of Securities and the Sale Price of a share of Applicable Stock on each Trading Day during the period commencing on the first Trading Day of the period during which the Market Price is calculated and ending on the Trading Day immediately preceding the Fundamental Change Repurchase Date; and (v) the receipt by the Trustee of an Opinion of Counsel stating that: (A) the shares of Applicable Stock to be issued by the Company in payment of the Fundamental Change Repurchase Price in respect of Securities have been duly authorized, and when issued and delivered pursuant to the terms of this Indenture in payment of the Fundamental Change Repurchase Price in respect of Securities, will be validly issued, fully paid and non-assessable and, to the best of such counsel's knowledge, free from preemptive rights; and (B) the conditions in clauses (i) and (iii) above have been satisfied in all material respects. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, and the Company has elected to repurchase the Securities pursuant to this Section 5.2 through the issuance of shares of Applicable Stock, the Company shall pay the entire Fundamental Change Repurchase Price of the Securities of such Holder or Holders in Cash. Upon determination of the actual number of shares of Applicable Stock to be issued upon repurchase of Securities, the Company shall be required to disseminate a press release through a public medium as is customary for such a press release. 41 (c) Covenants of the Company. All shares of Applicable Stock delivered upon repurchase of the Securities shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. (d) Taxes. If a Holder of a repurchased Security is paid in shares of Applicable Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on such issue of Applicable Stock. However, the Holder shall pay any such tax which is due because the Holder requests the Applicable Stock to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the shares of Applicable Stock being issued in a name other than the Holder's name until the Paying Agent receives a sum sufficient to pay any tax which will be due because the shares of Applicable Stock are to be issued in a name other than the Holder's name. Nothing contained herein shall preclude any income tax withholding required by law or regulations. Section 5.3. Effect of Fundamental Change Repurchase Notice. Upon receipt by the Paying Agent of the Fundamental Change Repurchase Notice specified in Section 5.1(c), the Holder of the Security in respect of which such Fundamental Change Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Fundamental Change Repurchase Price with respect to such Security. Such Fundamental Change Repurchase Price shall be paid to such Holder, subject to receipts of Cash and/or securities by the Paying Agent, promptly following the later of (a) the Fundamental Change Repurchase Date with respect to such Security (provided the conditions in Section 5.1 (c) have been satisfied) and (b) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 5.1(c). Securities in respect of which a Fundamental Change Repurchase Notice has been given by the Holder thereof may not be converted pursuant to Article XII on or after the date of the delivery of such Fundamental Change Repurchase Notice unless such Fundamental Change Repurchase Notice has first been validly withdrawn as specified in the following paragraph. A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Fundamental Change Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, specifying: (a) the principal amount of the Security with respect to which such notice of withdrawal is being submitted; (b) the certificate number, if any, or the appropriate Depository procedures, if applicable, of the Security in respect of which such notice of withdrawal is being submitted; and (c) the principal amount, if any, of such Security which remains subject to the original Fundamental Change Repurchase Notice and which has been or will be delivered for repurchase by the Company. 42 Section 5.4. Deposit of Fundamental Change Repurchase Price. Prior to 10:00 a.m., New York City time, on the applicable Fundamental Change Repurchase Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an amount of Cash (in immediately available funds if deposited on such Business Day) and/or Applicable Stock, if permitted hereunder, sufficient to pay the aggregate Fundamental Change Repurchase Price of all the Securities or portions thereof which are to be repurchased on such Fundamental Change Repurchase Date. If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the Business Day immediately following the applicable Fundamental Change Repurchase Date, Cash and/or Applicable Stock, if permitted hereunder, sufficient to pay the Fundamental Change Repurchase Price of any Securities for which a Fundamental Change Repurchase Notice has been tendered and not withdrawn pursuant to Section 5.3, then, immediately after such Fundamental Change Repurchase Date, such Securities will cease to be outstanding and interest and Additional Interest Amounts, if any, on such Securities will cease to accrue, whether or not such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Fundamental Change Repurchase Price upon delivery of such Securities). As soon as practicable on and after the Fundamental Change Repurchase Date, the Company shall deliver to each Holder entitled to receive shares of Applicable Stock through the Paying Agent, a certificate (other than in the case of Holders of Securities in book-entry form with the Depositary, which shares shall be delivered in accordance with the Depositary customary practices) for the number of full shares of Applicable Stock issuable in payment of the Fundamental Change Repurchase Price and Cash in lieu of any fractional interests. The person in whose name the certificate for the shares of Applicable Stock is registered shall be treated as a holder of record of Applicable Stock on the Fundamental Change Repurchase Date. No payment or adjustment will be made for dividends on the shares of Applicable Stock the record date for which occurred on or prior to the Fundamental Change Repurchase Date. Section 5.5. Securities Repurchased in Part. Any Certificated Security 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 Security, without charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered which is not repurchased. 43 Section 5.6. Covenant to Comply With Securities Laws Upon Repurchase of Securities. When complying with the provisions of Section 5.1 hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemptions available under applicable law, the Company shall: (a) comply with Rule 13e- 4 and Rule 14e-1 (or any successor provision) under the Exchange Act; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act; and (c) otherwise comply with all federal and state securities laws so as to permit the rights and obligations under Article V to be exercised in the time and in the manner specified therein. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Article V, the Company's compliance with such laws and regulations shall not in and of itself cause a breach of its obligations under this Article V. Section 5.7. Repayment to the Company. To the extent that the aggregate amount of Cash or shares of Applicable Stock deposited by the Company pursuant to Section 5.4 exceeds the aggregate Fundamental Change Repurchase Price of the Securities or portions thereof which the Company is obligated to repurchase as of the Fundamental Change Repurchase Date then, promptly after the Fundamental Change Repurchase Date, the Paying Agent shall return any such excess to the Company. ARTICLE VI COVENANTS Section 6.1. Payment of Securities. The Company shall promptly make all payments in respect of the Securities on the dates and in the manner provided in the Securities or pursuant to this Indenture. Principal amount, Redemption Price, Repurchase Price and Fundamental Change Repurchase Price and accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, shall be considered paid on the applicable date due if by 10:00 a.m., New York City time, on such date the Paying Agent holds, in accordance with this Indenture, Cash or securities, if permitted hereunder, sufficient to pay all such amounts then due. The Company shall, to the fullest extent permitted by law, pay interest on overdue principal and overdue installments of interest and Additional Interest Amounts, if any, at the rate borne by the Securities per annum. All references in this Indenture or the Securities to interest shall be 44 deemed to include Additional Interest Amounts, if any, payable pursuant to the Registration Rights Agreement. Payment of the principal of and interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on the Securities shall be in Cash except as otherwise provided herein. The Company shall pay interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on the Securities to the Person in whose name the Securities are registered at the close of business on the Regular Record Date next preceding the corresponding Interest Payment Date. Any such interest and Additional Interest Amounts, if any, not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid (a) to the Person in whose name the Securities are registered at the close of business on a Special Record Date for the payment of such defaulted interest and Additional Interest Amounts, if any, to be fixed by the Trustee, notice whereof will be given to the Holders not less than 10 days prior to such Special Record Date or (b) at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange. If a Security is redeemed pursuant to Article III hereof or the Holder elects to require the Company to repurchase such Security pursuant to either Article IV or Article V hereof on a date that is after the Regular Record Date and prior to the corresponding Interest Payment Date, interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, accrued and unpaid on such Security to, but not including, the applicable Redemption Date, Repurchase Date or Fundamental Change Repurchase Date will be paid to the same Holder to whom the Company pays the principal of such Security regardless of whether such Holder was the registered Holder on the Regular Record Date immediately preceding the applicable Redemption Date, Repurchase Date or Fundamental Change Repurchase Date. Holders must surrender the Securities to the Paying Agent to collect payment of principal. Payment of interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on Certificated Securities will be made by (i) check mailed to the address of the Person entitled thereto as such address appears in the Register if such surrendered Securities have an aggregate principal amount of $5 million or less or (ii) wire transfer of immediately available funds to an account designated by such Person if such surrendered Securities have an aggregate principal amount in excess of $5 million. Notwithstanding the foregoing, so long as the Securities are registered in the name of a Depositary or its nominee, all payments with respect to the Securities shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. Upon a determination by the Company that Holders will be entitled to receive Contingent Interest which will become payable during a Contingent Interest Period, on or prior to the first day of such Contingent Interest Period, the Company shall deliver an Officer's Certificate to the Trustee setting forth the amount of such Contingent Interest per $1,000 principal amount of Securities and shall issue a press release through a public medium as is customary for such a press release. 45 Section 6.2. SEC and Other Reports to the Trustee. The Company shall ensure delivery to 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 accordance with TIA Section 314(a); provided, however, that the Company shall not be required to deliver to the Trustee any material for which the Company has sought and received confidential treatment by the SEC. In the event the Company is at any time no longer subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall continue to provide the Trustee with annual and quarterly reports containing substantially the same information as would have been required to be filed with the SEC had the Company continued to have been subject to such reporting requirements. In such event, such reports shall be provided at the times the Company would have been required to provide reports had it continued to have been subject to such reporting requirements. The Company also shall comply with the other provisions of TIA Section 314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). Section 6.3. 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 December 31, 2003) an Officers' Certificate, stating whether or not to the knowledge of the signers thereof, the Company is in Default in the performance and observance of any of the terms, provisions and conditions of this Indenture 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 6.4. Further Instruments and Acts. Upon reasonable request of the Trustee, or as otherwise necessary, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. Section 6.5. Maintenance of Office or Agency of the Trustee, Registrar, Paying Agent and Conversion Agent. 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 Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer, exchange, redemption, repurchase or conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. An office of the Trustee 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 46 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 14.2. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes. Section 6.6. Delivery of Information Required Under Rule 144A. 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 owner of Securities or holder or beneficial owner of shares of Common Stock issued upon conversion thereof, the Company will make available the information required pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or any beneficial owner of Securities or holder or beneficial owner of shares of Common Stock issued upon conversion thereof, 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; provided, however, that the Company shall not be required to furnish such information in connection with any request made on or after the date which is two years from the later of the date such security was last acquired from the Company or an "affiliate" (as defined under Rule 144 under the Securities Act) of the Company. Whether a person is a beneficial owner shall be determined by the Company to the Company's reasonable satisfaction. Section 6.7. Waiver of Stay, Extension or Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it 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, Repurchase Price or Fundamental Change Repurchase Price in respect of Securities, or any interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on such amounts, as contemplated herein, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it 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. 47 Section 6.8. Statement by Officers as to Default. The Company shall deliver to the Trustee, as soon as practicable and in any event within five Business Days after the Company becomes aware of the occurrence of any Default or Event of Default or, an Officers' Certificate setting forth the details of such Default or Event of Default and the action which the Company proposes to take with respect thereto. ARTICLE VII SUCCESSOR CORPORATION Section 7.1. When Company May Merge or Transfer Assets. The Company shall not consolidate with, merge with or into, or sell, assign, convey, transfer or lease its properties and assets substantially in their entirety (computed on a consolidated basis) to any Person, unless: (a) either (i) the Company is the surviving entity or (ii) the successor or transferee (the "successor corporation") is a corporation organized and existing under the laws of the United States, any State thereof, or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, all of the obligation of the Company under the Securities and the Indenture; (b) immediately after giving effect to such transaction, no Default shall exist; and (c) the Company shall have delivered to the Trustee an Officers' Certificate and, if requested by the Trustee, an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer, sale, lease or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article VII and that all conditions precedent herein provided for relating to such transaction have been satisfied. Section 7.2. Successor Corporation Substituted Upon any consolidation with or merger into any corporation, or any conveyance, transfer or lease of the properties and assets of the Company substantially in their entirety in accordance with Section 7.1, the successor corporation formed by such consolidation or which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and in the case of a conveyance, transfer, or lease of the properties and assets of the Company substantially in their entirety, the Company shall be irrevocably released from its liabilities as obligor and maker of the Securities and from its obligations under this Indenture. 48 ARTICLE VIII DEFAULTS AND REMEDIES Section 8.1. Events of Default. So long as any Securities are outstanding, each of the following shall be an "EVENT OF DEFAULT": (a) the Company defaults in the payment of the principal amount (or premium, if any), with respect to the Securities, when the same become due and payable; (b) the Company defaults in the payment of any accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, in each case, when due and payable, and continuance of such default for a period of 30 days; (c) the Company fails to satisfy its conversion obligation with respect to any portion of the principal amount of any Security following the exercise by the Holder of the right to convert such Security into shares of Common Stock (or Cash or a combination of shares of Common Stock and Cash, if the Company so elects) pursuant to and in accordance with Article XII; (d) the Company defaults in its obligation to redeem any Security, or any portion thereof, called for redemption by the Company pursuant to and in accordance with Article III; (e) the Company defaults in its obligation to pay the Repurchase Price or the Fundamental Change Repurchase Price, as applicable, with respect to any Security, or any portion thereof, upon the exercise by the Holder of such Holder's right to require the Company to repurchase such Securities pursuant to and in accordance with Article IV or V, as applicable; (f) the Company fails to comply with any of its agreements or covenants in the Securities or this Indenture (other than those referred to in clause (a) through (e) above) and such failure continues for 60 days after receipt by the Company of a Notice of Default (defined below); (g) the Company fails or any Significant Subsidiary fails to make any payment at maturity on any indebtedness, including any applicable grace periods, in an amount in excess of $10.0 million in the aggregate for all such indebtedness and such amount has not been paid or discharged within 30 days after receipt by the Company of a Notice of Default; (h) a default by the Company or any Significant Subsidiary that results in the acceleration of maturity of any indebtedness of the Company or any significant subsidiary (other than Non-Recourse Indebtedness), at any one time, in an amount in excess of $10,000,000 unless the acceleration is rescinded, stayed or annulled within 30 days after receipt by the Company of a Notice of Default; 49 (i) the Company or any Significant Subsidiary, pursuant to or under or within the meaning of any Bankruptcy Law: (i) commences a voluntary case or proceeding; (ii) consents to the entry of any order for relief against it in an involuntary case or proceeding or the commencement of any case against it; (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; (iv) makes a general assignment for the benefit of its creditors; (v) files a petition in bankruptcy or answer or consent seeking reorganization or relief; or (vi) consents to the filing of such petition or the appointment of or taking possession by a Custodian; or (j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or any Significant Subsidiary, in an involuntary case or proceeding; (ii) appoints a Custodian of the Company or any Significant Subsidiary, or for any substantial part of its property; or (iii) orders the winding up or liquidation of the Company or any Significant Subsidiary, and the order of decree remains unstayed and in effect for 60 days. A Default under clause (f), (g) or (h) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding notify the Company and the Trustee, of the Default and the Company does not cure such Default (and such Default is not waived) within the time specified in clause (f), (g) or (h) 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." Section 8.2. Acceleration. If an Event of Default (other than an Event of Default specified in Section 8.1 (h) or (i)) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding by notice to the Company and the Trustee, may declare the principal amount plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on all the 50 Securities to be immediately due and payable. Upon such a declaration, such accelerated amount shall be due and payable immediately. If an Event of Default specified in Section 8.1 (h) or (i) occurs and is continuing, the principal amount plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on all the Securities shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholders. The Holders of not less than a majority in aggregate principal amount of the Securities at the time outstanding, by notice to the Trustee (and without notice to any other Securityholder) may rescind an 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 amount plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, that have become due solely as a result of acceleration and if all amounts due to the Trustee under Section 9.7 have been paid. No such rescission shall affect any subsequent Default or impair any right consequent thereto. Section 8.3. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy to collect the payment of the principal amount plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if the Trustee does not possess any of the Securities or does not produce any of the Securities in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 8.4. Waiver of Past Defaults. Subject to Sections 8.7 and 11.2, the Holders of not less than a majority in aggregate principal amount of the Securities at the time outstanding, by notice to the Trustee (and without notice to any other Securityholder), may waive an existing Default and its consequences except: (a) an Event of Default in the payment of the principal of, any premium or interest (including Contingent Interest, if any) on, or any Additional Interest Amounts with respect to, any Security or the payment of any applicable Repurchase Price, Fundamental Change Repurchase Price or Redemption Price; or (b) a Default in respect of any provision of this Indenture or the Securities, which, under Section 11.2, cannot be amended or modified without the consent of each Securityholder affected thereby. 51 When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. This Section 8.4 shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly excluded from this Indenture, as permitted by the TIA. Section 8.5. Control by Majority. The Holders of a majority in aggregate principal amount of the Securities at the time outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines in good faith is prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability unless the Trustee is offered indemnity or security satisfactory to it. This Section 8.5 shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded from this Indenture, as permitted by the TIA. Section 8.6. Limitation on Suits. A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (a) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (b) the Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding make a written request to the Trustee to pursue the remedy; (c) such Holder or Holders offer to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of such notice, request and offer of security or indemnity; and (e) the Holders of a majority in aggregate principal amount of the Securities at the time outstanding do not give the Trustee a direction inconsistent with the request during such 60-day period. A Securityholder may not use this Indenture to prejudice the rights of any other Securityholder or to obtain a preference or priority over any other Securityholder. Section 8.7. Rights of Holders to Receive Payment or to Convert. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of the principal amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price or interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, in respect of the Securities held by such Holder, on or after the respective due dates expressed in the Securities and in this Indenture, and to convert such Securities in accordance with Article XII, or to bring suit for the enforcement of any such 52 payment on or after such respective dates or the right to convert, is absolute and unconditional and shall not be impaired or affected adversely without the consent of such Holder. Section 8.8. Collection Suit by Trustee. If an Event of Default described in Section 8.1(a), (b), (d) or (e) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount owing with respect to the Securities and the amounts provided for in Section 9.7. Section 8.9. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price or interest and Additional Interest Amounts, if any, in respect of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of any such amount) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of the principal amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price, or interest and Additional Interest Amounts, if any, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel or any other amounts due the Trustee under Section 9.7) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 9.7. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 53 Section 8.10. Priorities. (a) If the Trustee collects any money pursuant to this Article VIII, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 9.7; SECOND: to Securityholders for amounts due and unpaid on the Securities for the principal amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price or interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, as the case may be, ratably, without preference or priority of any kind, according to such amounts due and payable on the Securities; and THIRD: the balance, if any, to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 8.10. At least 15 days before such record date, the Trustee shall mail to each Securityholder and the Company a notice that states the record date, the payment date and the amount to be paid. Section 8.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant (other than the Trustee) in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 8.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 8.7 or a suit by Holders of more than 10% in aggregate principal amount of the Securities at the time outstanding. This Section 8.11 shall be in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this Indenture, as permitted by the TIA. Section 8.12. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceedings to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. 54 ARTICLE IX TRUSTEE Section 9.1. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise of those rights and powers as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture, but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein. This Section 9.1(b) shall be in lieu of Section 315(a) of the TIA and such Section 315(a) is hereby expressly excluded from this Indenture, as permitted by the TIA. (c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that: (i) this Section (c) does not limit the effect of Section (b) of this Section 9.1; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 8.5. Subparagraphs (c)(i), (ii) and (iii) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA, respectively, and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the TIA. 55 (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 9.1. (e) The Trustee may refuse to perform any duty or exercise any right or power or extend or risk its own funds or otherwise incur any financial liability unless it receives indemnity or security satisfactory to it against any loss, liability or expense. (f) Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee (acting in any capacity hereunder) shall be under no liability for interest on any money received by it hereunder unless otherwise agreed in writing with the Company. Section 9.2. Rights of Trustee. Subject to its duties and responsibilities under Section 9.1 and under the TIA, (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate; (c) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (d) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith which it believes to be authorized or within its rights or powers conferred under this Indenture; (e) the Trustee may consult with counsel selected by it and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in reliance on such advice or Opinion of Counsel; (f) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby; 56 (g) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (h) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; (j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other person employed to act hereunder; and (k) the Trustee may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. Section 9.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or co-registrar may do the same with like rights. However, the Trustee must comply with Sections 9.10 and 9.11. Section 9.4. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use or application of the proceeds from the Securities, it shall not be responsible for any statement in any registration statement for the Securities under the Securities Act or in any offering document for the Securities, this Indenture or the Securities (other than its certificate of authentication), or the determination as to which beneficial owners are entitled to receive any notices hereunder. 57 Section 9.5. Notice of Defaults. If a Default occurs and if it is known to the Trustee, the Trustee shall give to each Securityholder notice of the Default within 90 days after it occurs or, if later, within 15 days after it is known to the Trustee, unless such Default shall have been cured or waived before the giving of such notice. Notwithstanding the preceding sentence, except in the case of a Default described in Section 8.1(a), (b) (d) or (e), the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interest of the Securityholders and provided, further, that in the case of any Default described in Section 8.1(f), no such notice shall be given to Holders until at least 30 days after the occurrence thereof. The preceding sentence shall be in lieu of the proviso to Section 315(b) of the TIA and such proviso is hereby expressly excluded from this Indenture, as permitted by the TIA. Section 9.6. Reports by Trustee to Holders. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, the Trustee shall mail to each Securityholder a brief report dated as of such May 15 that complies with TIA Section 313(a), if required by such Section 313(a). The Trustee also shall comply with TIA Section 313(b). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each securities exchange, if any, on which the Securities and Common Stock are listed. The Company agrees to notify the Trustee promptly whenever the Securities become listed on any securities exchange and of any delisting thereof. Section 9.7. Compensation and Indemnity. The Company agrees to: (a) pay to the Trustee from time to time such compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensation shall not be limited (to the extent permitted by law) by any provision of law in regard to the compensation of a trustee of an express trust); (b) reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses, advances and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its own negligence or willful misconduct or bad faith; and (c) fully indemnify the Trustee, any predecessor Trustee and each of their directors and officers for, and to hold each of them harmless against, any and all loss, damage, claim, liability, cost or expense (including reasonable attorney's fees and expenses, and taxes (other than taxes based upon, measured by or determined by the income of the Trustee)) incurred without negligence or willful misconduct or bad faith on the part of the Person so indemnified, arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending against any claim (whether asserted by the Company 58 or any Holder or any other person) or liability in connection with the exercise or performance of any powers or duties hereunder, or in connection with enforcing the provisions of this Section 9.7. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity hereunder; provided, that a failure to notify shall not relieve the Company of its obligations hereunder except to the extent the Company is materially prejudiced by such failure. The Trustee shall have the right to employ one separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Company shall pay the reasonable fees and expenses of such separate counsel; provided, however, that the Trustee may only employ such separate counsel at the expense of the Company if in the reasonable judgment of the outside counsel to the Trustee (i) a conflict of interest exists by reason of common representation or (ii) there are legal defenses available to the Trustee that are different from or are in addition to those available to the Company or if all parties commonly represented do not agree as to the action (or inaction) of counsel. To secure the Company's payment obligations in this Section 9.7, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay the principal amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price or interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, as the case may be, on particular Securities. The Company's payment obligations pursuant to this Section 9.7 shall survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default specified in Section 8.1 (h) or (i), the expenses including the reasonable charges and expenses of its counsel, are intended to constitute expenses of administration under any Bankruptcy Law. Section 9.8. Replacement of Trustee. The Trustee may resign by so notifying the Company; provided, however, that no such resignation shall be effective until a successor Trustee has accepted its appointment pursuant to this Section 9.8. The Holders of a majority in aggregate principal amount of the Securities at the time outstanding may remove the Trustee by so notifying the Trustee and the Company. The Company shall remove the Trustee if: (a) the Trustee fails to comply with Section 9.10; (b) the Trustee is adjudged bankrupt or insolvent; (c) a receiver or public officer takes charge of the Trustee or its property; or (d) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint, by resolution of its Board of Directors, a successor Trustee. 59 A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company satisfactory in form and substance to the retiring Trustee and the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 9.7. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate principal amount of the Securities at the time outstanding may petition at the expense of the Company any court of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee. If the Trustee fails to comply with Section 9.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Section 9.9. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or company, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. Section 9.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee (or its parent holding company) shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. Nothing contained herein shall prevent the Trustee from filing with the Commission the application referred to in the penultimate paragraph of TIA Section 310(b). Section 9.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311 (a) to the extent indicated therein. ARTICLE X DISCHARGE OF INDENTURE Section 10.1. Discharge of Liability on Securities. When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced or repaid pursuant to Section 2.7) for cancellation or (ii) all outstanding Securities have become due and payable (whether at the Stated Maturity or upon acceleration, or 60 on any Redemption Date, or with respect to any Repurchase Date or Fundamental Change Repurchase Date, or upon conversion) and the Company deposits with the Paying Agent or Conversion Agent Cash, Common Stock or Applicable Stock, as applicable, sufficient to pay all amounts due and owing on all outstanding Securities (other than Securities replaced pursuant to Section 2.7), and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture shall, subject to Section 9.7, cease to be of further effect. The Trustee shall join in the execution of a document prepared by the Company acknowledging satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers' Certificate and Opinion of Counsel and at the cost and expense of the Company. Notwithstanding the discharge of this Indenture, Article XIII shall survive until the Securities have been paid in full. Section 10.2. Repayment to the Company. The Trustee and the Paying Agent shall return to the Company upon written request any Cash or securities held by them for the payment of any amount with respect to the Securities that remains unclaimed for two years, subject to applicable unclaimed property law. After return to the Company, Holders entitled to the Cash or securities must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and the Trustee and the Paying Agent shall have no further liability to the Securityholders with respect to such Cash or securities for that period commencing after the return thereof. ARTICLE XI AMENDMENTS Section 11.1. Without Consent of Holders. The Company and the Trustee may amend this Indenture or the Securities without the consent of any Securityholder to: (a) add to the covenants of the Company for the benefit of the Holders of Securities; (b) surrender any right or power herein conferred upon the Company by the Indenture; (c) provide for the assumption of the Company's obligations to the Holders of Securities in the case of a merger, consolidation, conveyance, transfer, sale, lease or other disposition pursuant to Article VII; (d) increase the Conversion Rate or reduce the Conversion Price; provided, however, that such increase in the Conversion Rate or reduction in the Conversion Price, as the case may be, is in accordance with the terms of this Indenture or shall not adversely affect the interests of the Holders of Securities; 61 (e) provide for a successor Trustee with respect to the Securities; (f) add any additional Events of Default with respect to all or any of the Securities; (g) secure the Securities; (h) supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the discharge of the Securities, provided that such change or modification does not adversely affect the interests of the Holders of the Securities; (i) make any changes or modifications necessary in connection with the registration of the Securities under the Securities Act as contemplated in the Registration Rights Agreement; provided, however, that such action does not adversely affect the interests of the Holders of Securities in any material respect; (j) cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein or which is otherwise defective, or to make any other provisions with respect to matters or questions arising under this Indenture which the Company may deem necessary or desirable and which shall not be inconsistent with the provisions of this Indenture; provided, however, that such action does not adversely affect the interests of the Holders of Securities; (k) add or modify any other provisions herein with respect to matters or questions arising hereunder which the Company and the Trustee may deem necessary or desirable and which would not adversely affect the interests of the Holders of Securities; and (l) comply with the requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Section 11.2. With Consent of Holders. Except as provided below in this Section 11.2, this Indenture or the Securities may be amended, modified or supplemented, and noncompliance in any particular instance with any provision of this Indenture or the Securities may be waived, in each case with the written consent or affirmative vote of the Holders of not less than a majority of the principal amount of the Securities at the time outstanding. Without the written consent or the affirmative vote of each Holder of Securities affected thereby (in addition to the written consent or the affirmative vote of the Holders of at least a majority of the principal amount of the Securities at the time outstanding), an amendment or waiver under this Section 11.2 may not: (a) change the maturity of the principal amount of, or any premium due on, or the payment date of any installment of interest (including Contingent Interest, if any) or Additional Interest Amounts, if any, on, any Security; 62 (b) reduce the principal amount of, or rate of interest (including Contingent Interest, if any) or Additional Interest Amounts, if any, on, or the premium amount, Redemption Price, Repurchase Price or Fundamental Change Repurchase Price of, any Security; (c) change the currency of payment of principal amount of, or interest (including Contingent Interest, if any) or Additional Interest Amounts, if any, on, or the Redemption Price, Repurchase Price or Fundamental Change Repurchase Price of, any Security from U.S. Dollars or shares of Common Stock or Applicable Stock as provided herein; (d) alter the manner of calculation or rate of accrual of Contingent Interest, on any Security; (e) impair the right of any Holder to institute suit for the enforcement of any repurchase of, payment on or with respect to, or conversion of, any Security, including any payment on or after the stated maturity of the Securities, in the case of redemption, on or after the Redemption Date, or in the case of repayment at the option of the Holder, on or after the Repurchase Date or Fundamental Change Repurchase Date; (f) modify the obligation of the Company to maintain an agency in The City of New York pursuant to Section 6.5; (g) adversely affect the right of Holders of the Securities to convert such Securities as provided in Article XII; (h) adversely affect the right of Holders of the Securities to require the Company to repurchase such Securities as provided in Articles IV and V; (i) modify the optional redemption provisions of Article III in a manner that adversely affects the Holders of the Securities; (j) reduce the percentage of the principal amount of the outstanding Securities the written consent or affirmative vote of whose Holders is required to take specific actions under the Indenture; (k) reduce the percentage of the principal amount of the outstanding Securities the written consent or affirmative vote of whose Holders is required for any waiver of any past Default provided for in this Indenture; or (l) modify any of (a)-(k) above. It shall not be necessary for the consent of the Holders under this Section 11.2 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section 11.2 becomes effective, the Company shall mail to each Holder a notice briefly describing the amendment. 63 Nothing contained in this Section 11.2 shall impair the ability of the Company and the Trustee to amend this Indenture or the Securities without the consent of any Securityholder to provide for the assumption of the Company's obligations to the Holders of Securities in the case of a merger, consolidation, conveyance, transfer, sale, lease or other disposition pursuant to Article VII. Section 11.3. Compliance with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall comply with the TIA. Section 11.4. Revocation and Effect of Consents, Waivers and Actions. Until an amendment, waiver or other action by Holders becomes effective, a consent thereto by a Holder of a Security hereunder is a continuing consent by the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same obligation as the consenting Holder's Security, even if notation of the consent, waiver or action is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent, waiver or action as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment, waiver or action becomes effective. After an amendment, waiver or action becomes effective, it shall bind every Securityholder. Section 11.5. Notation on or Exchange of Securities. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article XI may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Securities. Section 11.6. Trustee to Sign Supplemental Indentures. The Trustee shall sign any supplemental indenture authorized pursuant to this Article XI if the amendment contained therein does not affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign such supplemental indenture. In signing such supplemental indenture the Trustee shall receive, and (subject to the provisions of Section 9.1) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture. Section 11.7. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. 64 ARTICLE XII CONVERSION Section 12.1. Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Article XII, a Holder of a Security shall have the right, at such Holder's option, to convert all or any portion (if the portion to be converted is $1,000 or a multiple of $1,000) of such Security into shares of Common Stock at the Conversion Rate in effect on the date of conversion only as follows: (i) during any fiscal quarter (beginning with the third quarter of 2003) if the Sale Price of the Common Stock for at least 20 consecutive Trading Days in the Measurement Period of the immediately preceding fiscal quarter exceeds 120% of the Conversion Price in effect on the last Trading Day of such Measurement Period (in the event that the Conversion Price on such last Trading Day of such Measurement Period is not the same as the Conversion Price in effect for each of the Trading Days in such Measurement Period, the Conversion Agent shall make such adjustments as it, in its discretion, deems appropriate in determining whether the foregoing condition has been met); (ii) during any five consecutive Trading Day period immediately following any five consecutive Trading Day period (the "DEBENTURE MEASUREMENT PERIOD") in which the average Market Price per $1,000 principal amount of Securities during such Debenture Measurement Period was less than 97% of the average Conversion Value during such Debenture Measurement Period; provided, however, that a Holder shall not have the right to convert any Security pursuant to this Section 12.1(a)(ii) after June 1, 2018 if on any Trading Day during such Debenture Measurement Period the Sale Price was more than the then current Conversion Price and less than 120% of the then current Conversion Price; (iii) at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Redemption Date, if such Security has been called for redemption pursuant to Article III hereof; or (iv) as provided in Section 12.1(b). The Conversion Agent shall, on behalf of the Company, determine at the end of each applicable period whether the Securities shall be convertible as a result of the occurrence of an event specified in clause (a) or (b) above and, if the Securities shall be so convertible, the Conversion Agent shall promptly deliver to the Company and the Trustee written notice thereof. Whenever the Securities shall become convertible pursuant to Section 12.1, the Company or, at the Company's request, the Trustee in the name and at the expense of the Company, shall notify the Holders in writing of the event triggering such convertibility in the manner provided in Section 14.2, and the Company shall also publicly announce such information and publish it on the Company's website. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. 65 (b) In addition, in the event that: (i) (A) the Company distributes to all holders of Common Stock rights or warrants entitling them to purchase Common Stock at less than the average Sale Price of the Common Stock for the 10 Trading Days immediately preceding the declaration for such distribution; or (B) the Company distributes to all holders of Common Stock cash or other assets, debt securities or certain rights to purchase the Company's securities, which distribution has a per share value as determined by the Board of Directors of the Company exceeding 15% of the Sale Price of the Common Stock on the Business Day immediately preceding the declaration for such distribution; then, in each case, the Company must notify, in writing, Holders of Securities of the occurrence of such an event at least 20 days prior to the Ex-Dividend Date for any such distribution. Once the Company has given such notice, Holders may surrender their Securities for conversion at any time until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date or the date of announcement by the Company that the distribution will not take place. No adjustment shall be made to the ability of a Holder of Securities to convert if such Holder may participate in the distribution without conversion. (ii) the Company becomes party to a consolidation, merger or binding share exchange pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, a Holder may surrender the Securities for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of the transaction. If the Company becomes party to a consolidation, merger or binding share exchange pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, then at the effective time of the transaction, the right to convert the Securities into Common Stock shall be changed into a right to convert such Securities into the kind and amount of cash, securities or other property which the Holder would have received if the Holder had converted such Securities immediately prior to the transaction. If the transaction occurs prior to June 1, 2008 and also constitutes a Fundamental Change, the Holder shall have the rights set forth in Article V above. Section 12.2. Conversion Procedure; Conversion Rate; Fractional Shares. (a) Subject to Section 12.2(e), each Security shall be convertible at the office of the Conversion Agent into fully paid and nonassessable shares (calculated to the nearest 1/100th of a share) of Common Stock. Subject to Section 12.2(e), the Security will be converted into shares of Common Stock at the Conversion Rate therefore. No payment or adjustment shall be made in respect of dividends on the Common Stock or accrued interest or accrued and unpaid Contingent Interest, if any, on a converted Security, except as described in Section 12.9 hereof. 66 The Company shall not issue any fraction of a share of Common Stock in connection with any conversion of Securities, but instead shall, subject to Section 12.3(g) hereof, make a Cash payment (calculated to the nearest cent) equal to such fraction multiplied by the Sale Price of the Common Stock on the last Trading Day prior to the date of conversion. Notwithstanding the foregoing, a Security in respect of which a Holder has delivered a Purchase Notice or Fundamental Change Purchase Notice exercising such Holder's option to require the Company to repurchase such Security may be converted only if such notice of exercise is withdrawn in accordance with Sections 4.3 or 5.3 hereof, as the case may be, prior to the close of business on the Business Day immediately preceding the applicable Repurchase Date or Fundamental Change Repurchase Date, as the case may be. (b) Before any Holder of a Security shall be entitled to convert the same into Common Stock, such Holder shall, in the case of Securities issued in global form, comply with the procedures of the Depositary in effect at that time, and in the case of certificated Securities, surrender such Securities, duly endorsed to the Company or in blank, at the office of the Conversion Agent, and shall give written notice to the Company at said office or place in the form of the Conversion Notice attached to the Security (the "CONVERSION NOTICE") that such Holder elects to convert the same and shall state in writing therein the principal amount of Security to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for Common Stock to be issued. Before any such conversion, a Holder also shall pay all funds required, if any, relating to interest on the Securities, as provided in Section 12.9, and all taxes or duties, if any, as provided in Section 12.8. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full shares of Common Stock which shall be deliverable upon conversion shall be computed on the basis of the aggregate principal amount of the Security (or specified portions thereof to the extent permitted thereby) so surrendered. Subject to the next succeeding sentence, the Company will, as soon as practicable thereafter, issue and deliver at said office or place to such Holder of a Security, or to such Holder's nominee or nominees, certificates (other than in the case of Holders of Securities in book-entry form with the Depositary, which shares shall be delivered in accordance with the Depositary customary practices) for the number of full shares of Common Stock to which such Holder shall be entitled as aforesaid, together with Cash in lieu of any fraction of a share to which such Holder would otherwise be entitled. The Company shall not be required to deliver certificates for shares of Common Stock while the stock transfer books for such stock or the security register are duly closed for any purpose, but certificates for shares of Common Stock shall be issued and delivered as soon as practicable after the opening of such books or security register; provided, that in the case of issuances of Common Stock described in Section 12.2(e), such issuances shall be made in accordance with the provisions of such section. If shares of Common Stock to be issued upon conversion of a Restricted Security are to be issued in the name of a Person other than the Holder of such Restricted Security, such Holder must deliver to the Conversion Agent a certification in substantially the form set forth in a Transfer Certificate dated the date of surrender of such Restricted Security and signed by such 67 Holder, as to compliance with the restrictions on transfer applicable to such Restricted Security. The Company shall not be required to issue Common Stock upon conversion of any such Restricted Security to a Person other than the Holder if such Restricted Security is not so accompanied by a properly completed certification, and the Registrar shall not be required to register Common Stock upon conversion of any such Restricted Security in the name of a Person other than the Holder if such Restricted Security is not so accompanied by a properly completed certification. (c) A Security shall be deemed to have been converted as of the close of business on the date of the surrender of such Security for conversion as provided above, and the person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record Holder or Holders of such Common Stock as of the close of business on such date. Upon conversion, all obligations under the Securities so converted will be deemed satisfied, including with respect to any accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any. (d) In case any Certificated Security shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Security so surrendered, without charge to such Holder (subject to the provisions of Section 12.8 hereof), a new Security or Securities in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Certificated Securities. Section 12.3. Adjustment of Conversion Rate for Common Stock. The Conversion Rate shall be adjusted from time to time as follows: (a) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, pay a dividend or make a distribution in shares of Common Stock to all holders of its outstanding shares of Common Stock, then the Conversion Rate in effect at the opening of business on the date next following the Record Date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by multiplying such Conversion Rate by a fraction: (i) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the close of business on such Record Date fixed for such determination and the total number of shares constituting such dividend or other distribution; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on such Record Date fixed for such determination. Such increase shall become effective immediately after the opening of business on the day following the Record Date fixed for such determination. 68 If any dividend or distribution of the type described in this Section 12.3(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would then be in effect if such dividend or distribution had not been declared. (b) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case the Company shall, at any time or from time to time while any of the Securities are outstanding, combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately decreased. In each such case, the Conversion Rate shall be adjusted by multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such subdivision or combination and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision or combination. Such increase or reduction, as the case may be, shall become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (c) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, issue rights or warrants (other than pursuant to a shareholders rights plan) for a period expiring within 60 days after the date of announcement of such issuance (other than any rights or warrants referred to in Section 12.3(d)), to all holders of its shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock (or securities convertible into or exchangeable or exercisable for shares of Common Stock), at a price per share (or having a conversion, exchange or exercise price per share) less than the Sale Price of the Common Stock on the Trading Day immediately preceding the date of the announcement of such issuance (treating the conversion, exchange or exercise price per share of the securities convertible into or exchangeable or exercisable for Common Stock as equal to the quotient of (x) the sum of (i) the price for a unit of the security convertible into or exchangeable or exercisable for Common Stock and (ii) any additional consideration initially payable upon the conversion, exchange or exercise of such security into Common Stock divided by (y) the number of shares of Common Stock initially underlying such convertible, exchangeable or exercisable security), then the Conversion Rate shall be adjusted so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the opening of business on the date after such date of announcement by a fraction: (i) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date of announcement, plus the total number of additional shares of Common Stock so offered for subscription or purchase (or into which the convertible, exchangeable or exercisable securities so offered are convertible, exchangeable or exercisable); and (ii) the denominator of which shall be the number of shares of Common Stock outstanding on the close of business on the date of announcement, plus 69 the number of shares (or convertible, exchangeable or exercisable securities) which the aggregate offering price of the total number of shares (or convertible, exchangeable or exercisable securities) so offered for subscription or purchase (or the aggregate conversion, exchange or exercise price of the convertible securities so offered) would purchase at the Sale Price of the Common Stock on the Business Day immediately preceding the date of the announcement of such issuance (determined by multiplying such total number of shares so offered by the exercise price of such rights or warrants and dividing the product so obtained by such Sale Price). Such adjustment shall become effective immediately after the opening of business on the day following the date of announcement of such issuance. To the extent that shares of Common Stock (or securities convertible into or exchangeable or exercisable for shares of Common Stock) are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock (or securities convertible into or exchangeable or exercisable for shares of Common Stock) actually delivered. In the event that such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if the date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration if other than Cash, to be determined in good faith by the Board of Directors of the Company. (d) (i) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, by dividend or otherwise, distribute to all holders of its shares of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation and the Common Stock is not changed or exchanged), shares of its Capital Stock (other than any dividends or distributions to which Section 12.3(a) applies), evidences of its Indebtedness or other non-Cash assets, including securities, but excluding (x) any rights or warrants referred to in Section 12.3(c), (y) dividends or distributions of stock referred to in Section 12.3(a) and (z) dividends and distributions paid exclusively in Cash (such capital stock, evidence of its indebtedness, other non-Cash assets or securities being distributed hereinafter in this Section 12.3(d) called the "DISTRIBUTED ASSETS"), then, in each such case, subject to the other provisions of this Section 12.3(d), the Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect immediately prior to the close of business on the Record Date with respect to such distribution by a fraction: (A) the numerator of which shall be the Current Market Price of the Common Stock; and 70 (B) the denominator of which shall be such Current Market Price, less the Fair Market Value on such date of the portion of the distributed assets so distributed applicable to one share of Common Stock (determined on the basis of the number of shares of Common Stock outstanding on the Record Date) (determined as provided in Section 12.3(f)). Such increase shall become effective immediately prior to the opening of business on the day following the Record Date for such distribution. In the event that such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if such dividend or distribution had not been declared. (ii) If the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 12.3(d) by reference to the actual or when issued trading market for any distributed assets comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the "REFERENCE PERIOD") used in computing the Current Market Price pursuant to Section 12.3(f) to the extent possible, unless the Board of Directors determines in good faith that determining the Fair Market Value during the Reference Period would not be in the best interest of the Holders. (iii) In the event any such distribution consists of shares of capital stock of, or similar equity interests in, one or more of the Company's Subsidiaries (a "SPIN-OFF"), the Fair Market Value of the securities to be distributed shall equal the average of the closing sale prices of such securities on the principal securities market on which such securities are traded for the five consecutive Trading Days commencing on and including the sixth Trading Day of those securities after the effectiveness of the Spin-Off, and the Current Market Price shall be measured for the same period. In the event, however, that an underwritten initial public offering of the securities in the Spin-Off occurs simultaneously with the Spin-Off, Fair Market Value of the securities distributed in the Spin-Off shall mean the initial public offering price of such securities and the Current Market Price shall mean the Sale Price for the Common Stock on the same Trading Day. (iv) Rights or warrants distributed by the Company to all holders of its shares of Common Stock entitling them 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"), (x) are deemed to be transferred with such shares of Common Stock, (y) are not exercisable and (z) are also issued in respect of future issuances of shares of Common Stock shall be deemed not to have been distributed for purposes of this Section 12.3(d) (and no adjustment to the Conversion Rate under this Section 12.3(d) 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 distributed assets, evidences of indebtedness or other assets, or entitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed to be the date of issuance and record date with respect to a new right or 71 warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). Pursuant to rights issued under any Company shareholder's rights plan, if holders of the Securities exercising the right of conversion after the date the rights separate from the underlying Common Stock are not entitled to receive the rights that would otherwise be attributable to the shares of Common Stock received upon conversion, the Conversion Rate will be adjusted as though the rights were being distributed to holders of Common Stock on the date of such separation. If such an adjustment is made and the rights are later redeemed, invalidated or terminated, then a corresponding reversing adjustment will be made to the conversion rate on an equitable basis. In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Rate under this Section 12.3(d): (A) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a Cash distribution, equal to the per share redemption or repurchase price received by a holder of shares of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of shares of Common Stock as of the date of such redemption or repurchase; and (B) in the case of such rights or warrants which shall have expired or been terminated without exercise, the Conversion Rate shall be readjusted as if such rights and warrants had never been issued. (v) For purposes of this Section 12.3(d) and Sections 12.3(a), 12.3(b) and 12.3(c), any dividend or distribution to which this Section 12.3(d) is applicable that also includes (x) shares of Common Stock, (y) a subdivision or combination of shares of Common Stock to which Section 12.3(b) applies or (z) rights or warrants to subscribe for or purchase shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock to which Section 12.3(c) applies (or any combination thereof), shall be deemed instead to be: (A) 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 or securities convertible into or exercisable or exchangeable for Common Stock to which Sections 12.3(a), 12.3(b) and 12.3(c) apply, respectively (and any Conversion Rate increase required by this Section 12.3(d) with respect to such dividend or distribution shall then be made), immediately followed by 72 (B) a dividend or distribution of such shares of Common Stock, such subdivision or combination or such rights or warrants or securities convertible into or exercisable or exchangeable for Common Stock (and any further Conversion Rate increase required by Sections 12.3(a), 12.3(b) and 12.3(c) with respect to such dividend or distribution shall then be made), except: (1) the Record Date of such dividend or distribution shall be substituted as (x) "the date fixed for the determination of stockholders entitled to receive such dividend or other distribution," "Record Date fixed for such determinations" and "Record Date" within the meaning of Section 12.3(a), (y) "the day upon which such subdivision becomes effective" and "the day upon which such combination becomes effective" within the meaning of Section 12.3(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 12.3(c); and (2) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of Section 12.3(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. (e) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, by dividend or otherwise, distribute to all holders of its shares of Common Stock, Cash (excluding any Cash that is distributed upon a reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance to which Section 12.4 applies or as part of a distribution referred to in Section 12.3(d)), in an aggregate amount that, combined together with: (i) the aggregate amount of any other such distributions to all holders of shares 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 12.3(e) has been made; and (ii) the aggregate amount of any Cash, plus the Fair Market Value, as of the expiration of any tender offer, of any other consideration paid in respect of any tender offer by the Company or any of its Subsidiaries for all or any portion of the shares of Common Stock concluded within the 12 months preceding the date of such distribution; exceeds 10% of the product of (x) the Sale Price of the Common Stock on the Record Date with respect to such distribution, multiplied by (y) the number of shares of Common Stock outstanding on such date (such excess over 10%, the "EXCESS AMOUNT"), then, and in each case, immediately after the close of business on such date, the Conversion Rate shall be increased so 73 that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the close of business of such Record Date by a fraction: (A) the numerator of which shall be equal to the Current Market Price on the Record Date; and (B) the denominator of which shall be equal to the Current Market Price on such date, less an amount equal to the quotient of (y) the Excess Amount and (z) the number of shares of Common Stock outstanding on the Record Date. (f) For purposes of this Article XII, the following terms shall have the meanings indicated: (i) "CURRENT MARKET PRICE" on any date means the average of the daily Sale Prices per share of Common Stock for the ten consecutive Trading Days immediately prior to such date; provided, however, that if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Rate pursuant to Section 12.3(a), (b), (c), (d) of (e) occurs during such ten consecutive Trading Days, "CURRENT MARKET PRICE" shall be calculated for such period in a manner determined in good faith by the Board of Directors to reflect the impact of such event on the Closing Price of the Common Stock during such period. For purposes of this paragraph, the term "ex" date, when used: (i) with respect to any issuance or distribution, means the first date on which the shares of Common Stock trade regular way on the relevant exchange or in the relevant market from which the Sale Price was obtained without the right to receive such issuance or distribution; (ii) with respect to any subdivision or combination of shares of Common Stock, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective; and (iii) with respect to any tender or exchange offer, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the expiration of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Rate are called for pursuant to this Section 12.3, such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 12.3 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors. "FAIR MARKET VALUE" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction (as determined in good faith by the Board of Directors, whose good faith determination shall be conclusive). 74 "RECORD DATE" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of shares of Common Stock have the right to receive any Cash, securities or other property or in which the shares of 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). (g) The Company shall be entitled at its election to make such additional increases in the Conversion Rate, in addition to those required by Sections 12.3(a), (b), (c), (d) and (e), as shall be necessary in order that any dividend or distribution of Common Stock, any subdivision, reclassification or combination of shares of Common Stock or any issuance of rights or warrants referred to above shall not be taxable to the holders of Common Stock for United States federal income tax purposes. (h) To the extent permitted by applicable law, the Company may, from time to time, increase the Conversion Rate by any amount for any period of time, if such period is at least 20 days, the Board of Directors determines that the increase in the Conversion Rate is in the best interest of the Company, and the increase is irrevocable during the period. Whenever the Conversion Rate is increased 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 of the Securities maintained by the Registrar, at least 15 days prior to the date the increased Conversion Rate takes effect, a notice of the increase stating the increased Conversion Rate and the period during which it will be in effect. (i) In any case in which this Section 12.3 shall require that any adjustment be made effective as of or retroactively immediately following a Record Date, the Company may elect to defer (but only for five Trading Days following the filing of the statement referred to in Section 12.5) issuing to the Holder of any Securities converted after such Record Date the shares of Common Stock issuable upon such conversion over and above the shares of Common Stock issuable upon such conversion on the basis of the Conversion Rate prior to adjustment; provided, however, that the Company shall deliver to such Holder a due bill or other appropriate instrument evidencing such Holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. (j) All calculations under this Section 12.3 shall be made to the nearest cent or one-hundredth of a share, with one-half cent and 0.005 of a share, respectively, being rounded upward. Notwithstanding any other provision of this Section 12.3, the Company shall not be required to make any adjustment of the Conversion Rate unless such adjustment would require an increase or decrease of at least 1% of such rate. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least 1% in such rate. Any adjustments under this Section 12.3 shall be made successively whenever an event requiring such an adjustment occurs. (k) In the event that at any time, as a result of an adjustment made pursuant to this Section 12.3, the Holder of any Securities thereafter surrendered for conversion shall 75 become entitled to receive any shares of stock of the Company other than shares of Common Stock into which the Securities originally were convertible, the Conversion Rate of such other shares so receivable upon conversion of any such Security shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Common Stock contained in subparagraphs (a) through (j) of this Section 12.3, and the provision of Sections 12.1, 12.2 and 12.4 through 12.9 with respect to the Common Stock shall apply on like or similar terms to any such other shares and the good faith determination of the Board of Directors as to any such adjustment shall be conclusive. (l) No adjustment shall be made pursuant to this Section 12.3 if the Holders of the Securities may participate in the transaction that would otherwise give rise to an adjustment pursuant to this Section 12.3. Section 12.4. Consolidation or Merger of the Company. If any of the following events occurs, namely: (a) any reclassification or change of the outstanding Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination); (b) any merger, consolidation, statutory share exchange or combination of the Company with another corporation as a result of which all of the 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 all of their Common Stock; or (c) any sale or conveyance of the properties and assets of the Company as, or substantially as, an entirety to any other person as a result of which all of the 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 all of their Common Stock; the Company or the successor or purchasing person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture, if such supplemental indenture is then required to so comply) providing that the Holder's right to convert a Security into Common Stock shall be changed to a right to convert a Security into the kind and amount of shares of stock and other securities or property or assets (including Cash) which such Holder would have been entitled to receive upon such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance had such Securities been converted into Common Stock immediately prior to such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance assuming such holder of Common Stock did not exercise its rights of election, if any, as to the kind or amount of securities, Cash or other property receivable upon such merger, consolidation, statutory share exchange, sale or conveyance (provided, that if the kind or amount of securities, Cash or other property receivable upon such merger, consolidation, statutory share exchange, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 12.4, the kind and 76 amount of securities, Cash or other property receivable upon such merger, consolidation, statutory share exchange, sale or conveyance for each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article XII. If, in the case of any such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, the stock or other securities and assets receivable thereupon by a holder of Common Stock includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the register of the Securities maintained by the Registrar, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section 12.4 shall similarly apply to successive reclassifications, changes, mergers, consolidations, statutory share exchanges, combinations, sales and conveyances. If this Section 12.4 applies to any event or occurrence, Section 12.3 shall not apply. Section 12.5. Notice of Adjustment. Whenever an adjustment in the Conversion Rate with respect to the Securities is required: (a) the Company shall forthwith place on file with the Trustee and any Conversion Agent for such securities a certificate of the Treasurer of the Company, stating the adjusted Conversion Rate determined as provided herein and setting forth in reasonable detail such facts as shall be necessary to show the reason for and the manner of computing such adjustment; and (b) a notice stating that the Conversion Rate has been adjusted and setting forth the adjusted Conversion Rate shall forthwith be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company, to each Holder in the manner provided in Section 14.2 hereof. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. 77 Section 12.6. Notice in Certain Events. In case: (a) of a consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or conveyance to another Person or entity or group of Persons or entities acting in concert as a partnership, limited partnership, syndicate or other group (within the meaning of Rule 13d-3 under the Exchange Act) of all or substantially all of the property and assets of the Company; or (b) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (c) of any action triggering an adjustment of the Conversion Rate referred to in clauses (y) or (z) below; then, in each case, the Company shall cause to be filed with the Trustee and the Conversion Agent, and shall cause to be given, to the Holders of the Securities in the manner provided in Section 14.2 hereof, at least 15 days prior to the applicable date hereinafter specified, a notice stating: (y) the date on which a record is to be taken for the purpose of any distribution or grant of rights or warrants or other securities triggering an adjustment to the Conversion Rate pursuant to this Article XII, or, if a record is not to be taken, the date as of which the holders of record of Common Stock entitled to such distribution, rights or warrants or other securities are to be determined, or (z) the date on which any reclassification, consolidation, merger, sale, conveyance, dissolution, liquidation or winding up described under clauses (a), (b) and (c) of Section 12.4 that changes a Holder's right to convert its Common Stock to a right to convert into another kind and amount of securities or other property or assets 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 Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger sale, conveyance, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in clause (a), (b) or (c) of this Section 12.6. Section 12.7. Company To Reserve Stock: Registration; Listing. (a) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued shares of Common Stock for the purpose of effecting the conversion of the Securities, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all Securities then outstanding into such Common Stock at any time (assuming that, at the time of the computation of such number of shares or securities, all such Securities would be held by a single Holder). The Company covenants that all shares of Common Stock which may be issued upon conversion of Securities will upon issue be fully paid and nonassessable and free from all liens and charges and, except as provided in Section 12.8, taxes with respect to the issue thereof. (b) If any shares of Common Stock which would be issuable upon conversion of Securities hereunder require registration with or approval of any governmental authority 78 before such shares or securities may be issued upon such conversion, the Company will use its commercially reasonable efforts to cause such shares or securities to be duly registered or approved, as the case may be. The Company further covenants that so long as the Common Stock shall be quoted on the Nasdaq National Market, the Company will use its commercially reasonable efforts, if permitted by the rules of the Nasdaq National Market, to quote and keep quoted all Common Stock issuable upon conversion of the Securities, and the Company will use its commercially reasonable efforts to list the shares of Common Stock required to be delivered upon conversion of the Securities prior to such delivery upon any other national securities exchange upon which the outstanding Common Stock is listed at the time of such delivery. Section 12.8. Taxes on Conversion. The issue of stock certificates on conversion of Securities shall be made without charge to the converting Holder for any documentary, stamp or similar issue or transfer taxes in respect of the issue thereof, and the Company shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or the portion, if any, of the Securities which are not so converted in a name other than that in which the Securities so converted were registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of such tax or has established to the satisfaction of the Company that such tax has been paid. The Company agrees, and each Holder is deemed to agree, that delivery to such Holder of the full number of shares of Common Stock into which each Security is convertible, together with any Cash payment of such Holder's fractional shares or otherwise in accordance with Section 12.13, will be treated as a contingent payment (in an amount equal to the sum of the then Fair Market Value of such Common Stock and such Cash payment, if any) on the Securities for purposes of the Contingent Payment Debt Regulations governing contingent payment debt obligations. Section 12.9. Conversion After Record Date. Except as provided in this Section 12.9, a converting Holder of Securities shall not be entitled to receive any accrued and unpaid interest (including Contingent Interest, if any) on any such Securities being converted. By delivery to the Holder of the number of shares of Common Stock or other consideration issuable or payable upon conversion in accordance with this Article XII, any accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on such Securities will be deemed to have been paid in full. If any Securities are surrendered for conversion subsequent to the Record Date preceding an Interest Payment Date but prior to such Interest Payment Date, the Holder of such Securities at the close of business on such Record Date shall receive the interest payable on such Security on such Interest Payment Date notwithstanding the conversion thereof. Securities surrendered for conversion during the period from the close of business on any Record Date preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of Securities which have been called for redemption on a Redemption Date within such 79 period) be accompanied by payment from converting Holders, for the account of the Company, in New York Clearing House funds, or other funds of an amount equal to the interest payable on such Interest Payment Date (excluding any overdue interest, if applicable) on the Securities being surrendered for conversion. Except as provided in this Section 12.9, no adjustments in respect of payments of interest, including Contingent Interest, if any, and Additional Interest Amounts, if any, on Securities surrendered for conversion or any dividends or distributions or interest on the Common Stock issued upon conversion shall be made upon the conversion of any Securities. Section 12.10. Company Determination Final. Any determination that the Company or the Board of Directors must make pursuant to this Article XII shall be conclusive if made in good faith and in accordance with the provisions of this Article, absent manifest error, and set forth in a Board Resolution. Section 12.11. Responsibility of Trustee for Conversion Provisions. The Trustee has no duty to determine when an adjustment under this Article XII should be made, how it should be made or what it should be. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for any failure of the Company to comply with this Article XII. Each Conversion Agent other than the Company shall have the same protection under this Section 12.11 as the Trustee. The rights, privileges, protections, immunities and benefits given to the Trustee under this Indenture including, without limitation, its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each Paying Agent or Conversion Agent acting hereunder. Section 12.12. Unconditional Right of Holders to Convert. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to convert its Security in accordance with this Article XII and to bring an action for the enforcement of any such right to convert, and such rights shall not be impaired or affected without the consent of such Holder. ARTICLE XIII TAX TREATMENT Section 13.1. Tax Treatment. (a) The parties hereto hereby agree, and each Holder and any beneficial holder of a Security by its purchase of a Security hereby agrees (in the absence of administrative pronouncement or judicial ruling to the contrary): 80 (i) to treat the Securities as indebtedness of the Company for all United States federal income tax purposes; (ii) to treat the Securities as debt instruments that are subject to Treasury Regulation section 1.1275-4(b); and (iii) to treat the delivery of Common Stock or Cash (including Cash delivered in lieu of a fractional share) to a Holder of a Security upon conversion of such Security, or upon a repurchase or redemption of such Security by the Company, as a contingent payment (in an amount equal to the sum of the Fair Market Value of such Common Stock and any Cash received) under Treasury Regulation section 1.1275-4(b). Section 13.2. Comparable Yield and Projected Payment Schedule. (a) Solely for purposes of applying Treasury Regulation section 1.1275-4 to the Securities: (i) for United States federal income tax purposes, the Company shall accrue interest with respect to outstanding Securities as original issue discount according to the "noncontingent bond method," as set forth in Treasury Regulation section 1.1275-4(b) using a comparable yield of 7.90%, compounded semiannually, and the projected payment schedule attached as Annex 1 to this Indenture; (ii) the Company shall file with the Trustee promptly at the end of each calendar year (A) a written notice specifying the amount of original issue discount for United States federal income tax purposes accrued on outstanding Securities as of the end of such year and (B) such other specific information relating to such original issue discount that the Company determines to be relevant under the Internal Revenue Code of 1986, as amended from time to time, including the amount of any adjustment made under the noncontingent bond method to account for the amount of any difference between the amount of an actual payment and the amount of a projected payment; and (iii) the Company acknowledges and agrees, and each Holder and any beneficial holder of a Security, by its purchase of a Security shall be deemed to acknowledge and agree, that (A) the comparable yield and the projected payment schedule are determined on the basis of an assumption of linear growth of stock price, (B) the comparable yield and the projected payment schedule are not determined for any purpose other than for the purpose of applying Treasury Regulation section 1.1275-4(b)(4) to the Security, (C) the comparable yield and the projected payment schedule do not constitute a projection or representation regarding the actual amounts payable on the Securities, and (D) the Company's application of Treasury Regulation section 1.1275-4(b) shall be binding on each Holder and any beneficial holder of a Security, including the Company's determination of the comparable yield and the projected payment schedule attached as Annex 1 to this Indenture. 81 ARTICLE XIV MISCELLANEOUS Section 14.1. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies, or conflicts with the duties imposed by TIA Section 318(c), such section of the TIA shall control. If any provision of this Indenture expressly modifies or excludes any provision of the TIA that may be so modified or excluded, the Indenture provision so modifying or excluding such provision of the TIA shall be deemed to apply. Section 14.2. Notices. Any request, demand, authorization, notice, waiver, consent or communication shall be in writing and delivered in person, 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: Electronics For Imaging, Inc. 303 Velocity Way Foster City, California 94404 Attn: Joseph Cutts and Jim Etheridge Facsimile No.: (650) 357- 3832 if to the Trustee: U.S. Bank National Association 180 East Fifth Street St. Paul, Minnesota 55101 Attn: Corporate Trust Department (Electronics For Imaging, Inc. - 1.50% Convertible Senior Debentures) Facsimile No.: (651) 244-0711 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 Securityholder shall be mailed to the Securityholder, by first-class mail, postage prepaid, at the Securityholder'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 Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. 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 Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar. 82 Section 14.3. Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have the protection of TIA Section 312(c). Section 14.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee, if the Trustee so requests: (a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Section 14.5. Statements Required in Certificate or Opinion. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a covenant or condition provided for in this Indenture shall include: (a) a statement that each person making such Officers' Certificate or Opinion of Counsel has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Officers' Certificate or Opinion of Counsel are based; (c) a statement that, in the opinion of each such person, he or she has made such examination or investigation as is necessary to enable such person to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement that, in the opinion of such person, such covenant or condition has been complied with. Section 14.6. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 83 Section 14.7. Rules by Trustee, Paying Agent, Conversion Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar, the Conversion Agent, the Bid Solicitation Agent and the Paying Agent may make reasonable rules for their functions. Section 14.8. Legal Holidays. If any specified date (including a date for giving notice) is a Legal Holiday, the action shall be taken on the next succeeding day that is not a Legal Holiday, and, if the action to be taken on such date is a payment in respect of the Securities, no interest, if any, shall accrue for the intervening period. Section 14.9. Governing Law; Submission to Jurisdiction; Service of Process. This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York. The Company submits to the nonexclusive jurisdiction of the courts of the State of New York and the courts of the United States of America, in each case located in the Borough of Manhattan, The City of New York and State of New York over any suit, action or proceeding arising under or in connection with this Indenture or the transactions contemplated hereby or the Securities. The Company waives any objection that it may have to the venue of any suit, action or proceeding arising under or in connection with this Indenture or the transactions contemplated hereby or the Securities in the courts of the State of New York or the courts of the United States of America, in each case located in the Borough of Manhattan, City of New York and State of New York, or that such suit, action or proceeding brought in the courts of the State of New York or the courts of the United States of America, in each case located in the Borough of Manhattan, City of New York and State of New York, was brought in an inconvenient court and agrees not to plead or claim the same. Section 14.10. No Recourse Against Others. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such, or against any past, present or future stockholder, officer or director, as such, of the Company or of any successor, either directly or through the Company or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders and as part of the consideration for the issue of the Securities. Section 14.11. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. 84 Section 14.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. Section 14.13. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any person, other than the parties hereto and the Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture or the Securities. 85 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. ELECTRONICS FOR IMAGING, INC. By:_____________________________________ Name: Title: U.S. BANK NATIONAL ASSOCIATION, As Trustee By:_____________________________________ Name: Title: ANNEX 1 PROJECTED PAYMENT SCHEDULE

