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                                                                     Exhibit 1.1

                             Molina Healthcare, Inc.

                  3.75% Convertible Notes Due October 1, 2014

                             Underwriting Agreement

                                                              New York, New York
                                                                 October 4, 2007

To the Representatives
   named in Schedule I
   hereto of the several
   Underwriters named in
   Schedule II hereto

Ladies and Gentlemen:

          Molina Healthcare, Inc., a corporation organized under the laws of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, the principal amount of its securities identified
in Schedule I hereto (the "Underwritten Securities"). The Company also proposes
to grant to the Underwriters an option to purchase up to an additional principal
amount of securities set forth in Schedule I hereto to cover over-allotments
(the "Option Securities"; the Option Securities, together with the Underwritten
Securities, hereinafter called the "Securities"). The Securities are convertible
into shares of Common Stock, par value $0.001 per share (the "Common Stock"), of
the Company at the conversion price set forth in the Final Prospectus. The
Securities are to be issued under an indenture (the "Indenture") to be dated as
of October 11, 2007, as amended by a supplemental indenture to be dated October
11, 2007, in each case between the Company and U.S. Bank National Association,
as trustee (the "Trustee"). To the extent there are no additional Underwriters
listed on Schedule II other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Base Prospectus, any Preliminary Prospectus
or the Final Prospectus, as the case may be, deemed to be incorporated therein
by reference. Certain terms used herein are defined in Section 20 hereof.



          1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.

          (a) The Company meets the requirements for use of Form S-3 under the
     Act and has prepared and filed with the Commission a registration statement
     (the file number of which is set forth in Schedule I hereto) on Form S-3,
     including a related Base Prospectus, for registration under the Act of the
     offering and sale of the Securities. Such Registration Statement, including
     any amendments thereto filed prior to the Execution Time, has become
     effective. The Company may have filed with the Commission, as part of an
     amendment to the Registration Statement or pursuant to Rule 424(b), one or
     more preliminary prospectus supplements relating to the Securities, each of
     which has previously been furnished to you. The Company will file with the
     Commission a final prospectus supplement relating to the Securities in
     accordance with Rule 424(b). As filed, such final prospectus supplement
     shall contain all information required by the Act and the rules thereunder,
     and, except to the extent the Representatives shall agree in writing to a
     modification, shall be in all substantive respects in the form furnished to
     you prior to the Execution Time or, to the extent not completed at the
     Execution Time, shall contain only such specific additional information and
     other changes (beyond that contained in the Base Prospectus and any
     Preliminary Prospectus) as the Company has advised you, prior to the
     Execution Time, will be included or made therein. The Registration
     Statement, at the Execution Time, meets the requirements set forth in Rule
     415(a)(1)(x).

          (b) On each Effective Date, the Registration Statement did, and when
     the Final Prospectus is first filed in accordance with Rule 424(b) and on
     the Closing Date (as defined herein) and on any date on which Option
     Securities are purchased, if such date is not the Closing Date (a
     "settlement date"), the Final Prospectus (and any supplement thereto) will,
     comply in all material respects with the applicable requirements of the
     Act, the Exchange Act and the Trust Indenture Act and the respective rules
     thereunder; on each Effective Date and at the Execution Time, the
     Registration Statement did not and will not contain any untrue statement of
     a material fact or omit to state any material fact required to be stated
     therein or necessary in order to make the statements therein not
     misleading; on the Effective Date and on the Closing Date the Indenture did
     or will comply in all material respects with the applicable requirements of
     the Trust Indenture Act and the rules thereunder; and on the date of any
     filing pursuant to Rule 424(b) and on the Closing Date and any settlement
     date, the Final Prospectus (together with any supplement thereto) will not
     include any untrue statement of a material fact or omit to state a material
     fact necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading; provided,
     however, that the Company makes no representations or warranties as to (i)
     that part of the Registration Statement which shall constitute the
     Statement of Eligibility and Qualification (Form T-1) under the Trust
     Indenture Act of the Trustee or (ii) the information contained in or
     omitted from the Registration Statement or the Final Prospectus (or any
     supplement thereto) in reliance upon and in conformity with information
     furnished in writing to the Company by or on behalf of any Underwriter
     through the Representatives specifically for inclusion in the Registration
     Statement or the Final Prospectus (or any supplement


                                        2



     thereto), it being understood and agreed that the only such information
     furnished by or on behalf of any Underwriter consists of the information
     described as such in Section 8 hereof.

          (c) (i) The Disclosure Package, and (ii) each electronic road show
     when taken together as a whole with the Disclosure Package, 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. The
     preceding sentence does not apply to statements in or omissions from the
     Disclosure Package based upon and in conformity with written information
     furnished to the Company by any Underwriter through the Representatives
     specifically for use therein, it being understood and agreed that the only
     such information furnished by or on behalf of any Underwriter consists of
     the information described as such in Section 8 hereof.

          (d) (i) At the earliest time after the filing of the Registration
     Statement that the Company or another offering participant made a bona fide
     offer (within the meaning of Rule 164(h)(2)) of the Securities and (ii) as
     of the Execution Time (with such date being used as the determination date
     for purposes of this clause (ii)), the Company was not and is not an
     Ineligible Issuer (as defined in Rule 405), without taking account of any
     determination by the Commission pursuant to Rule 405 that it is not
     necessary that the Company be considered an Ineligible Issuer.

          (e) Each Issuer Free Writing Prospectus and the final term sheet
     prepared and filed pursuant to Section 5(b) hereto does not include any
     information that conflicts with the information contained in the
     Registration Statement, including any document incorporated by reference
     therein and any prospectus supplement deemed to be a part thereof that has
     not been superseded or modified. The foregoing sentence does not apply to
     statements in or omissions from any Issuer Free Writing Prospectus based
     upon and in conformity with written information furnished to the Company by
     any Underwriter through the Representatives specifically for use therein,
     it being understood and agreed that the only such information furnished by
     or on behalf of any Underwriter consists of the information described as
     such in Section 8 hereof.

          (f) Each of the Company and its Significant Subsidiaries has been duly
     incorporated and is validly existing as a corporation in good standing
     under the laws of the jurisdiction in which it is chartered or organized
     with full corporate power and authority to own or lease, as the case may
     be, and to operate its properties and conduct its business as described in
     the Disclosure Package and the Final Prospectus, and is duly qualified to
     do business as a foreign corporation and is in good standing under the laws
     of each jurisdiction which requires such qualification.

          (g) All the outstanding shares of capital stock of each Significant
     Subsidiary have been duly and validly authorized and issued and are fully
     paid and nonassessable, and, except as otherwise set forth in the
     Disclosure Package and the Final Prospectus, all outstanding shares of
     capital stock of the Significant Subsidiaries are owned by the


                                       3



     Company either directly or through wholly owned subsidiaries free and clear
     of any perfected security interest or any other security interests, claims,
     liens or encumbrances.

          (h) There is no contract or other document of a character required to
     be described in the Registration Statement or Prospectus, or to be filed as
     an exhibit thereto, which is not described or filed as required (and the
     Preliminary Prospectus contains in all material respects the same
     description of the foregoing matters contained in the Final Prospectus).

          (i) This Agreement has been duly authorized, executed and delivered by
     the Company.

          (j) The Company is not and, after giving effect to the offering and
     sale of the Securities and the application of the proceeds thereof as
     described in the Disclosure Package and the Prospectus, will not be an
     "investment company" as defined in the Investment Company Act of 1940, as
     amended.

          (k) No consent, approval, authorization, filing with or order of any
     court or governmental agency or body is required in connection with the
     transactions contemplated herein, except such as have been obtained under
     the Act and the Trust Indenture Act and such as may be required under the
     blue sky laws of any jurisdiction in connection with the purchase and
     distribution of the Securities by the Underwriters in the manner
     contemplated herein and in the Disclosure Package and the Final Prospectus.

          (l) Neither the issue and sale of the Securities nor the consummation
     of any other of the transactions herein contemplated nor the fulfillment of
     the terms hereof will conflict with, result in a breach or violation of, or
     imposition of any lien, charge or encumbrance upon any property or assets
     of the Company or any of its Significant Subsidiaries pursuant to, (i) the
     charter or by-laws of the Company or any of its Significant Subsidiaries,
     (ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
     note agreement, loan agreement or other agreement, obligation, condition,
     covenant or instrument to which the Company or any of its Significant
     Subsidiaries is a party or bound or to which its or their property is
     subject, or (iii) any statute, law, rule, regulation, judgment, order or
     decree applicable to the Company or any of its Significant Subsidiaries of
     any court, regulatory body, administrative agency, governmental body,
     arbitrator or other authority having jurisdiction over the Company or any
     of its Significant Subsidiaries or any of its or their properties, except
     in the case of (ii) and (iii) above as would not (A) reasonably be expected
     to have a material adverse effect on the performance of this Agreement or
     the consummation of any of the transactions contemplated hereby or (B)
     reasonably be expected to have a material adverse effect on the condition
     (financial or otherwise), prospects, earnings or business of the Company
     and its Significant Subsidiaries, taken as a whole, whether or not arising
     from transactions in the ordinary course of business (a "Material Adverse
     Effect).

          (m) No holders of securities of the Company have rights to the
     registration of such securities under the Registration Statement.


                                       4



          (n) The consolidated historical financial statements and schedules of
     the Company and its consolidated subsidiaries included in the Preliminary
     Prospectus, the Prospectus and the Registration Statement present fairly,
     in all material respects, the financial condition, results of operations
     and cash flows of the Company as of the dates and for the periods
     indicated, comply as to form with the applicable accounting requirements of
     the Act and have been prepared in conformity with generally accepted
     accounting principles applied on a consistent basis throughout the periods
     involved (except as otherwise noted therein). The selected financial data
     set forth under the caption "Selected Financial Data" in the Preliminary
     Prospectus, the Prospectus and Registration Statement fairly present, in
     all material respects, on the basis stated in the Preliminary Prospectus,
     the Prospectus and the Registration Statement, the information included
     therein.

          (o) No action, suit or proceeding by or before any court or
     governmental agency, authority or body or any arbitrator involving the
     Company or any of its Significant Subsidiaries or its or their property is
     pending or, to the best knowledge of the Company, threatened that could
     have a Material Adverse Effect, except as set forth in or contemplated in
     the Disclosure Package and the Final Prospectus (exclusive of any
     supplement thereto).

          (p) Each of the Company and each of its subsidiaries owns or leases
     all such properties as are necessary to the conduct of its operations as
     presently conducted.

          (q) Neither the Company nor any Significant Subsidiary is in violation
     or default of (i) any provision of its charter or by-laws, (ii) the terms
     of any indenture, contract, lease, mortgage, deed of trust, note agreement,
     loan agreement or other agreement, obligation, condition, covenant or
     instrument to which it is a party or bound or to which its property is
     subject, or (iii) any statute, law, rule, regulation, judgment, order or
     decree of any court, regulatory body, administrative agency, governmental
     body, arbitrator or other authority having jurisdiction over the Company or
     such Significant Subsidiary or any of its properties, as applicable, except
     with respect to (ii) and (iii) above where any violation or default would
     not result in a Material Adverse Effect.

          (r) Ernst & Young LLP, who have certified certain financial statements
     of the Company and its consolidated subsidiaries and delivered their report
     with respect to the audited consolidated financial statements and schedules
     included in the Disclosure Package and the Final Prospectus, are
     independent public accountants with respect to the Company within the
     meaning of the Act and the applicable published rules and regulations
     thereunder.

          (s) The Company has filed all tax returns that are required to be
     filed or has requested extensions thereof (except in any case in which the
     failure so to file would not have a Material Adverse Effect, except as set
     forth in or contemplated in the Disclosure Package and the Final Prospectus
     (exclusive of any supplement thereto), and has paid all taxes required to
     be paid by it and any other assessment, fine or penalty levied against it,
     to the extent that any of the foregoing is due and payable, except for any
     such assessment,


                                       5



     fine or penalty that is currently being contested in good faith or as would
     not have a Material Adverse Effect, except as set forth in or contemplated
     in the Disclosure Package and the Final Prospectus (exclusive of any
     supplement thereto).

          (t) No material labor dispute with the employees of the Company or any
     of its Significant Subsidiaries exists or, to the Company's knowledge, is
     threatened, except such dispute as would not, individually or in the
     aggregate, result in a Material Adverse Effect.

          (u) The Company and each of its Significant Subsidiaries are insured
     by insurers of recognized financial responsibility against such losses and
     risks and in such amounts as are prudent and customary in the businesses in
     which they are engaged; all policies of insurance and fidelity or surety
     bonds, if any, insuring the Company or any of its Significant Subsidiaries
     or their respective businesses, assets, employees, officers and directors
     are in full force and effect; the Company and its Significant Subsidiaries
     are in compliance with the terms of such policies and instruments in all
     material respects; and there are no claims by the Company or any of its
     Significant Subsidiaries under any such policy or instrument as to which
     any insurance company is denying liability or defending under a reservation
     of rights clause; neither the Company nor any such Significant Subsidiary
     has been refused any insurance coverage sought or applied for; and neither
     the Company nor any such Significant Subsidiary has any reason to believe
     that it will not be able to renew its existing insurance coverage as and
     when such coverage expires or to obtain similar coverage from similar
     insurers as may be necessary to continue its business at a cost that would
     not have a Material Adverse Effect, except as set forth in or contemplated
     in the Disclosure Package and the Final Prospectus (exclusive of any
     supplement thereto).

          (v) No Significant Subsidiary of the Company is currently prohibited,
     directly or indirectly, from paying any dividends to the Company, from
     making any other distribution on such Significant Subsidiary's capital
     stock, from repaying to the Company any loans or advances to such
     Significant Subsidiary from the Company or from transferring any of such
     Significant Subsidiary's property or assets to the Company or any other
     Significant Subsidiary of the Company, except as described in or
     contemplated by the Disclosure Package and the Final Prospectus (exclusive
     of any supplement thereto).

          (w) The Company and each of its subsidiaries maintain a system of
     internal accounting controls sufficient to provide reasonable assurance
     that (i) transactions are executed in accordance with management's general
     or specific authorizations; (ii) transactions are recorded as necessary to
     permit preparation of financial statements in conformity with generally
     accepted accounting principles and to maintain asset accountability; (iii)
     access to assets is permitted only in accordance with management's general
     or specific authorization; and (iv) the recorded accountability for assets
     is compared with the existing assets at reasonable intervals and
     appropriate action is taken with respect to any differences. The Company
     and its subsidiaries' internal controls over


                                       6



     financial reporting are effective and the Company and its subsidiaries are
     not aware of any material weakness in their internal controls over
     financial reporting.

          (x) The Company and its subsidiaries maintain "disclosure controls and
     procedures" (as such term is defined in Rule 13a-15(e) under the Exchange
     Act); such disclosure controls and procedures are effective to perform the
     functions for which they were established.

          (y) The Company has not taken, directly or indirectly, any action
     designed to or that would constitute or that might reasonably be expected
     to cause or result in, under the Exchange Act or otherwise, stabilization
     or manipulation of the price of any security of the Company to facilitate
     the sale or resale of the Securities.

          (z) None of the following events has occurred or exists: (i) a failure
     to fulfill the obligations, if any, under the minimum funding standards of
     Section 302 of the United States Employee Retirement Income Security Act of
     1974, as amended ("ERISA"), and the regulations and published
     interpretations thereunder with respect to a Plan, determined without
     regard to any waiver of such obligations or extension of any amortization
     period; (ii) an audit or investigation by the Internal Revenue Service, the
     U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any
     other federal or state governmental agency or any foreign regulatory agency
     with respect to the employment or compensation of employees by any of the
     Company or any of its Significant Subsidiaries that could have a Material
     Adverse Effect; or (iii) any breach of any contractual obligation, or any
     violation of law or applicable qualification standards, with respect to the
     employment or compensation of employees by the Company or any of its
     Significant Subsidiaries that could have a Material Adverse Effect. None of
     the following events has occurred or is reasonably likely to occur: (i) a
     material increase in the aggregate amount of contributions required to be
     made to all Plans in the current fiscal year of the Company and its
     Significant Subsidiaries compared to the amount of such contributions made
     in the most recently completed fiscal year of the Company and its
     Significant Subsidiaries; (ii) a material increase in the "accumulated
     post-retirement benefit obligations" (within the meaning of Statement of
     Financial Accounting Standards 106) of the Company and its Significant
     Subsidiaries compared to the amount of such obligations in the most
     recently completed fiscal year of the Company and its Significant
     Subsidiaries; (iii) any event or condition giving rise to a liability under
     Title IV of ERISA that could have a Material Adverse Effect; or (iv) the
     filing of a claim by one or more employees or former employees of the
     Company or any of its Significant Subsidiaries related to their employment
     that could have a Material Adverse Effect. For purposes of this paragraph,
     the term "Plan" means a plan (within the meaning of Section 3(3) of ERISA)
     subject to Title IV of ERISA with respect to which the Company or any of
     its Significant Subsidiaries may have any liability.

          (aa) There is and has been no failure on the part of the Company and
     any of the Company's directors or officers, in their capacities as such, to
     comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules
     and regulations promulgated in


                                       7



     connection therewith (the "Sarbanes-Oxley Act"), including Section 402
     relating to loans and Sections 302 and 906 relating to certifications.

          (bb) The operations of the Company and its Significant Subsidiaries
     are and have been conducted at all times in compliance with applicable
     financial recordkeeping and reporting requirements and the money laundering
     statutes and the rules and regulations thereunder and any related or
     similar rules, regulations or guidelines, issued, administered or enforced
     by any governmental agency (collectively, the "Money Laundering Laws") and
     no action, suit or proceeding by or before any court or governmental
     agency, authority or body or any arbitrator involving the Company or any of
     its Significant Subsidiaries with respect to the Money Laundering Laws is
     pending or, to the best knowledge of the Company, threatened.