Projected Interest Payment per $1,000 Six Month Period Ending Principal Amount at Maturity of Securities - ------------------------ ------------------------------------------ June 4, 2003 $1,000.00 December 1, 2003 ($7.38) June 1, 2004 ($7.50) December 1, 2004 ($7.50) June 1, 2005 ($7.50) December 1, 2005 ($7.50) June 1, 2006 ($7.50) December 1, 2006 ($7.50) June 1, 2007 ($7.50) December 1, 2007 ($7.50) June 1, 2008 ($7.50) December 1, 2008 ($7.50) June 1, 2009 ($7.50) December 1, 2009 ($7.50) June 1, 2010 ($9.25) December 1, 2010 ($9.25) June 1, 2011 ($9.25) December 1, 2011 ($9.25) June 1, 2012 ($9.25) December 1, 2012 ($9.25) June 1, 2013 ($9.25) December 1, 2013 ($9.25) June 1, 2014 ($9.25) December 1, 2014 ($9.25) June 1, 2015 ($9.25) December 1, 2015 ($9.25) June 1, 2016 ($9.25) December 1, 2016 ($9.25) June 1, 2017 ($9.25) December 1, 2017 ($9.25) June 1, 2018 ($9.25) December 1, 2018 ($9.25) June 1, 2019 ($9.25) December 1, 2019 ($9.25) June 1, 2020 ($9.25) December 1, 2020 ($9.25) June 1, 2021 ($9.25) December 1, 2021 ($9.25) June 1, 2022 ($9.25) December 1, 2022 ($9.25) June 1, 2023 ($3,930.19) Comparable yield is 7.90%

EXHIBIT A [FORM OF FACE OF SECURITY] THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE ISSUE DATE OF THIS NOTE IS JUNE 4, 2003; AND THE COMPARABLE YIELD FOR THE PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 7.90% PER ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: ELECTRONICS FOR IMAGING, INC., CORPORATE SECRETARY, 303 VELOCITY WAY, FOSTER CITY, CALIFORNIA 94404. [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1) [THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS DEBENTURE AND - --------------------- (1) This legend should be included only if the Security is a Global Security. A-1 THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS DEBENTURE AGREES FOR THE BENEFIT OF ELECTRONICS FOR IMAGING, INC., THAT (A) THIS DEBENTURE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE DEBENTURES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR SUCCESSOR TRUSTEE, AS APPLICABLE), (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE ( OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT(2)] [THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2) - --------------------- (2) This legend should be included only if the Security is a Transfer Restricted Security. A-2 ELECTRONICS FOR IMAGING, INC. 1.50% CONVERTIBLE SENIOR DEBENTURES DUE 2023 No. CUSIP:______________________ ELECTRONICS FOR IMAGING, INC., a Delaware corporation (the "Company", which term shall include any successor corporation under the Indenture referred to on the reverse hereof), promises to pay to___________ , or registered assigns, the principal amount of___________ Dollars ($______________ ) [, or such greater or lesser amount as is indicated in the records of the Trustee and the Depositary,](3) on June 1, 2023, and to pay interest thereon from June 4, 2003 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 1 and December 1 in each year (each, an "Interest Payment Date"), commencing on December 1, 2003, at the rate of 1.50% per annum, until the principal hereof is paid or made available for payment at June 1, 2023 or upon acceleration, or until such date on which the Securities are converted, redeemed or repurchased as provided herein, and at the rate of 1.50% per annum on any overdue principal and on any overdue installment of interest and Additional Interest Amounts, if any. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture (as hereinafter defined), be paid to the Person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the regular record date for such interest, which will be the May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding the corresponding Interest Payment Date (a "Regular Record Date"). Any such interest and Additional Interest Amounts, if any, not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid (a) to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee (a "Special Record Date"), notice whereof will be given to Holders not less than 10 days prior to such Special Record Date, or (b) at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse side of this Security, which further provisions shall for all purposes have the same effect as if set forth at this place. - --------------------- (3) This phrase should be included only if the Security is a Global Security. A-3 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: June 4, 2003 ELECTRONICS FOR IMAGING, INC. By:______________________________ Title: A-4 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. Dated: June 4, 2003 U.S. BANK NATIONAL ASSOCIATION, as Trustee By:______________________________ Authorized Signatory A-5 [FORM OF REVERSE OF SECURITY] 1.50% Convertible Senior Debentures due 2023 This Security is one of a duly authorized issue of 1.50% Convertible Senior Debentures due 2023 (the "Securities") of ELECTRONICS FOR IMAGING, INC., a Delaware corporation (including any successor corporation under the Indenture hereinafter referred to, the "Company"), issued under an Indenture, dated as of June 4, 2003 (the "Indenture"), between the Company and U.S. Bank National Association, as trustee (the "Trustee"). The terms of the Security include those stated in the Indenture, those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended ("TIA"), and those set forth in this Security. This Security is subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Security and the terms of the Indenture, the terms of the Indenture shall control. Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. Interest. Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. In addition, the Company shall pay contingent interest ("CONTINGENT INTEREST") to the Holders during any six-month period (a "CONTINGENT INTEREST PERIOD") from June 1 to November 30 and from December 1 to May 31, commencing June 1, 2008, if the average Market Price of a Security for the five Trading Day period ending on the third Trading Day immediately preceding the first day of such Contingent Interest Period equals $1,200 (120% of the principal amount of a Security) or more. Upon a determination by the Company that Holders will be entitled to receive Contingent Interest which will become payable during a Contingent Interest Period, on or prior to the first day of such Contingent Interest Period, the Company shall deliver an Officer's Certificate to the Trustee setting forth the amount of such Contingent Interest per $1,000 principal amount of Securities and shall issue a press release through a public medium as is customary for such a press release. The amount of Contingent Interest payable per $1,000 principal amount of Securities in respect of any Contingent Interest Period shall equal 0.35% per annum. Contingent Interest, if any, will accrue and be payable to Holders in the same manner as regular Cash interest as provided in Section 6.1. Regular Cash interest will continue to accrue at the rate of 1.50% per year on the principal amount of the Securities whether or not Contingent Interest is paid. If this Security is redeemed pursuant to Section 5 of this Security or the Holder elects to require the Company to repurchase this Security pursuant to Section 6 of this Security, on a date that is after the Regular Record Date and prior to the corresponding Interest Payment Date, interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, accrued and unpaid hereon to, but not including, the applicable Redemption Date, Repurchase A-6 Date or Fundamental Change Repurchase Date will be paid to the same Holder to whom the Company pays the principal of such Security regardless of whether such Holder was the registered Holder on the Regular Record Date immediately preceding the applicable Redemption Date, Repurchase Date or Fundamental Change Repurchase Date. Interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on Securities converted after the close of business on a Regular Record Date but prior to the opening of business on the corresponding Interest Payment Date will be paid to the Holder of the Securities on the Regular Record Date but, upon conversion, the Holder must pay the Company the interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, which have accrued and will be paid on such Interest Payment Date. No such payment need be made with respect to Securities which will be converted after a Regular Record Date and prior to the corresponding Interest Payment Date after being called for redemption by the Company. Any reference herein to interest accrued or payable as of any date shall include any Additional Interest Amounts accrued or payable on such date as provided in the Registration Rights Agreement. 2. Method of Payment. Payment of the principal of and interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on the Securities shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts or in Applicable Stock, as the case may be, as permitted in the Indenture. The Holder must surrender the Securities to the Paying Agent to collect payment of principal. Payment of interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on Certificated Securities will be made by check mailed to the address of the Person entitled thereto as such address appears in the Register. Notwithstanding the foregoing, so long as the Securities are registered in the name of a Depositary or its nominee, all payments with respect to the Securities shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. 3. Paying Agent, Registrar, Conversion Agent and Bid Solicitation Agent. Initially, U.S. Bank National Association will act as Paying Agent, Conversion Agent and Bid Solicitation Agent. The Company may appoint and change any Paying Agent, Registrar, Conversion Agent or Bid Solicitation Agent without notice, other than notice to the Trustee; provided that the Company will maintain at least one Paying Agent in the State of New York, The 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 any of their Affiliates may act as Paying Agent, Registrar or Conversion Agent. None of the Company or any Subsidiary or any Affiliate of any of them may act as Bid Solicitation Agent. 4. Indenture. The Securities are general unsecured obligations of the Company limited to up to $240,000,000 aggregate principal amount. The Indenture does not limit other indebtedness of the Company, secured or unsecured. A-7 5. Redemption at the Option of the Company. The Company may, at its option, redeem the Securities for Cash at any time as a whole, or from time to time in part, on or after June 1, 2008, at a redemption price equal to 100% of the principal amount of Securities to be redeemed plus any accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on those Securities to, but not including, the Redemption Date (the "REDEMPTION PRICE"). Notice of redemption pursuant to this Section of this Security will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder's registered address. If Cash sufficient to pay the Redemption Price of all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent prior to 10:00 a.m., New York City time, on the Redemption Date, then on such Redemption Date interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, cease to accrue on such Securities or portions thereof. Securities in denominations larger than $1,000 of principal amount may be redeemed in part but only in multiples of $1,000 of principal amount. 6. Repurchase By the Company at the Option of the Holder or Upon a Fundamental Change. Subject to the terms and conditions of the Indenture, the Company shall become obligated to repurchase, at the option of the Holder, all or any portion of the Securities held by such Holder on June 1, 2008, June 1, 2013 and June 1, 2018 in multiples of $1,000 at a repurchase price equal to 100% of the principal amount of those Securities plus accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, to, but not including, such Repurchase Date (the "REPURCHASE PRICE"). To exercise such right, a Holder shall deliver to the Paying Agent a Repurchase Notice containing the information set forth in the Indenture, at any time from 9:00 a.m., New York City time, on the date that is 20 Business Days immediately preceding such Repurchase Date until 5:00 p.m., New York City time, on the Business Day immediately preceding such Repurchase Date, and shall deliver the Securities to the Paying Agent as set forth in the Indenture. If the Securities are to be repurchased on June 1, 2008, the Repurchase Price must be paid in Cash. If the Securities are to be repurchased on the June 1, 2013 or June 1, 2018 Repurchase Date, the Repurchase Price may be paid, at the option of the Company, in Cash or by the issuance and delivery of shares of Common Stock, or in any combination thereof, subject to the terms and conditions of the Indenture. Subject to the terms and conditions of the Indenture, the Company shall become obligated to repurchase, at the option of the Holder, all or any portion of the Securities held by such Holder upon a Fundamental Change of the Company that occurs prior to June 1, 2008 in multiples of $1,000 at the Fundamental Change Repurchase Price. To exercise such right, a Holder shall deliver to the Paying Agent a Fundamental Change Repurchase Notice containing the information set forth in the Indenture, at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, and shall deliver the Securities to the Paying Agent as set forth in the Indenture. A-8 The Fundamental Change Repurchase Price may be paid, at the option of the Company, in Cash or by the issuance and delivery of shares of Applicable Stock, or in any combination thereof, subject to the terms and conditions of the Indenture. Holders have the right to withdraw any Repurchase Notice or Fundamental Change Repurchase Notice by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture. If Cash and/or Applicable Stock, if permitted under the Indenture, sufficient to pay the Repurchase Price or Fundamental Change Repurchase Price, as the case may be, of all Securities or portions thereof to be repurchased with respect to a Repurchase Date or Fundamental Change Repurchase Date, as the case may be, has been deposited with the Paying Agent, at 10:00 a.m., New York City time, on the Business Day immediately following the Repurchase Date or Fundamental Change Repurchase Date, as the case may be, then, immediately after the Repurchase Date or Fundamental Change Repurchase Date, as applicable, such Securities will cease to be outstanding and interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, on such Securities will cease to accrue and the Holder thereof shall have no other rights as such other than the right to receive the Repurchase Price or Fundamental Change Repurchase Price upon surrender of such Security. 7. Conversion. Subject to and in compliance with the provisions of the Indenture (including, without limitation, the conditions to conversion of this Security set forth in Section 12.1 thereof), a Holder is entitled, at such Holder's option, to convert the Holder's Security (or any portion of the principal amount thereof that is $1,000 or a multiple of $1,000), into fully paid and nonassessable shares of Common Stock at the Conversion Rate in effect on the date of conversion. The Company will notify Holders of any event triggering the right to convert the Securities as specified above in accordance with the Indenture. A Security in respect of which a Holder has delivered a Repurchase Notice or Fundamental Change Repurchase Notice, as the case may be, exercising the right of such Holder to require the Company to repurchase such Security may be converted only if such Repurchase Notice or Fundamental Change Repurchase Notice is withdrawn in accordance with the terms of the Indenture. The initial Conversion Rate is 37.8508 shares per $1,000 principal amount of Securities, subject to adjustment in certain events described in the Indenture. To surrender a Security for conversion, a Holder must, in the case of Global Securities, comply with the Applicable Procedures of the Depositary in effect at that time, and in the case of Certificated Securities, (1) surrender the Security to the Conversion Agent, (2) 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, (3) furnish appropriate endorsements and transfer documents and (4) pay all funds required, if any, relating to interest A-9 (including Contingent Interest, if any) or Additional Interest Amounts, if any, and any transfer or similar tax, if required. No fractional share of Common Stock shall be issued upon conversion of any Security. Instead, the Company shall pay a Cash adjustment as provided in the Indenture. No payment or adjustment will be made for accrued and unpaid interest (including Contingent Interest, if any) and Additional Interest Amounts, if any, or dividends on the shares of Common Stock, except as provided in the Indenture. If the Company (i) is a party to a consolidation, merger, statutory share exchange or combination of the Company with another corporation as a result of which all the holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including Cash or a combination thereof) with respect to or in exchange for all of their Common Stock, (ii) reclassifies or changes the shares of Common Stock or (iii) conveys, transfers or leases its properties and assets as, or substantially as, an entirety to any person, the right to convert a Security into shares of Common Stock may be changed to a right to convert a Security into the kind and amount of shares of stock and other securities or property or assets (including Cash) which such Holder would have been entitled to receive upon such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance had such Holder converted its Security into Common Stock immediately prior to such transaction, in each case, in accordance with the Indenture. 8. Denominations; Transfer; Exchange. The Securities are in fully registered form, without coupons, in denominations of $1,000 of principal amount and multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities in respect of which a Repurchase Notice or Fundamental Change Repurchase Notice has been given and not withdrawn (except, in the case of a Security to be repurchased in part, the portion of the Security not to be repurchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed. 9. Persons Deemed Owners. The registered Holder of this Security may be treated as the owner of this Security for all purposes. 10. Unclaimed Money or Securities. The Trustee and the Paying Agent shall return to the Company upon written request any Cash or securities held by them for the payment of any amount with respect to the Securities that remains unclaimed for two years, subject to applicable unclaimed property law. After return to the Company, Holders entitled to the money or securities must look to the A-10 Company for payment as general creditors unless an applicable abandoned property law designates another person. 11. Amendment; Waiver. Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent or affirmative vote of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities and (ii) certain Defaults may be waived with the written consent or affirmative vote of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities. Without the consent of any Securityholder, the Company and the Trustee may amend the Indenture or the Securities to (i) add to the covenants of the Company for the benefit of the Holders of Securities, (ii) surrender any right or power conferred upon the Company in the Indenture, (iii) provide for the assumption of the Company's obligations to the Holders of Securities in the case of a merger, consolidation, conveyance, transfer, sale, lease or other disposition pursuant to Article VII of the Indenture, (iv) increase the Conversion Rate or reduce the Conversion Price; provided, however, that such increase in the Conversion Rate or reduction in the Conversion Price is in accordance with the terms of the Indenture or shall not adversely affect the interest of the Holders of Securities, (v) provide for a successor Trustee with respect to the Securities, (vi) add any additional Events of Default with respect to all or any of the Securities, (vii) secure the Securities, (viii) supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the discharge of the Securities, provided that such change or modification does not adversely affect the interests of the Holders of the Securities, (ix) make any changes or modifications necessary in connection with the registration of the Securities under the Securities Act as contemplated in the Registration Rights Agreement; provided, however, that such action pursuant to this clause does not adversely affect the interests of the Holders of Securities in any material respect, (x) cure any ambiguity, correct or supplement any provision in the Indenture which may be inconsistent with any other provision therein or which is otherwise defective, or to make any other provisions with respect to matters or questions arising under the Indenture which the Company may deem necessary or desirable and which shall not be inconsistent with the provisions of the Indenture; provided, however, that such action pursuant to this clause does not adversely affect the interests of the Holders of Securities, (xi) add or modify any other provisions in the Indenture with respect to matters or questions arising thereunder which the Company and the Trustee may deem necessary or desirable and which would not adversely affect the interests of the Holders of Securities, and (xii) comply with the requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. 12. Defaults and Remedies. If any Event of Default other than as a result of certain events of bankruptcy, insolvency or reorganization of the Company or its Significant Subsidiaries occurs and is continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. If an Event of Default occurs as a result of certain events of bankruptcy, insolvency or reorganization of the Company or its Significant Subsidiaries, the principal of all the Securities shall become due and payable immediately A-11 without any declaration or other act on the part of the Trustee or any Holder, all as and to the extent provided in the Indenture. 13. Trustee Dealings with the Company. Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 14. Calculations in Respect of Securities. The Company or its agents will be responsible for making all calculations called for under the Securities including, but not limited to, determination of the Market Price and Sale Price of the Applicable Stock, the number of shares of Applicable Stock and/or the amount of Cash issuable or payable upon conversion and the amounts of interest and Additional Interest Amounts, if any, on the Securities. Any calculations made in good faith and without manifest error will be final and binding on Holders of the Securities. The Company or its agents will be required to deliver to the Trustee a schedule of its calculations and the Trustee will be entitled to conclusively rely upon the accuracy of such calculations without independent verification. 15. No Recourse Against Others. No recourse under or upon any obligation, covenant or agreement contained in the Indenture, or in this Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such, or against any past, present or future stockholder, officer or director, as such, of the Company or of any successor, either directly or through the Company or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders and as part of the consideration for the issue of the Securities. 16. Authentication. This Security shall not be valid until an authorized signatory of the Trustee manually signs the Trustee's Certificate of Authentication on the other side of this Security. 17. Abbreviations. Customary abbreviations may be used in the name of a Securityholder 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). 18. INDENTURE TO CONTROL; GOVERNING LAW. A-12 IN THE CASE OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS SECURITY AND THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL CONTROL. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Requests may be made to: ELECTRONICS FOR IMAGING, INC. 303 Velocity Way Foster City, CA 94404 Attn: Joseph Cutts and Jim Etheridge Facsimile No. (650) 351-3832 19. Registration Rights.(4) The Holders of the Securities are entitled to the benefits of a Registration Rights Agreement, dated as of June 4, 2003, between the Company and the Initial Purchasers named therein, including the receipt of Additional Interest Amounts upon a registration default (as defined in such agreement). - --------------------- (4) This section shall be deleted from any Securities that are not Transfer Restricted Securities. A-13 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to ________________________________________________________________________________ (Insert assignee's soc. sec. or tax ID no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Your Signature: Date:_____________________ ________________________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guaranteed _______________________________________________ Participant in a Recognized Signature Guarantee Medallion Program By:___________________________ Authorized Signatory A-14 CONVERSION NOTICE To convert this Security into shares of Common Stock (or Cash or a combination of shares of Common Stock and Cash, if the Company so elects) of the Company, check the box [ ] To convert only part of this Security, state the principal amount to be converted (which must be $1,000 or a multiple of $1,000): If you want the stock certificate made out in another person's name fill in the form below: ________________________________________________________________________________ (Insert assignee's soc. sec. or tax ID no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) Your Signature: Date:_________________ _________________________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guaranteed _______________________________________________ Participant in a Recognized Signature Guarantee Medallion Program By:_______________________________ Authorized Signatory A-15 TRANSFER CERTIFICATE(5) Re: 1.50% Convertible Senior Debentures due 2023 (the "Securities") of Electronics For Imaging, Inc. (the "Company") This certificate relates to $ principal amount of Securities owned in (check applicable box) [ ] book-entry or [ ] definitive form by________(the "Transferor"). The Transferor has requested a Registrar or the Trustee to exchange or register the transfer of such Securities. In connection with such request and in respect of each such Security, the Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating to the Securities as provided in Sections 2.6 and 2.12 of the Indenture dated June 4, 2003 between the Company and U.S. Bank National Association, as trustee (the "Indenture"), and the transfer of such Security is being made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), or the transfer or exchange, as the case may be, of such Security does not require registration under the Securities Act because (check applicable box): [ ] Such Security is being transferred pursuant to an effective registration statement under the Securities Act; or [ ] Such Security is being transferred to the Company or a Subsidiary; or [ ] Such Security is being transferred inside the United States to a "qualified institutional buyer" in compliance with Rule 144A under the Securities Act; or [ ] Such Security is being transferred inside the United Stated to an "institutional accredited investor" that prior to such transfer has furnished to U.S. Bank National Association as Trustee (or a successor trustee, as applicable) a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities (in the form obtained from such Trustee or successor trustee, as applicable); or [ ] Such Security is being transferred outside the United States in compliance with Rule 904 under the Securities Act; or - --------------------- (5) This certificate should only be included if this Security is a Transfer Restricted Security. A-16 [ ] Such Security is being transferred pursuant to and in compliance with an exemption from the registration requirements under the Securities Act in accordance with Rule 144 (or any successor thereto) ("Rule 144") under the Securities Act; or [ ] Such Security is being acquired for the Transferor's own account, without transfer; A-17 and unless the Such Security is being transferred to the Company or a Subsidiary box is checked, the undersigned confirms that such Security is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act. DATE: ___________________________________________________ Signature(s) of Transferor (If the registered owner is a corporation, partnership or fiduciary, the title of the person signing on behalf of such registered owner must be stated.) Signature Guaranteed ___________________________________________________ Participant in a Recognized Signature A-18 EXHIBIT B [FORM OF RESTRICTIVE LEGEND FOR COMMON STOCK ISSUED UPON CONVERSION] [THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF ELECTRONICS FOR IMAGING, INC., THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO AMERICAN STOCK AND TRANSFER COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR SECURITIES, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.] B-1 EXHIBIT C [FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE] _________________,______ U.S. Bank National Association 180 East Fifth Street St. Paul, Minnesota 55101 Attn: Corporate Trust Department (Electronics For Imaging, Inc. - 1.50% Convertible Senior Debentures due 2023) Fax: (651) 244-0711 Re: Electronics For Imaging, Inc. (the "COMPANY") 1.50% Convertible Senior Debentures due 2023 This is a Fundamental Change Repurchase Notice as defined in Section 5.1 of the Indenture dated as of June 4, 2003 (the "INDENTURE") between the Company and U.S. Bank National Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture. Certificate No(s). of Securities: _____________________________________________ I intend to deliver the following aggregate Principal Amount of Securities for purchase by the Company pursuant to Section 5.1 of the Indenture (in multiples of $1,000): $________________________________ I hereby agree that the Securities will be purchased on the Fundamental Change Repurchase Date pursuant to the terms and conditions specified in the Securities and the Indenture. In the event the Company elects, pursuant to Section 5.2 of the Indenture, to pay the Fundamental Change Repurchase Price, in whole or in part, in shares of Applicable Stock but such portion of the Fundamental Change Repurchase Price shall ultimately be paid to such Holder entirely in Cash because any of the conditions to payment of the Fundamental Change Repurchase Price in shares of Applicable Stock is not satisfied prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date, as set forth in Section 5.2(b) of the Indenture, I hereby elect to: [ ] withdraw this Fundamental Change Repurchase Notice as to $_________ in principal amount of Securities with the following certificate numbers:________________________________ to which this Fundamental Change Repurchase Notice relates; [ ] receive Cash in respect of the entire Fundamental Change Repurchase Price for all Securities (or portions thereof) to which this Fundamental Change Repurchase Notice relates. Signed:____________________ EX-4.3 4 f91955exv4w3.txt EXHIBIT 4.3 EXHIBIT 4.3 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of June 4, 2003 by and among Electronics For Imaging, Inc., a Delaware corporation (the "Company") and UBS Warburg LLC, C.E. Unterberg, Towbin (a California limited partnership) and Morgan Stanley & Co. Incorporated (collectively, the "Initial Purchasers"), for whom UBS Warburg LLC is acting as representative, pursuant to that certain Purchase Agreement, dated as of May 29, 2003 (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 (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial Purchasers) from time to time of the Bonds (as defined herein) and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issued upon conversion of the Bonds (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: "Additional Interest Amount" has the meaning set forth in Section 2(e) hereof. "Additional Interest Payment Date" means each interest payment date under the Indenture in the case of the Bonds, and each June 1 and December 1 in the case of the Underlying Common Stock. "Additional Interest Period" has the meaning set forth in Section 2(e) hereof. "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 set forth in Section 2(d) hereof. "Applicable Conversion Price" means, as of any date of determination, $1,000 divided by the Conversion Rate then in effect as of the date of determination or, if no Bonds are then outstanding, the Conversion Rate that would be in effect were Bonds then outstanding. "Bonds" means the 1.50% Convertible Senior Debentures due 2023 of the Company to be purchased pursuant to the Purchase Agreement. "Business Day" means each day on which the Nasdaq National Market is open for trading. "Common Stock" means the shares of common stock, par value $0.01 per share, of the Company and any other shares of capital stock as may constitute "Common Stock" for purposes of the Indenture, including the Underlying Common Stock. "Conversion Rate" has the meaning assigned to such term in the Indenture. "Effectiveness Deadline Date" has the meaning set forth in Section 2(a) hereof. "Effectiveness Period" means a period that will terminate upon the earlier of (1) the date on when each of the Registrable Securities covered by the Shelf Registration Statement has been effectively registered under the Securities Act and disposed of, whether or not in accordance with the Shelf Registration Statement and (2) the date on which all Registrable Securities held by non-affiliates are eligible to be sold to the public pursuant to Rule 144(k) under the Securities Act or any successor provision thereof. "Event" has the meaning set forth in Section 2(e) hereof. "Event Date" has the meaning set forth 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 set forth in Section 2(a) hereof. "Holder" has the meaning set forth in the third paragraph of this Agreement. "Indenture" means the Indenture, dated as of June 4, 2003 between the Company and U.S. Bank National Association, as trustee, pursuant to which the Bonds are being issued. "Initial Purchasers" has the meaning set forth in the preamble hereto. "Initial Shelf Registration Statement" has the meaning set forth in Section 2(a) hereof. 2 "Issue Date" means the first date of original issuance of the Bonds. "Material Event" has the meaning set forth in Section 3(h) hereof. "Notice and Questionnaire" means a written notice and questionnaire delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum dated May 29, 2003 relating to the Bonds as such notice may be amended by the Company upon the advice of counsel to the extent necessary to ensure compliance with applicable law. "Notice Holder" means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date, so long as all of their Registrable Securities that have been registered for resale pursuant to a Notice and Questionnaire have not been sold in accordance with a Shelf Registration Statement. "Purchase Agreement" has the meaning set forth in the preamble hereof. "Prospectus" means the prospectus included in any Shelf 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. "Record Holder" means (i) with respect to any Additional Interest Payment Date relating to any Bonds as to which any such Additional Interest Payment Amount has accrued, the holder of record of such Bond on the record date with respect to the interest payment date under the Indenture on which such Additional Interest Payment Date shall occur and (ii) with respect to any Additional Interest Payment Date relating to the Underlying Common Stock as to which any such Additional Interest Payment Amount has accrued, the registered holder of such Underlying Common Stock fifteen (15) days prior to such Damages Payment Date. "Registrable Securities" means the Bonds until such Bonds have been converted into the Underlying Common Stock and, at all times the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, the earlier of (x) the date on which such security has been effectively registered under the Securities Act and disposed of, whether or not in accordance with the Shelf Registration Statement and (y) the date on which such security is sold to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act or any successor provisions thereunder. 3 "Registration Expenses" has the meaning set forth 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. "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 Securities and Exchange Commission. "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 set forth in Section 2(a) hereof. "Subsequent Shelf Registration Statement" has the meaning set forth in Section 2(b) hereof. "Suspension Notice" has the meaning set forth in Section 3(h) hereof. "Suspension Period" has the meaning set forth in Section 3(h) hereof. "TIA" means the Trust Indenture Act of 1939, as amended. "Trustee" means U.S. Bank National Association, the Trustee under the Indenture. "Underlying Common Stock" means the Common Stock into which the Bonds are convertible or issued upon any such conversion. Section 2. Shelf Registration. 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") that is 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-1 or S-3 or another appropriate 4 form permitting registration of such Registrable Securities for resale by such Holders in accordance with the reasonable methods of distribution elected by the Holders, approved by the Company, and set forth in the Initial Shelf Registration Statement. The Company shall use its 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 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. At the time the Initial Shelf Registration Statement is declared effective, each Holder that became a Notice Holder on or prior to the date that is ten (10) Business Days prior to such time of effectiveness shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law. (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 have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its reasonable best 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 its reasonable best efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep such Shelf 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 as reasonably requested by the Initial Purchasers or by the Trustee on behalf of the Holders of the Registrable Securities covered by such Shelf Registration Statement. (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(h). Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver a completed and executed Notice and Questionnaire to the 5 Company at least five (5) Business Days prior to any attempted or actual distribution of Registrable Securities under the Shelf Registration Statement. Each Holder of Registrable Securities who elects to sell Registrable Securities under a Shelf Registration Statement agrees by submitting a Notice and Questionnaire, it will be bound by the terms and conditions of the Notice and Questionnaire and this Agreement. From and after the date the Initial Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and Questionnaire is delivered, and in any event within the later of (x) five (5) Business Days after such date or (y) five (5) Business Days after the expiration of any Suspension Period (1) in effect when the Notice and Questionnaire is delivered or (2) put into effect within five (5) Business Days of such delivery date: (i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or, if permitted by applicable law, prepare and 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 securityholder 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 its reasonable best 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 a reasonable number of 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); provided that if such Notice and Questionnaire is delivered during a Suspension Period, or a Suspension Period is put into effect within five (5) Business Days after such delivery date, 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 within five (5) Business Days after expiration of the Suspension Period in accordance with Section 3(h); 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, the Company shall 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 6 obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(d) (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was declared effective) shall be named as a selling securityholder in the Shelf 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 or (iii) the Initial Shelf Registration Statement is filed and declared effective but shall thereafter cease to be effective (without being succeeded immediately by an additional registration statement filed and declared effective) or usable for the offer and sale of Registrable Securities for a period of time (including any Suspension Period) which shall exceed thirty (30) days in the aggregate in any three (3) month period or sixty (60) days in the aggregate in any twelve (12) month period (each of the events of a type described in any of the foregoing clauses (i) through (iii) 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 on which the duration of the ineffectiveness or unusability of the Initial Shelf Registration Statement in any period exceeds the number of days permitted by clause (iii) hereof in the case of clause (iii), being referred to herein as an "Event Date"). Events shall be deemed to continue until 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), and the date the Initial Shelf Registration Statement becomes effective or usable again in the case of an Event of the type described in clause (iii). 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 (an "Additional Interest Period"), the Company agrees to pay, as additional interest and not as a penalty, an amount (the "Additional Interest Amount") at the rate described below, payable periodically on each Additional Interest Payment Date to Record Holders of Bonds that are Registrable Securities 7 and of shares of Underlying Common Stock issued upon conversion of Bonds that are Registrable Securities, as the case may be, to the extent of, for each such Additional Interest Payment Date, accrued and unpaid Additional Interest Amount to (but excluding) such Additional Interest Payment Date (or, if the Additional Interest Period shall have ended prior to such Additional Interest Payment Date, the date of the end of the Additional Interest Period); provided that any Additional Interest Amount accrued with respect to any Bond or portion thereof called for redemption on a redemption date or converted into Underlying Common Stock on a conversion date prior to the Additional Interest Payment Date, shall, in any such event, be paid instead to the Holder who submitted such Bond 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). The Additional Interest Amount shall accrue at a rate per annum equal to (1) one-quarter of one percent (0.25%) for the first 90-day period from the Event Date and (2) thereafter, one-half of one percent (0.50%) of (i) the principal amount of such Bonds or, without duplication, (ii) in the case of Bonds that have been converted into Underlying Common Stock, the Applicable Conversion Price of such shares of Underlying Common Stock, as the case may be, in each case determined as of the Business Day immediately preceding the next Additional Interest Payment Date. Notwithstanding the foregoing, no Additional Interest 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 Additional Interest Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events. Following the cure of all Events requiring the payment by the Company of Additional Interest Amounts to the Holders of Registrable Securities pursuant to this Section, the accrual of Additional Interest Amounts shall cease (without in any way limiting the effect of any subsequent Event requiring the payment of Additional Interest Amount by the Company). The Trustee shall be entitled, on behalf of Holders of Bonds, to seek any available remedy for the enforcement of this Agreement, including for the payment of any Additional Interest Amount. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement with respect to which additional interest is expressly provided shall be such additional interest. 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 additional interest 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 8 Registration Statement to be filed or 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) Prepare and file with the SEC a Shelf Registration Statement or Shelf Registration Statements on Form S-1 or S-3 or any other appropriate form under the Securities Act available for the sale of the Registrable Securities by the Holders thereof in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause each such Shelf Registration Statement to become effective and remain effective as provided herein; provided that before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, the Company shall furnish to the Initial Purchasers and counsel for the Holders and for the Initial Purchasers (or, if applicable, separate counsel for the Holders) copies of all such documents proposed to be filed and use its reasonable best efforts to reflect in each such document when so filed with the SEC such comments as the such counsel reasonably shall propose within three (3) Business Days of the delivery of such copies to the Initial Purchasers and such counsel. (b) Subject to Section 3(h) hereof, prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective until the expiration of the Effectiveness Period; 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 its reasonable best efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Shelf Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented. (c) As promptly as practicable give notice to the Notice Holders, the Initial Purchasers and counsel for the Holders and for the Initial Purchasers (or, if applicable, separate counsel for the Holders) (i) when any Prospectus, Prospectus supplement, Shelf Registration Statement or post-effective amendment to a Shelf Registration Statement has been filed with the SEC and, with respect to a Shelf 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 Shelf 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 Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) 9 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) after the effective date of any Shelf Registration Statement filed pursuant to this Agreement of the occurrence of (but not the nature of or details concerning) a Material Event and (vi) of the determination by the Company that a post-effective amendment to a Shelf Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section 3(h)), state that it constitutes a Suspension Notice, in which event the provisions of Section 3(h) shall apply. (d) Use its reasonable best efforts to prevent the issuance of, and, if issued, to obtain the withdrawal of any order suspending the effectiveness of a Shelf 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 as promptly as practicable, and provide prompt notice to each Notice Holder and the Initial Purchasers of the withdrawal of any such order. (e) As promptly as practicable furnish to each Notice Holder, counsel for the Holders and for the Initial Purchasers (or, if applicable, separate counsel for the Holders) and the Initial Purchasers, without charge, at least one (1) conformed copy of the Shelf 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, such counsel or the Initial Purchasers). (f) During the Effectiveness Period, deliver to each Notice Holder, counsel for the Holders and for the Initial Purchasers (or, if applicable, separate counsel for the Holders) and the Initial Purchasers, in connection with any sale of Registrable Securities pursuant to a Shelf 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 and the Initial Purchasers may reasonably request; and the Company hereby consents (except during such periods that a Suspension 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. (g) Prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use its reasonable best 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 10 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 its reasonable best 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 reasonably necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the relevant Shelf 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 subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject. (h) 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 as a result of which any Shelf 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 necessary in order 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 (a "Material Event") that, in the reasonable 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) or (C) above, subject to the next sentence, as promptly as practicable, prepare and file, if necessary pursuant to applicable law, a post-effective amendment to such Shelf 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 Shelf Registration Statement and Prospectus so that such Shelf 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 necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that the Company may rely on information provided by each Notice Holder with respect to such Notice Holder), as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Shelf Registration Statement, subject to the next sentence, use its reasonable best efforts to cause it to be declared effective as promptly as is practicable, and 11 (ii) give notice to the Notice Holders and counsel for the Holders and for the Initial Purchasers (or, if applicable, separate counsel for the Holders) that the availability of the Shelf Registration Statement is suspended (a "Suspension Notice") and, upon receipt of any Suspension Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to such Shelf 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 its reasonable best 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 reasonable judgment of the Company, the Shelf Registration Statement does not contain any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus does not contain any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (z) in the case of clause (C) above, as soon as, in the reasonable discretion of the Company, such suspension is no longer appropriate. The period during which the availability of the Shelf Registration Statement and any Prospectus may be suspended (the "Suspension Period") without the Company incurring any obligation to pay additional interest pursuant to Section 2(e) shall not exceed thirty (30) days in any three (3) month period and sixty (60) days in any twelve (12) month period. (i) Make available for inspection during normal business hours by representatives 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 and pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to make available for inspection during normal business hours all relevant information reasonably requested by such representatives 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, at the Company's request, 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 Shelf Registration Statement or the use of any Prospectus referred to in this Agreement), (iii) such information 12 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 or is not otherwise under a duty of trust to the Company, and provided 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. (j) 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 Shelf Registration Statement, which statements shall cover said 12-month periods. (k) Cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to a Shelf Registration Statement, which certificates shall not bear any restrictive legends, 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 (2) Business Days prior to any sale of such Registrable Securities. (l) Provide a CUSIP number for all Registrable Securities covered by each Shelf Registration Statement not later than the effective date of such Shelf Registration Statement and provide the Trustee and the transfer agent for the Common Stock with certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company. (m) Cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc. (n) Upon (i) the filing of the Initial Registration Statement and (ii) the effectiveness of the Initial Registration Statement, announce the same, in each case by release to Reuters Economic Services and Bloomberg Business News. (o) Enter into such customary agreements and take all such other actions reasonable under the circumstances, if any, as a majority of the holders of the Registrable Securities being sold shall reasonably request in order to expedite or facilitate disposition of such Registrable Securities pursuant to the Registration Statement. 13 (p) Cause the Indenture to be qualified under the TIA not later than the effective date of any Shelf 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 its reasonable best 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 Shelf 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 the Company may from time to time reasonably request. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to or provided by such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact relating to or provided by such Holder or its plan of distribution necessary in order to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading. 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 Section 2 and 3 of this Agreement whether or not any of the Shelf Registration Statements are declared effective. Such fees and expenses ("Registration 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 counsel for the Holders 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 Shelf Registration Statement may designate), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with 14 The Depository Trust Company), (iii) duplication and mailing expenses relating to copies of any Shelf Registration Statement or Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of counsel for the Company and the fees and disbursements of one counsel for the Holders in connection with the Shelf Registration Statement, (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock and (vi) Securities Act liability insurance obtained by the Company in its sole discretion. 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 by the Company 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. In connection with any underwritten offering of any Registrable Securities covered by Shelf Registration Statement, the participating Holders shall be responsible for the payment of any and all underwriters and brokers and dealers discounts and commissions in proportion to the number of Securities sold by such Holders; provided that no event will such methods of distribution set forth herein take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. Section 6. Indemnification; Contribution. (a) The Company agrees to indemnify, defend and hold harmless each Holder and each person who controls any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Holder Indemnified Party"), from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which such Holder Indemnified Party may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in any Shelf Registration Statement or in any amendment or supplement thereto or necessary to make the statements therein not misleading, or arises out of or is based upon any omission or alleged omission to state a material fact necessary in order to make the statements made in any Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, in the light of the circumstances under which they were made, not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission of a material fact contained in, or omitted from, and in conformity with information furnished in writing by or on behalf of any Holder to the Company expressly for use therein; provided that the indemnification contained in this Section 6(a) shall 15 not inure to the benefit of any Holder (or to the benefit of any person controlling such Holder) on account of any such losses, claims, damages or liabilities caused by any untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus provided in each case the Company has performed its obligations under Section 3(a) hereof if either (A) (i) such Holder failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by such Holder to the person asserting the claim from which such losses, claims, damages or liabilities arise and (ii) the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (B) (x) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the Prospectus and (y) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such Holder thereafter fails to deliver such Prospectus as so amended or supplemented, with or prior to the delivery of written confirmation of the sale of a Registrable Security to the person asserting the claim from which such losses, claims, damages or liabilities arise. (b) Each Holder, severally and not jointly, agrees to indemnify, defend and hold harmless the Company, its directors and officers and any person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Company Indemnified Party") from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which such Company Indemnified Party may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in information furnished in writing by or on behalf of such Holder to the Company expressly for use in any Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in any Shelf Registration Statement or in any amendment or supplement thereto or necessary to make the statements therein not misleading, or arises out of or is based upon any omission or alleged omission to state a material fact necessary in order to make the statements in any Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, in the light of the circumstances under which they were made, not misleading, in connection with such information. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the Shelf Registration Statement giving rise to such indemnification obligation. (c) If any action, suit or proceeding (each, a "Proceeding") is brought against any person in respect of which indemnity may be sought pursuant to either subsection (a) or (b) of this Section 6, such person (the "Indemnified Party") shall 16 promptly notify the person against whom such indemnity may be sought (the "Indemnifying Party") in writing of the institution of such Proceeding and the Indemnifying Party shall assume the defense of such Proceeding; provided, however, that the omission to so notify such Indemnifying Party shall not relieve such Indemnifying Party from any liability which it may have to such Indemnified Party hereunder to the extent such omission has not materially prejudiced (through the forfeiture of substantive rights or defenses) such Indemnifying Party. Such Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party (x) unless the employment of such counsel shall have been authorized in writing by such Indemnifying Party in connection with the defense of such Proceeding or (y) such Indemnifying Party shall not have employed counsel to have charge of the defense of such Proceeding within 30 days of the receipt of notice thereof or (z) such Indemnified Party shall have reasonably concluded upon the written advice of counsel that there may be one or more defenses available to it that are different from, additional to or in conflict with those available to such Indemnifying Party (in which case such Indemnifying Party shall not have the right to direct that portion of the defense of such Proceeding on behalf of the Indemnified Party, but such Indemnifying Party may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Indemnifying Party), in any of which events such reasonable fees and expenses shall be borne by such Indemnifying Party and paid as incurred (it being understood, however, that such Indemnifying Party shall not be liable for the expenses of more than one separate counsel in any one Proceeding or series of related Proceedings together with reasonably necessary local counsel representing the Indemnified Parties who are parties to such Proceeding). An Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, but if settled with the written consent of such Indemnifying Party, such Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party to reimburse such Indemnified Party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then such Indemnifying Party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 Business Days after receipt by such Indemnifying Party of the aforesaid request, (ii) such Indemnifying Party shall not have reimbursed such Indemnified Party in accordance with such request prior to the date of such settlement and (iii) such Indemnified Party shall have given such Indemnifying Party at least 30 days' prior notice of its intention to settle. No Indemnifying Party shall, without the prior written consent of any Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which such Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of 17 such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party. (d) If the indemnification provided for in this Section 6 is unavailable to an Indemnified Party under subsections (a) and (b) of this Section 6 in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Holders on the other hand from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Holders on the other in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Holders on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Holders and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to above shall be deemed to include any reasonable legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any Proceeding. (e) The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in subsection (d) above. Notwithstanding the provisions of this Section 6, no Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by it were offered to the public exceeds the amount of any damages which it has 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. The Holders' respective obligations to contribute pursuant to this Section 6 are several in proportion to the respective amount of Registrable Securities they have sold pursuant to a Shelf Registration Statement, and not joint. The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. 18 (f) The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or any person controlling any Holder, or the Company, or the Company's officers or directors or any person controlling the Company and (iii) the sale of any Registrable Security by any Holder. Section 7. Information Requirements. (a) The Company covenants that, if at any time before the end of the Effectiveness Period it is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder of Registrable Securities and take such further action as any Holder of Registrable Securities may reasonably request in writing (including, without limitation, making such 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, Rule 144A, Regulation S and Regulation D 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 filed with the SEC 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 the Common Stock) under any section of the Exchange Act. (b) The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Exchange Act and to comply with all other requirements set forth in the instructions to Form S-1 or Form S-3, as the case may be, in order to allow the Company to be eligible to file registration statements on Form S-1 or Form S-3. 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 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 19 constituting Registrable Securities (with Holders of Bonds deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Bonds are or would be convertible 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 Shelf 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 Shelf 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. The foregoing notwithstanding, this Agreement may be amended by written agreement signed by the Company and the Initial Purchasers, without the consent of the Holders of Registrable Securities, to cure any ambiguity or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect the interests of the Holders of Registrable Securities. (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: (x) if to a Holder of Registrable Securities, 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: 303 Velocity Way Foster City, California 94404 Attention: General Counsel Telecopy No.: (650) 357-3776 20 with a copy (which shall not constitute notice) to: Morgan, Lewis & Bockius LLP 300 South Grand Avenue Los Angeles, California 90071 Attention: John F. Hartigan, Esq. Telecopy No.: (213) 612-2501 (z) if to the Initial Purchasers, to: c/o UBS Warburg LLC 299 Park Avenue New York, New York 10171 Attention: Syndicate Department Telecopy No.: (212) 821-4998 with a copy to (for informational purposes only): c/o UBS Warburg LLC UBS Warburg LLC 677 Washington Boulevard Stamford, Connecticut 06901 Attention: Legal Department Telecopy No.: (203) 719-0683 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, 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 the Initial Purchasers or any Holder shall be deemed, for purposes of this Agreement, to be an assignee of the Initial Purchasers or such Holder, as the case may be. 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; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement, applicable law or the Indenture. If any transferee of any Holder shall 21 acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof. (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 its reasonable 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. (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. No party hereto shall have any rights, duties or obligations other than those specifically set forth in this Agreement. (k) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Section 4, 5 or 6 hereof and the obligations to make payments of and provide for Additional Interest Amount under Section 2(e) 22 hereof to the extent such Additional Interest Amount accrues prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms. 23 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ELECTRONICS FOR IMAGING, INC. By: __________________________ Name: Title: Confirmed and accepted as of the date first above written on behalf of itself and the other several Initial Purchasers: UBS WARBURG LLC By:____________________________ Name: Title: By:____________________________ Name: Title: 24 EX-21 5 f91955exv21.txt EXHIBIT 21 . . . EXHIBIT 21 EFI SUBSIDARIES*