          (cc) Neither the Company nor any of its subsidiaries nor, to the
     knowledge of the Company, any director, officer, agent, employee or
     affiliate of the Company or any of its subsidiaries is currently subject to
     any sanctions administered by the Office of Foreign Assets Control of the
     U.S. Treasury Department ("OFAC"); and the Company will not directly or
     indirectly use the proceeds of the offering, or lend, contribute or
     otherwise make available such proceeds to any subsidiary, joint venture
     partner or other person or entity, for the purpose of financing the
     activities of any person currently subject to any U.S. sanctions
     administered by OFAC.

          (dd) The Subsidiaries listed on Annex A attached hereto are the only
     Significant Subsidiaries of the Company as defined by Rule 1-02 of
     Regulation S-X.

          (ee) The Company and its Significant Subsidiaries own, possess,
     license or have other rights to use, on reasonable terms, sufficient
     patents, patent applications, trade and service marks, trade and service
     mark registrations, trade names, copyrights, licenses, inventions, trade
     secrets, technology, know-how and other intellectual property
     (collectively, the "Intellectual Property") necessary for the conduct of
     the Company's business as now conducted or as proposed in the Prospectus to
     be conducted. Except as set forth in the Preliminary Prospectus and the
     Prospectus (a) there are no rights of third parties to any such
     Intellectual Property; (b) there is no material infringement by third
     parties of any such Intellectual Property; (c) there is no pending or, to
     the knowledge of the Company, threatened action, suit, proceeding or claim
     by others challenging the Company's rights in or to any such Intellectual
     Property; (d) there is no pending or threatened action, suit, proceeding or
     claim by others challenging the validity or scope of any such Intellectual
     Property; and (e) there is no pending or threatened action, suit,
     proceeding or claim by others that the Company infringes or otherwise
     violates any patent, trademark, copyright, trade secret or other
     proprietary rights of others, and the Company is unaware of any other fact
     which would form a reasonable basis for any such claim.

          (ff) Except as disclosed in the Registration Statement, the Disclosure
     Package and the Final Prospectus, the Company (i) does not have any
     material lending or other relationship with any bank or lending affiliate
     of the Underwriters and (ii) does not intend


                                       8



     to use any of the proceeds from the sale of the Securities hereunder to
     repay any outstanding debt owed to any affiliate of the Underwriters.

          (gg) The Company and each of its Significant Subsidiaries possess such
     valid and current certificates, authorizations or permits issued by the
     appropriate states, federal or foreign agencies of bodies necessary to
     conduct their respective businesses, except where such failure would not
     have a Material Adverse Effect, and none of the Company nor any Significant
     Subsidiary has received any notice of proceedings relating to the
     revocation or modification of, or noncompliance with, any such certificate,
     authorization or permit which, if the subject of an unfavorable decisions,
     ruling or finding, would result in a Material Adverse Effect.

          (hh) To the extent required in connection with their respective
     businesses, each of the Company and its Significant Subsidiaries has the
     requisite provider number or other authorization to bill the Medicaid
     program in the state or states in which such entity operates unless failure
     to maintain such provider number or other authorization would not,
     individually or in the aggregate, result in a Material Adverse Effect;
     neither the Company nor any of its Significant Subsidiaries is subject to
     any pending, or, to the Company's knowledge, threatened or contemplated
     action which could reasonably be expected to result either in revocation of
     any provider number or authorization or in the Company's or any Significant
     Subsidiary's exclusion from any state Medicaid programs; the Company's and
     each Significant Subsidiary's business practices have been structured in a
     manner reasonably designed to comply with the federal or state laws
     governing Medicaid programs, including, without limitation, Sections
     1320a-7a and 1320a-7b of Title 42 of the United States Code, and the
     Company reasonably believes that it is in compliance with such laws in all
     material respects, except as set forth in or contemplated in the Disclosure
     Package and the Final Prospectus (exclusive of any supplement thereto); the
     Company and each Significant Subsidiary have taken reasonable actions
     designed to ensure that they do not: (i) violate the False Claims Act, 31
     U.S.C. Sections 3729-3733, or (ii) allow any individual with an ownership
     or control interest (as defined in 42 U.S.C. Section 1320a-3(a)(3)) in the
     Company or any subsidiary or any officer, director or managing employee (as
     defined in 42 U.S.C. Section 1320a-5(b)) of the Company or any subsidiary
     who would be a person excluded from participation in any federal health
     care program (as defined in 42 U.S.C. Section 1320a-7b(f)) as described in
     42 U.S.C. Section 1320a-7(b)(8) to participate in any such federal health
     care program maintained by the Company or any Significant Subsidiary; and
     the Company and its Significant Subsidiaries have structured their
     respective business practices in a manner reasonably designed to comply
     with the federal and state laws regarding physician ownership of (or
     financial relationship with), and the referral to entities providing,
     healthcare related goods or services, and laws requiring disclosure of
     financial interests held by physicians in entities to which they may refer
     patients for the provisions of health care related goods and services, and
     the Company reasonably believes that it is in material compliance with such
     laws.

          (ii) None of the Company, its subsidiaries nor any of their respective
     officers, directors or stockholders, or, to the knowledge of the Company,
     any employee or other agent of the Company or any of its subsidiaries, has
     engaged on behalf of the Company


                                       9



     or such subsidiary in any of the following: (i) knowingly and willfully
     making or causing to be made a false statement or representation of a
     material fact in any applications for any benefit or payment under the
     Medicare or Medicaid or similar state program or from any third party
     (where applicable federal or state law prohibits such payments to third
     parties); (ii) knowingly and willfully making or causing to be made any
     false statement or representation of a material fact for use in determining
     rights to any benefit or payment under the Medicare or Medicaid or similar
     state program or from any third party (where applicable federal or state
     law prohibits such payments to third parties); (iii) knowingly and
     willfully failing to disclose knowledge by a claimant of the occurrence of
     any event affecting the initial or continued right to any benefit or
     payment under the Medicare or Medicaid or similar state program or from any
     third party (where applicable federal or state law prohibits such payments
     to third parties) on its own behalf or on behalf of another, with intent to
     secure such benefit or payment fraudulently; (iv) knowingly and willfully
     offering, paying, soliciting or receiving any remuneration (including any
     kickback, bribe or rebate), directly or indirectly, overtly or covertly, in
     cash or in kind (A) in return for referring an individual to a person for
     the furnishing or arranging for the furnishing of any item or service for
     which payment may be made in whole or in part by Medicare, Medicaid,
     similar state program or plan or any third party (where applicable federal
     or state law prohibits such payments to third parties), or (B) in return
     for purchasing, leasing or ordering or arranging for or recommending the
     purchasing, leasing or ordering of any good, facility, service, or item for
     which payment may be made in whole or in part by Medicare, Medicaid,
     similar state program or plan or any third party (where applicable federal
     or state law prohibits such payments to third parties).

     Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.

          2. Purchase and Sale. (a) Subject to the terms and conditions and in
     reliance upon the representations and warranties herein set forth, the
     Company agrees to sell to each Underwriter, and each Underwriter agrees,
     severally and not jointly, to purchase from the Company, at the purchase
     price set forth in Schedule I hereto the principal amount of the Securities
     set forth opposite such Underwriter's name in Schedule II hereto.

          (b) Subject to the terms and conditions and in reliance upon the
     representations and warranties herein set forth, the Company hereby grants
     an option to the several Underwriters to purchase, severally and not
     jointly, up to the principal amount of Option Securities set forth in
     Schedule I hereto at the same purchase price set forth in Schedule I hereto
     for the Underwritten Securities. Said option may be exercised only to cover
     over-allotments in the sale of the Underwritten Securities by the
     Underwriters. Said option may be exercised in whole or in part at any time
     on or before the 13th day after the date of the Prospectus upon written or
     telegraphic notice by the Representatives to the Company setting forth the
     aggregate principal amount of the Option Securities as to which the several
     Underwriters are exercising the option and the settlement date. The


                                       10



     aggregate principal amount of Option Securities to be purchased by each
     Underwriter shall be the same percentage of the total aggregate principal
     amount of the Option Securities to be purchased by the several Underwriters
     as such Underwriter is purchasing of the Underwritten Securities, subject
     to such adjustments as you in your absolute discretion shall make to ensure
     that the Option Securities are not issued in minimum denominations of less
     than $1,000 or whole multiples thereof.

          (c) Each Underwriter agrees that, to the knowledge of such
     Underwriter, no individual purchaser shall acquire Securities convertible
     into more than 9.9% of the total outstanding Common Stock.

          3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day immediately
preceding the Closing Date) shall be made on the date and at the time specified
in Schedule I hereto or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the Underwritten Securities and
the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.

          If the option provided for in Section 2(b) hereof is exercised after
the third Business Day immediately preceding the Closing Date, the Company will
deliver the Option Securities (at the expense of the Company) to the
Representatives, at 388 Greenwich Street, New York, New York, on the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.

          4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.