NAME, ADDRESS JURISDICTION OF ORGANIZATION DOING BUSINESS AS** Electronics for Imaging Australia Pty Ltd Australia 26 Cunningham Street North Sydney NSW 2060 Australia Incorporation Date: March 5, 1997 EFI Brazil LTDA Brazil Electronics for Av. Ayrton Senna Imaging do Brazil 3000 Bloco2-Sala 412 Edificio via Purque Offices Barra da Tijuca Rio da Janiero RJ CEP 22775-001 EFI (Canada), Inc. Canada Box 25 Commerce Court West Toronto, Ontario, Canada M5L 1A9 Electronics for Imaging, International Cayman Islands PW Corporate Services (Cayman) Ltd PO Box 258 First Home Tower British American Centre George Town Grand Cayman, Cayman Islands Tidenet, Inc. Delaware 303 Velocity Way Foster City, CA 94404 Electronics for Imaging France SARL France EPLI Immeuble Atria 5, Place des Marseillais 94227 Charenton-le-Pont Cedex Electronics for Imaging GmbH Germany EFI Deutschland Kaiserswerther Strasse 115 D-40880 Ratingen Germany Best GmbH Germany Mevissenstr 65 47803 Krefeld Germany EFI Ireland Imaging Solutions Investment Company Ltd Ireland Harcourt Centre

Harcourt Street Dublin 2 Ireland Electronics for Imaging (Israel) Ltd Israel Inactive Electronics for Imaging Italia SRL Italy Centro Direzionale Milano Fiori Strada 6, Palazzo E3 20090 Assago (Milano) Italy Electronics for Imaging India Private Limited India 427, 16th Main, 3rd Cross, 3rd Block Koramangala, Bangalore 560 038 EFI KK Japan Electronics for Shinjuku Island Wing 13F Imaging KK 3-1 Nishi-Shinjuku 6-chome Shinjuku-ku Tokyo 160-0023 Japan Electronics for Imaging Korea Co., Ltd. Korea 37th Floor, ASEM Tower 159-1 Samsung-dong, Gangnam-gu Seoul, Korea 135-798 Electronics for Imaging, B.V. Netherlands 201-207 Boeing Avenue 1119 PD Schi phol-Rijk The Netherlands Electronics for Imaging Investments S.a.r.l. Netherlands 2 Rue Hackin L-1746 Luxembourg Electronics for Imaging Singapore Pte Ltd Singapore 5 Shenton Way #21-08A-11&12 UIC Building Singapore 068808 Electronics for Imaging Espana S.L. Spain Parque Impresarial San Fernando Edificio Francia 28883 L Madrid Spain Electronics for Imaging AB Sweden Electronics for Frosundaviks Alle 15 4tr Imaging Sweden 169 70 Solna Sweden Electronics for Imaging Holding GmbH Switzerland ATAG Ernst & Young AG Attn: Thomas Rast Bundesstrasse 3 CH - 6304 Zug Electronics for Imaging (Europe) Limited UK Electronics for Stonebridge House Imaging UK Padbury Oaks Old Bath Road Lomgford, Middlesex UB7 0EW United Kingdom EFI Foreign Sales Corporation, Inc. US Virgin Islands Crown Bay Marina Suite 521 St. Thomas, U.S.V.I. 00802 * All of the listed subsidiaries are 100% wholly-owned subsidiaries of EFI ** "Doing Business As" names have been listed only where they differ from the name of the subsidiary. EX-31.1 6 f91955exv31w1.txt EXHIBIT 31.1 EXHIBIT 31.1 CERTIFICATION I, Guy Gecht, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Electronics for Imaging, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [intentionally omitted] c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 14, 2003 /s/ Guy Gecht -------------------------- Guy Gecht Chief Executive Officer 36 EX-31.2 7 f91955exv31w2.txt EXHIBIT 31.2 EXHIBIT 31.2 CERTIFICATION I, Joseph Cutts, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Electronics for Imaging, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [intentionally omitted] c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: August 14, 2003 /s/ Joseph Cutts -------------------------- Joseph Cutts Chief Financial Officer 37 EX-32.1 8 f91955exv32w1.txt EXHIBIT 32.1 Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying Quarterly Report of Electronics for Imaging, Inc. (the "Company"), on Form 10-Q for the quarter ended June 30, 2003 (the "Report"), I, Guy Gecht, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 8/14/03 /s/ Guy Gecht ---------------------------- Date Guy Gecht Chief Executive Officer 38 EX-32.2 9 f91955exv32w2.txt EXHIBIT 32.2 Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying Quarterly Report of Electronics for Imaging, Inc. (the "Company"), on Form 10-Q for the quarter ended June 30, 2003 (the "Report"), I, Joseph Cutts, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 8/14/03 /s/ Joseph Cutts ---------------------------- Date Joseph Cutts Chief Financial Officer 39 -----END PRIVACY-ENHANCED MESSAGE-----

EX-4.1

                                                                     EXHIBIT 4.1

                          ELECTRONICS FOR IMAGING, INC.

                                    AS ISSUER

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

                         U.S. BANK NATIONAL ASSOCIATION,

                                   AS TRUSTEE

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

                UP TO $240,000,000 AGGREGATE PRINCIPAL AMOUNT OF

                  1.50% CONVERTIBLE SENIOR DEBENTURES DUE 2023

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

                                    INDENTURE

                            DATED AS OF JUNE 4, 2003

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



                                TABLE OF CONTENTS



                                                                                                                   PAGE
                                                                                                                
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................    1

         Section 1.1.      Definitions...........................................................................    1
         Section 1.2.      Incorporation by Reference of Trust Indenture Act.....................................    8
         Section 1.3.      Rules of Construction.................................................................    9
         Section 1.4.      Acts of Holders.......................................................................    9

ARTICLE II THE SECURITIES........................................................................................   10

         Section 2.1.      Form and Dating.......................................................................   10
         Section 2.2.      Execution and Authentication..........................................................   11
         Section 2.3.      Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent..................   12
         Section 2.4.      Paying Agent to Hold Cash and Securities in Trust.....................................   13
         Section 2.5.      Securityholder Lists..................................................................   13
         Section 2.6.      Transfer and Exchange.................................................................   14
         Section 2.7.      Replacement Securities................................................................   15
         Section 2.8.      Outstanding Securities; Determinations of Holders' Action.............................   15
         Section 2.9.      Temporary Securities..................................................................   16
         Section 2.10.     Cancellation..........................................................................   17
         Section 2.11.     Persons Deemed Owners.................................................................   17
         Section 2.12.     Additional Transfer and Exchange Requirements.........................................   17
         Section 2.13.     CUSIP Numbers.........................................................................   24
         Section 2.14.     Ranking...............................................................................   25

ARTICLE III REDEMPTION...........................................................................................   25

         Section 3.1.      The Company's Right to Redeem; Notice to Trustee......................................   25
         Section 3.2.      Selection of Securities to Be Redeemed................................................   26
         Section 3.3.      Notice of Redemption..................................................................   26
         Section 3.4.      Effect of Notice of Redemption........................................................   27
         Section 3.5.      Deposit of Redemption Price...........................................................   27
         Section 3.6.      Securities Redeemed in Part...........................................................   28
         Section 3.7.      Repayment to the Company..............................................................   28

ARTICLE IV REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS ON SPECIFIC DATES...................................   28

         Section 4.1.      Optional Put..........................................................................   28
         Section 4.2.      The Company's Right to Elect Manner of Payment of Repurchase Price....................   31
         Section 4.3.      Effect of Repurchase Notice...........................................................   33
         Section 4.4.      Deposit of Repurchase Price...........................................................   34


                                       i



                                                                                                                 
         Section 4.5.      Securities Repurchased in Part........................................................   35
         Section 4.6.      Covenant to Comply With Securities Laws Upon Repurchase of Securities.................   35
         Section 4.7.      Repayment to the Company..............................................................   35

ARTICLE V REPURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE..........................................   36

         Section 5.1.      Fundamental Change Put................................................................   36
         Section 5.2.      The Company's Right to Elect Manner of Payment of Fundamental Change Repurchase Price.   40
         Section 5.3.      Effect of Fundamental Change Repurchase Notice........................................   42
         Section 5.4.      Deposit of Fundamental Change Repurchase Price........................................   43
         Section 5.5.      Securities Repurchased in Part........................................................   43
         Section 5.6.      Covenant to Comply With Securities Laws Upon Repurchase of Securities.................   44
         Section 5.7.      Repayment to the Company..............................................................   44

ARTICLE VI COVENANTS.............................................................................................   44

         Section 6.1.      Payment of Securities.................................................................   44
         Section 6.2.      SEC and Other Reports to the Trustee..................................................   46
         Section 6.3.      Compliance Certificate................................................................   46
         Section 6.4.      Further Instruments and Acts..........................................................   46
         Section 6.5.      Maintenance of Office or Agency of the Trustee, Registrar, Paying Agent and
                           Conversion Agent. ....................................................................   46
         Section 6.6.      Delivery of Information Required Under Rule 144A......................................   47
         Section 6.7.      Waiver of Stay, Extension or Usury Laws...............................................   47
         Section 6.8.      Statement by Officers as to Default...................................................   48

ARTICLE VII SUCCESSOR CORPORATION................................................................................   48

         Section 7.1.      When Company May Merge or Transfer Assets.............................................   48
         Section 7.2.      Successor Corporation Substituted.....................................................   48

ARTICLE VIII DEFAULTS AND REMEDIES...............................................................................   49

         Section 8.1.      Events of Default.....................................................................   49
         Section 8.2.      Acceleration..........................................................................   50
         Section 8.3.      Other Remedies........................................................................   51
         Section 8.4.      Waiver of Past Defaults...............................................................   51
         Section 8.5.      Control by Majority...................................................................   52
         Section 8.6.      Limitation on Suits...................................................................   52
         Section 8.7.      Rights of Holders to Receive Payment or to Convert....................................   52
         Section 8.8.      Collection Suit by Trustee............................................................   53
         Section 8.9.      Trustee May File Proofs of Claim......................................................   53
         Section 8.10.     Priorities............................................................................   54
         Section 8.11.     Undertaking for Costs.................................................................   54



                                       ii



                                                                                                                 
         Section 8.12.     Restoration of Rights and Remedies....................................................   54

ARTICLE IX TRUSTEE...............................................................................................   55

         Section 9.1.      Duties of Trustee.....................................................................   55
         Section 9.2.      Rights of Trustee.....................................................................   56
         Section 9.3.      Individual Rights of Trustee..........................................................   57
         Section 9.4.      Trustee's Disclaimer..................................................................   57
         Section 9.5.      Notice of Defaults....................................................................   58
         Section 9.6.      Reports by Trustee to Holders.........................................................   58
         Section 9.7.      Compensation and Indemnity............................................................   58
         Section 9.8.      Replacement of Trustee................................................................   59
         Section 9.9.      Successor Trustee by Merger...........................................................   60
         Section 9.10.     Eligibility; Disqualification.........................................................   60
         Section 9.11.     Preferential Collection of Claims Against Company.....................................   60

ARTICLE X DISCHARGE OF INDENTURE.................................................................................   60

         Section 10.1.     Discharge of Liability on Securities..................................................   60
         Section 10.2.     Repayment to the Company..............................................................   61

ARTICLE XI AMENDMENTS............................................................................................   61

         Section 11.1.     Without Consent of Holders............................................................   61
         Section 11.2.     With Consent of Holders...............................................................   62
         Section 11.3.     Compliance with Trust Indenture Act...................................................   64
         Section 11.4.     Revocation and Effect of Consents, Waivers and Actions................................   64
         Section 11.5.     Notation on or Exchange of Securities.................................................   64
         Section 11.6.     Trustee to Sign Supplemental Indentures...............................................   64
         Section 11.7.     Effect of Supplemental Indentures.....................................................   64

ARTICLE XII CONVERSION...........................................................................................   65

         Section 12.1.     Conversion Privilege..................................................................   65
         Section 12.2.     Conversion Procedure; Conversion Rate; Fractional Shares..............................   66
         Section 12.3.     Adjustment of Conversion Rate for Common Stock........................................   68
         Section 12.4.     Consolidation or Merger of the Company................................................   76
         Section 12.5.     Notice of Adjustment..................................................................   77
         Section 12.6.     Notice in Certain Events..............................................................   77
         Section 12.7.     Company To Reserve Stock: Registration; Listing.......................................   78
         Section 12.8.     Taxes on Conversion...................................................................   79
         Section 12.9.     Conversion After Record Date..........................................................   79
         Section 12.10.    Company Determination Final...........................................................   80
         Section 12.11.    Responsibility of Trustee for Conversion Provisions...................................   80
         Section 12.12.    Unconditional Right of Holders to Convert.............................................   80



                                      iii



                                                                                                                 
ARTICLE XIII TAX TREATMENT.......................................................................................   80

         Section 13.1.     Tax Treatment.........................................................................   80
         Section 13.2.     Comparable Yield and Projected Payment Schedule.......................................   81

ARTICLE XIV MISCELLANEOUS........................................................................................   82

         Section 14.1.     Trust Indenture Act Controls..........................................................   82
         Section 14.2.     Notices...............................................................................   82
         Section 14.3.     Communication by Holders with Other Holders...........................................   83
         Section 14.4.     Certificate and Opinion as to Conditions Precedent....................................   83
         Section 14.5.     Statements Required in Certificate or Opinion.........................................   83
         Section 14.6.     Separability Clause...................................................................   83
         Section 14.7.     Rules by Trustee, Paying Agent, Conversion Agent and Registrar........................   84
         Section 14.8.     Legal Holidays........................................................................   84
         Section 14.9.     Governing Law; Submission to Jurisdiction; Service of Process.........................   84
         Section 14.10.    No Recourse Against Others............................................................   84
         Section 14.11.    Successors............................................................................   84
         Section 14.12.    Multiple Originals....................................................................   85
         Section 14.13.    Benefits of Indenture.................................................................   85



ANNEX 1    Projected Payment Schedule

EXHIBIT A  Form of Security

EXHIBIT B  Form of Restrictive Legend for shares of Common Stock Issued Upon
Conversion

EXHIBIT C  Form of Fundamental Change Repurchase Notice

                                       iv



         INDENTURE dated as of June 4, 2003 between ELECTRONICS FOR IMAGING,
INC., a Delaware corporation (the "COMPANY"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States as trustee (the "Trustee").

         Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 1.50% Convertible
Senior Debentures due 2023:

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.1.   Definitions.

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

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

         "AGENT MEMBERS" has the meaning set forth in Section 2.1(b).

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

         "APPLICABLE STOCK" means the shares of Common Stock; provided, that, in
the event of a Fundamental Change occurring prior to June 1, 2008 in which the
Company is not the surviving Person, the term "APPLICABLE STOCK" shall mean the
Capital Stock or ordinary shares or American Depositary Shares of such surviving
Person or its direct or indirect parent.

         "BANKRUPTCY LAW" means Title 11, United States Code, or any similar
federal or State law for the relief of debtors.

         "BID SOLICITATION AGENT" has the meaning set forth in Section 2.3.

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



         "BOARD RESOLUTION" means a resolution of the Board of Directors.

         "BUSINESS DAY" means each day of the year other than a Saturday or a
Sunday or other day on which banking institutions in The City of New York are
required or authorized by law or regulation to close.

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

         "CASH" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.

         "CERTIFICATED SECURITIES" means Securities that are in substantially
the form attached hereto as Exhibit A and that do not include the information
called for by footnotes 1 and 3 thereof.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMMON STOCK" means the common stock, $0.01 par value per share, of
the Company as that stock exists on the date of this Indenture or any other
shares of Capital Stock of the Company into which such 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 such subsequent 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, at least one of whom is
the Chief Executive Officer, the President, the Chief Financial Officer, an
Executive Vice President or a Senior Vice President.

         "CONTINGENT INTEREST" has the meaning set forth in the Securities.

         "CONTINGENT INTEREST PERIOD" has the meaning set forth in the
Securities.

         "CONVERSION AGENT" has the meaning set forth in Section 2.3.

         "CONVERSION NOTICE" has the meaning set forth in Section 12.2(b).

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

         "CONVERSION RATE" means initially 37.8508 shares per $1,000 principal
amount of Securities, subject to adjustment as set forth herein.

                                       2



         "CONVERSION VALUE" means, at any time, the amount equal to the product
of the Sales Price at such time multiplied by the then current Conversion Rate.

         "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 of the execution of this Indenture is located at 180 East
Fifth St., St. Paul, Minnesota 55101, Attention: Corporate Trust Department
(Electronics For Imaging, Inc. - 1.50% Convertible Senior Debentures due 2023),
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).

         "CURRENT MARKET PRICE" has the meaning set forth in Section 12.3(f).

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

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

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

         "DIRECTOR" means a member of the Board of Directors.

         "DISTRIBUTED ASSETS" has the meaning set forth in Section 12.3(d).

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

         "EVENT OF DEFAULT" has the meaning set forth in Section 8.1.

         "EXCESS AMOUNT" has the meaning set forth in Section 12.3(e).

         "EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.

         "EX-DIVIDEND DATE" means, with respect to any issuance or distribution
on shares of Common Stock, the first Trading Day on which the shares of Common
Stock trade regular way on the principal securities market on which the shares
of Common Stock are then traded without the right to receive such issuance or
distribution.

         "FAIR MARKET VALUE" has the meaning set forth in Section 12.3(f).

         "FUNDAMENTAL CHANGE" has the meaning set forth in Section 5.1(a).

                                       3



         "FUNDAMENTAL CHANGE COMPANY NOTICE" has the meaning set forth in
Section 5.1(b).

         "FUNDAMENTAL CHANGE REPURCHASE DATE" has the meaning set forth in
Section 5.1(a).

         "FUNDAMENTAL CHANGE REPURCHASE NOTICE" has the meaning set forth in
Section 5.1(c).

         "FUNDAMENTAL CHANGE REPURCHASE PRICE" has the meaning set forth in
Section 5.1(a).

         "GLOBAL SECURITIES" means Securities that are in substantially the form
attached hereto as Exhibit A and that include the information called for by
footnotes 1 and 3 thereof and that are deposited with the Depositary or its
custodian and registered in the name of, the Depositary or its nominee.

         "HOLDER" OR "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.

         "INDEBTEDNESS" has the meaning set forth in Section 2.14.

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

         "INITIAL PURCHASERS" mean UBS Warburg LLC, C.E. Unterberg, Towbin (a
California limited partnership) and Morgan Stanley & Co. Incorporated.

         "INTEREST PAYMENT DATE" has the meaning set forth in the Securities.

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

         "LEGAL HOLIDAY" means any day other than a Business Day.

         "MARKET PRICE" means:

               (a)  with respect to Securities, as of any date of determination,
     the average of the secondary market bid quotations per $1,000 principal
     amount of Securities obtained by the Bid Solicitation Agent (which shall
     initially be the Trustee) for $1,000,000 principal amount of Securities at
     approximately 4:00 p.m., New York City time, on such date of determination
     from three securities dealers (none of which shall be an Affiliate of the
     Company) selected by the Company, which may include any of the Initial
     Purchasers, provided, that if at least three such bids cannot be reasonably
     obtained by the Bid Solicitation Agent, but two bids are obtained, then the
     average of the two bids shall be used, and if only one such bid can be
     reasonably obtained by the Bid Solicitation Agent, this one bid will be
     used; provided, however, if (a) the Bid Solicitation Agent,

                                       4



     through the exercise of reasonable efforts, is unable to obtain at least
     one bid from a securities dealer, or (b) in the Company's reasonable
     judgment, the bid quotations are not indicative of the secondary market
     value of the Securities as of such date of determination, then the Market
     Price of a Security for such date of determination shall equal (1) the
     Conversion Rate in effect as of such date of determination multiplied by
     (2) the average Sale Price of a share of Common Stock for the five Trading
     Days ending on such date of determination;

               (b)  with respect to Common Stock, the average of the Sale Price
     of one share of Common Stock for the 20-Trading Day period immediately
     preceding and including the third Business Day immediately preceding the
     applicable Repurchase Date (or if the third Business Day immediately
     preceding the relevant date of determination is not a Trading Day, then on
     the last Trading Day immediately preceding such third Business Day).

               (c)  with respect to Applicable Stock, the average of the Sale
     Price of one share of Applicable Stock for the 20-Trading Day period
     immediately preceding and including the third Business Day immediately
     preceding the Fundamental Change Repurchase Date (or if the third Business
     Day immediately preceding the relevant date of determination is not a
     Trading Day, then on the last Trading Day immediately preceding such third
     Business Day), appropriately adjusted to take into account the occurrence,
     during the period commencing on the first of such Trading Days during such
     20-Trading Day period and ending on the date of determination, as the case
     may be, of any event described in Sections 12.3 or 12.4.

         "MEASUREMENT PERIOD" means the last 30 consecutive Trading Days in a
fiscal quarter, beginning with the second fiscal quarter of 2003.

         "NON-ELECTING SHARE" has the meaning set forth Section 12.4.

         "NON-RECOURSE INDEBTEDNESS" means indebtedness the terms of which
provide that the lender's claim for repayment of such indebtedness is limited
solely to a claim against the property which secures such indebtedness.

         "NOTICE OF DEFAULT" has the meaning set forth in Section 8.1.

         "NYSE" means The New York Stock Exchange, Inc.

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

         "OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 14.4 and 14.5, signed in the name of the
Company by any two Officers, at least one of whom is the Chief Executive
Officer, the President, the Chief Financial Officer, an Executive Vice President
or a Senior Vice President and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 6.3 shall be signed by the principal
financial or accounting Officer of the Company and one other Officer.

                                       5



         "OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 14.4 and 14.5, from legal counsel. The counsel may be an
employee of, or counsel to, the Company.

         "PAYING AGENT" has the meaning set forth in Section 2.3.

         "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.

         "PURCHASE AGREEMENT" means the Purchase Agreement dated as of May 29,
2003 among the Company and the Initial Purchasers.

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

         "RECORD DATE" has the meaning set forth in Section 12.3(f).

         "REDEMPTION DATE" means, when used with respect to any Security to be
redeemed, the date fixed for redemption pursuant to this Indenture.

         "REDEMPTION PRICE" has the meaning set forth in Section 3.1.

         "REFERENCE PERIOD" has the meaning set forth in Section 12.3(d).

         "REGISTRAR" has the meaning set forth in Section 2.3.

         "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of June 4, 2003, between the Company and the Initial
Purchasers.

         "REGULAR RECORD DATE" has the meaning set forth in the Securities.

         "REPURCHASE DATE" has the meaning set forth in Section 4.1(a).

         "REPURCHASE NOTICE" has the meaning set forth in Section 4.1(c).

         "REPURCHASE PRICE" has the meaning set forth in Section 4.1(a).

         "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 or assistant treasurer 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 and who shall have direct responsibility
for the administration of this Indenture.

         "RESTRICTED CERTIFICATED SECURITY" means a Certificated Security which
is a Transfer Restricted Security.

                                       6



         "RESTRICTED GLOBAL SECURITY" means a Global Security that is a Transfer
Restricted Security.

         "RESTRICTED SECURITY" means a Restricted Certificated Security or a
Restricted Global Security.

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

         "SALE PRICE" of one share of Common Stock or one share of Applicable
Stock on any date means the closing per share sale price of such Common Stock or
Applicable Stock, as applicable (or, if no closing sale price is reported, the
average of the bid and ask prices or, if there is more than one bid or ask
price, the average of the average bid and the average ask prices) on such date
as reported in composite transactions on the Nasdaq National Market or, if the
shares of Applicable Stock are not quoted on the Nasdaq National Market, as
reported on a U.S. national or regional securities exchange, or if not listed on
a U.S. 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 a quotation, the Board of
Directors of the Company shall be entitled to make a good faith determination of
the sale price on the basis it considers appropriate.

         "SEC" means the United States Securities and Exchange Commission.

         "SECURITY" OR "SECURITIES" means any of the Company's 1.50% Convertible
Senior Debentures due 2023, as amended or supplemented from time to time, issued
under this Indenture.

         "SECURITIES ACT" means the United States Securities Act of 1933, as
amended.

         "SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02(w) of
Regulation S-X.

         "SPECIAL RECORD DATE" has the meaning set forth in Exhibit A attached
hereto.

         "SPIN-OFF" has the meaning set forth in Section 12.3(d).

         "STATED MATURITY", when used with respect to any Security, means June
1, 2023.

         "SUBSIDIARY" means any Person of which at least a majority of the
outstanding voting stock shall at the time directly or indirectly be owned by
the Company or by one or more Subsidiaries thereof or by the Company and one or
more Subsidiaries.

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

         "TRADING DAY" means:

                                       7



               (a)  if the applicable security is quoted on the Nasdaq National
     Market, a day on which trades may be made on the Nasdaq National Market;

               (b)  if the applicable security is listed or admitted for trading
     on the quoted on the NYSE, a day on which the NYSE is open for business; or

               (c)  if the applicable security is not so listed or admitted for
     trading on the NYSE and not so quoted on the Nasdaq National Market, a day
     on which the principal U.S. national or regional exchange on which the
     applicable security is listed or admitted for trading is open for business.

         "TRANSFER CERTIFICATE" has the meaning set forth in Section 2.12(f).

         "TRANSFER RESTRICTED SECURITY" has the meaning set forth in Section
2.12(f).

         "TRIGGER EVENT" has the meaning set forth in Section 12.3(d).

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

         "UNRESTRICTED CERTIFICATED SECURITY" means a Certificated Security that
is not a Transfer Restricted Security.

         "UNRESTRICTED GLOBAL SECURITY" means a Global Security that is not a
Transfer Restricted Security.

         Section 1.2.   Incorporation by Reference of Trust Indenture Act.

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

         "COMMISSION" means the SEC.

         "INDENTURE SECURITIES" means the Securities.

         "INDENTURE SECURITY HOLDER" means a Securityholder.

         "INDENTURE TO BE QUALIFIED" means this Indenture.

         "INDENTURE TRUSTEE" or "institutional trustee" means the Trustee.

         "OBLIGOR" on the indenture securities means the Company.

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

                                       8



         Section 1.3.   Rules of Construction.

         Unless the context otherwise requires:

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

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

         (c)   "or" is not exclusive;

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

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

         Section 1.4.   Acts of Holders.

         (a)   Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company, as
described in Section 14.2. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of 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, if it so states. The
fact and date of the execution of any such instrument or writing, or the
authority of the person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.

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

          (d)  Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the

                                       9



Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.

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

                                   ARTICLE II

                                 THE SECURITIES

         Section 2.1.   Form and Dating.

         The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, which is a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage (provided that any such notation, legend or
endorsement required by usage is in a form acceptable to the Company). The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing. Each Security shall be dated the date of its authentication.

         (a)   Restricted Global Securities. All of the Securities are being
offered and sold to QIBs in reliance on Rule 144A and shall be issued initially
in the form of one or more Restricted Global Securities, which shall be
deposited with the Trustee at its Corporate Trust Office, as custodian for the
Depositary and registered in the name of DTC or the nominee thereof, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Restricted Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary as hereinafter provided.

         (b)   Global Securities in General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall initially represent the aggregate amount of
outstanding Securities stated thereon, but that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, repurchases and
conversions of such Securities.

                                       10



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

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

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

         Section 2.2.   Execution and Authentication.

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

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

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

         The Trustee shall authenticate and deliver the Securities for original
issue in an aggregate principal amount of up to $200,000,000 (up to $240,000,000
aggregate principal amount if the Initial Purchasers' option set forth in the
Purchase Agreement is exercised in full) upon one or more Company Orders without
any further action by the Company (other than as contemplated in Section 14.4
and Section 14.5). Subject to the preceding sentence, at any time and from time
to time after the execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for authentication.
Except as otherwise provided in this Article Three, the Trustee shall thereupon
authenticate and make available for delivery said Securities to or upon Company
Order. The aggregate principal amount of the Securities due at the Stated
Maturity thereof outstanding at any time may not

                                       11



exceed the amount set forth in this paragraph except as provided in Section 2.7.
In authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall receive
and shall be fully protected in relying upon:

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

               (b)  an Officers' Certificate delivered in accordance with
     Sections 14.4 and 14.5; and

                    (i)  an Opinion of Counsel reasonably satisfactory to the
         Trustee.

         The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.

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

         Section 2.3.  Registrar, Paying Agent, Conversion Agent and Bid
Solicitation Agent.

         The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR"), an office
or agency where Securities may be presented for redemption, repurchase or
payment ("PAYING AGENT"), an office or agency where Securities may be presented
for conversion ("CONVERSION AGENT") and an office or agency where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company shall also appoint a bid solicitation agent ("BID
SOLICITATION AGENT") to act as set forth in Section 1 of the Securities.
Pursuant to Section 6.5, the Company will at all times maintain a Registrar,
Paying Agent, Conversion Agent, and Bid Solicitation Agent and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served in the Borough of Manhattan, New
York City. The Registrar shall keep a register of the Securities and of their
transfer and exchange.

         The Company may have one or more co-registrars, one or more additional
paying agents, one or more additional conversion agents and one or more
additional Bid Solicitation

                                       12



Agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 6.5. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 6.5.

         The Company shall enter into an appropriate limited agency agreement
with any Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or
co-registrar (in each case, if such Person is a Person 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,
Conversion Agent or Bid Solicitation Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 9.7.
The Company or any Subsidiary or an Affiliate of either of them may act as
Paying Agent, Registrar, Conversion Agent or co-registrar. None of the Company
or any Subsidiary or any Affiliate of any of them may act as Bid Solicitation
Agent.

         The Company hereby initially appoints the Trustee as Registrar, Paying
Agent, Conversion Agent and Bid Solicitation Agent in connection with the
Securities.

         Section 2.4.   Paying Agent to Hold Cash and Securities in Trust.

         Except as otherwise provided herein, prior to 10:00 a.m., New York City
time, on each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent Cash (in immediately available funds if deposited
on the due date) or number of shares of Common Stock and/or Applicable Stock
sufficient to make such payments when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
Cash, Common Stock and Applicable Stock held by the Paying Agent for the making
of payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. If the Company, a Subsidiary
or an Affiliate of any of them acts as Paying Agent, it shall segregate the
money, Common Stock and Applicable Stock held by it as Paying Agent and hold it
as a separate trust fund.

         The Company at any time may require a Paying Agent to pay all Cash,
Common Stock and Applicable Stock held by it to the Trustee, and to account for
any funds and Common Stock or Applicable Stock disbursed by it, and the Trustee
may at any time during the continuance of any such default, upon the written
request to the Paying Agent, require such Paying Agent to forthwith pay to the
Trustee all Cash, Common Stock and Applicable Stock so held in trust. Upon doing
so, the Paying Agent shall have no further liability for the Cash, Common Stock
or Applicable Stock.

         Section 2.5.   Securityholder Lists.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee on or before each semiannual interest payment date
and at such other times as the Trustee may request in writing a

                                       13



list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.

         Section 2.6.   Transfer and Exchange.

         (a)   Subject to compliance with any applicable additional requirements
contained in Section 2.12, when a Security is presented to the Registrar with a
request to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by an assignment form
and, if applicable, a transfer certificate, each in the form included in Exhibit
A attached hereto and in form satisfactory to the Registrar and each duly
executed by the Holder thereof or its attorney duly authorized in writing. To
permit registration of transfers and exchanges, upon surrender of any Security
for registration of transfer or exchange at an office or agency maintained for
such purpose pursuant to Section 2.3, the Company shall execute, and the Trustee
shall authenticate Securities of a like aggregate principal amount at the
Registrar's request. Any transfer or exchange shall be without charge, except
that the Company or the Registrar may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange.

         Neither the Company, the Registrar nor the Trustee shall be required to
exchange or register a transfer of (i) any Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed), (ii) any Securities in respect of which a Repurchase Notice
or a Fundamental Change 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 Securities to be repurchased in part, the portion thereof not to be
repurchased) or (iii) any Securities for a period of 15 days before the mailing
of a notice of redemption of Securities to be redeemed.

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

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

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

         The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between

                                       14



or among Agent Members or other beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.

         Section 2.7.   Replacement Securities.

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

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

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

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

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

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

         Securities outstanding at any time are all the Securities authenticated
by the Trustee, except for those cancelled by it, those paid, redeemed or
repurchased pursuant to Section 2.7, those delivered to it for cancellation and
those described in this Section 2.8 as not outstanding.

                                       15



         A Security does not cease to be outstanding because the Company or an
Affiliate thereof holds the Security; provided, however, that in determining
whether the Holders of the requisite principal amount of Securities have given
or concurred in any request, demand, authorization, direction, notice, consent,
waiver, or other Act hereunder, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other Act,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination.

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

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

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

         Section 2.9.   Temporary Securities.

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

         If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.3,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized

                                       16



denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.

         Section 2.10.  Cancellation.

         All Securities surrendered for payment, repurchase by the Company
pursuant to Articles IV or V, conversion, redemption or registration of transfer
or exchange shall, if surrendered to any person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly cancelled
by the Trustee. The Company may not issue new Securities to replace Securities
it has paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article XII. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with the
Trustee's customary procedure.

         Section 2.11.  Persons Deemed Owners.

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

         Section 2.12.  Additional Transfer and Exchange Requirements.

         (a)   Transfer and Exchange of Global Securities.

               (i)  Certificated Securities shall be issued in exchange for
     interests in the Global Securities only if (x) the Depositary notifies the
     Company that it is unwilling or unable to continue as Depositary for the
     Global Securities or if it at any time ceases to be a "clearing agency"
     registered under the Exchange Act, if so required by applicable law or
     regulation and a successor Depositary is not appointed by the Company
     within 90 days, (y) the Company decides to discontinue use of the system of
     book-entry transfer through DTC (or any successor depositary) or (z) an
     Event of Default has occurred and is continuing. In either case, the
     Company shall execute, and the Trustee shall, upon receipt of a Company
     Order (which the Company agrees to deliver promptly), authenticate and
     deliver Certificated Securities in an aggregate principal amount equal to
     the principal amount of such Global Securities in exchange therefor. Only
     Restricted Certificated Securities shall be issued in exchange for
     beneficial interests in Restricted Global Securities, and only Unrestricted
     Certificated Securities shall be issued in exchange for

                                       17



     beneficial interests in Unrestricted Global Securities. Certificated
     Securities issued in exchange for beneficial interests in Global Securities
     shall be registered in such names and shall be in such authorized
     denominations as the Depositary, pursuant to instructions from its direct
     or indirect participants or otherwise, shall instruct the Trustee. The
     Trustee shall deliver or cause to be delivered such Certificated Securities
     to the Persons in whose name such Securities are so registered. Such
     exchange shall be effected in accordance with the Applicable Procedures.

               (ii) Notwithstanding any other provisions of this Indenture other
     than the provisions set forth in Section 2.12(a)(i), a Global Security may
     not be transferred except as a whole by the Depositary to a nominee of the
     Depositary or by a nominee of the Depositary to the Depositary or another
     nominee of the Depositary or by the Depositary or any such nominee to a
     successor Depositary or a nominee of such successor Depositary.

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

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

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

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

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

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

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

                    (B)  if such Restricted Certificated Security is being
          transferred to a person the Holder reasonably believes is a QIB in
          accordance with Rule 144A, or pursuant to an effective registration
          statement under the Securities Act or in compliance with Rule 904
          under the Securities Act, a certification to that effect from such
          Holder (in substantially the form set forth in the Transfer
          Certificate);

                                       18



                    (C)  if such Restricted Certificated Security is being
               issued to an institutional "accredited investor" (as defined in
               Rule 501(a)(1), (2), (3) or (7) under the Securities Act), a
               certificate to that effect from the Holder (in substantially the
               form set forth in the Transfer Certificate) and a signed letter
               containing certain representations and agreements relating to the
               restrictions on transfer of the Securities in the form obtained
               from the Trustee;

                    (D)  if such Restricted Certificated Security is being
               transferred pursuant to an exemption from the registration
               requirements of the Securities Act in accordance with Rule 144
               pursuant to and in compliance with an exemption from the
               registration requirements under the Securities Act, a
               certification to that effect from the Holder (in substantially
               the form set forth in the Transfer Certificate) and if the
               Company or the Registrar so requests, a customary Opinion of
               Counsel, certificates and other information reasonably acceptable
               to the Company and the Registrar to the effect that such transfer
               does not require registration under the Securities Act.

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

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

                    (ii) if such beneficial interest is being transferred
          pursuant to an exemption from the registration requirements of the
          Securities Act in accordance with Rule 144, a certification to that
          effect from the Holder (in substantially the form set forth in the
          Transfer Certificate) and, if the Company or the Trustee so requests,
          a customary Opinion of Counsel, certificates and other information
          reasonably acceptable to the Company and the Register to the effect
          that such transfer does not require registration under the Securities
          Act,

the Registrar shall reduce or cause to be reduced the aggregate principal amount
of the Restricted Global Security by the appropriate principal amount and shall
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Security by a like principal amount. Such transfer shall
otherwise be effected in accordance with the Applicable Procedures. If no
Unrestricted Global Security is then outstanding, the Company shall execute and
the Trustee

                                       19



shall, upon receipt of a Company Order (which the Company agrees to
deliver promptly), authenticate and deliver an Unrestricted Global Security.

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

                         (i)  a certification from the Holder (in substantially
the form set forth in the Transfer Certificate) to the effect that such
beneficial interest is being transferred to a person that the transferor
reasonably believes is a QIB in accordance with Rule 144A; or

                         (ii) a certification from the Holder (in substantially
the form set forth in the Transfer Certificate) to the effect that such
beneficial interest is being transferred in compliance with Rule 904 under the
Act; or

                         (iii) a certification from the Holder (in substantially
the form set forth in the Transfer Certificate) to the effect that such
beneficial interest is being transferred to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) and a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Securities in the form obtained
from the Trustee.

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

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

                                       20



such procedures and the events or circumstances requiring that such notice be
given. Thereafter, if Certificated Securities are presented by a Holder to a
Registrar with a request:

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

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

provided, however, that the Certificated Securities presented or surrendered for
registration of transfer or exchange:

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

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

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

                       (ii) if such Restricted Certificated Security is being
                    transferred pursuant to an exemption from the registration
                    requirements of the Securities Act in accordance with Rule
                    144, a certification to that effect from such Holder (in
                    substantially the form set forth in the Transfer
                    Certificate) and, if the Company or the Registrar so
                    requests, a customary Opinion of Counsel, certificates and
                    other information reasonably acceptable to the Company and
                    the Trustee to the effect that such transfer does not
                    require registration under of the Securities Act;

                                       21


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

                        (i)  if such Restricted Certificated Security is being
                    transferred to a person the Holder reasonably believes is a
                    QIB (which, in the case of an exchange, shall be such
                    Holder) in accordance with Rule 144A, a certification to
                    that effect from such Holder (in substantially the form set
                    forth in the Transfer Certificate); or

                        (ii) if such Restricted Certificated Security is being
                    transferred in compliance with Rule 904 under the Act,
                    certification to that effect from such Holder (in
                    substantially the form set forth in the Transfer
                    Certificate); or

                        (iii) if such Restricted Certificated Security is being
                    transferred to an institutional "accredited investor" (as
                    defined in Rule 501(a)(1), (2), (3) or (7) under the
                    Securities Act), certification to that effect from such
                    Holder (in substantially the form set forth in the Transfer
                    Certificate) and a signed letter containing certain
                    representations and agreements relating to the restrictions
                    on transfer of the Securities in the form obtained from the
                    Trustee;

                    (4)  in the case of an Unrestricted Certificated Security to
          be transferred or exchanged for a beneficial interest in an
          Unrestricted Global Security, such request need not be accompanied by
          any additional information or documents; and

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

                        (i)  if such Unrestricted Certificated Security is being
                    transferred to a person the Holder reasonably believes is a
                    QIB (which, in the case of an exchange, shall be such
                    Holder) in accordance with Rule 144A, a certification to
                    that effect from such Holder (in substantially the form set
                    forth in the Transfer Certificate); or

                                       22


                        (ii) if such Unrestricted Certificated Security is being
                    transferred in compliance with Rule 904 under the Act,
                    certification to that effect from such Holder (in
                    substantially the form set forth in the Transfer
                    Certificate); or

                        (iii) if such Unrestricted Certificated Security is
                    being transferred to an institutional "accredited investor"
                    (as defined in Rule 501(a)(1), (2), (3) or (7) under the
                    Securities Act), certification to that effect from such
                    Holder (in substantially the form set forth in the Transfer
                    Certificate) and a signed letter containing certain
                    representations and agreements relating to the restrictions
                    on transfer of the Securities in the form obtained from the
                    Trustee;

          (f)  Legends.

                    (1)  Except as permitted by the following paragraphs (2),
          (3) and (4), each Global Security and Certificated Security (and all
          Securities issued in exchange therefor or upon registration of
          transfer or replacement thereof) shall bear a legend in substantially
          the form called for by footnote 2 to Exhibit A attached hereto (each a
          "TRANSFER RESTRICTED SECURITY"), for so long as it is required by this
          Indenture to bear such legend. Each Transfer Restricted Security shall
          have attached thereto a certificate (a "TRANSFER CERTIFICATE") in
          substantially the form called for by footnote 5 to Exhibit A attached
          hereto.

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

                        (i)  in the case of any Restricted Certificated
                    Security, any Registrar shall permit the Holder thereof to
                    exchange such Restricted Certificated Security for an
                    Unrestricted Certificated Security, or (under the
                    circumstances described in Section 2.12(e)) to transfer such
                    Restricted Certificated Security to a transferee who shall
                    take such Security in the form of a beneficial interest in
                    an Unrestricted Global Security, and in each case shall
                    rescind any restriction on the transfer of such Security;
                    provided, however, that the Holder of such Restricted
                    Certificated Security shall, in connection with such
                    exchange or transfer, comply with the other applicable
                    provisions of this Section 2.12; and

                                       23


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

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

                    (4)  After the expiration of the holding period pursuant to
          Rule 144(k) of the Securities Act, the Company may with the consent of
          the Holder of a Restricted Global Security or a Restricted
          Certificated Security, remove any restriction of transfer on such
          Security, and the Company shall execute, and the Trustee shall
          authenticate and deliver, Securities that do not bear such legend and
          that do not have a Transfer Certificate attached thereto.

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

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

          Section 2.13. CUSIP Numbers.

          The Company may issue the Securities with one or more "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be

                                       24


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. Ranking.

          The indebtedness of the Company arising under or in connection with
this Indenture and every outstanding Security issued under this Indenture from
time to time constitutes and will constitute a senior unsecured general
obligation of the Company, ranking equally with other existing and future senior
unsecured Indebtedness of the Company and ranking senior in right of payment to
any future Indebtedness of the Company that is expressly made subordinate to the
Securities by the terms of such Indebtedness.

          For purposes of this Section 2.14 only, "INDEBTEDNESS" means, without
duplication, the principal or face amount of:

          (a)  all obligations for borrowed money;

          (b)  all obligations evidenced by notes or other similar instruments;

          (c)  all obligations in respect of letters of credit or bankers
acceptances or similar instruments (or reimbursement obligations with respect
thereto);

          (d)  all obligations to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business;

          (e)  all obligations as lessee which are capitalized in accordance
with generally accepted accounting principles; and

          (f)  all Indebtedness of others guaranteed by the Company or any of
its Subsidiaries or for which the Company or any of its Subsidiaries is legally
responsible or liable (whether by agreement to purchase indebtedness of, or to
supply funds or to invest in, others).

                                  ARTICLE III
                                   REDEMPTION

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

          Prior to June 1, 2008, the Securities will not be redeemable at the
Company's option. Beginning on June 1, 2008, the Company, at its option, may
redeem the Securities in accordance with this Article III for Cash at any time
as a whole, or from time to time in part, at a redemption price equal to 100% of
the principal amount of Securities to be redeemed plus any accrued and unpaid
interest (including Contingent Interest, if any) and Additional Interest
Amounts, if any, on those Securities to, but not including, the Redemption Date
(the "REDEMPTION PRICE").

          In the event that the Company elects to redeem the Securities on a
date that is on or after any Regular Record Date but before the corresponding
Interest Payment Date, the Company shall be required to pay any accrued and
unpaid interest (including Contingent Interest,

                                       25


if any) and Additional Interest Amounts, if any, to the same Holder to whom the
Company pays the principal of such Security regardless of whether such Holder
was the registered Holder on the Regular Record Date immediately preceding such
Redemption Date.

          If the Company elects to redeem Securities, it shall notify the
Trustee in writing of the Redemption Date, the principal amount of Securities to
be redeemed and the Redemption Price. The Company shall give this notice to the
Trustee by a Company Order at least 40 days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee).

          Section 3.2. Selection of Securities to Be Redeemed.

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

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

          Securities and portions of Securities that are to be redeemed are
convertible by the Holder until 5:00 p.m., New York City time, on the Business
Day immediately preceding the Redemption Date. If any Security selected for
partial redemption is converted in part before termination of the conversion
right with respect to the portion of the Security so selected, the converted
portion of such Security shall be deemed (so far as may be) to be the portion
selected for redemption. Securities which have been converted during a selection
of Securities to be redeemed may be treated by the Trustee as outstanding for
the purpose of such selection.

          Section 3.3. Notice of Redemption.

          At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.

          The notice of redemption shall identify the Securities to be redeemed
and shall state:

          (a)  the Redemption Date;

          (b)  the Redemption Price;

          (c)  the Conversion Rate;

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

                                       26


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

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

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

          (h)  in the case of any Security redeemed in part, that the Holder of
such Security will receive a new Security or Securities, of authorized
denominations for the principal amount thereof remaining unredeemed;

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

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

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

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

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

          Section 3.4. Effect of Notice of Redemption.

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

          Section 3.5. Deposit of Redemption Price.

          Prior to 10:00 a.m., New York City time, on the applicable Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.4) an amount of Cash (in
immediately available funds if deposited on the Redemption Date) sufficient to
pay the aggregate Redemption Price of all Securities or portions thereof which
are to be redeemed as of such Redemption Date other than Securities or portions
of Securities called for redemption which on or prior thereto have been
delivered by the Company to the Trustee for cancellation or have been converted.

                                       27


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

          Section 3.6. Securities Redeemed in Part.

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

          Section 3.7. Repayment to the Company.

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

                                   ARTICLE IV

                            REPURCHASE OF SECURITIES
                            AT THE OPTION OF HOLDERS
                                ON SPECIFIC DATES

          Section 4.1. Optional Put.

          (a)  Securities shall be repurchased by the Company, at the option of
the Holder thereof, on June 1, 2008, June 1, 2013 and June 1, 2018 (each, a
"REPURCHASE DATE"), at a repurchase price equal to 100% of the principal amount
of those Securities plus accrued and unpaid interest (including Contingent
Interest, if any) and Additional Interest Amounts, if any, to, but not
including, such Repurchase Date (the "REPURCHASE PRICE"), subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
Section 4.1(c).

          (b)  No later than 20 Business Days prior to each Repurchase Date, the
Company shall mail a written notice of the repurchase right by first class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Repurchase Notice to be
completed by the Holder and shall briefly state, as applicable:

               (i)  the date by which the Repurchase Notice must be delivered to
     the Paying Agent in order for a Holder to exercise the repurchase right;

               (ii) the Repurchase Date;

                                       28


               (iii) the Repurchase Price;

               (iv) whether the Repurchase Price will be paid in Cash or, if
     permitted hereunder, in shares of Common Stock, or a combination thereof
     and, in the case of a combination, the percentage of each;

               (v)  if the Company elects to pay the Repurchase Price in shares
     of Common Stock or a combination of Cash and shares of Common Stock, that
     the number of shares of Common Stock each Holder will receive will equal
     the portion of the Repurchase Price to be paid in shares of Common Stock
     divided by the Market Price of one share of Common Stock;

               (vi) if the Company elects to pay the Repurchase Price in shares
     of Common Stock or a combination of Cash and shares of Common Stock, the
     method of calculating the Market Price of the shares of Common Stock;

               (vii) that because the Market Price of one share of Common Stock
     will be determined prior to the Repurchase Date, Holders of the Securities
     will bear the market risk that the shares of Common Stock to be received
     will decline in value between the date such Market Price is determined and
     the Repurchase Date;

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

               (ix) the Conversion Rate and any adjustments thereto;

               (x)  that the Securities as to which a Repurchase Notice has been
     given may be converted if they are otherwise convertible pursuant to
     Article XII only if the Repurchase Notice has been withdrawn in accordance
     with the terms of this Indenture;

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

               (xii) that the Repurchase Price for any Security as to which a
     Repurchase Notice has been duly given and not withdrawn will be paid
     promptly following the later of the Repurchase Date and the time of
     surrender of such Security;

               (xiii) the procedures the Holder must follow to exercise its put
     right under this Section 4.1;

               (xiv) the conversion rights, if any, of the Securities;

               (xv) the procedures for withdrawing a Repurchase Notice;

               (xvi) that, unless the Company defaults in making payment of such
     Repurchase Price, interest (including Contingent Interest, if any) and
     Additional Interest Amounts, if any, on Securities surrendered for
     repurchase by the Company will cease to accrue on and after the Repurchase
     Date; and

                                       29


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

          At the Company's request, the Trustee shall give the notice of
repurchase right in the Company's name and at the Company's expense; provided,
however, that the Company makes such request at least three Business Days
(unless a shorter period shall be satisfactory to the Trustee) prior to the date
by which such notice of repurchase right must be given to the Holder in
accordance with this Section 4.1(b); provided, further, that the text of the
notice of repurchase right shall be prepared by the Company.

          (c)  A Holder may exercise its right specified in Section 4.1(a) upon
delivery of a written notice of repurchase (a "REPURCHASE NOTICE") to the Paying
Agent at any time during the period beginning at 9:00 a.m., New York City time,
on the date that is 20 Business Days immediately preceding the relevant
Repurchase Date until 5:00 p.m., New York City time, on the Business Day
immediately preceding such Repurchase Date, stating:

               (i)  the certificate number of the Security which the Holder will
     deliver to be repurchased or the appropriate Depositary procedures if
     Certificated Securities have not been issued;

               (ii) the portion of the principal amount of the Security which
     the Holder will deliver to be repurchased, which portion must be in
     principal amounts of $1,000 or a multiple of $1,000;

               (iii) that such Security shall be repurchased by the Company as
     of the Repurchase Date pursuant to the terms and conditions specified in
     the Securities and in this Indenture; and

               (iv) in the event the Company elects, pursuant to Section 4.2(b),
     to pay the Repurchase Price, in whole or in part, in shares of Common Stock
     but such portion of the Repurchase Price shall ultimately be paid to such
     Holder entirely in Cash because any of the conditions to payment of the
     Repurchase Price in shares of Common Stock is not satisfied prior to 5:00
     p.m., New York City time, on the Business Day immediately preceding the
     relevant Repurchase Date, as set forth in Section 4.2(b), whether such
     Holder elects to (A) withdraw such Repurchase Notice as to some or all of
     the Securities to which such Repurchase Notice relates (stating the
     principal amount and certificate numbers, if any or the appropriate
     Depositary procedures, if applicable, of the Securities as to which such
     withdrawal shall relate), or (B) receive Cash in respect of the entire
     Repurchase Price for all Securities (or portions thereof) to which such
     Repurchase Notice relates.

          The delivery of such Security to the Paying Agent with, or at any time
after delivery of, the Repurchase Notice (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Repurchase Price therefor; provided, however, that
such Repurchase Price shall be so paid pursuant to this Section 4.1 only if the
Security so delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Repurchase Notice.

                                       30


          If a Holder, in such Holder's Repurchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of Section
4.3, fails to indicate such Holder's choice with respect to the election set
forth in Section 4.1(c)(iv), such Holder shall be deemed to have elected to
receive Cash in respect of the entire Repurchase Price for all Securities
subject to such Repurchase Notice in the circumstances set forth in such Section
4.1(c)(iv).

          The Company shall repurchase from the Holder thereof, pursuant to this
Section 4.1, a portion of a Security, so long as the principal amount of such
portion is $1,000 or a multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

          Any repurchase by the Company contemplated pursuant to the provisions
of this Section 4.1 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of delivery of the Security.

          Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by this
Section 4.1(c) shall have the right to withdraw such Repurchase Notice at any
applicable time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Repurchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 4.3.

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

          Section 4.2. The Company's Right to Elect Manner of Payment of
Repurchase Price.

          (a)  If the Securities are to be repurchased on June 1, 2008 pursuant
to Section 4.1(a), the Repurchase Price must be paid in Cash. If the Securities
to be repurchased on June 1, 2013 or June 1, 2018, pursuant to Section 4.1(a),
the Repurchase Price may be paid for at the election of the Company, in Cash or
shares of Common Stock, or in any combination of Cash and shares of Common
Stock, subject to the conditions set forth in Section 4.2(b). The Company shall
designate, in the notice of repurchase right delivered pursuant to Section
4.1(b), whether the Company will repurchase the Securities for Cash or, if
permitted hereunder, shares of Common Stock, or, if a combination thereof, the
percentages of the Repurchase Price in respect of which it will pay in Cash or
shares of Common Stock; provided, however, that the Company will pay Cash for
fractional interests in a share of Common Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to
repurchase by the Company held by a Holder shall be considered together (no
matter how many separate certificates are to be presented). Each Holder whose
Securities are repurchased pursuant to Section 4.1 shall receive the same
percentage of Cash or, if permitted hereunder, shares of Common Stock in payment
of the Repurchase Price for such Securities, (i) except as provided in this
Section 4.2(a) with regard to the payment of Cash in lieu of fractional shares
of Common Stock, (ii) in the event that the Company is unable to purchase the
Securities of the Holder or Holders for shares of Common Stock because any
necessary qualifications or registration of the shares of Common Stock under

                                       31


applicable securities laws cannot be obtained, the Company may purchase the
Securities of such Holder or Holders for Cash. The Company may not change its
election with respect to the consideration (or components or percentages of
components thereof) to be paid once the Company has given its notice of
repurchase right to Holders except in the event of a failure to satisfy, prior
to 5:00 p.m., New York City time, on the Business Day immediately preceding the
Repurchase Date, any condition to the payment of the Repurchase Price in whole
or in part, in shares of Common Stock.

          (b)  If the Company elects to pay all or a portion of the Repurchase
Price of Securities in respect of which a Repurchase Notice pursuant to Section
4.1(c) has been given in shares of Common Stock, the number of shares of Common
Stock to be issued shall be equal to the portion of the Repurchase Price to be
paid in shares of Common Stock divided by the Market Price of one share of
Common Stock, subject to satisfaction of the conditions set forth in the second
succeeding paragraph.

          The Company will not issue any fraction of a share of Common Stock in
payment of the Repurchase Price. Instead, the Company will make a Cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the Market
Price of one share of Common Stock. If a Holder elects to have more than one
Security purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Securities to be purchased.

          The Company's right to exercise its election to repurchase Securities
through the issuance of shares of Common Stock shall be conditioned upon:

               (i)  the registration of such shares of Common Stock under the
     Securities Act and the Exchange Act, in each case, if required;

               (ii) any qualification or registration of such shares of Common
     Stock under applicable state securities laws, if necessary, or the
     availability of an exemption from such qualification and registration;

               (iii) the listing of such shares of Common Stock on a United
     States national securities exchange or the quotation of such shares of
     Common Stock in an inter-dealer quotation system of any registered United
     States national securities association; and

               (iv) the receipt by the Trustee of an Officers' Certificate
     stating: (A) that the terms of the issuance of the shares of Common Stock
     are in conformity with this Indenture; (B) that the shares of Common Stock
     to be issued in payment of the Repurchase Price in respect of Securities
     have been duly authorized and, when issued and delivered pursuant to the
     terms of this Indenture in payment of the Repurchase Price in respect of
     Securities, will be validly issued, fully paid, non-assessable and free
     from preemptive rights; (C) that the conditions above, the conditions in
     clauses (i)-(iii) above and the condition set forth in the second
     succeeding sentence regarding issuance of a press release have been
     satisfied in all material respects; and (D) the number of shares of Common
     Stock to be issued for each $1,000 principal amount of Securities and the
     Sale Price of a share of Common Stock on each Trading Day during the period
     commencing

                                       32


     on the first Trading Day of the PERIOD during which the Market Price is
     calculated and ending on the Trading Day immediately preceding the
     Repurchase Date; and

               (v)  the receipt by the Trustee of an Opinion of Counsel stating
     that: (A) the shares of Common Stock to be issued in payment of the
     Repurchase Price in respect of Securities have been duly authorized, and
     when issued and delivered pursuant to the terms of this Indenture in
     payment of the Repurchase Price in respect of Securities, will be validly
     issued, fully paid and non-assessable and, to the best of such counsel's
     knowledge, free from preemptive rights; and (B) the conditions in clauses
     (i) through (iii) above have been satisfied in all material respects.

          If the foregoing conditions are not satisfied with respect to a Holder
or Holders prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Repurchase Date, and the Company has elected to
repurchase the Securities pursuant to this Section 4.2 through the issuance of
Common Stock, the Company shall pay the entire Repurchase Price of the
Securities of such Holder or Holders in Cash.

          Upon determination of the actual number of shares of Common Stock to
be issued upon repurchase of Securities, the Company shall be required to
disseminate a press release through a public medium as is customary for such a
press release.

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

          (d)  Taxes. If a Holder of a repurchased Security is paid in shares of
Common Stock, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on such issue of shares of Common Stock. However, the Holder
shall pay any such tax which is due because the Holder requests the shares of
Common Stock to be issued in a name other than the Holder's name. The Paying
Agent may refuse to deliver the certificates representing the shares of Common
Stock being issued in a name other than the Holder's name until the Paying Agent
receives a sum sufficient to pay any tax which will be due because the shares of
Common Stock are to be issued in a name other than the Holder's name. Nothing
contained herein shall preclude any income tax withholding required by law or
regulations.

          Section 4.3. Effect of Repurchase Notice.

          Upon receipt by the Paying Agent of the Repurchase Notice specified in
Section 4.1(c), the Holder of the Security in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified
in the following paragraph) thereafter be entitled to receive solely the
Repurchase Price with respect to such Security. Such Repurchase Price shall be
paid to such Holder, subject to receipts of Cash and/or securities by the Paying
Agent, promptly following the later of (a) the Repurchase Date with respect to
such Security (provided the conditions in Section 4.1 (c) have been satisfied)
and (b) the time of delivery of such Security to the Paying Agent by the Holder

                                       33


thereof in the manner required by Section 4.1(c). Securities in respect of which
a Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to Article XII on or after the date of the delivery of such Repurchase
Notice unless such Repurchase Notice has first been validly withdrawn as
specified in the following paragraph.

          A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Repurchase Date, specifying:

          (a)  the certificate number, if any, or the appropriate Depositary
procedures, if applicable, of the Security in respect of which such notice of
withdrawal is being submitted;

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

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

          Section 4.4. Deposit of Repurchase Price.

          Prior to 10:00 a.m., New York City time, on the applicable Repurchase
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.4) an amount of Cash (in
immediately available funds if deposited on such Business Day) and/or shares of
Common Stock, if permitted hereunder, sufficient to pay the aggregate Repurchase
Price of all the Securities or portions thereof which are to be repurchased on
such Repurchase Date.

          If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Business Day immediately following the
applicable Repurchase Date, Cash and/or shares of Common Stock, if permitted
hereunder, sufficient to pay the Repurchase Price of any Securities for which a
Repurchase Notice has been tendered and not withdrawn pursuant to Section 4.3,
then, immediately after such Repurchase Date, such Securities will cease to be
outstanding and interest (including, Contingent Interest, if any) and Additional
Interest Amounts, if any, on such Securities will cease to accrue, whether or
not such Securities are delivered to the Paying Agent, and the rights of the
Holders in respect thereof shall terminate (other than the right to receive the
Repurchase Price upon delivery of such Securities).

          As soon as practicable on and after the Repurchase Date, the Company
shall deliver to each Holder entitled to receive shares of Common Stock through
the Paying Agent, a certificate (other than in the case of Holders of Securities
in book-entry form with DTC, which shares shall be delivered in accordance with
DTC customary practices) for the number of full shares of Common Stock issuable
in payment of the Repurchase Price and Cash in lieu of any fractional interests.
The person in whose name the certificate for the shares of Common Stock is
registered shall be treated as a holder of record of shares of Common Stock on
the Repurchase Date. No payment or adjustment will be made for dividends on the
shares of Common Stock the record date for which occurred on or prior to the
Repurchase Date.

                                       34


          Section 4.5. Securities Repurchased in Part.

          Any Certificated Security 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 Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

          Section 4.6. Covenant to Comply With Securities Laws Upon Repurchase
of Securities.

          When complying with the provisions of Section 4.1 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

          (a)  comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act;

          (b)  file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and

          (c)  otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under Article IV to be exercised in the
time and in the manner specified therein.

          To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Article IV, the Company's
compliance with such laws and regulations shall not in and of itself cause a
breach of its obligations under this Article IV.

          Section 4.7. Repayment to the Company.

          To the extent that the aggregate amount of Cash or shares of Common
Stock deposited by the Company pursuant to Section 4.4 exceeds the aggregate
Repurchase Price of the Securities or portions thereof which the Company is
obligated to repurchase on the Repurchase Date, then, promptly after the
Repurchase Date, the Paying Agent shall return any such excess to the Company.

                                       35


                                   ARTICLE V

                       REPURCHASE AT THE OPTION OF HOLDERS
                            UPON A FUNDAMENTAL CHANGE

          Section 5.1. Fundamental Change Put.

          (a)  General. If a Fundamental Change occurs at any time prior to June
1, 2008, the Securities not previously repurchased by the Company shall be
repurchased by the Company at the option of the Holder thereof at a repurchase
price equal to 100% of the principal amount of the Securities to be repurchased,
plus accrued and unpaid interest, including Contingent Interest, if any, and
Additional Interest Amounts, if any, on those notes to, but not including, the
Fundamental Change Repurchase Date (the "FUNDAMENTAL CHANGE REPURCHASE PRICE"),
subject to satisfaction by or on behalf of any Holder of the requirements set
forth in Section 5.2(c). The fundamental change repurchase date must be within
30 days after the date of the mailing of the Fundamental Change Company Notice
under Section 5.1 (b) (the "FUNDAMENTAL CHANGE REPURCHASE DATE"). No Holder
shall have the right to require the Company to repurchase its Securities under
this Article V if a Fundamental Change occurs on or after June 1, 2008.

     A "FUNDAMENTAL CHANGE" is any transaction or event (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which any of
the following occur:

               (i)  any "person" or "group" is or becomes the "beneficial
     owner," directly or indirectly, of shares of the Company's voting stock
     representing 50% or more of the total voting power of all outstanding
     classes of the Company's stock or has the power, directly or indirectly, to
     elect a majority of the members of the Board of Directors;

              (ii) the holders of the Company's capital stock approve any plan
     or proposal for the liquidation or dissolution of the Company (whether or
     not otherwise in compliance with this Indenture); or

               (iii) all or substantially all of the Common Stock is exchanged
     for, converted into, acquired for or constitutes solely the right to
     receive, consideration (excluding cash payments for fractional shares)
     which is not all or substantially all common stock that is listed on, or
     immediately after the transaction or event will be listed on, a United
     States national securities exchange, or is approved, or immediately after
     the transaction or event will be approved, for quotation on the Nasdaq
     National Market or any similar United States system of automated
     dissemination of quotations of securities prices.

          (b)  Notice of Fundamental Change. No later than 30 days after the
occurrence of a Fundamental Change that occurs prior to June 1, 2008, the
Company shall mail a written notice of Fundamental Change (the "FUNDAMENTAL
CHANGE COMPANY NOTICE") by first class mail to the Trustee and to each Holder
(and to beneficial owners as required by applicable

                                       36


law). The notice shall include a form of Fundamental Change Repurchase Notice to
be completed by the Holder and shall briefly state, as applicable:

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

               (ii) that the Holder has a right to require the Company to
     repurchase the Holder's Securities;

               (iii) the date by which the Fundamental Change Repurchase Notice
     must be delivered to the Paying Agent in order for a Holder to exercise the
     Fundamental Change repurchase right;

               (iv) the Fundamental Change Repurchase Date;

               (v)  the Fundamental Change Repurchase Price;

               (vi) whether the Fundamental Change Repurchase Price will be paid
     in Cash or shares of Applicable Stock, or a combination thereof and, in the
     case of a combination, the percentage of each;

               (vii) if the Company elects to pay the Fundamental Change
     Repurchase Price in shares of Applicable Stock or a combination of Cash and
     shares of Applicable Stock, that the number of shares of Applicable Stock
     each Holder will receive will equal the portion of the Fundamental Change
     Repurchase Price to be paid in shares of Applicable Stock divided by the
     Market Price of one share of Applicable Stock;

               (viii) if the Company elects to pay the Fundamental Change
     Repurchase Price in shares of Applicable Stock or a combination of Cash and
     shares of Applicable Stock, the method of calculating the Market Price of
     the shares of Applicable Stock;

               (ix) that because the Market Price of one share of Applicable
     Stock will be determined prior to the Fundamental Change Repurchase Date,
     Holders of the Securities will bear the market risk that the shares of
     Applicable Stock to be received will decline in value between the date such
     Market Price is determined and the Fundamental Change Repurchase Date;

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

               (xi) the Conversion Rate applicable on the Fundamental Change
     Company Notice Date;

               (xii) that the Securities as to which a Fundamental Change
     Repurchase Notice has been given may be converted if they are otherwise
     convertible pursuant to Article XII only if the Fundamental Change
     Repurchase Notice has been withdrawn in accordance with the terms of this
     Indenture;

                                       37


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

               (xiv) that the Fundamental Change Repurchase Price for any
     Security as to which a Fundamental Change Repurchase Notice has been duly
     given and not withdrawn will be paid promptly following the later of the
     Fundamental Repurchase Date and the time of surrender of such Security;

               (xv) the procedures the Holder must follow to exercise its put
     right under this Section 5.1;

               (xvi) the conversion rights, if any, of the Securities;

               (xvii) the procedures for withdrawing a Fundamental Change
     Repurchase Notice;

               (xviii) that, unless the Company defaults in making payment of
     such Fundamental Change Repurchase Price, interest and Additional Interest
     Amounts, if any, on Securities surrendered for repurchase by the Company
     will cease to accrue on and after the Fundamental Change Repurchase Price;
     and

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

          At the Company's request, the Trustee shall give the Fundamental
Change Company Notice in the Company's name and at the Company's expense;
provided, however, the Company makes such request at least three Business Days
(unless a shorter period shall be satisfactory to the Trustee) prior to the date
by which such Fundamental Change Company Notice must be given to the Holders in
accordance with this Section 5.1(b); provided, further, that the text of the
Fundamental Change Company Notice shall be prepared by the Company.

          (c)  Fundamental Change Repurchase Notice. A Holder may exercise its
right specified in Section 5.1 (a) upon delivery of a written notice of
repurchase (a "FUNDAMENTAL CHANGE REPURCHASE NOTICE"), substantially in the form
of EXHIBIT C hereto, to the Paying Agent at any time prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date, stating:

               (i)  the certificate number of the Security which the Holder will
     deliver to be repurchased or the appropriate depositary procedures if
     Certificated Securities have not been issued;

               (ii) the portion of the principal amount of the Security which
     the Holder will deliver to be repurchased, which portion must be $1,000 or
     a multiple of $1,000;

               (iii) that such Security shall be repurchased on the Fundamental
     Change Repurchase Date pursuant to the terms and conditions specified in
     the Securities and in this Indenture; and

                                       38


               (iv) in the event the Company elects, pursuant to Section 5.2, to
     pay the Fundamental Change Repurchase Price, in whole or in part, in shares
     of Applicable Stock but such portion of the Fundamental Change Repurchase
     Price shall ultimately be paid to such Holder entirely in Cash because any
     of the conditions to payment of the Fundamental Change Repurchase Price in
     shares of Applicable Stock is not satisfied prior to 5:00 p.m., New York
     City time, on the Business Day immediately preceding the Fundamental Change
     Repurchase Date, as set forth in Section 5.2(b), whether such Holder elects
     to (A) withdraw such Fundamental Change Repurchase Notice as to some or all
     of the Securities to which such Fundamental Change Repurchase Notice
     relates (stating the principal amount and certificate numbers, if any, or
     the appropriate Depositary procedures, if applicable, of the Securities as
     to which such withdrawal shall relate), or (B) receive Cash in respect of
     the entire Fundamental Change Repurchase Price for all Securities (or
     portions thereof) to which such Fundamental Change Repurchase Notice
     relates.

          The delivery of such Security to the Paying Agent with, or at any time
after delivery of, the Fundamental Change Repurchase Notice (together with all
necessary endorsements) at the offices of the Paying Agent shall be a condition
to the receipt by the Holder of the Fundamental Change Repurchase Price
therefor; provided, however, that such Fundamental Change Repurchase Price shall
be so paid pursuant to this Section 5.1 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Fundamental Change Repurchase Notice.

          If a Holder, in such Holder's Fundamental Change Repurchase Notice and
in any written notice of withdrawal delivered by such Holder pursuant to the
terms of Section 5.3, fails to indicate such Holder's choice with respect to the
election set forth in Section 5.1(c)(iv), such Holder shall be deemed to have
elected to receive Cash in respect of the entire Fundamental Change Repurchase
Price for all Securities subject to such Fundamental Change Repurchase Notice in
the circumstances set forth in such Section 5.1 (c) (iv).

          The Company shall repurchase from the Holder thereof, pursuant to this
Section 5.1, a portion of a Security, so long as the principal amount of such
portion is $1,000 or a multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

          Any repurchase by the Company contemplated pursuant to the provisions
of this Section 5.1 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Fundamental Change
Repurchase Date and the time of delivery of the Security.

          Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Fundamental Change Repurchase Notice
contemplated by this Section 5.1(c) shall have the right to withdraw such
Fundamental Change Repurchase Notice at any time prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date by delivery of a written notice of withdrawal to the Paying
Agent in accordance with Section 5.3.

                                       39


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

          Section 5.2. The Company's Right to Elect Manner of Payment of
Fundamental Change Repurchase Price.

          (a)  The Securities to be repurchased with respect to any Fundamental
Change Repurchase Date pursuant to Section 5.1(a) may be paid for at the
election of the Company in Cash or shares of Applicable Stock, or in any
combination of Cash and shares of Applicable Stock, subject to the conditions
set forth in Section 5.2(b). The Company shall designate, in the Fundamental
Change Company Notice delivered pursuant to Section 5.1(b), whether the Company
will repurchase the Securities for Cash or shares of Applicable Stock, or, if a
combination thereof, the percentages of the Fundamental Change Repurchase Price
in respect of which it will pay in Cash or shares of Applicable Stock; provided,
however, that the Company will pay Cash for fractional interests in shares of
Applicable Stock. For purposes of determining the existence of potential
fractional interests, all Securities subject to repurchase by the Company held
by a Holder shall be considered together (no matter how many separate
certificates are to be presented). Each Holder whose Securities are repurchased
pursuant to Section 5.1 shall receive the same percentage of Cash or shares of
Applicable Stock in payment of the Fundamental Change Repurchase Price for such
Securities, except (i) as provided in this Section 5.2(a) with regard to the
payment of Cash in lieu of fractional shares of Applicable Stock and (ii) in the
event that the Company is unable to purchase the Securities of a Holder or
Holders for shares of Applicable Stock because any necessary qualifications or
registrations of the shares of Applicable Stock under applicable securities laws
cannot be obtained, the Company may purchase the Securities of such Holder or
Holders for Cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given its Fundamental Change Company Notice to Holders
except in the event of a failure to satisfy, prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date, any condition to the payment of the Fundamental Change
Repurchase Price in whole or in part, in shares of Applicable Stock.