          5. Agreements. The Company agrees with the several Underwriters that:


                                       11



          (a) Prior to the termination of the offering of the Securities, the
     Company will not file any amendment of the Registration Statement or
     supplement (including the Final Prospectus or any Preliminary Prospectus)
     to the Base Prospectus or any Rule 462(b) Registration Statement unless the
     Company has furnished you a copy for your review prior to filing and will
     not file any such proposed amendment or supplement to which you reasonably
     object. The Company will cause the Final Prospectus, properly completed,
     and any supplement thereto to be filed in a form approved by the
     Representatives with the Commission pursuant to the applicable paragraph of
     Rule 424(b) within the time period prescribed and will provide evidence
     satisfactory to the Representatives of such timely filing. The Company will
     promptly advise the Representatives (i) when the Final Prospectus, and any
     supplement thereto, shall have been filed (if required) with the Commission
     pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
     shall have been filed with the Commission, (ii) when, prior to termination
     of the offering of the Securities, any amendment to the Registration
     Statement shall have been filed or become effective, (iii) of any request
     by the Commission or its staff for any amendment of the Registration
     Statement, or any Rule 462(b) Registration Statement, or for any supplement
     to the Final Prospectus or for any additional information, (iv) of the
     issuance by the Commission of any stop order suspending the effectiveness
     of the Registration Statement or of any notice objecting to its use or the
     institution or threatening of any proceeding for that purpose and (v) of
     the receipt by the Company of any notification with respect to the
     suspension of the qualification of the Securities for sale in any
     jurisdiction or the institution or threatening of any proceeding for such
     purpose. The Company will use its reasonable efforts to prevent the
     issuance of any such stop order or the occurrence of any such suspension or
     objection to the use of the Registration Statement and, upon such issuance,
     occurrence or notice of objection, to obtain as soon as possible the
     withdrawal of such stop order or relief from such occurrence or objection,
     including, if necessary, by filing an amendment to the Registration
     Statement or a new registration statement and using its reasonable efforts
     to have such amendment or new registration statement declared effective as
     soon as practicable.

          (b) To prepare a final term sheet, containing solely a description of
     final terms of the Securities and the offering thereof, in the form
     approved by you and attached as Schedule IV hereto and to file such term
     sheet pursuant to Rule 433(d) within the time required by such Rule.

          (c) If, at any time prior to the filing of the Final Prospectus
     pursuant to Rule 424(b), any event occurs as a result of which the
     Disclosure Package would include any untrue statement of a material fact or
     omit to state any material fact necessary to make the statements therein,
     in the light of the circumstances under which they were made or the
     circumstances then prevailing, not misleading, the Company will (i) notify
     promptly the Representatives so that any use of the Disclosure Package may
     cease until it is amended or supplemented; (ii) amend or supplement the
     Disclosure Package to correct such statement or omission; and (iii) supply
     any amendment or supplement to you in such quantities as you may reasonably
     request.


                                       12



          (d) If, at any time when a prospectus relating to the Securities is
     required to be delivered under the Act (including in circumstances where
     such requirement may be satisfied pursuant to Rule 172), any event occurs
     as a result of which the Final Prospectus as then supplemented would
     include any untrue statement of a material fact or omit to state any
     material fact necessary to make the statements therein, in the light of the
     circumstances under which they were made, at such time not misleading, or
     if it shall be necessary to amend the Registration Statement, file a new
     registration statement or supplement the Final Prospectus to comply with
     the Act or the Exchange Act or the respective rules thereunder, including
     in connection with use or delivery of the Final Prospectus, the Company
     promptly will (i) notify the Representatives of any such event, (ii)
     prepare and file with the Commission, subject to the second sentence of
     paragraph (a) of this Section 5, an amendment or supplement or new
     registration statement which will correct such statement or omission or
     effect such compliance, (iii) use its reasonable efforts to have any
     amendment to the Registration Statement or new registration statement
     declared effective as soon as practicable in order to avoid any disruption
     in use of the Final Prospectus and (iv) supply any supplemented Final
     Prospectus to you in such quantities as you may reasonably request.

          (e) As soon as practicable, the Company will make generally available
     to its security holders and to the Representatives an earnings statement or
     statements of the Company and its Significant Subsidiaries which will
     satisfy the provisions of Section 11(a) of the Act and Rule 158.

          (f) The Company will furnish to the Representatives and counsel for
     the Underwriters, without charge, signed copies of the Registration
     Statement (including exhibits thereto) and to each other Underwriter a copy
     of the Registration Statement (without exhibits thereto) and, so long as
     delivery of a prospectus by an Underwriter or dealer may be required by the
     Act (including in circumstances where such requirement may be satisfied
     pursuant to Rule 172), as many copies of each Preliminary Prospectus, the
     Final Prospectus and each Issuer Free Writing Prospectus and any supplement
     thereto as the Representatives may reasonably request. The Company will pay
     the expenses of printing or other production of all documents relating to
     the offering.

          (g) The Company will arrange, with the assistance of the
     Representatives and Underwriters' counsel, if necessary, for the
     qualification of the Securities for sale under the laws of such
     jurisdictions as the Representatives may designate and will maintain such
     qualifications in effect so long as required for the distribution of the
     Securities; provided that in no event shall the Company be obligated to
     qualify to do business in any jurisdiction where it is not now so qualified
     or to take any action that would subject it to service of process in suits,
     other than those arising out of the offering or sale of the Securities, in
     any jurisdiction where it is not now so subject.

          (h) The Company agrees that, unless it has or shall have obtained the
     prior written consent of the Representatives, and each Underwriter,
     severally and not jointly, agrees with the Company that, unless it has or
     shall have obtained, as the case may be, the prior written consent of the
     Company, it has not made and will not make any offer


                                       13



     relating to the Securities that would constitute an Issuer Free Writing
     Prospectus or that would otherwise constitute a "free writing prospectus"
     (as defined in Rule 405) required to be filed by the Company with the
     Commission or retained by the Company under Rule 433, other than the free
     writing prospectus containing the information contained in the final term
     sheet prepared and filed pursuant to Section 5(b) hereto; provided that the
     prior written consent of the parties hereto shall be deemed to have been
     given in respect of the Free Writing Prospectuses included in Schedule III
     hereto. Any such free writing prospectus consented to by the
     Representatives or the Company is hereinafter referred to as a "Permitted
     Free Writing Prospectus." The Company agrees that (x) it has treated and
     will treat, as the case may be, each Permitted Free Writing Prospectus as
     an Issuer Free Writing Prospectus and (y) it has complied and will comply,
     as the case may be, with the requirements of Rules 164 and 433 applicable
     to any Permitted Free Writing Prospectus, including in respect of timely
     filing with the Commission, legending and record keeping.

          (i) The Company will not, without the prior written consent of
     Citigroup Global Markets Inc. and UBS Securities LLC, offer, sell, contract
     to sell, pledge, or otherwise dispose of (or enter into any transaction
     which is designed to, or might reasonably be expected to, result in the
     disposition (whether by actual disposition or effective economic
     disposition due to cash settlement or otherwise) by the Company or any
     affiliate of the Company or any person in privity with the Company or any
     affiliate of the Company), directly or indirectly, including the filing (or
     participation in the filing) of a registration statement with the
     Commission in respect of, or establish or increase a put equivalent
     position or liquidate or decrease a call equivalent position within the
     meaning of Section 16 of the Exchange Act, any shares of Common Stock or
     any securities convertible into, or exercisable, or exchangeable for,
     shares of Common Stock; or publicly announce an intention to effect any
     such transaction, until the Business Day set forth on Schedule I hereto,
     provided, however, that the Company may issue and sell Common Stock
     pursuant to any employee stock option plan, stock ownership plan or
     dividend reinvestment plan of the Company in effect at the Execution Time
     and the Company may issue Common Stock issuable upon the conversion of
     securities or the exercise of warrants outstanding at the Execution Time.

          (j) The Company will not take, directly or indirectly, any action
     designed to or that would constitute or that might reasonably be expected
     to cause or result in, under the Exchange Act or otherwise, stabilization
     or manipulation of the price of any security of the Company to facilitate
     the sale or resale of the Securities.

          (k) The Company will reserve and keep available at all times, free of
     preemptive rights, the full number of shares of Common Stock issuable upon
     conversion of the Securities.

          (l) Between the date hereof and the Closing Date, the Company will not
     do or authorize any act or thing that would result in an adjustment of the
     conversion price.

          (m) The Company agrees to pay the costs and expenses relating to the
     following matters: (i) the preparation, printing or reproduction and filing
     with the


                                       14



     Commission of the Registration Statement (including financial statements
     and exhibits thereto), each Preliminary Prospectus, the Final Prospectus
     and each Issuer Free Writing Prospectus, and each amendment or supplement
     to any of them; (ii) the printing (or reproduction) and delivery (including
     postage, air freight charges and charges for counting and packaging) of
     such copies of the Registration Statement, each Preliminary Prospectus, the
     Final Prospectus and each Issuer Free Writing Prospectus, and all
     amendments or supplements to any of them, as may, in each case, be
     reasonably requested for use in connection with the offering and sale of
     the Securities; (iii) the preparation, printing, authentication, issuance
     and delivery of certificates for the Securities, including any stamp or
     transfer taxes in connection with the original issuance and sale of the
     Securities; (iv) the printing (or reproduction) and delivery of this
     Agreement, any blue sky memorandum and all other agreements or documents
     printed (or reproduced) and delivered in connection with the offering of
     the Securities; (v) the listing of the Common Stock issuable upon
     conversion of the Securities on the New York Stock Exchange; (vi) any
     registration or qualification of the Securities for offer and sale under
     the securities or blue sky laws of the several states (including filing
     fees and the reasonable fees and expenses of counsel for the Underwriters
     relating to such registration and qualification up to a maximum of
     $10,000); (vii) any filings required to be made with the NASD, Inc.
     (including filing fees and the reasonable fees and expenses of counsel for
     the Underwriters relating to such filings); (viii) the transportation and
     other expenses incurred by or on behalf of Company representatives in
     connection with presentations to prospective purchasers of the Securities;
     (ix) the fees and expenses of the Company's accountants and the fees and
     expenses of counsel (including local and special counsel) for the Company;
     and (x) all other costs and expenses incident to the performance by the
     Company of its obligations hereunder.

          6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:

          (a) The Final Prospectus, and any supplement thereto, have been filed
     in the manner and within the time period required by Rule 424(b); the final
     term sheet contemplated by Section 5(b) hereto and any other material
     required to be filed by the Company pursuant to Rule 433(d) under the Act
     shall have been filed with the Commission within the applicable time
     periods prescribed for such filings by Rule 433; and no stop order
     suspending the effectiveness of the Registration Statement or any notice
     objecting to its use shall have been issued and no proceedings for that
     purpose shall have been instituted or threatened.

          (b) The Company shall have requested and caused Holme Roberts & Owen
     LLP, counsel for the Company, to have furnished to the Representatives
     their opinion,


                                       15



     dated the Closing Date and addressed to the Representatives, substantially
     in the form of Exhibit B-1.

          (c) The Company shall have requested and caused each of Nancy Lukey,
     with respect to Molina Healthcare of Michigan, Inc., Modrall, Sperling,
     Roehl, Harris & Sisk, P.A., with respect to Molina Healthcare of New
     Mexico, Inc., Thompson Hine LLP, with respect to Molina Healthcare of Ohio,
     Inc., Andrews Kurth LLP, with respect to Molina Healthcare of Texas, Inc.,
     Kirton & McConkie, with respect to Molina Healthcare of Utah, Inc. and
     Carney Badley Spellman, with respect to Molina Healthcare of Washington,
     Inc., to have furnished to the Representatives their opinion, dated the
     Closing Date and addressed to the Representatives, substantially in the
     form of Exhibit B-2, subject to such firms' respective assumptions,
     qualifications and limitations.

          (d) The Company shall have requested and caused Mark Andrews, general
     counsel for the Company, to have furnished to the Representatives his
     opinion, dated the Closing Date and addressed to the Representatives,
     substantially in the form of Exhibit B-3.

          (e) The Company shall have requested and caused Orrick, Herrington &
     Sutcliffe LLP to have furnished to the Representatives their opinion, dated
     the Closing Date and addressed to the Representatives, substantially in the
     form of Exhibit B-2.


          (f) The Representatives shall have received from Davis Polk &
     Wardwell, counsel for the Underwriters, such opinion or opinions, dated the
     Closing Date and addressed to the Representatives, with respect to the
     issuance and sale of the Securities, the Indenture, the Registration
     Statement, the Disclosure Package, the Final Prospectus (together with any
     supplement thereto) and other related matters as the Representatives may
     reasonably require, and the Company shall have furnished to such counsel
     such documents as they request for the purpose of enabling them to pass
     upon such matters.

          (g) The Company shall have furnished to the Representatives a
     certificate of the Company, signed by the Chairman of the Board or the
     President and the principal financial or accounting officer of the Company,
     dated the Closing Date, to the effect that the signers of such certificate
     have carefully examined the Registration Statement, the Disclosure Package,
     the Final Prospectus and any supplements or amendments thereto, as well as
     each electronic road show used in connection with the offering of the
     Securities, and this Agreement and that:

               (i) the representations and warranties of the Company in this
          Agreement are true and correct on and as of the Closing Date with the
          same effect as if made on the Closing Date and the Company has
          complied with all the agreements and satisfied all the conditions on
          its part to be performed or satisfied at or prior to the Closing Date;

               (ii) no stop order suspending the effectiveness of the
          Registration Statement or any notice objecting to its use has been
          issued and no proceedings for that purpose have been instituted or, to
          the Company's knowledge, threatened; and

               (iii) since the date of the most recent financial statements
          included in the Disclosure Package and the Final Prospectus (exclusive
          of any supplement


                                       16



          thereto), there has been no Material Adverse Effect, except as set
          forth in or contemplated in the Disclosure Package and the Final
          Prospectus (exclusive of any supplement thereto).

          (h) The Company shall have requested and caused Ernst & Young LLP to
     have furnished to the Representatives, at the Execution Time and at the
     Closing Date, letters (which may refer to letters previously delivered to
     one or more of the Representatives), dated respectively as of the Execution
     Time and as of the Closing Date, in form and substance reasonably
     satisfactory to the Representatives, confirming that they are independent
     accountants within the meaning of the Act and the Exchange Act and the
     respective applicable rules and regulations adopted by the Commission
     thereunder and that they have performed a review of the unaudited interim
     financial information of the Company for the three-month period ended March
     31, 2007 and the three and six-month periods ended June 30, 2007 and as at
     June 30, 2007 in accordance with Statement on Auditing Standards No. 100,
     substantially in the form of Exhibit C.

          (i) Subsequent to the Execution Time or, if earlier, the dates as of
     which information is given in the Registration Statement (exclusive of any
     amendment thereof) and the Final Prospectus (exclusive of any amendment or
     supplement thereto), there shall not have been (i) any change or decrease
     specified in the letter or letters referred to in paragraph (h) of this
     Section 6 or (ii) any change, or any development involving a prospective
     change, in or affecting the condition (financial or otherwise), earnings,
     business or properties of the Company and its Significant Subsidiaries
     taken as a whole, whether or not arising from transactions in the ordinary
     course of business, except as set forth in or contemplated in the
     Disclosure Package and the Final Prospectus (exclusive of any amendment or
     supplement thereto) the effect of which, in any case referred to in clause
     (i) or (ii) above, is, in the sole judgment of the Representatives, so
     material and adverse as to make it impractical or inadvisable to proceed
     with the offering or delivery of the Securities as contemplated by the
     Registration Statement (exclusive of any amendment thereof), the Disclosure
     Package and the Final Prospectus (exclusive of any amendment or supplement
     thereto).

          (j) Subsequent to the Execution Time, there shall not have been any
     decrease in the rating of any of the Company's debt securities by any
     "nationally recognized statistical rating organization" (as defined for
     purposes of Rule 436(g) under the Act) or any notice given of any intended
     or potential decrease in any such rating or of a possible change in any
     such rating that does not indicate the direction of the possible change.

          (k) The shares of Common Stock issuable upon conversion of the
     Securities shall have been listed and admitted and authorized for trading
     on the New York Stock Exchange, and satisfactory evidence of such actions
     shall have been provided to the Representatives.

          (l) Prior to the Closing Date, the Company shall have furnished to the
     Representatives such further information, certificates and documents as the
     Representatives may reasonably request.


                                       17



          (m) Prior to the Execution Time, the Company shall have furnished to
     the Representatives a letter substantially in the form of Exhibit A hereto
     from each executive officer and director of the Company, each 5%
     shareholder and each shareholder who is member of the Molina family, or
     which holds shares of Common Stock on behalf of any member of the Molina
     family, addressed to the Representatives.

          If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.

          The documents required to be delivered by this Section 6 shall be
delivered at the office of Davis Polk & Wardwell, counsel for the Underwriters,
at 450 Lexington Avenue, New York N.Y., on the Closing Date.

          7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Citigroup Global Markets Inc. and UBS Securities LLC on demand
for all expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities; provided, however, if this Agreement is terminated due
to a failure of the condition set forth in Section 6(e), the Company shall not
be obligated to reimburse any expenses of the Representatives or the
Underwriters.

          8. Indemnification and Contribution. (a) The Company agrees to
     indemnify and hold harmless each Underwriter, the directors, officers,
     employees and agents of each Underwriter and each person who controls any
     Underwriter within the meaning of either the Act or the Exchange Act
     against any and all losses, claims, damages or liabilities, joint or
     several, to which they or any of them may become subject under the Act, the
     Exchange Act or other Federal or state statutory law or regulation, at
     common law or otherwise, insofar as such losses, claims, damages or
     liabilities (or actions in respect thereof) arise out of or are based upon
     any untrue statement or alleged untrue statement of a material fact
     contained in the registration statement for the registration of the
     Securities as originally filed or in any amendment thereof, or in the Base
     Prospectus, any Preliminary Prospectus or any other preliminary prospectus
     supplement relating to the Securities, the Final Prospectus, or any Issuer
     Free Writing Prospectus or the information contained in the final term
     sheet required to be prepared and filed pursuant to Section 5(b) hereto, or
     in any amendment thereof or supplement thereto, or arise out of or are
     based upon the omission or alleged omission to state therein a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading, and agrees to


                                       18



     reimburse each such indemnified party, as incurred, for any legal or other
     expenses reasonably incurred by them in connection with investigating or
     defending any such loss, claim, damage, liability or action; provided,
     however, that the Company will not be liable in any such case to the extent
     that any such loss, claim, damage or liability arises out of or is based
     upon any such untrue statement or alleged untrue statement or omission or
     alleged omission made therein in reliance upon and in conformity with
     written information furnished to the Company by or on behalf of any
     Underwriter through the Representatives specifically for inclusion therein.
     This indemnity agreement will be in addition to any liability which the
     Company may otherwise have.