          (b)  If the Company elects to pay all or a portion of the Fundamental
Change Repurchase Price of Securities in respect of which a Fundamental Change
Repurchase Notice pursuant to Section 5.1(c) has been given in Applicable Stock,
the number of shares of Applicable Stock to be issued shall be equal to (i) the
portion of the Fundamental Change Repurchase Price to be paid in Applicable
Stock divided by (ii) the Market Price of one share of Applicable Stock, subject
to satisfaction of the conditions set forth in the second succeeding paragraph.

          The Company will not issue any fraction of a share of Applicable Stock
in payment of the Fundamental Change Repurchase Price. Instead, the Company will
make a Cash payment (calculated to the nearest cent) equal to such fraction
multiplied by the Market Price of one share of Applicable Stock on or prior to
the Fundamental Change Repurchase Date. If a Holder elects to have more than one
Security purchased, the number of shares of Applicable Stock shall be based on
the aggregate amount of Securities to be purchased.

                                       40


          The Company's right to exercise its election to repurchase Securities
through the issuance of shares of Applicable Stock shall be conditioned upon:

          (i)  the registration of such shares of Applicable Stock under the
     Securities Act and the Exchange Act, in each case, if required; and

          (ii) any qualification or registration of such shares of Applicable
     Stock under applicable state securities laws, if necessary, or the
     availability of an exemption from such qualification and registration;

          (iii) the listing of such shares of Applicable Stock on a United
     States national securities exchange or the quotation of such shares of
     Applicable Stock in an inter-dealer quotation system of any registered
     United States national securities association;

          (iv) the receipt by the Trustee of an Officers' Certificate stating
     (A): that the terms of the issuance of the shares of Applicable Stock are
     in conformity with this Indenture; (B) that the shares of Applicable Stock
     to be issued in payment of the Fundamental Change Repurchase Price in
     respect of Securities have been duly authorized and, when issued and
     delivered pursuant to the terms of this Indenture in payment of the
     Fundamental Change Repurchase Price in respect of Securities, will be
     validly issued, fully paid, non-assessable and free from preemptive rights;
     (C) that the conditions above, the conditions in clauses (i)-(iii) above
     and the condition set forth in the second succeeding sentence regarding
     issuance of a press release have been satisfied in all material respects;
     and (D) the number of shares of Applicable Stock to be issued for each
     $1,000 principal amount of Securities and the Sale Price of a share of
     Applicable Stock on each Trading Day during the period commencing on the
     first Trading Day of the period during which the Market Price is calculated
     and ending on the Trading Day immediately preceding the Fundamental Change
     Repurchase Date; and

          (v)  the receipt by the Trustee of an Opinion of Counsel stating that:
     (A) the shares of Applicable Stock to be issued by the Company in payment
     of the Fundamental Change Repurchase Price in respect of Securities have
     been duly authorized, and when issued and delivered pursuant to the terms
     of this Indenture in payment of the Fundamental Change Repurchase Price in
     respect of Securities, will be validly issued, fully paid and
     non-assessable and, to the best of such counsel's knowledge, free from
     preemptive rights; and (B) the conditions in clauses (i) and (iii) above
     have been satisfied in all material respects.

          If the foregoing conditions are not satisfied with respect to a Holder
or Holders prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Fundamental Change Repurchase Date, and the Company
has elected to repurchase the Securities pursuant to this Section 5.2 through
the issuance of shares of Applicable Stock, the Company shall pay the entire
Fundamental Change Repurchase Price of the Securities of such Holder or Holders
in Cash. Upon determination of the actual number of shares of Applicable Stock
to be issued upon repurchase of Securities, the Company shall be required to
disseminate a press release through a public medium as is customary for such a
press release.

                                       41


          (c)  Covenants of the Company. All shares of Applicable Stock
delivered upon repurchase of the Securities shall be newly issued shares, shall
be duly authorized, validly issued, fully paid and nonassessable, and shall be
free from preemptive rights and free of any lien or adverse claim.

          (d)  Taxes. If a Holder of a repurchased Security is paid in shares of
Applicable Stock, the Company shall pay any documentary, stamp or similar issue
or transfer tax due on such issue of Applicable Stock. However, the Holder shall
pay any such tax which is due because the Holder requests the Applicable Stock
to be issued in a name other than the Holder's name. The Paying Agent may refuse
to deliver the certificates representing the shares of Applicable Stock being
issued in a name other than the Holder's name until the Paying Agent receives a
sum sufficient to pay any tax which will be due because the shares of Applicable
Stock are to be issued in a name other than the Holder's name. Nothing contained
herein shall preclude any income tax withholding required by law or regulations.

          Section 5.3. Effect of Fundamental Change Repurchase Notice.

          Upon receipt by the Paying Agent of the Fundamental Change Repurchase
Notice specified in Section 5.1(c), the Holder of the Security in respect of
which such Fundamental Change Repurchase Notice was given shall (unless such
Fundamental Change Repurchase Notice is withdrawn as specified in the following
paragraph) thereafter be entitled to receive solely the Fundamental Change
Repurchase Price with respect to such Security. Such Fundamental Change
Repurchase Price shall be paid to such Holder, subject to receipts of Cash
and/or securities by the Paying Agent, promptly following the later of (a) the
Fundamental Change Repurchase Date with respect to such Security (provided the
conditions in Section 5.1 (c) have been satisfied) and (b) the time of delivery
of such Security to the Paying Agent by the Holder thereof in the manner
required by Section 5.1(c). Securities in respect of which a Fundamental Change
Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to Article XII on or after the date of the delivery of such Fundamental
Change Repurchase Notice unless such Fundamental Change Repurchase Notice has
first been validly withdrawn as specified in the following paragraph.

          A Fundamental Change Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Fundamental Change Repurchase Notice at any time prior to
5:00 p.m., New York City time, on the Business Day immediately preceding the
Fundamental Change Repurchase Date, specifying:

          (a)  the principal amount of the Security with respect to which such
notice of withdrawal is being submitted;

          (b)  the certificate number, if any, or the appropriate Depository
procedures, if applicable, of the Security in respect of which such notice of
withdrawal is being submitted; and

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

                                       42


          Section 5.4. Deposit of Fundamental Change Repurchase Price.

          Prior to 10:00 a.m., New York City time, on the applicable Fundamental
Change Repurchase Date, the Company shall deposit with the Paying Agent (or if
the Company or a Subsidiary or an Affiliate of any of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an
amount of Cash (in immediately available funds if deposited on such Business
Day) and/or Applicable Stock, if permitted hereunder, sufficient to pay the
aggregate Fundamental Change Repurchase Price of all the Securities or portions
thereof which are to be repurchased on such Fundamental Change Repurchase Date.

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

          As soon as practicable on and after the Fundamental Change Repurchase
Date, the Company shall deliver to each Holder entitled to receive shares of
Applicable Stock through the Paying Agent, a certificate (other than in the case
of Holders of Securities in book-entry form with the Depositary, which shares
shall be delivered in accordance with the Depositary customary practices) for
the number of full shares of Applicable Stock issuable in payment of the
Fundamental Change Repurchase Price and Cash in lieu of any fractional
interests. The person in whose name the certificate for the shares of Applicable
Stock is registered shall be treated as a holder of record of Applicable Stock
on the Fundamental Change Repurchase Date. No payment or adjustment will be made
for dividends on the shares of Applicable Stock the record date for which
occurred on or prior to the Fundamental Change Repurchase Date.

          Section 5.5. Securities Repurchased in Part.

          Any Certificated Security 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 Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

                                       43


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

          When complying with the provisions of Section 5.1 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

          (a)  comply with Rule 13e- 4 and Rule 14e-1 (or any successor
provision) under the Exchange Act;

          (b)  file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and

          (c)  otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under Article V to be exercised in the time
and in the manner specified therein.

          To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Article V, the Company's
compliance with such laws and regulations shall not in and of itself cause a
breach of its obligations under this Article V.

          Section 5.7. Repayment to the Company.

          To the extent that the aggregate amount of Cash or shares of
Applicable Stock deposited by the Company pursuant to Section 5.4 exceeds the
aggregate Fundamental Change Repurchase Price of the Securities or portions
thereof which the Company is obligated to repurchase as of the Fundamental
Change Repurchase Date then, promptly after the Fundamental Change Repurchase
Date, the Paying Agent shall return any such excess to the Company.

                                   ARTICLE VI

                                    COVENANTS

          Section 6.1. Payment of Securities.

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

                                       44


deemed to include Additional Interest Amounts, if any, payable pursuant to the
Registration Rights Agreement.

          Payment of the principal of and interest (including Contingent
Interest, if any) and Additional Interest Amounts, if any, on the Securities
shall be in Cash except as otherwise provided herein.

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

          If a Security is redeemed pursuant to Article III hereof or the Holder
elects to require the Company to repurchase such Security pursuant to either
Article IV or Article V hereof on a date that is after the Regular Record Date
and prior to the corresponding Interest Payment Date, interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, accrued
and unpaid on such Security to, but not including, the applicable Redemption
Date, Repurchase Date or Fundamental Change Repurchase Date will be paid to the
same Holder to whom the Company pays the principal of such Security regardless
of whether such Holder was the registered Holder on the Regular Record Date
immediately preceding the applicable Redemption Date, Repurchase Date or
Fundamental Change Repurchase Date.

          Holders must surrender the Securities to the Paying Agent to collect
payment of principal. Payment of interest (including Contingent Interest, if
any) and Additional Interest Amounts, if any, on Certificated Securities will be
made by (i) check mailed to the address of the Person entitled thereto as such
address appears in the Register if such surrendered Securities have an aggregate
principal amount of $5 million or less or (ii) wire transfer of immediately
available funds to an account designated by such Person if such surrendered
Securities have an aggregate principal amount in excess of $5 million.
Notwithstanding the foregoing, so long as the Securities are registered in the
name of a Depositary or its nominee, all payments with respect to the Securities
shall be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

          Upon a determination by the Company that Holders will be entitled to
receive Contingent Interest which will become payable during a Contingent
Interest Period, on or prior to the first day of such Contingent Interest
Period, the Company shall deliver an Officer's Certificate to the Trustee
setting forth the amount of such Contingent Interest per $1,000 principal amount
of Securities and shall issue a press release through a public medium as is
customary for such a press release.

                                       45


          Section 6.2. SEC and Other Reports to the Trustee.

          The Company shall ensure delivery to 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
accordance with TIA Section 314(a); provided, however, that the Company shall
not be required to deliver to the Trustee any material for which the Company has
sought and received confidential treatment by the SEC. In the event the Company
is at any time no longer subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, it shall continue to provide the Trustee with annual
and quarterly reports containing substantially the same information as would
have been required to be filed with the SEC had the Company continued to have
been subject to such reporting requirements. In such event, such reports shall
be provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

          Section 6.3. 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
December 31, 2003) an Officers' Certificate, stating whether or not to the
knowledge of the signers thereof, the Company is in Default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
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 6.4. Further Instruments and Acts.

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

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

          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 Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer, exchange,
redemption, repurchase or conversion and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. An
office of the Trustee 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

                                       46


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
14.2.

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

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

          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 owner of
Securities or holder or beneficial owner of shares of Common Stock issued upon
conversion thereof, the Company will make available the information required
pursuant to Rule 144A(d)(4) under the Securities Act to such Holder or any
beneficial owner of Securities or holder or beneficial owner of shares of Common
Stock issued upon conversion thereof, 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; provided,
however, that the Company shall not be required to furnish such information in
connection with any request made on or after the date which is two years from
the later of the date such security was last acquired from the Company or an
"affiliate" (as defined under Rule 144 under the Securities Act) of the Company.
Whether a person is a beneficial owner shall be determined by the Company to the
Company's reasonable satisfaction.

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

          The Company covenants (to the extent that it may lawfully do so) that
it 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, Repurchase Price or Fundamental Change Repurchase
Price in respect of Securities, or any interest (including Contingent Interest,
if any) and Additional Interest Amounts, if any, on such amounts, as
contemplated herein, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it 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.

                                       47


          Section 6.8. Statement by Officers as to Default.

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

                                  ARTICLE VII

                              SUCCESSOR CORPORATION

          Section 7.1. When Company May Merge or Transfer Assets.

          The Company shall not consolidate with, merge with or into, or sell,
assign, convey, transfer or lease its properties and assets substantially in
their entirety (computed on a consolidated basis) to any Person, unless:

          (a)  either (i) the Company is the surviving entity or (ii) the
successor or transferee (the "successor corporation") is a corporation organized
and existing under the laws of the United States, any State thereof, or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, all of the obligation of the
Company under the Securities and the Indenture;

          (b)  immediately after giving effect to such transaction, no Default
shall exist; and

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

          Section 7.2. Successor Corporation Substituted

          Upon any consolidation with or merger into any corporation, or any
conveyance, transfer or lease of the properties and assets of the Company
substantially in their entirety in accordance with Section 7.1, the successor
corporation formed by such consolidation or which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein, and in the case of a conveyance, transfer, or lease
of the properties and assets of the Company substantially in their entirety, the
Company shall be irrevocably released from its liabilities as obligor and maker
of the Securities and from its obligations under this Indenture.

                                       48


                                  ARTICLE VIII

                              DEFAULTS AND REMEDIES

          Section 8.1. Events of Default.

          So long as any Securities are outstanding, each of the following shall
be an "EVENT OF DEFAULT":

          (a)  the Company defaults in the payment of the principal amount (or
premium, if any), with respect to the Securities, when the same become due and
payable;

          (b)  the Company defaults in the payment of any accrued and unpaid
interest (including Contingent Interest, if any) and Additional Interest
Amounts, if any, in each case, when due and payable, and continuance of such
default for a period of 30 days;

          (c)  the Company fails to satisfy its conversion obligation with
respect to any portion of the principal amount of any Security following the
exercise by the Holder of the right to convert such Security into shares of
Common Stock (or Cash or a combination of shares of Common Stock and Cash, if
the Company so elects) pursuant to and in accordance with Article XII;

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

          (e)  the Company defaults in its obligation to pay the Repurchase
Price or the Fundamental Change Repurchase Price, as applicable, with respect to
any Security, or any portion thereof, upon the exercise by the Holder of such
Holder's right to require the Company to repurchase such Securities pursuant to
and in accordance with Article IV or V, as applicable;

          (f)  the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in
clause (a) through (e) above) and such failure continues for 60 days after
receipt by the Company of a Notice of Default (defined below);

          (g)  the Company fails or any Significant Subsidiary fails to make any
payment at maturity on any indebtedness, including any applicable grace periods,
in an amount in excess of $10.0 million in the aggregate for all such
indebtedness and such amount has not been paid or discharged within 30 days
after receipt by the Company of a Notice of Default;

          (h)  a default by the Company or any Significant Subsidiary that
results in the acceleration of maturity of any indebtedness of the Company or
any significant subsidiary (other than Non-Recourse Indebtedness), at any one
time, in an amount in excess of $10,000,000 unless the acceleration is
rescinded, stayed or annulled within 30 days after receipt by the Company of a
Notice of Default;

                                       49


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

               (i)  commences a voluntary case or proceeding;

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

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

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

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

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

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

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

               (ii) appoints a Custodian of the Company or any Significant
     Subsidiary, or for any substantial part of its property; or

               (iii) orders the winding up or liquidation of the Company or any
     Significant Subsidiary,

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

          A Default under clause (f), (g) or (h) above is not an Event of
Default until the Trustee notifies the Company, or the Holders of at least 25%
in aggregate principal amount of the Securities at the time outstanding notify
the Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause
(f), (g) or (h) 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."

          Section 8.2. Acceleration.

          If an Event of Default (other than an Event of Default specified in
Section 8.1 (h) or (i)) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding by notice to the Company and the Trustee, may
declare the principal amount plus accrued and unpaid interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, on all the

                                       50


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

          If an Event of Default specified in Section 8.1 (h) or (i) occurs and
is continuing, the principal amount plus accrued and unpaid interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, on all the
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders.

          The Holders of not less than a majority in aggregate principal amount
of the Securities at the time outstanding, by notice to the Trustee (and without
notice to any other Securityholder) may rescind an 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 amount plus accrued and unpaid interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, that have
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 9.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

          Section 8.3. Other Remedies.

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

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

          Section 8.4. Waiver of Past Defaults.

          Subject to Sections 8.7 and 11.2, the Holders of not less than a
majority in aggregate principal amount of the Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except:

          (a)  an Event of Default in the payment of the principal of, any
premium or interest (including Contingent Interest, if any) on, or any
Additional Interest Amounts with respect to, any Security or the payment of any
applicable Repurchase Price, Fundamental Change Repurchase Price or Redemption
Price; or

          (b)  a Default in respect of any provision of this Indenture or the
Securities, which, under Section 11.2, cannot be amended or modified without the
consent of each Securityholder affected thereby.

                                       51



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

          Section 8.5. Control by Majority.

          The Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines in good faith is prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity or security satisfactory to it. This Section 8.5
shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

          Section 8.6. Limitation on Suits.

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

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

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

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

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

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

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

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

          Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of the principal amount, Redemption Price,
Repurchase Price, Fundamental Change Repurchase Price or interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, in respect
of the Securities held by such Holder, on or after the respective due dates
expressed in the Securities and in this Indenture, and to convert such
Securities in accordance with Article XII, or to bring suit for the enforcement
of any such

                                       52



payment on or after such respective dates or the right to convert, is absolute
and unconditional and shall not be impaired or affected adversely without the
consent of such Holder.

          Section 8.8. Collection Suit by Trustee.

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

          Section 8.9. Trustee May File Proofs of Claim.

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

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

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

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

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

                                       53



          Section 8.10. Priorities.

          (a)  If the Trustee collects any money pursuant to this Article VIII,
it shall pay out the money in the following order:

          FIRST: to the Trustee for amounts due under Section 9.7;

          SECOND: to Securityholders for amounts due and unpaid on the
     Securities for the principal amount, Redemption Price, Repurchase Price,
     Fundamental Change Repurchase Price or interest (including Contingent
     Interest, if any) and Additional Interest Amounts, if any, as the case may
     be, ratably, without preference or priority of any kind, according to such
     amounts due and payable on the Securities; and

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

          The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.

          Section 8.11. Undertaking for Costs.

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

          Section 8.12. Restoration of Rights and Remedies.

          If the Trustee or any Holder has instituted any proceedings to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

                                       54



                                   ARTICLE IX

                                     TRUSTEE

          Section 9.1. Duties of Trustee.

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

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

               (i)  the Trustee undertakes to perform such duties and only such
     duties as are specifically set forth in this Indenture, and no implied
     covenants or obligations shall be read into this Indenture against the
     Trustee; and

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

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

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

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

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

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

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

                                       55



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

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

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

          Section 9.2. Rights of Trustee.

          Subject to its duties and responsibilities under Section 9.1 and under
the TIA,

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

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

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

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

          (e)  the Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in reliance on such advice or Opinion of Counsel;

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

                                       56



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

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

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

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

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

          Section 9.3. Individual Rights of Trustee.

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

          Section 9.4. Trustee's Disclaimer.

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

                                       57



          Section 9.5. Notice of Defaults.

          If a Default occurs and if it is known to the Trustee, the Trustee
shall give to each Securityholder notice of the Default within 90 days after it
occurs or, if later, within 15 days after it is known to the Trustee, unless
such Default shall have been cured or waived before the giving of such notice.
Notwithstanding the preceding sentence, except in the case of a Default
described in Section 8.1(a), (b) (d) or (e), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interest of the Securityholders
and provided, further, that in the case of any Default described in Section
8.1(f), no such notice shall be given to Holders until at least 30 days after
the occurrence thereof. The preceding sentence shall be in lieu of the proviso
to Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA.

          Section 9.6. Reports by Trustee to Holders.

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

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

          Section 9.7. Compensation and Indemnity.

          The Company agrees to:

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

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

          (c)  fully indemnify the Trustee, any predecessor Trustee and each of
their directors and officers for, and to hold each of them harmless against, any
and all loss, damage, claim, liability, cost or expense (including reasonable
attorney's fees and expenses, and taxes (other than taxes based upon, measured
by or determined by the income of the Trustee)) incurred without negligence or
willful misconduct or bad faith on the part of the Person so indemnified,
arising out of or in connection with the acceptance or administration of this
trust, including the reasonable costs and expenses of defending against any
claim (whether asserted by the Company

                                       58



or any Holder or any other person) or liability in connection with the exercise
or performance of any powers or duties hereunder, or in connection with
enforcing the provisions of this Section 9.7.

          The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity hereunder; provided, that a failure to notify shall not
relieve the Company of its obligations hereunder except to the extent the
Company is materially prejudiced by such failure. The Trustee shall have the
right to employ one separate counsel in any such action or proceeding and
participate in the investigation and defense thereof, and the Company shall pay
the reasonable fees and expenses of such separate counsel; provided, however,
that the Trustee may only employ such separate counsel at the expense of the
Company if in the reasonable judgment of the outside counsel to the Trustee (i)
a conflict of interest exists by reason of common representation or (ii) there
are legal defenses available to the Trustee that are different from or are in
addition to those available to the Company or if all parties commonly
represented do not agree as to the action (or inaction) of counsel.

          To secure the Company's payment obligations in this Section 9.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal
amount, Redemption Price, Repurchase Price, Fundamental Change Repurchase Price
or interest (including Contingent Interest, if any) and Additional Interest
Amounts, if any, as the case may be, on particular Securities.

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

          Section 9.8. Replacement of Trustee.

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

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

          (b)  the Trustee is adjudged bankrupt or insolvent;

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

          (d)  the Trustee otherwise becomes incapable of acting.

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

                                       59



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

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

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

          Section 9.9. Successor Trustee by Merger.

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

          Section 9.10. Eligibility; Disqualification.

          The Trustee shall at all times satisfy the requirements of TIA
Sections 310(a)(1) and 310(b). The Trustee (or its parent holding company) shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. Nothing contained herein shall
prevent the Trustee from filing with the Commission the application referred to
in the penultimate paragraph of TIA Section 310(b).

          Section 9.11. Preferential Collection of Claims Against Company.

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

                                    ARTICLE X

                             DISCHARGE OF INDENTURE

          Section 10.1. Discharge of Liability on Securities.

          When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced or repaid pursuant to Section 2.7)
for cancellation or (ii) all outstanding Securities have become due and payable
(whether at the Stated Maturity or upon acceleration, or

                                       60



on any Redemption Date, or with respect to any Repurchase Date or Fundamental
Change Repurchase Date, or upon conversion) and the Company deposits with the
Paying Agent or Conversion Agent Cash, Common Stock or Applicable Stock, as
applicable, sufficient to pay all amounts due and owing on all outstanding
Securities (other than Securities replaced pursuant to Section 2.7), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 9.7, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and Opinion of Counsel and
at the cost and expense of the Company.

          Notwithstanding the discharge of this Indenture, Article XIII shall
survive until the Securities have been paid in full.

          Section 10.2. Repayment to the Company.

          The Trustee and the Paying Agent shall return to the Company upon
written request any Cash or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the Cash or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and the Trustee and the Paying Agent shall have no further
liability to the Securityholders with respect to such Cash or securities for
that period commencing after the return thereof.

                                   ARTICLE XI

                                   AMENDMENTS

          Section 11.1. Without Consent of Holders.

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

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

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

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

          (d)  increase the Conversion Rate or reduce the Conversion Price;
provided, however, that such increase in the Conversion Rate or reduction in the
Conversion Price, as the case may be, is in accordance with the terms of this
Indenture or shall not adversely affect the interests of the Holders of
Securities;

                                       61



          (e)  provide for a successor Trustee with respect to the Securities;

          (f)  add any additional Events of Default with respect to all or any
of the Securities;

          (g)  secure the Securities;

          (h)  supplement any of the provisions of the Indenture to such extent
as shall be necessary to permit or facilitate the discharge of the Securities,
provided that such change or modification does not adversely affect the
interests of the Holders of the Securities;

          (i)  make any changes or modifications necessary in connection with
the registration of the Securities under the Securities Act as contemplated in
the Registration Rights Agreement; provided, however, that such action does not
adversely affect the interests of the Holders of Securities in any material
respect;

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

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

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

          Section 11.2. With Consent of Holders.

          Except as provided below in this Section 11.2, this Indenture or the
Securities may be amended, modified or supplemented, and noncompliance in any
particular instance with any provision of this Indenture or the Securities may
be waived, in each case with the written consent or affirmative vote of the
Holders of not less than a majority of the principal amount of the Securities at
the time outstanding.

          Without the written consent or the affirmative vote of each Holder of
Securities affected thereby (in addition to the written consent or the
affirmative vote of the Holders of at least a majority of the principal amount
of the Securities at the time outstanding), an amendment or waiver under this
Section 11.2 may not:

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

                                       62



          (b)  reduce the principal amount of, or rate of interest (including
Contingent Interest, if any) or Additional Interest Amounts, if any, on, or the
premium amount, Redemption Price, Repurchase Price or Fundamental Change
Repurchase Price of, any Security;

          (c)  change the currency of payment of principal amount of, or
interest (including Contingent Interest, if any) or Additional Interest Amounts,
if any, on, or the Redemption Price, Repurchase Price or Fundamental Change
Repurchase Price of, any Security from U.S. Dollars or shares of Common Stock or
Applicable Stock as provided herein;

          (d)  alter the manner of calculation or rate of accrual of Contingent
Interest, on any Security;

          (e)  impair the right of any Holder to institute suit for the
enforcement of any repurchase of, payment on or with respect to, or conversion
of, any Security, including any payment on or after the stated maturity of the
Securities, in the case of redemption, on or after the Redemption Date, or in
the case of repayment at the option of the Holder, on or after the Repurchase
Date or Fundamental Change Repurchase Date;

          (f)  modify the obligation of the Company to maintain an agency in The
City of New York pursuant to Section 6.5;

          (g)  adversely affect the right of Holders of the Securities to
convert such Securities as provided in Article XII;

          (h)  adversely affect the right of Holders of the Securities to
require the Company to repurchase such Securities as provided in Articles IV and
V;

          (i)  modify the optional redemption provisions of Article III in a
manner that adversely affects the Holders of the Securities;

          (j)  reduce the percentage of the principal amount of the outstanding
Securities the written consent or affirmative vote of whose Holders is required
to take specific actions under the Indenture;

          (k)  reduce the percentage of the principal amount of the outstanding
Securities the written consent or affirmative vote of whose Holders is required
for any waiver of any past Default provided for in this Indenture; or

          (l)  modify any of (a)-(k) above.

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

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

                                       63



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

          Section 11.3. Compliance with Trust Indenture Act.

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

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

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

          Section 11.5. Notation on or Exchange of Securities.

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

          Section 11.6. Trustee to Sign Supplemental Indentures.

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

          Section 11.7. Effect of Supplemental Indentures.

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

                                       64



                                   ARTICLE XII

                                   CONVERSION

          Section 12.1. Conversion Privilege.

          (a)  Subject to and upon compliance with the provisions of this
Article XII, a Holder of a Security shall have the right, at such Holder's
option, to convert all or any portion (if the portion to be converted is $1,000
or a multiple of $1,000) of such Security into shares of Common Stock at the
Conversion Rate in effect on the date of conversion only as follows:

               (i)  during any fiscal quarter (beginning with the third quarter
     of 2003) if the Sale Price of the Common Stock for at least 20 consecutive
     Trading Days in the Measurement Period of the immediately preceding fiscal
     quarter exceeds 120% of the Conversion Price in effect on the last Trading
     Day of such Measurement Period (in the event that the Conversion Price on
     such last Trading Day of such Measurement Period is not the same as the
     Conversion Price in effect for each of the Trading Days in such Measurement
     Period, the Conversion Agent shall make such adjustments as it, in its
     discretion, deems appropriate in determining whether the foregoing
     condition has been met);

               (ii) during any five consecutive Trading Day period immediately
     following any five consecutive Trading Day period (the "DEBENTURE
     MEASUREMENT PERIOD") in which the average Market Price per $1,000 principal
     amount of Securities during such Debenture Measurement Period was less than
     97% of the average Conversion Value during such Debenture Measurement
     Period; provided, however, that a Holder shall not have the right to
     convert any Security pursuant to this Section 12.1(a)(ii) after June 1,
     2018 if on any Trading Day during such Debenture Measurement Period the
     Sale Price was more than the then current Conversion Price and less than
     120% of the then current Conversion Price;

               (iii) at any time prior to 5:00 p.m., New York City time, on the
     Business Day immediately preceding the Redemption Date, if such Security
     has been called for redemption pursuant to Article III hereof; or

               (iv) as provided in Section 12.1(b).

          The Conversion Agent shall, on behalf of the Company, determine at the
end of each applicable period whether the Securities shall be convertible as a
result of the occurrence of an event specified in clause (a) or (b) above and,
if the Securities shall be so convertible, the Conversion Agent shall promptly
deliver to the Company and the Trustee written notice thereof. Whenever the
Securities shall become convertible pursuant to Section 12.1, the Company or, at
the Company's request, the Trustee in the name and at the expense of the
Company, shall notify the Holders in writing of the event triggering such
convertibility in the manner provided in Section 14.2, and the Company shall
also publicly announce such information and publish it on the Company's website.
Any notice so given shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice.

                                       65



          (b)  In addition, in the event that:

               (i)

                    (A)  the Company distributes to all holders of Common Stock
          rights or warrants entitling them to purchase Common Stock at less
          than the average Sale Price of the Common Stock for the 10 Trading
          Days immediately preceding the declaration for such distribution; or

                    (B)  the Company distributes to all holders of Common Stock
          cash or other assets, debt securities or certain rights to purchase
          the Company's securities, which distribution has a per share value as
          determined by the Board of Directors of the Company exceeding 15% of
          the Sale Price of the Common Stock on the Business Day immediately
          preceding the declaration for such distribution;

     then, in each case, the Company must notify, in writing, Holders of
     Securities of the occurrence of such an event at least 20 days prior to the
     Ex-Dividend Date for any such distribution. Once the Company has given such
     notice, Holders may surrender their Securities for conversion at any time
     until the earlier of the close of business on the Business Day immediately
     preceding the Ex-Dividend Date or the date of announcement by the Company
     that the distribution will not take place. No adjustment shall be made to
     the ability of a Holder of Securities to convert if such Holder may
     participate in the distribution without conversion.

               (ii) the Company becomes party to a consolidation, merger or
     binding share exchange pursuant to which the Common Stock of the Company
     would be converted into cash, securities or other property, a Holder may
     surrender the Securities for conversion at any time from and after the date
     which is 15 days prior to the anticipated effective date of the transaction
     until 15 days after the actual date of the transaction. If the Company
     becomes party to a consolidation, merger or binding share exchange pursuant
     to which the Common Stock of the Company would be converted into cash,
     securities or other property, then at the effective time of the
     transaction, the right to convert the Securities into Common Stock shall be
     changed into a right to convert such Securities into the kind and amount of
     cash, securities or other property which the Holder would have received if
     the Holder had converted such Securities immediately prior to the
     transaction. If the transaction occurs prior to June 1, 2008 and also
     constitutes a Fundamental Change, the Holder shall have the rights set
     forth in Article V above.

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

          (a)  Subject to Section 12.2(e), each Security shall be convertible at
the office of the Conversion Agent into fully paid and nonassessable shares
(calculated to the nearest 1/100th of a share) of Common Stock. Subject to
Section 12.2(e), the Security will be converted into shares of Common Stock at
the Conversion Rate therefore.

          No payment or adjustment shall be made in respect of dividends on the
Common Stock or accrued interest or accrued and unpaid Contingent Interest, if
any, on a converted Security, except as described in Section 12.9 hereof.

                                       66



          The Company shall not issue any fraction of a share of Common Stock in
connection with any conversion of Securities, but instead shall, subject to
Section 12.3(g) hereof, make a Cash payment (calculated to the nearest cent)
equal to such fraction multiplied by the Sale Price of the Common Stock on the
last Trading Day prior to the date of conversion.

          Notwithstanding the foregoing, a Security in respect of which a Holder
has delivered a Purchase Notice or Fundamental Change Purchase Notice exercising
such Holder's option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn in accordance with
Sections 4.3 or 5.3 hereof, as the case may be, prior to the close of business
on the Business Day immediately preceding the applicable Repurchase Date or
Fundamental Change Repurchase Date, as the case may be.

          (b)  Before any Holder of a Security shall be entitled to convert the
same into Common Stock, such Holder shall, in the case of Securities issued in
global form, comply with the procedures of the Depositary in effect at that
time, and in the case of certificated Securities, surrender such Securities,
duly endorsed to the Company or in blank, at the office of the Conversion Agent,
and shall give written notice to the Company at said office or place in the form
of the Conversion Notice attached to the Security (the "CONVERSION NOTICE") that
such Holder elects to convert the same and shall state in writing therein the
principal amount of Security to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.

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

          If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares of Common Stock which shall
be deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Security (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to such Holder's nominee or
nominees, certificates (other than in the case of Holders of Securities in
book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Common Stock to which such Holder shall be entitled as aforesaid,
together with Cash in lieu of any fraction of a share to which such Holder would
otherwise be entitled. The Company shall not be required to deliver certificates
for shares of Common Stock while the stock transfer books for such stock or the
security register are duly closed for any purpose, but certificates for shares
of Common Stock shall be issued and delivered as soon as practicable after the
opening of such books or security register; provided, that in the case of
issuances of Common Stock described in Section 12.2(e), such issuances shall be
made in accordance with the provisions of such section.

          If shares of Common Stock to be issued upon conversion of a Restricted
Security are to be issued in the name of a Person other than the Holder of such
Restricted Security, such Holder must deliver to the Conversion Agent a
certification in substantially the form set forth in a Transfer Certificate
dated the date of surrender of such Restricted Security and signed by such

                                       67



Holder, as to compliance with the restrictions on transfer applicable to such
Restricted Security. The Company shall not be required to issue Common Stock
upon conversion of any such Restricted Security to a Person other than the
Holder if such Restricted Security is not so accompanied by a properly completed
certification, and the Registrar shall not be required to register Common Stock
upon conversion of any such Restricted Security in the name of a Person other
than the Holder if such Restricted Security is not so accompanied by a properly
completed certification.

          (c)  A Security shall be deemed to have been converted as of the close
of business on the date of the surrender of such Security for conversion as
provided above, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock as of the close of business on such date.
Upon conversion, all obligations under the Securities so converted will be
deemed satisfied, including with respect to any accrued and unpaid interest
(including Contingent Interest, if any) and Additional Interest Amounts, if any.

          (d)  In case any Certificated Security shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate
and deliver to or upon the written order of the Holder of the Security so
surrendered, without charge to such Holder (subject to the provisions of Section
12.8 hereof), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Certificated Securities.

          Section 12.3. Adjustment of Conversion Rate for Common Stock.

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

          (a)  In case the Company shall, at any time or from time to time while
any of the Securities are outstanding, pay a dividend or make a distribution in
shares of Common Stock to all holders of its outstanding shares of Common Stock,
then the Conversion Rate in effect at the opening of business on the date next
following the Record Date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be increased by multiplying
such Conversion Rate by a fraction:

               (i)  the numerator of which shall be the sum of the number of
     shares of Common Stock outstanding at the close of business on such Record
     Date fixed for such determination and the total number of shares
     constituting such dividend or other distribution; and

               (ii) the denominator of which shall be the number of shares of
     Common Stock outstanding at the close of business on such Record Date fixed
     for such determination.

          Such increase shall become effective immediately after the opening of
business on the day following the Record Date fixed for such determination.

                                       68



          If any dividend or distribution of the type described in this Section
12.3(a) is declared but not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate which would then be in effect if such dividend
or distribution had not been declared.

          (b)  In case the Company shall, at any time or from time to time while
any of the Securities are outstanding, subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
increased, and conversely, in case the Company shall, at any time or from time
to time while any of the Securities are outstanding, combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
decreased. In each such case, the Conversion Rate shall be adjusted by
multiplying such Conversion Rate by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding immediately after giving effect
to such subdivision or combination and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
subdivision or combination. Such increase or reduction, as the case may be,
shall become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes effective.