          (b) Each Underwriter severally and not jointly agrees to indemnify and
     hold harmless the Company, each of its directors, each of its officers who
     signs the Registration Statement, and each person who controls the Company
     within the meaning of either the Act or the Exchange Act, to the same
     extent as the foregoing indemnity from the Company to each Underwriter, but
     only with reference to written information relating to such Underwriter
     furnished to the Company by or on behalf of such Underwriter through the
     Representatives specifically for inclusion in the documents referred to in
     the foregoing indemnity. This indemnity agreement will be in addition to
     any liability which any Underwriter may otherwise have. The Company
     acknowledges that the statements set forth (i) in the last paragraph of the
     cover page regarding delivery of the Securities and, under the heading
     "Underwriting" or "Plan of Distribution", (ii) the list of Underwriters and
     their respective participation in the sale of the Securities, (iii) the
     sentences related to concessions and reallowances and (iv) the paragraph
     related to stabilization, syndicate covering transactions and penalty bids
     in any Preliminary Prospectus and the Final Prospectus constitute the only
     information furnished in writing by or on behalf of the several
     Underwriters for inclusion in any Preliminary Prospectus, the Final
     Prospectus or any Issuer Free Writing Prospectus.

          (c) Promptly after receipt by an indemnified party under this Section
     8 of notice of the commencement of any action, such indemnified party will,
     if a claim in respect thereof is to be made against the indemnifying party
     under this Section 8, notify the indemnifying party in writing of the
     commencement thereof; but the failure so to notify the indemnifying party
     (i) will not relieve it from liability under paragraph (a) or (b) above
     unless and to the extent it did not otherwise learn of such action and such
     failure results in the forfeiture by the indemnifying party of substantial
     rights and defenses and (ii) will not, in any event, relieve the
     indemnifying party from any obligations to any indemnified party other than
     the indemnification obligation provided in paragraph (a) or (b) above. The
     indemnifying party shall be entitled to appoint counsel of the indemnifying
     party's choice at the indemnifying party's expense to represent the
     indemnified party in any action for which indemnification is sought (in
     which case the indemnifying party shall not thereafter be responsible for
     the fees and expenses of any separate counsel retained by the indemnified
     party or parties except as set forth below); provided, however, that such
     counsel shall be satisfactory to the indemnified party. Notwithstanding the
     indemnifying party's election to appoint counsel to represent the
     indemnified party in an action, the indemnified party shall have the right
     to employ separate counsel (including local counsel), and the indemnifying
     party shall bear the


                                       19



     reasonable fees, costs and expenses of such separate counsel if (i) the use
     of counsel chosen by the indemnifying party to represent the indemnified
     party would present such counsel with a conflict of interest, (ii) the
     actual or potential defendants in, or targets of, any such action include
     both the indemnified party and the indemnifying party and the indemnified
     party shall have reasonably concluded that there may be legal defenses
     available to it and/or other indemnified parties which are different from
     or additional to those available to the indemnifying party, (iii) the
     indemnifying party shall not have employed counsel satisfactory to the
     indemnified party to represent the indemnified party within a reasonable
     time after notice of the institution of such action or (iv) the
     indemnifying party shall authorize the indemnified party to employ separate
     counsel at the expense of the indemnifying party. An indemnifying party
     will not, without the prior written consent of the indemnified parties,
     settle or compromise or consent to the entry of any judgment with respect
     to any pending or threatened claim, action, suit or proceeding in respect
     of which indemnification or contribution may be sought hereunder (whether
     or not the indemnified parties are actual or potential parties to such
     claim or action) unless such settlement, compromise or consent includes an
     unconditional release of each indemnified party from all liability arising
     out of such claim, action, suit or proceeding.

          (d) In the event that the indemnity provided in paragraph (a), (b) or
     (c) of this Section 8 is unavailable to or insufficient to hold harmless an
     indemnified party for any reason, the Company and the Underwriters
     severally agree to contribute to the aggregate losses, claims, damages and
     liabilities (including legal or other expenses reasonably incurred in
     connection with investigating or defending the same) (collectively
     "Losses") to which the Company and one or more of the Underwriters may be
     subject in such proportion as is appropriate to reflect the relative
     benefits received by the Company on the one hand and by the Underwriters on
     the other from the offering of the Securities; provided, however, that in
     no case shall any Underwriter (except as may be provided in any agreement
     among underwriters relating to the offering of the Securities) be
     responsible for any amount in excess of the underwriting discount or
     commission applicable to the Securities purchased by such Underwriter
     hereunder. If the allocation provided by the immediately preceding sentence
     is unavailable for any reason, the Company and the Underwriters severally
     shall contribute in such proportion as is appropriate to reflect not only
     such relative benefits but also the relative fault of the Company on the
     one hand and of the Underwriters on the other in connection with the
     statements or omissions which resulted in such Losses as well as any other
     relevant equitable considerations. Benefits received by the Company shall
     be deemed to be equal to the total net proceeds from the offering (before
     deducting expenses) received by it, and benefits received by the
     Underwriters shall be deemed to be equal to the total underwriting
     discounts and commissions, in each case as set forth on the cover page of
     the Final Prospectus. Relative fault shall be determined by reference to,
     among other things, whether any untrue or any alleged untrue statement of a
     material fact or the omission or alleged omission to state a material fact
     relates to information provided by the Company on the one hand or the
     Underwriters on the other, the intent of the parties and their relative
     knowledge, access to information and opportunity to correct or prevent such
     untrue statement or omission. The Company and the Underwriters agree that
     it would not be just and equitable if contribution were determined by pro
     rata allocation or


                                       20



     any other method of allocation which does not take account of the equitable
     considerations referred to above. Notwithstanding the provisions of this
     paragraph (d), no person guilty of fraudulent misrepresentation (within the
     meaning of Section 11(f) of the Act) shall be entitled to contribution from
     any person who was not guilty of such fraudulent misrepresentation. For
     purposes of this Section 8, each person who controls an Underwriter within
     the meaning of either the Act or the Exchange Act and each director,
     officer, employee and agent of an Underwriter shall have the same rights to
     contribution as such Underwriter, and each person who controls the Company
     within the meaning of either the Act or the Exchange Act, each officer of
     the Company who shall have signed the Registration Statement and each
     director of the Company shall have the same rights to contribution as the
     Company, subject in each case to the applicable terms and conditions of
     this paragraph (d).

          9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule II hereto,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.

          10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such
delivery and payment (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as


                                       21



contemplated by any Preliminary Prospectus or the Final Prospectus (exclusive of
any supplement thereto).

          11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.

          12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 388 Greenwich Street, New York, New York, 10013, Attention:
General Counsel, and UBS Securities LLC (fax no.: (212) 713-3460), and confirmed
to the General Counsel at 299 Park Avenue, New York, New York 10171, Attention:
Syndicate Department; or, if sent to the Company, will be mailed, delivered or
telefaxed to Molina Healthcare, Inc. General Counsel (fax no.: (916) 646-4572)
and confirmed to the General Counsel, Molina Healthcare, Inc., at 2277 Fair Oaks
Blvd., Suite 440, Sacramento, California 95825, attention of the Legal
Department.

          13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.

          14. No fiduciary duty. The Company hereby acknowledges that (a) the
purchase and sale of the Securities pursuant to this Agreement is an
arm's-length commercial transaction between the Company, on the one hand, and
the Underwriters and any affiliate through which it may be acting, on the other,
(b) the Underwriters are acting as principal and not as an agent or fiduciary of
the Company and (c) the Company's engagement of the Underwriters in connection
with the offering and the process leading up to the offering is as independent
contractors and not in any other capacity. Furthermore, the Company agrees that
it is solely responsible for making its own judgments in connection with the
offering (irrespective of whether any of the Underwriters has advised or is
currently advising the Company on related or other matters). The Company agrees
that it will not claim that the Underwriters have rendered advisory services of
any nature or respect, or owe an agency, fiduciary or similar duty to the
Company, in connection with such transaction or the process leading thereto.

          15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.


                                       22


          16. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.

          17. Waiver of Jury Trial. The Company hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

          18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.

          19. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.

          20. Definitions. The terms that follow, when used in this Agreement,
shall have the meanings indicated.

          "Act" shall mean the Securities Act of 1933, as amended, and the rules
     and regulations of the Commission promulgated thereunder.

          "Base Prospectus" shall mean the base prospectus referred to in
     paragraph 1(a) above contained in the Registration Statement at the
     Execution Time.

          "Business Day" shall mean any day other than a Saturday, a Sunday or a
     legal holiday or a day on which banking institutions or trust companies are
     authorized or obligated by law to close in New York City.

          "Commission" shall mean the Securities and Exchange Commission.

          "Disclosure Package" shall mean (i) the Base Prospectus, (ii) the
     Preliminary Prospectus used most recently prior to the Execution Time,
     (iii) the Issuer Free Writing Prospectuses, if any, identified in Schedule
     III hereto, (iv) the final term sheet prepared and filed pursuant to
     Section 5(b) hereto, if any, and (v) any other Free Writing Prospectus that
     the parties hereto shall hereafter expressly agree in writing to treat as
     part of the Disclosure Package.

          "Effective Date" shall mean each date and time that the Registration
     Statement and any post-effective amendment or amendments thereto and any
     Rule 462(b) Registration Statement became or becomes effective.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission promulgated
     thereunder.

          "Execution Time" shall mean the date and time that this Agreement is
     executed and delivered by the parties hereto.


                                       23



          "Final Prospectus" shall mean the prospectus supplement relating to
     the Securities that was first filed pursuant to Rule 424(b) after the
     Execution Time, together with the Base Prospectus.

          "Free Writing Prospectus" shall mean a free writing prospectus, as
     defined in Rule 405.

          "Issuer Free Writing Prospectus" shall mean an issuer free writing
     prospectus, as defined in Rule 433.

          "Preliminary Prospectus" shall mean any preliminary prospectus
     supplement to the Base Prospectus referred to in paragraph 1(a) above which
     is used prior to the filing of the Final Prospectus, together with the Base
     Prospectus.

          "Registration Statement" shall mean the registration statement
     referred to in paragraph 1(a) above, including exhibits and financial
     statements and any prospectus supplement relating to the Securities that is
     filed with the Commission pursuant to Rule 424(b) and deemed part of such
     registration statement pursuant to Rule 430B, as amended on each Effective
     Date and, in the event any post-effective amendment thereto or any Rule
     462(b) Registration Statement becomes effective prior to the Closing Date,
     shall also mean such registration statement as so amended or such Rule
     462(b) Registration Statement, as the case may be.

          "Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule
     415", "Rule 424", "Rule 430B", and "Rule 433" and "Rule 462" refer to such
     rules under the Act.

          "Rule 462(b) Registration Statement" shall mean a registration
     statement and any amendments thereto filed pursuant to Rule 462(b) relating
     to the offering covered by the registration statement referred to in
     Section 1(a) hereof.

          "Significant Subsidiary" means any Subsidiary of the Company which had
     (a) revenues (directly and together with its Subsidiaries, but excluding
     intercompany revenues) for the most recent fiscal year of the Company that
     were at least five percent (5%) of the Company's consolidated revenues for
     such fiscal year or (b) total assets (directly and together with its
     Subsidiaries) as of the last day of the most recent fiscal year of the
     Company that were at least five (5%) of the Company's consolidated total
     assets as of such date.

          "Subsidiary" of an entity means a corporation, partnership, joint
     venture, limited liability company or other business entity which is
     organized under the laws of a political subdivision of the United States of
     which a majority of the shares of securities or other interests having
     ordinary voting power for the election of directors or other governing body
     (other than securities or interests having such power only by reason of the
     happening of a contingency) are at the time beneficially owned, or the
     management of which is otherwise controlled directly, or indirectly through
     one or more intermediaries, or both, by such entity. Unless otherwise
     specified, all references herein to a


                                       24



     "Subsidiary," the "Subsidiary" or to "Subsidiaries" shall refer to a
     Subsidiary or Subsidiaries of the Company.

          "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
     amended, and the rules and regulations of the Commission promulgated
     thereunder.


                                       25



          If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.

                                        Very truly yours,

                                        Molina Healthcare, Inc.


                                        By: /s/ John C. Molina
                                            ------------------------------------
                                        Name: John C. Molina
                                              ----------------------------------
                                        Title: Chief Financial Officer
                                               ---------------------------------

The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.

Citigroup Global Markets Inc.
UBS Securities LLC

By: Citigroup Global Markets Inc.


By: /s/ Richard Jacobsen Jr.
    ---------------------------------
Name: Richard Jacobsen Jr.
      -------------------------------
Title: Managing Director
       ------------------------------


By: UBS Securities LLC


By: /s/ Robert Armstrong
    ---------------------------------
Name: Robert Armstrong
      -------------------------------
Title: Executive Director
       ------------------------------


By: /s/ M. Robert DiGia
    ---------------------------------
Name: M. Robert DiGia
      -------------------------------
Title: Managing Director
       ------------------------------



For themselves and the other several Underwriters named in Schedule II to the
foregoing Agreement.


                                       26



                                     ANNEX A

               Significant Subsidiaries of Molina Healthcare, Inc.

Molina Healthcare of California
Molina Healthcare of California Partner Plan, Inc.
Molina Healthcare of Michigan, Inc.
Molina Healthcare of New Mexico, Inc.
Molina Healthcare of Ohio, Inc.
Molina Healthcare of Texas, Inc.
Molina Healthcare of Utah, Inc.
Molina Healthcare of Washington, Inc.



                                   SCHEDULE I

Underwriting Agreement dated October 4, 2007.

Registration Statement No. 333-123783

Representatives: Citigroup Global Markets Inc. and UBS Securities LLC.

Title, Purchase Price and Description of Securities:

          Title: 3.75% Convertible Senior Notes due 2014

          Principal amount of Underwritten Securities: $175,000,000

          Purchase price (include accrued interest or amortization, if any):
          $169,750,000

          Sinking fund provisions: None

          Redemption provisions:   None

          Other provisions:        None

          Principal Amount of Option Securities: $25,000,000

          Other provisions:                      None

Closing Date, Time and Location: October 11, 2007 at 10:00 a.m. at Davis Polk &
Wardwell, New York, N.Y.

Type of Offering: Non-Delayed

Date referred to in Section 5(i) after which the Company may offer or sell
securities issued by the Company without the consent of Citigroup Global Markets
Inc. and UBS Securities LLC: January 3, 2008

Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 6(h) at the Execution Time: None



                                   SCHEDULE II



                                        PRINCIPAL AMOUNT OF UNDERWRITTEN
UNDERWRITERS                               SECURITIES TO BE PURCHASED
- ------------                            --------------------------------
                                     
Citigroup Global Markets Inc. .......            $    78,750,000
UBS Securities LLC ..................            $    78,750,000
Bear, Stearns & Co. Inc. ............            $    17,500,000
                                                 ---------------
   Total ............................            $   175,000,000
                                                 ===============




                                  SCHEDULE III

Schedule of Free Writing Prospectuses included in the Disclosure Package

I. Final Term Sheet dated October 4, 2007


                                   SCHEDULE IV

Pricing Term Sheet dated October 4, 2007               Filed pursuant to Rule433
                                                Registration File No. 333-123783
                                                   Supplementing the Preliminary
                                                     Prospectus Supplement dated
                                                  October 3, 2007 and Prospectus
                                                         dated November 23, 2005

                                  $175,000,000
                         3.75% CONVERTIBLE SENIOR NOTES
                             MOLINA HEALTHCARE, INC.

In connection with the pricing of our 3.75% Convertible Senior Notes, we
increased the aggregate principal amount of the Notes being offered from
$150,000,000 to $175,000,000.


                               FINAL PRICING TERMS



                                 
THE ISSUER                          Molina Healthcare, Inc. (NYSE: MOH).

SECURITIES OFFERED                  3.75% Convertible Senior Notes due 2014.

AGGREGATE PRINCIPAL
AMOUNT OFFERED                      $175,000,000.

OVER-ALLOTMENT OPTION               $25,000,000.

MATURITY DATE                       October 1, 2014.

INTEREST                            3.75% per annum, accruing from the settlement date.

INTEREST PAYMENT DATES              Each October 1 and April 1, beginning April 1, 2008.

RECORD DATES                        Each September 15 and March 15 beginning on March 15, 2008.

PRICE TO PUBLIC                     100%.

PROCEEDS TO THE ISSUER              97.00%.

NYSE CLOSING PRICE OF THE
ISSUER'S COMMON STOCK ON
OCTOBER 4, 2007                     $34.51 per share.

CONVERSION PREMIUM                  36% above reference price.

CONVERSION PRICE                    $46.93 (approximately) per share of common stock, subject to
                                    adjustment.

FREE CONVERTIBILITY PERIOD          At the option of the holder, holders may convert their notes,
                                    in multiples of $1,000 in principal amount, at any time on or
                                    after July 1, 2014 through the scheduled trading day
                                    immediately preceding the maturity date.

CONVERSION RATE                      21.3067 shares of common stock per $1,000 principal amount
                                    of notes, subject to adjustment.

TRADE DATE                          October 5, 2007.




                                 
SETTLEMENT DATE                     October 11, 2007.

CUSIP                               60855R AA8

JOINT BOOKRUNNING MANAGERS          Citigroup Global Markets Inc. and UBS Securities LLC

CO-MANAGER                          Bear, Stearns & Co. Inc.