          (c)  In case the Company shall, at any time or from time to time while
any of the Securities are outstanding, issue rights or warrants (other than
pursuant to a shareholders rights plan) for a period expiring within 60 days
after the date of announcement of such issuance (other than any rights or
warrants referred to in Section 12.3(d)), to all holders of its shares of Common
Stock entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into or exchangeable or exercisable for shares of Common
Stock), at a price per share (or having a conversion, exchange or exercise price
per share) less than the Sale Price of the Common Stock on the Trading Day
immediately preceding the date of the announcement of such issuance (treating
the conversion, exchange or exercise price per share of the securities
convertible into or exchangeable or exercisable for Common Stock as equal to the
quotient of (x) the sum of (i) the price for a unit of the security convertible
into or exchangeable or exercisable for Common Stock and (ii) any additional
consideration initially payable upon the conversion, exchange or exercise of
such security into Common Stock divided by (y) the number of shares of Common
Stock initially underlying such convertible, exchangeable or exercisable
security), then the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect at the
opening of business on the date after such date of announcement by a fraction:

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

               (ii) the denominator of which shall be the number of shares of
     Common Stock outstanding on the close of business on the date of
     announcement, plus

                                       69



     the number of shares (or convertible, exchangeable or exercisable
     securities) which the aggregate offering price of the total number of
     shares (or convertible, exchangeable or exercisable securities) so offered
     for subscription or purchase (or the aggregate conversion, exchange or
     exercise price of the convertible securities so offered) would purchase at
     the Sale Price of the Common Stock on the Business Day immediately
     preceding the date of the announcement of such issuance (determined by
     multiplying such total number of shares so offered by the exercise price of
     such rights or warrants and dividing the product so obtained by such Sale
     Price).

          Such adjustment shall become effective immediately after the opening
     of business on the day following the date of announcement of such issuance.

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

          (d)  (i) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, by dividend or otherwise,
distribute to all holders of its shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock is not changed or
exchanged), shares of its Capital Stock (other than any dividends or
distributions to which Section 12.3(a) applies), evidences of its Indebtedness
or other non-Cash assets, including securities, but excluding (x) any rights or
warrants referred to in Section 12.3(c), (y) dividends or distributions of stock
referred to in Section 12.3(a) and (z) dividends and distributions paid
exclusively in Cash (such capital stock, evidence of its indebtedness, other
non-Cash assets or securities being distributed hereinafter in this Section
12.3(d) called the "DISTRIBUTED ASSETS"), then, in each such case, subject to
the other provisions of this Section 12.3(d), the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction:

                    (A)  the numerator of which shall be the Current Market
          Price of the Common Stock; and

                                       70



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

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

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

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

               (iv) Rights or warrants distributed by the Company to all holders
     of its shares of Common Stock entitling them 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"), (x) are deemed to be
     transferred with such shares of Common Stock, (y) are not exercisable and
     (z) are also issued in respect of future issuances of shares of Common
     Stock shall be deemed not to have been distributed for purposes of this
     Section 12.3(d) (and no adjustment to the Conversion Rate under this
     Section 12.3(d) 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 distributed assets, evidences of indebtedness or
     other assets, or entitle the holder to purchase a different number or
     amount of the foregoing or to purchase any of the foregoing at a different
     purchase price, then the occurrence of each such event shall be deemed to
     be the date of issuance and record date with respect to a new right or

                                       71



     warrant (and a termination or expiration of the existing right or warrant
     without exercise by the holder thereof). Pursuant to rights issued under
     any Company shareholder's rights plan, if holders of the Securities
     exercising the right of conversion after the date the rights separate from
     the underlying Common Stock are not entitled to receive the rights that
     would otherwise be attributable to the shares of Common Stock received upon
     conversion, the Conversion Rate will be adjusted as though the rights were
     being distributed to holders of Common Stock on the date of such
     separation. If such an adjustment is made and the rights are later
     redeemed, invalidated or terminated, then a corresponding reversing
     adjustment will be made to the conversion rate on an equitable basis.

               In addition, in the event of any distribution (or deemed
     distribution) of rights or warrants, or any Trigger Event or other event
     (of the type described in the preceding sentence) with respect thereto,
     that resulted in an adjustment to the Conversion Rate under this Section
     12.3(d):

                    (A)  in the case of any such rights or warrants which shall
          all have been redeemed or repurchased without exercise by any holders
          thereof, the Conversion Rate shall be readjusted upon such final
          redemption or repurchase to give effect to such distribution or
          Trigger Event, as the case may be, as though it were a Cash
          distribution, equal to the per share redemption or repurchase price
          received by a holder of shares of Common Stock with respect to such
          rights or warrants (assuming such holder had retained such rights or
          warrants), made to all holders of shares of Common Stock as of the
          date of such redemption or repurchase; and

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

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

                    (A)  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 or securities convertible into
          or exercisable or exchangeable for Common Stock to which Sections
          12.3(a), 12.3(b) and 12.3(c) apply, respectively (and any Conversion
          Rate increase required by this Section 12.3(d) with respect to such
          dividend or distribution shall then be made), immediately followed by

                                       72



                    (B)  a dividend or distribution of such shares of Common
          Stock, such subdivision or combination or such rights or warrants or
          securities convertible into or exercisable or exchangeable for Common
          Stock (and any further Conversion Rate increase required by Sections
          12.3(a), 12.3(b) and 12.3(c) with respect to such dividend or
          distribution shall then be made), except:

                         (1)  the Record Date of such dividend or distribution
          shall be substituted as (x) "the date fixed for the determination of
          stockholders entitled to receive such dividend or other distribution,"
          "Record Date fixed for such determinations" and "Record Date" within
          the meaning of Section 12.3(a), (y) "the day upon which such
          subdivision becomes effective" and "the day upon which such
          combination becomes effective" within the meaning of Section 12.3(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 12.3(c); and

                         (2)  any shares of Common Stock included in such
          dividend or distribution shall not be deemed "outstanding at the close
          of business on the date fixed for such determination" within the
          meaning of Section 12.3(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.

          (e)  In case the Company shall, at any time or from time to time while
any of the Securities are outstanding, by dividend or otherwise, distribute to
all holders of its shares of Common Stock, Cash (excluding any Cash that is
distributed upon a reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance to which Section 12.4 applies or
as part of a distribution referred to in Section 12.3(d)), in an aggregate
amount that, combined together with:

               (i)  the aggregate amount of any other such distributions to all
     holders of shares 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 12.3(e) has been made; and

               (ii) the aggregate amount of any Cash, plus the Fair Market
     Value, as of the expiration of any tender offer, of any other consideration
     paid in respect of any tender offer by the Company or any of its
     Subsidiaries for all or any portion of the shares of Common Stock concluded
     within the 12 months preceding the date of such distribution;

exceeds 10% of the product of (x) the Sale Price of the Common Stock on the
Record Date with respect to such distribution, multiplied by (y) the number of
shares of Common Stock outstanding on such date (such excess over 10%, the
"EXCESS AMOUNT"), then, and in each case, immediately after the close of
business on such date, the Conversion Rate shall be increased so

                                       73



that the same shall equal the rate determined by multiplying the Conversion Rate
in effect immediately prior to the close of business of such Record Date by a
fraction:

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

                    (B)  the denominator of which shall be equal to the Current
          Market Price on such date, less an amount equal to the quotient of (y)
          the Excess Amount and (z) the number of shares of Common Stock
          outstanding on the Record Date.

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

               (i)  "CURRENT MARKET PRICE" on any date means the average of the
     daily Sale Prices per share of Common Stock for the ten consecutive Trading
     Days immediately prior to such date; provided, however, that if the "ex"
     date (as hereinafter defined) for any event (other than the issuance or
     distribution requiring such computation) that requires an adjustment to the
     Conversion Rate pursuant to Section 12.3(a), (b), (c), (d) of (e) occurs
     during such ten consecutive Trading Days, "CURRENT MARKET PRICE" shall be
     calculated for such period in a manner determined in good faith by the
     Board of Directors to reflect the impact of such event on the Closing Price
     of the Common Stock during such period.

For purposes of this paragraph, the term "ex" date, when used:

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

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

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

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

          "FAIR MARKET VALUE" shall mean the amount which a willing buyer would
pay a willing seller in an arm's length transaction (as determined in good faith
by the Board of Directors, whose good faith determination shall be conclusive).

                                       74



          "RECORD DATE" shall mean, with respect to any dividend, distribution
or other transaction or event in which the holders of shares of Common Stock
have the right to receive any Cash, securities or other property or in which the
shares of 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).

          (g)  The Company shall be entitled at its election to make such
additional increases in the Conversion Rate, in addition to those required by
Sections 12.3(a), (b), (c), (d) and (e), as shall be necessary in order that any
dividend or distribution of Common Stock, any subdivision, reclassification or
combination of shares of Common Stock or any issuance of rights or warrants
referred to above shall not be taxable to the holders of Common Stock for United
States federal income tax purposes.

          (h)  To the extent permitted by applicable law, the Company may, from
time to time, increase the Conversion Rate by any amount for any period of time,
if such period is at least 20 days, the Board of Directors determines that the
increase in the Conversion Rate is in the best interest of the Company, and the
increase is irrevocable during the period. Whenever the Conversion Rate is
increased 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 of the Securities maintained by the Registrar, at least 15 days prior
to the date the increased Conversion Rate takes effect, a notice of the increase
stating the increased Conversion Rate and the period during which it will be in
effect.

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

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

          (k)  In the event that at any time, as a result of an adjustment made
pursuant to this Section 12.3, the Holder of any Securities thereafter
surrendered for conversion shall

                                       75



become entitled to receive any shares of stock of the Company other than shares
of Common Stock into which the Securities originally were convertible, the
Conversion Rate of such other shares so receivable upon conversion of any such
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in subparagraphs (a) through (j) of this Section 12.3,
and the provision of Sections 12.1, 12.2 and 12.4 through 12.9 with respect to
the Common Stock shall apply on like or similar terms to any such other shares
and the good faith determination of the Board of Directors as to any such
adjustment shall be conclusive.

                  (l)      No adjustment shall be made pursuant to this Section
12.3 if the Holders of the Securities may participate in the transaction that
would otherwise give rise to an adjustment pursuant to this Section 12.3.

                  Section 12.4. Consolidation or Merger of the Company.

                  If any of the following events occurs, namely:

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

                  (b)      any merger, consolidation, statutory share exchange
or combination of the Company with another corporation as a result of which all
of the 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 all of their Common Stock; or

                  (c)      any sale or conveyance of the properties and assets
of the Company as, or substantially as, an entirety to any other person as a
result of which all of the 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 all of their Common Stock;

the Company or the successor or purchasing person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture, if such supplemental indenture is then required to so comply)
providing that the Holder's right to convert a Security into Common Stock shall
be changed to a right to convert a Security into the kind and amount of shares
of stock and other securities or property or assets (including Cash) which such
Holder would have been entitled to receive upon such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
had such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
Cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided, that if the kind or amount of
securities, Cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 12.4,
the kind and

                                       76



amount of securities, Cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article XII. If, in the case
of any such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of Common Stock includes shares of stock
or other securities and assets of a corporation other than the successor or
purchasing corporation, as the case may be, in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing.

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

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

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

                  Section 12.5. Notice of Adjustment.

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

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

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

                                       77


                  Section 12.6. Notice in Certain Events.

                  In case:

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

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

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

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

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

                  (z) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up described under
clauses (a), (b) and (c) of Section 12.4 that changes a Holder's right to
convert its Common Stock to a right to convert into another kind and amount of
securities or other property or assets 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 Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger sale, conveyance,
dissolution, liquidation or winding up.

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

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

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

                  (b)      If any shares of Common Stock which would be issuable
upon conversion of Securities hereunder require registration with or approval of
any governmental authority

                                       78


before such shares or securities may be issued upon such conversion, the Company
will use its commercially reasonable efforts to cause such shares or securities
to be duly registered or approved, as the case may be. The Company further
covenants that so long as the Common Stock shall be quoted on the Nasdaq
National Market, the Company will use its commercially reasonable efforts, if
permitted by the rules of the Nasdaq National Market, to quote and keep quoted
all Common Stock issuable upon conversion of the Securities, and the Company
will use its commercially reasonable efforts to list the shares of Common Stock
required to be delivered upon conversion of the Securities prior to such
delivery upon any other national securities exchange upon which the outstanding
Common Stock is listed at the time of such delivery.

                  Section 12.8. Taxes on Conversion.

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

                  The Company agrees, and each Holder is deemed to agree, that
delivery to such Holder of the full number of shares of Common Stock into which
each Security is convertible, together with any Cash payment of such Holder's
fractional shares or otherwise in accordance with Section 12.13, will be treated
as a contingent payment (in an amount equal to the sum of the then Fair Market
Value of such Common Stock and such Cash payment, if any) on the Securities for
purposes of the Contingent Payment Debt Regulations governing contingent payment
debt obligations.

                  Section 12.9. Conversion After Record Date.

                  Except as provided in this Section 12.9, a converting Holder
of Securities shall not be entitled to receive any accrued and unpaid interest
(including Contingent Interest, if any) on any such Securities being converted.
By delivery to the Holder of the number of shares of Common Stock or other
consideration issuable or payable upon conversion in accordance with this
Article XII, any accrued and unpaid interest (including Contingent Interest, if
any) and Additional Interest Amounts, if any, on such Securities will be deemed
to have been paid in full. If any Securities are surrendered for conversion
subsequent to the Record Date preceding an Interest Payment Date but prior to
such Interest Payment Date, the Holder of such Securities at the close of
business on such Record Date shall receive the interest payable on such Security
on such Interest Payment Date notwithstanding the conversion thereof. Securities
surrendered for conversion during the period from the close of business on any
Record Date preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall (except in the case of Securities which have
been called for redemption on a Redemption Date within such

                                       79


period) be accompanied by payment from converting Holders, for the account of
the Company, in New York Clearing House funds, or other funds of an amount equal
to the interest payable on such Interest Payment Date (excluding any overdue
interest, if applicable) on the Securities being surrendered for conversion.

                  Except as provided in this Section 12.9, no adjustments in
respect of payments of interest, including Contingent Interest, if any, and
Additional Interest Amounts, if any, on Securities surrendered for conversion or
any dividends or distributions or interest on the Common Stock issued upon
conversion shall be made upon the conversion of any Securities.

                  Section 12.10. Company Determination Final.

                  Any determination that the Company or the Board of Directors
must make pursuant to this Article XII shall be conclusive if made in good faith
and in accordance with the provisions of this Article, absent manifest error,
and set forth in a Board Resolution.

                  Section 12.11. Responsibility of Trustee for Conversion
Provisions.

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

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

                  Section 12.12. Unconditional Right of Holders to Convert.

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

                                  ARTICLE XIII

                                  TAX TREATMENT

                  Section 13.1.  Tax Treatment.

                  (a)      The parties hereto hereby agree, and each Holder and
any beneficial holder of a Security by its purchase of a Security hereby agrees
(in the absence of administrative pronouncement or judicial ruling to the
contrary):

                                       80


                           (i)      to treat the Securities as indebtedness of
         the Company for all United States federal income tax purposes;

                           (ii)     to treat the Securities as debt instruments
         that are subject to Treasury Regulation section 1.1275-4(b); and

                           (iii)    to treat the delivery of Common Stock or
         Cash (including Cash delivered in lieu of a fractional share) to a
         Holder of a Security upon conversion of such Security, or upon a
         repurchase or redemption of such Security by the Company, as a
         contingent payment (in an amount equal to the sum of the Fair Market
         Value of such Common Stock and any Cash received) under Treasury
         Regulation section 1.1275-4(b).

                  Section 13.2. Comparable Yield and Projected Payment
Schedule.

                  (a)      Solely for purposes of applying Treasury Regulation
section 1.1275-4 to the Securities:

                           (i)      for United States federal income tax
         purposes, the Company shall accrue interest with respect to outstanding
         Securities as original issue discount according to the "noncontingent
         bond method," as set forth in Treasury Regulation section 1.1275-4(b)
         using a comparable yield of 7.90%, compounded semiannually, and the
         projected payment schedule attached as Annex 1 to this Indenture;

                           (ii)     the Company shall file with the Trustee
         promptly at the end of each calendar year (A) a written notice
         specifying the amount of original issue discount for United States
         federal income tax purposes accrued on outstanding Securities as of the
         end of such year and (B) such other specific information relating to
         such original issue discount that the Company determines to be relevant
         under the Internal Revenue Code of 1986, as amended from time to time,
         including the amount of any adjustment made under the noncontingent
         bond method to account for the amount of any difference between the
         amount of an actual payment and the amount of a projected payment; and

                           (iii)    the Company acknowledges and agrees, and
         each Holder and any beneficial holder of a Security, by its purchase of
         a Security shall be deemed to acknowledge and agree, that (A) the
         comparable yield and the projected payment schedule are determined on
         the basis of an assumption of linear growth of stock price, (B) the
         comparable yield and the projected payment schedule are not determined
         for any purpose other than for the purpose of applying Treasury
         Regulation section 1.1275-4(b)(4) to the Security, (C) the comparable
         yield and the projected payment schedule do not constitute a projection
         or representation regarding the actual amounts payable on the
         Securities, and (D) the Company's application of Treasury Regulation
         section 1.1275-4(b) shall be binding on each Holder and any beneficial
         holder of a Security, including the Company's determination of the
         comparable yield and the projected payment schedule attached as Annex 1
         to this Indenture.

                                       81


                                   ARTICLE XIV

                                  MISCELLANEOUS

                  Section 14.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies, or conflicts with the duties imposed by TIA
Section 318(c), such section of the TIA shall control. If any provision of this
Indenture expressly modifies or excludes any provision of the TIA that may be so
modified or excluded, the Indenture provision so modifying or excluding such
provision of the TIA shall be deemed to apply.

                  Section 14.2. Notices. Any request, demand, authorization,
notice, waiver, consent or communication shall be in writing and delivered in
person, 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:

         Electronics For Imaging, Inc.
         303 Velocity Way
         Foster City, California  94404
         Attn:  Joseph Cutts and Jim Etheridge
         Facsimile No.:  (650) 357- 3832

if to the Trustee:

         U.S. Bank National Association
         180 East Fifth Street
         St. Paul, Minnesota  55101
         Attn: Corporate Trust Department (Electronics For Imaging, Inc. - 1.50%
         Convertible Senior Debentures)
         Facsimile No.:  (651) 244-0711

                  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 Securityholder shall be
mailed to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder'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 Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. 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
Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent, Conversion Agent or co-registrar.

                                       82


                  Section 14.3. Communication by Holders with Other Holders.

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

                  Section 14.4. Certificate and Opinion as to Conditions
Precedent.

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

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

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

                  Section 14.5. Statements Required in Certificate or Opinion.

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

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

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

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

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

                  Section 14.6. Separability Clause.

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

                                       83


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

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

                  Section 14.8. Legal Holidays.

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

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

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

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

                  Section 14.10. No Recourse Against Others.

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

                  Section 14.11. Successors.

                  All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.

                                       84


                  Section 14.12. Multiple Originals.

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

                  Section 14.13. Benefits of Indenture.

                  Nothing in this Indenture or in the Securities, express or
implied, shall give to any person, other than the parties hereto and the Holders
of the Securities, any benefit or any legal or equitable right, remedy or claim
under this Indenture or the Securities.

                                       85


                  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.

                                        ELECTRONICS FOR IMAGING, INC.

                                        By:_____________________________________
                                           Name:
                                           Title:

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        As Trustee

                                        By:_____________________________________
                                           Name:
                                           Title:



                                                                         ANNEX 1

                           PROJECTED PAYMENT SCHEDULE



                                          Projected Interest Payment per $1,000
 Six Month Period Ending               Principal Amount at Maturity of Securities
- ------------------------               ------------------------------------------
                                    
  June 4, 2003                                    $1,000.00
December 1, 2003                                     ($7.38)
  June 1, 2004                                       ($7.50)
December 1, 2004                                     ($7.50)
  June 1, 2005                                       ($7.50)
December 1, 2005                                     ($7.50)
  June 1, 2006                                       ($7.50)
December 1, 2006                                     ($7.50)
  June 1, 2007                                       ($7.50)
December 1, 2007                                     ($7.50)
  June 1, 2008                                       ($7.50)
December 1, 2008                                     ($7.50)
  June 1, 2009                                       ($7.50)
December 1, 2009                                     ($7.50)
  June 1, 2010                                       ($9.25)
December 1, 2010                                     ($9.25)
  June 1, 2011                                       ($9.25)
December 1, 2011                                     ($9.25)
  June 1, 2012                                       ($9.25)
December 1, 2012                                     ($9.25)
  June 1, 2013                                       ($9.25)
December 1, 2013                                     ($9.25)
  June 1, 2014                                       ($9.25)
December 1, 2014                                     ($9.25)
  June 1, 2015                                       ($9.25)
December 1, 2015                                     ($9.25)
  June 1, 2016                                       ($9.25)
December 1, 2016                                     ($9.25)
  June 1, 2017                                       ($9.25)
December 1, 2017                                     ($9.25)
  June 1, 2018                                       ($9.25)
December 1, 2018                                     ($9.25)
  June 1, 2019                                       ($9.25)
December 1, 2019                                     ($9.25)
  June 1, 2020                                       ($9.25)
December 1, 2020                                     ($9.25)
  June 1, 2021                                       ($9.25)
December 1, 2021                                     ($9.25)
  June 1, 2022                                       ($9.25)
December 1, 2022                                     ($9.25)
  June 1, 2023                                   ($3,930.19)
                  Comparable yield is 7.90%





                                    EXHIBIT A

                           [FORM OF FACE OF SECURITY]

         THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR
PURPOSES OF SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED. THE ISSUE PRICE OF THIS DEBENTURE IS $1,000 PER $1,000 OF PRINCIPAL
AMOUNT AT MATURITY; THE ISSUE DATE OF THIS NOTE IS JUNE 4, 2003; AND THE
COMPARABLE YIELD FOR THE PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 7.90%
PER ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS. HOLDERS OF THIS
DEBENTURE MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
DEBENTURE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: ELECTRONICS
FOR IMAGING, INC., CORPORATE SECRETARY, 303 VELOCITY WAY, FOSTER CITY,
CALIFORNIA 94404.

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

         [THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS DEBENTURE AND

- ---------------------
(1)      This legend should be included only if the Security is a Global
         Security.

                                      A-1



THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THIS DEBENTURE AGREES FOR THE BENEFIT OF ELECTRONICS FOR IMAGING, INC., THAT (A)
THIS DEBENTURE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE DEBENTURES (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR SUCCESSOR TRUSTEE, AS APPLICABLE),
(III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE ( OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
DEBENTURE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY
CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT(2)]

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

- ---------------------
(2)      This legend should be included only if the Security is a Transfer
         Restricted Security.

                                      A-2



                          ELECTRONICS FOR IMAGING, INC.

                  1.50% CONVERTIBLE SENIOR DEBENTURES DUE 2023

   No.                                              CUSIP:______________________

ELECTRONICS FOR IMAGING, INC., a Delaware corporation (the "Company", which term
shall include any successor corporation under the Indenture referred to on the
reverse hereof), promises to pay to___________ , or registered assigns, the
principal amount of___________ Dollars ($______________ ) [, or such greater or
lesser amount as is indicated in the records of the Trustee and the
Depositary,](3) on June 1, 2023, and to pay interest thereon from June 4, 2003
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, on June 1 and December 1 in each year (each, an "Interest
Payment Date"), commencing on December 1, 2003, at the rate of 1.50% per annum,
until the principal hereof is paid or made available for payment at June 1, 2023
or upon acceleration, or until such date on which the Securities are converted,
redeemed or repurchased as provided herein, and at the rate of 1.50% per annum
on any overdue principal and on any overdue installment of interest and
Additional Interest Amounts, if any. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture (as hereinafter defined), be paid to the Person in whose name this
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest, which will be the May 15
or November 15 (whether or not a Business Day), as the case may be, next
preceding the corresponding Interest Payment Date (a "Regular Record Date"). Any
such interest and Additional Interest Amounts, if any, not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may be paid (a) to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a special record date for the payment of such defaulted interest to
be fixed by the Trustee (a "Special Record Date"), notice whereof will be given
to Holders not less than 10 days prior to such Special Record Date, or (b) at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture.

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

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

                                      A-3



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

Dated: June 4, 2003                            ELECTRONICS FOR IMAGING, INC.

                                               By:______________________________
                                               Title:

                                      A-4



                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: June 4, 2003                            U.S. BANK NATIONAL ASSOCIATION,
                                               as Trustee

                                               By:______________________________
                                                   Authorized Signatory

                                      A-5



                          [FORM OF REVERSE OF SECURITY]

                  1.50% Convertible Senior Debentures due 2023

                  This Security is one of a duly authorized issue of 1.50%
Convertible Senior Debentures due 2023 (the "Securities") of ELECTRONICS FOR
IMAGING, INC., a Delaware corporation (including any successor corporation under
the Indenture hereinafter referred to, the "Company"), issued under an
Indenture, dated as of June 4, 2003 (the "Indenture"), between the Company and
U.S. Bank National Association, as trustee (the "Trustee"). The terms of the
Security include those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended ("TIA"), and those
set forth in this Security. This Security is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of all such
terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture referred to below
unless otherwise indicated.

1.  Interest.

                  Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.

                  In addition, the Company shall pay contingent interest
("CONTINGENT INTEREST") to the Holders during any six-month period (a
"CONTINGENT INTEREST PERIOD") from June 1 to November 30 and from December 1 to
May 31, commencing June 1, 2008, if the average Market Price of a Security for
the five Trading Day period ending on the third Trading Day immediately
preceding the first day of such Contingent Interest Period equals $1,200 (120%
of the principal amount of a Security) or more.

                  Upon a determination by the Company that Holders will be
entitled to receive Contingent Interest which will become payable during a
Contingent Interest Period, on or prior to the first day of such Contingent
Interest Period, the Company shall deliver an Officer's Certificate to the
Trustee setting forth the amount of such Contingent Interest per $1,000
principal amount of Securities and shall issue a press release through a public
medium as is customary for such a press release.

                  The amount of Contingent Interest payable per $1,000 principal
amount of Securities in respect of any Contingent Interest Period shall equal
0.35% per annum. Contingent Interest, if any, will accrue and be payable to
Holders in the same manner as regular Cash interest as provided in Section 6.1.
Regular Cash interest will continue to accrue at the rate of 1.50% per year on
the principal amount of the Securities whether or not Contingent Interest is
paid.

                  If this Security is redeemed pursuant to Section 5 of this
Security or the Holder elects to require the Company to repurchase this Security
pursuant to Section 6 of this Security, on a date that is after the Regular
Record Date and prior to the corresponding Interest Payment Date, interest
(including Contingent Interest, if any) and Additional Interest Amounts, if any,
accrued and unpaid hereon to, but not including, the applicable Redemption Date,
Repurchase

                                      A-6



Date or Fundamental Change Repurchase Date will be paid to the same Holder to
whom the Company pays the principal of such Security regardless of whether such
Holder was the registered Holder on the Regular Record Date immediately
preceding the applicable Redemption Date, Repurchase Date or Fundamental Change
Repurchase Date.

                  Interest (including Contingent Interest, if any) and
Additional Interest Amounts, if any, on Securities converted after the close of
business on a Regular Record Date but prior to the opening of business on the
corresponding Interest Payment Date will be paid to the Holder of the Securities
on the Regular Record Date but, upon conversion, the Holder must pay the Company
the interest (including Contingent Interest, if any) and Additional Interest
Amounts, if any, which have accrued and will be paid on such Interest Payment
Date. No such payment need be made with respect to Securities which will be
converted after a Regular Record Date and prior to the corresponding Interest
Payment Date after being called for redemption by the Company.

                  Any reference herein to interest accrued or payable as of any
date shall include any Additional Interest Amounts accrued or payable on such
date as provided in the Registration Rights Agreement.

2.  Method of Payment.

                  Payment of the principal of and interest (including Contingent
Interest, if any) and Additional Interest Amounts, if any, on the Securities
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts or in
Applicable Stock, as the case may be, as permitted in the Indenture. The Holder
must surrender the Securities to the Paying Agent to collect payment of
principal. Payment of interest (including Contingent Interest, if any) and
Additional Interest Amounts, if any, on Certificated Securities will be made by
check mailed to the address of the Person entitled thereto as such address
appears in the Register. Notwithstanding the foregoing, so long as the
Securities are registered in the name of a Depositary or its nominee, all
payments with respect to the Securities shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

3.  Paying Agent, Registrar, Conversion Agent and Bid Solicitation Agent.

                  Initially, U.S. Bank National Association will act as Paying
Agent, Conversion Agent and Bid Solicitation Agent. The Company may appoint and
change any Paying Agent, Registrar, Conversion Agent or Bid Solicitation Agent
without notice, other than notice to the Trustee; provided that the Company will
maintain at least one Paying Agent in the State of New York, The 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 any of their Affiliates may
act as Paying Agent, Registrar or Conversion Agent. None of the Company or any
Subsidiary or any Affiliate of any of them may act as Bid Solicitation Agent.

4.   Indenture.

                  The Securities are general unsecured obligations of the
Company limited to up to $240,000,000 aggregate principal amount. The Indenture
does not limit other indebtedness of the Company, secured or unsecured.

                                      A-7



5.  Redemption at the Option of the Company.

                  The Company may, at its option, redeem the Securities for Cash
at any time as a whole, or from time to time in part, on or after June 1, 2008,
at a redemption price equal to 100% of the principal amount of Securities to be
redeemed plus any accrued and unpaid interest (including Contingent Interest, if
any) and Additional Interest Amounts, if any, on those Securities to, but not
including, the Redemption Date (the "REDEMPTION PRICE").

                  Notice of redemption pursuant to this Section of this Security
will be mailed at least 30 days but not more than 60 days before the Redemption
Date to each Holder of Securities to be redeemed at the Holder's registered
address. If Cash sufficient to pay the Redemption Price of all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to 10:00 a.m., New York City time, on the Redemption Date,
then on such Redemption Date interest (including Contingent Interest, if any)
and Additional Interest Amounts, if any, cease to accrue on such Securities or
portions thereof. Securities in denominations larger than $1,000 of principal
amount may be redeemed in part but only in multiples of $1,000 of principal
amount.

6.  Repurchase By the Company at the Option of the Holder or Upon a Fundamental
    Change.

                  Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder, all
or any portion of the Securities held by such Holder on June 1, 2008, June 1,
2013 and June 1, 2018 in multiples of $1,000 at a repurchase price equal to 100%
of the principal amount of those Securities plus accrued and unpaid interest
(including Contingent Interest, if any) and Additional Interest Amounts, if any,
to, but not including, such Repurchase Date (the "REPURCHASE PRICE"). To
exercise such right, a Holder shall deliver to the Paying Agent a Repurchase
Notice containing the information set forth in the Indenture, at any time from
9:00 a.m., New York City time, on the date that is 20 Business Days immediately
preceding such Repurchase Date until 5:00 p.m., New York City time, on the
Business Day immediately preceding such Repurchase Date, and shall deliver the
Securities to the Paying Agent as set forth in the Indenture.

                  If the Securities are to be repurchased on June 1, 2008, the
Repurchase Price must be paid in Cash. If the Securities are to be repurchased
on the June 1, 2013 or June 1, 2018 Repurchase Date, the Repurchase Price may be
paid, at the option of the Company, in Cash or by the issuance and delivery of
shares of Common Stock, or in any combination thereof, subject to the terms and
conditions of the Indenture.

                  Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder, all
or any portion of the Securities held by such Holder upon a Fundamental Change
of the Company that occurs prior to June 1, 2008 in multiples of $1,000 at the
Fundamental Change Repurchase Price. To exercise such right, a Holder shall
deliver to the Paying Agent a Fundamental Change Repurchase Notice containing
the information set forth in the Indenture, at any time prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date, and shall deliver the Securities to the Paying Agent as set
forth in the Indenture.

                                      A-8



                  The Fundamental Change Repurchase Price may be paid, at the
option of the Company, in Cash or by the issuance and delivery of shares of
Applicable Stock, or in any combination thereof, subject to the terms and
conditions of the Indenture.

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

                  If Cash and/or Applicable Stock, if permitted under the
Indenture, sufficient to pay the Repurchase Price or Fundamental Change
Repurchase Price, as the case may be, of all Securities or portions thereof to
be repurchased with respect to a Repurchase Date or Fundamental Change
Repurchase Date, as the case may be, has been deposited with the Paying Agent,
at 10:00 a.m., New York City time, on the Business Day immediately following the
Repurchase Date or Fundamental Change Repurchase Date, as the case may be, then,
immediately after the Repurchase Date or Fundamental Change Repurchase Date, as
applicable, such Securities will cease to be outstanding and interest (including
Contingent Interest, if any) and Additional Interest Amounts, if any, on such
Securities will cease to accrue and the Holder thereof shall have no other
rights as such other than the right to receive the Repurchase Price or
Fundamental Change Repurchase Price upon surrender of such Security.

7.  Conversion.

                  Subject to and in compliance with the provisions of the
Indenture (including, without limitation, the conditions to conversion of this
Security set forth in Section 12.1 thereof), a Holder is entitled, at such
Holder's option, to convert the Holder's Security (or any portion of the
principal amount thereof that is $1,000 or a multiple of $1,000), into fully
paid and nonassessable shares of Common Stock at the Conversion Rate in effect
on the date of conversion.

                  The Company will notify Holders of any event triggering the
right to convert the Securities as specified above in accordance with the
Indenture.

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

                  The initial Conversion Rate is 37.8508 shares per $1,000
principal amount of Securities, subject to adjustment in certain events
described in the Indenture.

                  To surrender a Security for conversion, a Holder must, in the
case of Global Securities, comply with the Applicable Procedures of the
Depositary in effect at that time, and in the case of Certificated Securities,
(1) surrender the Security to the Conversion Agent, (2) 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, (3) furnish
appropriate endorsements and transfer documents and (4) pay all funds required,
if any, relating to interest

                                      A-9



(including Contingent Interest, if any) or Additional Interest Amounts, if any,
and any transfer or similar tax, if required.

                  No fractional share of Common Stock shall be issued upon
conversion of any Security. Instead, the Company shall pay a Cash adjustment as
provided in the Indenture.

                  No payment or adjustment will be made for accrued and unpaid
interest (including Contingent Interest, if any) and Additional Interest
Amounts, if any, or dividends on the shares of Common Stock, except as provided
in the Indenture.

                  If the Company (i) is a party to a consolidation, merger,
statutory share exchange or combination of the Company with another corporation
as a result of which all the holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including Cash or a
combination thereof) with respect to or in exchange for all of their Common
Stock, (ii) reclassifies or changes the shares of Common Stock or (iii) conveys,
transfers or leases its properties and assets as, or substantially as, an
entirety to any person, the right to convert a Security into shares of Common
Stock may be changed to a right to convert a Security into the kind and amount
of shares of stock and other securities or property or assets (including Cash)
which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Holder converted its Security into
Common Stock immediately prior to such transaction, in each case, in accordance
with the Indenture.

8.  Denominations; Transfer; Exchange.

                  The Securities are in fully registered form, without coupons,
in denominations of $1,000 of principal amount and multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Repurchase Notice or Fundamental Change
Repurchase Notice has been given and not withdrawn (except, in the case of a
Security to be repurchased in part, the portion of the Security not to be
repurchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

9.  Persons Deemed Owners.

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

10. Unclaimed Money or Securities.

                  The Trustee and the Paying Agent shall return to the Company
upon written request any Cash or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the

                                      A-10



Company for payment as general creditors unless an applicable abandoned property
law designates another person.

11. Amendment; Waiver.

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent or
affirmative vote of the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities and (ii) certain Defaults may be
waived with the written consent or affirmative vote of the Holders of not less
than a majority in aggregate principal amount of the outstanding Securities.

                  Without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to (i) add to the covenants of
the Company for the benefit of the Holders of Securities, (ii) surrender any
right or power conferred upon the Company in the Indenture, (iii) provide for
the assumption of the Company's obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition pursuant to Article VII of the Indenture, (iv) increase the
Conversion Rate or reduce the Conversion Price; provided, however, that such
increase in the Conversion Rate or reduction in the Conversion Price is in
accordance with the terms of the Indenture or shall not adversely affect the
interest of the Holders of Securities, (v) provide for a successor Trustee with
respect to the Securities, (vi) add any additional Events of Default with
respect to all or any of the Securities, (vii) secure the Securities, (viii)
supplement any of the provisions of the Indenture to such extent as shall be
necessary to permit or facilitate the discharge of the Securities, provided that
such change or modification does not adversely affect the interests of the
Holders of the Securities, (ix) make any changes or modifications necessary in
connection with the registration of the Securities under the Securities Act as
contemplated in the Registration Rights Agreement; provided, however, that such
action pursuant to this clause does not adversely affect the interests of the
Holders of Securities in any material respect, (x) cure any ambiguity, correct
or supplement any provision in the Indenture which may be inconsistent with any
other provision therein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under the Indenture
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Indenture; provided, however, that such
action pursuant to this clause does not adversely affect the interests of the
Holders of Securities, (xi) add or modify any other provisions in the Indenture
with respect to matters or questions arising thereunder which the Company and
the Trustee may deem necessary or desirable and which would not adversely affect
the interests of the Holders of Securities, and (xii) comply with the
requirements of the SEC in order to effect or maintain the qualification of this
Indenture under the TIA.

12. Defaults and Remedies.

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

                                      A-11



without any declaration or other act on the part of the Trustee or any Holder,
all as and to the extent provided in the Indenture.

13. Trustee Dealings with the Company.

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

14. Calculations in Respect of Securities.

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

15. No Recourse Against Others.

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

16. Authentication.

                  This Security shall not be valid until an authorized signatory
of the Trustee manually signs the Trustee's Certificate of Authentication on the
other side of this Security.

17. Abbreviations.

                  Customary abbreviations may be used in the name of a
Securityholder 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).

18. INDENTURE TO CONTROL; GOVERNING LAW.

                                      A-12



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

                  The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. Requests may be made to:

                  ELECTRONICS FOR IMAGING, INC.
                  303 Velocity Way
                  Foster City, CA 94404
                  Attn: Joseph Cutts and Jim Etheridge
                  Facsimile No. (650) 351-3832

19. Registration Rights.(4)

                  The Holders of the Securities are entitled to the benefits of
a Registration Rights Agreement, dated as of June 4, 2003, between the Company
and the Initial Purchasers named therein, including the receipt of Additional
Interest Amounts upon a registration default (as defined in such agreement).

- ---------------------
(4)      This section shall be deleted from any Securities that are not Transfer
         Restricted Securities.

                                      A-13



                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

________________________________________________________________________________

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

and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.

                                       Your Signature:

Date:_____________________              ________________________________________
                                       (Sign exactly as your name appears on the
                                       other side of this Security)
Signature Guaranteed

_______________________________________________
Participant in a Recognized Signature Guarantee
Medallion Program

By:___________________________
       Authorized Signatory

                                      A-14



                                CONVERSION NOTICE

To convert this Security into shares of Common Stock (or Cash or a combination
of shares of Common Stock and Cash, if the Company so elects) of the Company,
check the box [ ]

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

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

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

________________________________________________________________________________

________________________________________________________________________________

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

                                       Your Signature:

Date:_________________                 _________________________________________
                                       (Sign exactly as your name appears on the
                                       other side of this Security)
Signature Guaranteed

_______________________________________________
Participant in a Recognized Signature Guarantee
Medallion Program

By:_______________________________
        Authorized Signatory

                                      A-15



                             TRANSFER CERTIFICATE(5)

                Re: 1.50% Convertible Senior Debentures due 2023
       (the "Securities") of Electronics For Imaging, Inc. (the "Company")

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

                  [ ] book-entry or       [ ] definitive form by________(the
                                          "Transferor").

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

                  In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with transfer restrictions relating to the Securities as provided in Sections
2.6 and 2.12 of the Indenture dated June 4, 2003 between the Company and U.S.
Bank National Association, as trustee (the "Indenture"), and the transfer of
such Security is being made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), or the
transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):

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

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

                  [ ]      Such Security is being transferred inside the United
                           States to a "qualified institutional buyer" in
                           compliance with Rule 144A under the Securities Act;
                           or

                  [ ]      Such Security is being transferred inside the United
                           Stated to an "institutional accredited investor" that
                           prior to such transfer has furnished to U.S. Bank
                           National Association as Trustee (or a successor
                           trustee, as applicable) a signed letter containing
                           certain representations and agreements relating to
                           the restrictions on transfer of the Securities (in
                           the form obtained from such Trustee or successor
                           trustee, as applicable); or

                  [ ]      Such Security is being transferred outside the United
                           States in compliance with Rule 904 under the
                           Securities Act; or
- ---------------------
(5)      This certificate should only be included if this Security is a Transfer
         Restricted Security.

                                      A-16



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

                  [ ]      Such Security is being acquired for the Transferor's
                           own account, without transfer;

                                      A-17



and unless the Such Security is being transferred to the Company or a Subsidiary
box is checked, the undersigned confirms that such Security is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act.

DATE:
                             ___________________________________________________
                             Signature(s) of Transferor

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

                             Signature Guaranteed

                             ___________________________________________________
                             Participant in a Recognized Signature

                                      A-18



                                    EXHIBIT B

                         [FORM OF RESTRICTIVE LEGEND FOR
                      COMMON STOCK ISSUED UPON CONVERSION]

         [THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
ELECTRONICS FOR IMAGING, INC., THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO AMERICAN STOCK AND TRANSFER COMPANY,
AS TRANSFER AGENT (OR A SUCCESSOR SECURITIES, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (III) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE
SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.]

                                      B-1



                                    EXHIBIT C

                 [FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

                                                        _________________,______
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: Corporate Trust Department (Electronics For Imaging, Inc. - 1.50%
Convertible Senior Debentures due 2023)
Fax: (651) 244-0711

                   Re:   Electronics For Imaging, Inc. (the "COMPANY")
                         1.50% Convertible Senior Debentures due 2023

                  This is a Fundamental Change Repurchase Notice as defined in
Section 5.1 of the Indenture dated as of June 4, 2003 (the "INDENTURE") between
the Company and U.S. Bank National Association, as Trustee. Terms used but not
defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities: _____________________________________________

I intend to deliver the following aggregate Principal Amount of Securities for
purchase by the Company pursuant to Section 5.1 of the Indenture (in multiples
of $1,000):

$________________________________

         I hereby agree that the Securities will be purchased on the Fundamental
Change Repurchase Date pursuant to the terms and conditions specified in the
Securities and the Indenture.

         In the event the Company elects, pursuant to Section 5.2 of the
Indenture, to pay the Fundamental Change Repurchase Price, in whole or in part,
in shares of Applicable Stock but such portion of the Fundamental Change
Repurchase Price shall ultimately be paid to such Holder entirely in Cash
because any of the conditions to payment of the Fundamental Change Repurchase
Price in shares of Applicable Stock is not satisfied prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date, as set forth in Section 5.2(b) of the Indenture, I hereby elect
to:

         [ ] withdraw this Fundamental Change Repurchase Notice as to $_________
in principal amount of Securities with the following certificate
numbers:________________________________ to which this Fundamental Change
Repurchase Notice relates;



         [ ] receive Cash in respect of the entire Fundamental Change Repurchase
Price for all Securities (or portions thereof) to which this Fundamental Change
Repurchase Notice relates.

                                                     Signed:____________________

EX-4.3

                                                                     EXHIBIT 4.3

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 4, 2003 by and among Electronics For Imaging, Inc., a
Delaware corporation (the "Company") and UBS Warburg LLC, C.E. Unterberg, Towbin
(a California limited partnership) and Morgan Stanley & Co. Incorporated
(collectively, the "Initial Purchasers"), for whom UBS Warburg LLC is acting as
representative, pursuant to that certain Purchase Agreement, dated as of May 29,
2003 (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 (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Bonds (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Bonds (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:

         "Additional Interest Amount" has the meaning set forth in Section 2(e)
hereof.

         "Additional Interest Payment Date" means each interest payment date
under the Indenture in the case of the Bonds, and each June 1 and December 1 in
the case of the Underlying Common Stock.

         "Additional Interest Period" has the meaning set forth in Section 2(e)
hereof.

         "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 set forth in
Section 2(d) hereof.

         "Applicable Conversion Price" means, as of any date of determination,
$1,000 divided by the Conversion Rate then in effect as of the date of



determination or, if no Bonds are then outstanding, the Conversion Rate that
would be in effect were Bonds then outstanding.

         "Bonds" means the 1.50% Convertible Senior Debentures due 2023 of the
Company to be purchased pursuant to the Purchase Agreement.

         "Business Day" means each day on which the Nasdaq National Market is
open for trading.

         "Common Stock" means the shares of common stock, par value $0.01 per
share, of the Company and any other shares of capital stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

         "Conversion Rate" has the meaning assigned to such term in the
Indenture.

         "Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.

         "Effectiveness Period" means a period that will terminate upon the
earlier of (1) the date on when each of the Registrable Securities covered by
the Shelf Registration Statement has been effectively registered under the
Securities Act and disposed of, whether or not in accordance with the Shelf
Registration Statement and (2) the date on which all Registrable Securities held
by non-affiliates are eligible to be sold to the public pursuant to Rule 144(k)
under the Securities Act or any successor provision thereof.

         "Event" has the meaning set forth in Section 2(e) hereof.

         "Event Date" has the meaning set forth 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 set forth in Section 2(a)
hereof.

         "Holder" has the meaning set forth in the third paragraph of this
Agreement.

         "Indenture" means the Indenture, dated as of June 4, 2003 between the
Company and U.S. Bank National Association, as trustee, pursuant to which the
Bonds are being issued.

         "Initial Purchasers" has the meaning set forth in the preamble hereto.

         "Initial Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.

                                       2



         "Issue Date" means the first date of original issuance of the Bonds.

         "Material Event" has the meaning set forth in Section 3(h) hereof.

          "Notice and Questionnaire" means a written notice and questionnaire
delivered to the Company containing substantially the information called for by
the Selling Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum dated May 29, 2003 relating to the Bonds as such notice may
be amended by the Company upon the advice of counsel to the extent necessary to
ensure compliance with applicable law.

         "Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date, so long as all
of their Registrable Securities that have been registered for resale pursuant to
a Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.

         "Purchase Agreement" has the meaning set forth in the preamble hereof.

         "Prospectus" means the prospectus included in any Shelf 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.

         "Record Holder" means (i) with respect to any Additional Interest
Payment Date relating to any Bonds as to which any such Additional Interest
Payment Amount has accrued, the holder of record of such Bond on the record date
with respect to the interest payment date under the Indenture on which such
Additional Interest Payment Date shall occur and (ii) with respect to any
Additional Interest Payment Date relating to the Underlying Common Stock as to
which any such Additional Interest Payment Amount has accrued, the registered
holder of such Underlying Common Stock fifteen (15) days prior to such Damages
Payment Date.

         "Registrable Securities" means the Bonds until such Bonds have been
converted into the Underlying Common Stock and, at all times the Underlying
Common Stock and any securities into or for which such Underlying Common Stock
has been converted, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, the
earlier of (x) the date on which such security has been effectively registered
under the Securities Act and disposed of, whether or not in accordance with the
Shelf Registration Statement and (y) the date on which such security is sold to
the public pursuant to Rule 144 under the Securities Act or is saleable pursuant
to Rule 144(k) under the Securities Act or any successor provisions thereunder.

                                       3



         "Registration Expenses" has the meaning set forth 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.

          "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 Securities and Exchange Commission.

         "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 set forth in Section
2(a) hereof.

         "Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.

         "Suspension Notice" has the meaning set forth in Section 3(h) hereof.

         "Suspension Period" has the meaning set forth in Section 3(h) hereof.

         "TIA" means the Trust Indenture Act of 1939, as amended.

         "Trustee" means U.S. Bank National Association, the Trustee under the
Indenture.

         "Underlying Common Stock" means the Common Stock into which the Bonds
are convertible or issued upon any such conversion.

         Section 2. Shelf Registration. 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") that is 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-1 or
S-3 or another appropriate

                                       4



form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the reasonable methods of distribution elected by the
Holders, approved by the Company, and set forth in the Initial Shelf
Registration Statement. The Company shall use its 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 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. At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date that is ten (10) Business Days
prior to such time of effectiveness shall be named as a selling securityholder
in the Initial Shelf Registration Statement and the related Prospectus in such a
manner as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law.

         (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 have been resold pursuant thereto or shall have otherwise
ceased to be Registrable Securities), the Company shall use its reasonable best
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 its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Shelf 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 as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.

         (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(h). Each Holder of Registrable Securities wishing to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a completed and executed Notice and
Questionnaire to the

                                       5



Company at least five (5) Business Days prior to any attempted or actual
distribution of Registrable Securities under the Shelf Registration Statement.
Each Holder of Registrable Securities who elects to sell Registrable Securities
under a Shelf Registration Statement agrees by submitting a Notice and
Questionnaire, it will be bound by the terms and conditions of the Notice and
Questionnaire and this Agreement. From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered, and in any
event within the later of (x) five (5) Business Days after such date or (y) five
(5) Business Days after the expiration of any Suspension Period (1) in effect
when the Notice and Questionnaire is delivered or (2) put into effect within
five (5) Business Days of such delivery date:

                  (i)      if required by applicable law, file with the SEC a
         post-effective amendment to the Shelf Registration Statement or, if
         permitted by applicable law, prepare and 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 securityholder 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 its
         reasonable best 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 a reasonable number of 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);

provided that if such Notice and Questionnaire is delivered during a Suspension
Period, or a Suspension Period is put into effect within five (5) Business Days
after such delivery date, 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 within five (5) Business Days after expiration of the
Suspension Period in accordance with Section 3(h); 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, the Company shall 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

                                       6



obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus;
provided, however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(d) (whether or not such Holder was a Notice Holder
at the time the Shelf Registration Statement was declared effective) shall be
named as a selling securityholder in the Shelf 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 or

                  (iii)    the Initial Shelf Registration Statement is filed and
         declared effective but shall thereafter cease to be effective (without
         being succeeded immediately by an additional registration statement
         filed and declared effective) or usable for the offer and sale of
         Registrable Securities for a period of time (including any Suspension
         Period) which shall exceed thirty (30) days in the aggregate in any
         three (3) month period or sixty (60) days in the aggregate in any
         twelve (12) month period

(each of the events of a type described in any of the foregoing clauses (i)
through (iii) 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 on which the duration of the ineffectiveness or
unusability of the Initial Shelf Registration Statement in any period exceeds
the number of days permitted by clause (iii) hereof in the case of clause (iii),
being referred to herein as an "Event Date"). Events shall be deemed to continue
until 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), and the date the Initial Shelf
Registration Statement becomes effective or usable again in the case of an Event
of the type described in clause (iii).

         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 (an "Additional Interest Period"), the Company agrees to pay,
as additional interest and not as a penalty, an amount (the "Additional Interest
Amount") at the rate described below, payable periodically on each Additional
Interest Payment Date to Record Holders of Bonds that are Registrable Securities

                                       7



and of shares of Underlying Common Stock issued upon conversion of Bonds that
are Registrable Securities, as the case may be, to the extent of, for each such
Additional Interest Payment Date, accrued and unpaid Additional Interest Amount
to (but excluding) such Additional Interest Payment Date (or, if the Additional
Interest Period shall have ended prior to such Additional Interest Payment Date,
the date of the end of the Additional Interest Period); provided that any
Additional Interest Amount accrued with respect to any Bond or portion thereof
called for redemption on a redemption date or converted into Underlying Common
Stock on a conversion date prior to the Additional Interest Payment Date, shall,
in any such event, be paid instead to the Holder who submitted such Bond 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). The Additional Interest Amount
shall accrue at a rate per annum equal to (1) one-quarter of one percent (0.25%)
for the first 90-day period from the Event Date and (2) thereafter, one-half of
one percent (0.50%) of (i) the principal amount of such Bonds or, without
duplication, (ii) in the case of Bonds that have been converted into Underlying
Common Stock, the Applicable Conversion Price of such shares of Underlying
Common Stock, as the case may be, in each case determined as of the Business Day
immediately preceding the next Additional Interest Payment Date. Notwithstanding
the foregoing, no Additional Interest 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 Additional Interest Amount with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events. Following the cure of all Events requiring the
payment by the Company of Additional Interest Amounts to the Holders of
Registrable Securities pursuant to this Section, the accrual of Additional
Interest Amounts shall cease (without in any way limiting the effect of any
subsequent Event requiring the payment of Additional Interest Amount by the
Company).

         The Trustee shall be entitled, on behalf of Holders of Bonds, to seek
any available remedy for the enforcement of this Agreement, including for the
payment of any Additional Interest Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which additional interest is expressly provided shall
be such additional interest.

         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 additional interest 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

                                       8



Registration Statement to be filed or 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)      Prepare and file with the SEC a Shelf Registration Statement
or Shelf Registration Statements on Form S-1 or S-3 or any other appropriate
form under the Securities Act available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof, and use its reasonable best efforts to cause
each such Shelf Registration Statement to become effective and remain effective
as provided herein; provided that before filing any Shelf Registration Statement
or Prospectus or any amendments or supplements thereto with the SEC, the Company
shall furnish to the Initial Purchasers and counsel for the Holders and for the
Initial Purchasers (or, if applicable, separate counsel for the Holders) copies
of all such documents proposed to be filed and use its reasonable best efforts
to reflect in each such document when so filed with the SEC such comments as the
such counsel reasonably shall propose within three (3) Business Days of the
delivery of such copies to the Initial Purchasers and such counsel.

         (b)      Subject to Section 3(h) hereof, prepare and file with the SEC
such amendments and post-effective amendments to each Shelf Registration
Statement as may be necessary to keep such Shelf Registration Statement
continuously effective until the expiration of the Effectiveness Period; 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 its reasonable best
efforts to comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all securities covered by such Shelf
Registration Statement during the Effectiveness Period in accordance with the
intended methods of disposition by the sellers thereof set forth in such Shelf
Registration Statement as so amended or such Prospectus as so supplemented.

         (c)      As promptly as practicable give notice to the Notice Holders,
the Initial Purchasers and counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) (i) when any
Prospectus, Prospectus supplement, Shelf Registration Statement or
post-effective amendment to a Shelf Registration Statement has been filed with
the SEC and, with respect to a Shelf 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 Shelf 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 Shelf Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv)

                                       9



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) after the effective date of any Shelf
Registration Statement filed pursuant to this Agreement of the occurrence of
(but not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Shelf
Registration Statement will be filed with the SEC, which notice may, at the
discretion of the Company (or as required pursuant to Section 3(h)), state that
it constitutes a Suspension Notice, in which event the provisions of Section
3(h) shall apply.

         (d)      Use its reasonable best efforts to prevent the issuance of,
and, if issued, to obtain the withdrawal of any order suspending the
effectiveness of a Shelf 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 as promptly as practicable, and provide prompt notice to
each Notice Holder and the Initial Purchasers of the withdrawal of any such
order.

         (e)      As promptly as practicable furnish to each Notice Holder,
counsel for the Holders and for the Initial Purchasers (or, if applicable,
separate counsel for the Holders) and the Initial Purchasers, without charge, at
least one (1) conformed copy of the Shelf 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, such
counsel or the Initial Purchasers).

         (f)      During the Effectiveness Period, deliver to each Notice
Holder, counsel for the Holders and for the Initial Purchasers (or, if
applicable, separate counsel for the Holders) and the Initial Purchasers, in
connection with any sale of Registrable Securities pursuant to a Shelf
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 and
the Initial Purchasers may reasonably request; and the Company hereby consents
(except during such periods that a Suspension 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.

         (g)      Prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable best 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

                                       10



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 its reasonable best 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 reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Shelf
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 subject it to
general service of process in suits or to taxation in any such jurisdiction
where it is not then so subject.

         (h)      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 as a result of which any Shelf 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 necessary in order 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 (a "Material Event") that, in the reasonable 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)
or (C) above, subject to the next sentence, as promptly as practicable, prepare
and file, if necessary pursuant to applicable law, a post-effective amendment to
such Shelf 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 Shelf Registration
Statement and Prospectus so that such Shelf 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 necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that the Company may rely on
information provided by each Notice Holder with respect to such Notice Holder),
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement, subject to the next sentence, use its reasonable best
efforts to cause it to be declared effective as promptly as is practicable, and

                                       11



(ii) give notice to the Notice Holders and counsel for the Holders and for the
Initial Purchasers (or, if applicable, separate counsel for the Holders) that
the availability of the Shelf Registration Statement is suspended (a "Suspension
Notice") and, upon receipt of any Suspension Notice, each Notice Holder agrees
not to sell any Registrable Securities pursuant to such Shelf 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 its
reasonable best 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 reasonable judgment of the Company,
the Shelf Registration Statement does not contain any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and the Prospectus
does not contain any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (z) in the
case of clause (C) above, as soon as, in the reasonable discretion of the
Company, such suspension is no longer appropriate. The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the "Suspension Period") without the Company incurring any obligation
to pay additional interest pursuant to Section 2(e) shall not exceed thirty (30)
days in any three (3) month period and sixty (60) days in any twelve (12) month
period.

         (i)      Make available for inspection during normal business hours by
representatives 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 and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
officers, directors and employees of the Company and its subsidiaries to make
available for inspection during normal business hours all relevant information
reasonably requested by such representatives 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, at the Company's request, 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 Shelf Registration Statement or the use of any Prospectus referred to in
this Agreement), (iii) such information

                                       12



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 or is not otherwise under a
duty of trust to the Company, and provided 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.

         (j)      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 Shelf Registration Statement, which
statements shall cover said 12-month periods.

         (k)      Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Shelf Registration Statement, which certificates shall not
bear any restrictive legends, 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 (2) Business Days
prior to any sale of such Registrable Securities.

         (l)      Provide a CUSIP number for all Registrable Securities covered
by each Shelf Registration Statement not later than the effective date of such
Shelf Registration Statement and provide the Trustee and the transfer agent for
the Common Stock with certificates for the Registrable Securities that are in a
form eligible for deposit with The Depository Trust Company.

         (m)      Cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.

         (n)      Upon (i) the filing of the Initial Registration Statement and
(ii) the effectiveness of the Initial Registration Statement, announce the same,
in each case by release to Reuters Economic Services and Bloomberg Business
News.

         (o)      Enter into such customary agreements and take all such other
actions reasonable under the circumstances, if any, as a majority of the holders
of the Registrable Securities being sold shall reasonably request in order to
expedite or facilitate disposition of such Registrable Securities pursuant to
the Registration Statement.

                                       13



         (p)      Cause the Indenture to be qualified under the TIA not later
than the effective date of any Shelf 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 its reasonable best 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 Shelf
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 the Company may from time to time reasonably request.
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary in
order to make the statements in such Prospectus, in the light of the
circumstances under which they were made, not misleading.

         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 Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are declared effective. Such fees and expenses
("Registration 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 counsel for the Holders 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 Shelf Registration Statement may designate), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with

                                       14



The Depository Trust Company), (iii) duplication and mailing expenses relating
to copies of any Shelf Registration Statement or Prospectus delivered to any
Holders hereunder, (iv) fees and disbursements of counsel for the Company and
the fees and disbursements of one counsel for the Holders in connection with the
Shelf Registration Statement, (v) reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock and (vi) Securities Act liability insurance obtained by the Company in its
sole discretion. 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 by the
Company 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. In connection
with any underwritten offering of any Registrable Securities covered by Shelf
Registration Statement, the participating Holders shall be responsible for the
payment of any and all underwriters and brokers and dealers discounts and
commissions in proportion to the number of Securities sold by such Holders;
provided that no event will such methods of distribution set forth herein take
the form of an underwritten offering of the Registrable Securities without the
prior agreement of the Company.

         Section 6. Indemnification; Contribution.

         (a)      The Company agrees to indemnify, defend and hold harmless each
Holder and each person who controls any Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each, a "Holder
Indemnified Party"), from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which such Holder
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in any Shelf Registration Statement or Prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact required to be stated in any Shelf Registration Statement or in any
amendment or supplement thereto or necessary to make the statements therein not
misleading, or arises out of or is based upon any omission or alleged omission
to state a material fact necessary in order to make the statements made in any
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or omission or alleged
untrue statement or omission of a material fact contained in, or omitted from,
and in conformity with information furnished in writing by or on behalf of any
Holder to the Company expressly for use therein; provided that the
indemnification contained in this Section 6(a) shall

                                       15



not inure to the benefit of any Holder (or to the benefit of any person
controlling such Holder) on account of any such losses, claims, damages or
liabilities caused by any untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus provided in each
case the Company has performed its obligations under Section 3(a) hereof if
either (A) (i) such Holder failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale by such Holder
to the person asserting the claim from which such losses, claims, damages or
liabilities arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission, or
(B) (x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which such losses, claims, damages or
liabilities arise.

         (b)      Each Holder, severally and not jointly, agrees to indemnify,
defend and hold harmless the Company, its directors and officers and any person
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each, a "Company Indemnified Party") from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which such Company Indemnified Party may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in information
furnished in writing by or on behalf of such Holder to the Company expressly for
use in any Shelf Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in any Shelf Registration Statement or in any amendment or supplement
thereto or necessary to make the statements therein not misleading, or arises
out of or is based upon any omission or alleged omission to state a material
fact necessary in order to make the statements in any Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, in the light
of the circumstances under which they were made, not misleading, in connection
with such information. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Shelf Registration Statement giving rise to such indemnification
obligation.

         (c)      If any action, suit or proceeding (each, a "Proceeding") is
brought against any person in respect of which indemnity may be sought pursuant
to either subsection (a) or (b) of this Section 6, such person (the "Indemnified
Party") shall

                                       16



promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Party") in writing of the institution of such Proceeding and the
Indemnifying Party shall assume the defense of such Proceeding; provided,
however, that the omission to so notify such Indemnifying Party shall not
relieve such Indemnifying Party from any liability which it may have to such
Indemnified Party hereunder to the extent such omission has not materially
prejudiced (through the forfeiture of substantive rights or defenses) such
Indemnifying Party. Such Indemnified Party shall have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party (x) unless the employment of such
counsel shall have been authorized in writing by such Indemnifying Party in
connection with the defense of such Proceeding or (y) such Indemnifying Party
shall not have employed counsel to have charge of the defense of such Proceeding
within 30 days of the receipt of notice thereof or (z) such Indemnified Party
shall have reasonably concluded upon the written advice of counsel that there
may be one or more defenses available to it that are different from, additional
to or in conflict with those available to such Indemnifying Party (in which case
such Indemnifying Party shall not have the right to direct that portion of the
defense of such Proceeding on behalf of the Indemnified Party, but such
Indemnifying Party may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Indemnifying Party), in any of which events such reasonable fees and expenses
shall be borne by such Indemnifying Party and paid as incurred (it being
understood, however, that such Indemnifying Party shall not be liable for the
expenses of more than one separate counsel in any one Proceeding or series of
related Proceedings together with reasonably necessary local counsel
representing the Indemnified Parties who are parties to such Proceeding). An
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, but if settled with the written consent of
such Indemnifying Party, such Indemnifying Party agrees to indemnify and hold
harmless an Indemnified Party from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party to reimburse such
Indemnified Party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then such Indemnifying Party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 Business Days after receipt
by such Indemnifying Party of the aforesaid request, (ii) such Indemnifying
Party shall not have reimbursed such Indemnified Party in accordance with such
request prior to the date of such settlement and (iii) such Indemnified Party
shall have given such Indemnifying Party at least 30 days' prior notice of its
intention to settle. No Indemnifying Party shall, without the prior written
consent of any Indemnified Party, effect any settlement of any pending or
threatened Proceeding in respect of which such Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of

                                       17



such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such Indemnified Party.

         (d)      If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 6 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Holders on the
other hand from the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Holders on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Holders on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and claims
referred to above shall be deemed to include any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any Proceeding.

         (e)      The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in subsection (d) above.
Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by it were offered to the public exceeds the
amount of any damages which it has 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. The Holders' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective amount of Registrable Securities they have sold pursuant to a
Shelf Registration Statement, and not joint. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

                                       18



         (f)      The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Security by any Holder.

         Section 7. Information Requirements. (a) The Company covenants that, if
at any time before the end of the Effectiveness Period it is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder of
Registrable Securities and take such further action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation,
making such 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, Rule 144A, Regulation S and Regulation D
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 filed with the SEC
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 the Common Stock) under any section
of the Exchange Act.

         (b)      The Company shall use its reasonable best efforts to file the
reports required to be filed by it under the Exchange Act and to comply with all
other requirements set forth in the instructions to Form S-1 or Form S-3, as the
case may be, in order to allow the Company to be eligible to file registration
statements on Form S-1 or Form S-3.

         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 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

                                       19



constituting Registrable Securities (with Holders of Bonds deemed to be the
Holders, for purposes of this Section, of the number of outstanding shares of
Underlying Common Stock into which such Bonds are or would be convertible 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 Shelf 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 Shelf
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. The foregoing notwithstanding, this Agreement may be
amended by written agreement signed by the Company and the Initial Purchasers,
without the consent of the Holders of Registrable Securities, to cure any
ambiguity or to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision contained herein, or to make
such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Securities.

         (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:

         (x)      if to a Holder of Registrable Securities, 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:

                 303 Velocity Way
                 Foster City, California 94404
                 Attention: General Counsel
                 Telecopy No.: (650) 357-3776

                                       20



                  with a copy (which shall not constitute notice) to:

                  Morgan, Lewis & Bockius LLP
                  300 South Grand Avenue
                  Los Angeles, California 90071
                  Attention: John F. Hartigan, Esq.
                  Telecopy No.: (213) 612-2501

         (z)      if to the Initial Purchasers, to:

                  c/o UBS Warburg LLC
                  299 Park Avenue
                  New York, New York 10171
                  Attention: Syndicate Department
                  Telecopy No.: (212) 821-4998

                  with a copy to (for informational purposes only):

                  c/o UBS Warburg LLC
                  UBS Warburg LLC
                  677 Washington Boulevard
                  Stamford, Connecticut 06901
                  Attention: Legal Department
                  Telecopy No.: (203) 719-0683

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, 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 the Initial Purchasers or any Holder shall be
deemed, for purposes of this Agreement, to be an assignee of the Initial
Purchasers or such Holder, as the case may be. 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; provided that nothing herein shall be deemed to permit
any assignment, transfer or other disposition of Registrable Securities in
violation of the terms of the Purchase Agreement, applicable law or the
Indenture. If any transferee of any Holder shall

                                       21



acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities, such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement and such person shall be
entitled to receive the benefits hereof.

         (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 its reasonable 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.

         (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. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement.

         (k)      Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for Additional Interest Amount under
Section 2(e)

                                       22



hereof to the extent such Additional Interest Amount accrues prior to the end of
the Effectiveness Period, each of which shall remain in effect in accordance
with its terms.

                                       23



         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                                  ELECTRONICS FOR IMAGING, INC.

                                                  By: __________________________
                                                       Name:
                                                       Title:

Confirmed and accepted as of the date
first above written on behalf of itself
and the other several Initial Purchasers:

UBS WARBURG LLC

By:____________________________
   Name:
   Title:

By:____________________________
   Name:
   Title:

                                       24

EX-21

                                                                               .
                                                                               .
                                                                               .

                                                                      EXHIBIT 21

                                EFI SUBSIDARIES*



                NAME, ADDRESS                  JURISDICTION OF ORGANIZATION   DOING BUSINESS AS**
                                                                        
Electronics for Imaging Australia Pty Ltd            Australia
26 Cunningham Street
North Sydney NSW 2060
Australia
Incorporation Date: March 5, 1997

EFI Brazil LTDA                                      Brazil                    Electronics for
Av. Ayrton Senna                                                               Imaging do Brazil
3000 Bloco2-Sala
412 Edificio via Purque Offices
Barra da Tijuca
Rio da Janiero
RJ CEP 22775-001

EFI (Canada), Inc.                                   Canada
Box 25
Commerce Court West
Toronto, Ontario, Canada M5L 1A9

Electronics for Imaging, International               Cayman Islands
PW Corporate Services (Cayman) Ltd
PO Box 258
First Home Tower
British American Centre
George Town
Grand Cayman, Cayman Islands

Tidenet, Inc.                                        Delaware
303 Velocity Way
Foster City, CA 94404

Electronics for Imaging France SARL                  France                    EPLI
Immeuble Atria
5, Place des Marseillais
94227 Charenton-le-Pont Cedex

Electronics for Imaging GmbH                         Germany                   EFI Deutschland
Kaiserswerther Strasse 115
D-40880 Ratingen
Germany

Best GmbH                                            Germany
Mevissenstr 65
47803 Krefeld
Germany

EFI Ireland Imaging Solutions Investment
Company Ltd                                          Ireland
Harcourt Centre




                                                                        
Harcourt Street
Dublin 2
Ireland

Electronics for Imaging (Israel) Ltd                 Israel
Inactive

Electronics for Imaging Italia SRL                   Italy
Centro Direzionale Milano Fiori
Strada 6, Palazzo E3
20090 Assago (Milano)
Italy

Electronics for Imaging India Private Limited        India
427, 16th Main, 3rd Cross, 3rd Block
Koramangala, Bangalore 560 038

EFI KK                                               Japan                     Electronics for
Shinjuku Island Wing 13F                                                       Imaging KK
3-1 Nishi-Shinjuku 6-chome
Shinjuku-ku
Tokyo 160-0023
Japan

Electronics for Imaging Korea Co., Ltd.              Korea
37th Floor, ASEM Tower
159-1 Samsung-dong, Gangnam-gu
Seoul, Korea 135-798

Electronics for Imaging, B.V.                        Netherlands
201-207 Boeing Avenue
1119 PD Schi
phol-Rijk
The Netherlands

Electronics for Imaging Investments S.a.r.l.         Netherlands
2 Rue Hackin
L-1746 Luxembourg

Electronics for Imaging Singapore Pte Ltd            Singapore
5 Shenton Way
#21-08A-11&12 UIC Building
Singapore 068808

Electronics for Imaging Espana S.L.                  Spain
Parque Impresarial San Fernando
Edificio Francia
28883 L Madrid
Spain

Electronics for Imaging AB                           Sweden                    Electronics for
Frosundaviks Alle 15 4tr                                                       Imaging Sweden
169 70 Solna
Sweden





                                                                        
Electronics for Imaging Holding GmbH                 Switzerland
ATAG Ernst & Young AG
Attn: Thomas Rast
Bundesstrasse 3
CH - 6304 Zug

Electronics for Imaging (Europe) Limited             UK                        Electronics for
Stonebridge House                                                              Imaging UK
Padbury Oaks
Old Bath Road
Lomgford, Middlesex UB7 0EW
United Kingdom

EFI Foreign Sales Corporation, Inc.                  US Virgin Islands
Crown Bay Marina
Suite 521
St. Thomas, U.S.V.I. 00802



*    All of the listed subsidiaries are 100% wholly-owned subsidiaries of EFI

**   "Doing Business As" names have been listed only where they differ from the
     name of the subsidiary.

EX-31.1

                                                                    EXHIBIT 31.1

                                  CERTIFICATION

I, Guy Gecht, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Electronics for
Imaging, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

         b) [intentionally omitted]

         c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report; and

         d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal controls over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

         a) All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls over financial reporting.

     Date: August 14, 2003                   /s/ Guy Gecht
                                             --------------------------
                                             Guy Gecht
                                             Chief Executive Officer

                                       36

EX-31.2

                                                                    EXHIBIT 31.2

                                  CERTIFICATION

I, Joseph Cutts, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Electronics for
Imaging, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

         b) [intentionally omitted]

         c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report; and

         d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal controls over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

         a) All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls over financial reporting.

Date: August 14, 2003                        /s/ Joseph Cutts
                                             --------------------------
                                             Joseph Cutts
                                             Chief Financial Officer

                                       37

EX-32.1

                                                                    Exhibit 32.1

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report of Electronics for Imaging,
Inc. (the "Company"), on Form 10-Q for the quarter ended June 30, 2003 (the
"Report"), I, Guy Gecht, Chief Executive Officer of the Company, hereby certify
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 that: (1) the Report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and (2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

         8/14/03                               /s/ Guy Gecht
                                               ----------------------------
         Date                                  Guy Gecht
                                               Chief Executive Officer

                                       38

EX-32.2

                                                                    Exhibit 32.2

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the accompanying Quarterly Report of Electronics for
Imaging, Inc. (the "Company"), on Form 10-Q for the quarter ended June 30, 2003
(the "Report"), I, Joseph Cutts, Chief Financial Officer of the Company, hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 that: (1) the Report fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and (2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

         8/14/03                               /s/ Joseph Cutts
                                               ----------------------------
         Date                                  Joseph Cutts
                                               Chief Financial Officer

                                       39