USE OF PROCEEDS:                    The issuer intends to use the net proceeds of the offering to
                                    repay amounts outstanding under its revolving credit
                                    facility, fund its acquisition of Mercy CarePlus in
                                    placeStateMissouri, continue to pursue its acquisition and
                                    expansion strategy, and for general corporate purposes
                                    including working capital.

ADJUSTMENT TO CONVERSION
RATE UPON FUNDAMENTAL CHANGE        The number of additional shares to be added to the conversion
                                    rate will be determined by reference to the table below and
                                    is based on the conversion date and the "applicable price" in
                                    connection with such transaction. The "applicable price" in
                                    connection with a make-whole change of control means:


                                    o If the consideration (excluding cash payment for fractional
                                    shares or pursuant to statutory appraisal rights) paid to
                                    holders of the issuer's common stock in connection with such
                                    transaction consists exclusively of cash, the amount of such
                                    cash per share of the issuer's common stock; and


                                    o In all other cases, the average of the closing sale prices
                                    per share of the issuer's common stock for the five
                                    consecutive trading days immediately preceding the related
                                    conversion date.


                                    The applicable prices set forth in the first row of the table
                                    below (i.e., the column headers), will be adjusted as of any
                                    date on which the conversion rate of the Notes is adjusted.
                                    The adjusted applicable prices will equal the applicable
                                    prices in effect immediately prior to such adjustment
                                    multiplied by a fraction, the numerator of which is the
                                    conversion rate in effect immediately prior to the adjustment
                                    giving rise to the applicable price adjustment and the
                                    denominator of which is the conversion rate as so adjusted.
                                    The increase of the additional shares to the conversion rate
                                    will be subject to adjustment in the same manner as the
                                    conversion rate.


* The deal was upsized from an original size of $150,000,000 with an
over-allotment option of $22,500,000.


                                APPLICABLE PRICE




CONVERSION DATE   $34.51   $38.00   $41.50   $45.00   $48.50   $52.00    $55.50   $60.00   $70.00   $80.00   $100.00  $120.00
                  ------   ------   ------   ------   ------   -------   ------   ------   ------   ------   ------   ------
                                                                                  
OCTOBER 5, 2007   7.6704   6.8816   5.9458   5.2060   4.6113   4.1259    3.7243   3.3017   2.6201   2.1594   1.5796   1.2285
OCTOBER 1, 2008   7.6704   6.6085   5.6459   4.8930   4.2944   3.8114    3.4162   3.0054   2.3559   1.9276   1.4017   1.0896
OCTOBER 1, 2009   7.6704   6.3145   5.3140   4.5413   3.9354   3.4533    3.0645   2.6669   2.0548   1.6645   1.2013   0.9335
OCTOBER 1, 2010   7.6704   5.9936   4.9394   4.1377   3.5197   3.0371    2.6555   2.2738   1.7081   1.3646   0.9759   0.7590
OCTOBER 1, 2011   7.6704   5.6428   4.5090   3.6631   3.0259   2.5411    2.1683   1.8078   1.3038   1.0205   0.7228   0.5640
OCTOBER 1, 2012   7.6704   5.2646   4.0048   3.0879   2.4199   1.9320    1.5739   1.2470   0.8353   0.6348   0.4486   0.3536
OCTOBER 1, 2013   7.6704   5.0091   3.3773   2.3207   1.5955   1.1084    0.7869   0.5322   0.2887   0.2103   0.1537   0.1233
OCTOBER 1, 2014   7.6704   5.0091   2.7897   0.9155   0.0000   0.0000    0.0000   0.0000   0.0000   0.0000   0.0000   0.0000



The exact applicable price and conversion date may not be set forth in the table
above, in which case:

     1.   if the actual applicable price is between two applicable price amounts
          in the table or the conversion date is between two dates in the table,
          the increase in the conversion rate will be determined by
          straight-line interpolation between the numbers set forth for the
          higher and lower applicable price amounts, and/or the two dates, based
          on a 365- or 366-day year, as applicable;



     2.   if the actual applicable price is in excess of $120.00 per share
          (subject to adjustment), the issuer will not increase the conversion
          rate applicable to the converted Note; and

     3.   if the actual applicable price is less than $34.51 per share (the last
          bid price of the issuer's common stock on the date of the prospectus
          supplement) (subject to adjustment), the issuer will not increase the
          conversion rate applicable to the converted Note.

Notwithstanding the foregoing, in no event will the issuer increase the
conversion rate as described above to the extent the increase will cause the
conversion rate to exceed 28.9771 per $1,000 principal amount of Notes, subject
to adjustment in the same manner as the conversion rate as set forth under "--
Conversion Rate Adjustments" in the prospectus supplement for the offering.


If any information contained in this term sheet is inconsistent with information
contained in the prospectus or preliminary prospectus supplement relating to the
Notes, the terms of this term sheet shall govern.


THE ISSUER HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS, WITH THE
SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU
SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS
THE ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER
AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING EDGAR ON THE
SEC WEB SITE AT WWW.SEC.GOV. ALTERNATIVELY, COPIES MAY BE OBTAINED FROM CITI,
BROOKLYN ARMY TERMINAL, ADDRESSSTREET140 58TH STREET, 8TH FLOOR,
PLACECITYBROOKLYN, STATENY POSTALCODE11220, (718) 765-6732.

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO
THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.


                                    EXHIBIT A

                            Form of Lock-Up Agreement

       [LETTERHEAD OF EXECUTIVE OFFICER, DIRECTOR, MOLINA FAMILY MEMBER OR
               OTHER MAJOR STOCKHOLDER OF MOLINA HEALTHCARE, INC.]

                             Molina Healthcare, Inc.
                    Public Offering of Convertible Securities

                                                             September ___, 2007

Citigroup Global Markets Inc.
UBS Securities, LLC
Bear, Stearns & Co. Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013

and

UBS Securities LLC
299 Park Avenue
New York, New York 10171

Ladies and Gentlemen:

          This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Molina
Healthcare, Inc., a Delaware corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering (the "Offering") of Convertible Senior Notes (the
"Convertible Notes") of the Company. The Convertible Notes will be convertible
into shares of the common stock, $0.001 par value (the "Common Stock"), of the
Company.

          In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc. and UBS Securities LLC, offer, sell,
contract to sell, pledge or otherwise dispose of, (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned), directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or



liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period
commencing on the effectiveness of the Underwriting Agreement and continuing
through the close of trading on the earlier of (i) the date 90 days after the
date of the Underwriting Agreement or (ii) the date of any termination of the
Underwriting Agreement; provided, however, if the Offering is not consummated by
December 31, 2007, this agreement shall terminate on such date; provided,
further, however, the undersigned shall be permitted, without obtaining consent,
to (a) exercise options to purchase Common Stock, which options are outstanding
on the date hereof, but not sell during the period covered by this agreement the
shares of Common Stock so purchased, (b) purchase Common Stock pursuant to the
Company's 2002 Employee Stock Purchase Plan, (c) sell Common Stock pursuant to a
Rule 10b5-1 plan of the undersigned, (d) make bona fide gifts of Common Stock,
transfer or sell Common Stock to and among trusts, limited liability companies
and limited partnerships, and distribute Common Stock from trusts to
beneficiaries of such trusts, in each case for the direct or indirect benefit of
the undersigned or members of the undersigned's immediately family, in each case
so long as the transferees are bound or agree in writing to be bound by the
terms of this agreement.

                                        Yours very truly,

                                        ----------------------------------------
                                        PRINTED NAME OF HOLDER


                                        BY:
                                            ------------------------------------

                                        ----------------------------------------
                                        PRINTED NAME AND TITLE OF PERSON SIGNING



                                                                     Exhibit 4.1

                             MOLINA HEALTHCARE, INC.

                                    as Issuer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee

                                    INDENTURE

                           Dated as of October 11, 2007

                           Providing for the Issuance

                                       of

                             Senior Debt Securities



                             MOLINA HEALTHCARE, INC.
           RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
                    AND INDENTURE DATED AS OF OCTOBER 11, 2007



TRUST INDENTURE ACT SECTION        INDENTURE SECTION
- ---------------------------       -------------------
                               
Section 310 (a) (1)                       607
            (a)(2)                        607
            (a)(3)                        613
            (a)(4)                  Not Applicable
            (b)                        608, 612
Section 311 (a)                           614
            (b)                           614
Section 312 (a)                           701
            (b)                           701
            (c)                           701
Section 313 (a)                           702
            (b)                           702
            (c)                           702
            (d)                           702
Section 314 (a)                           703
            (a)(4)                       1006
            (b)                     Not Applicable
            (c)(1)                        102
            (c)(2)                        102
            (c)(3)                  Not Applicable
            (d)                     Not Applicable
            (e)                           102
Section 315 (a)                           602
            (b)                           601
            (c)                           602
            (d)                           602
            (e)                           513
Section 316 (a) (last sentence)   101 ("Outstanding")
            (a)(1)(A)                  502, 512
            (a)(1)(B)                     513
            (b)                           508
            (c)                           104
Section 317 (a)(1)                        503
            (a)(2)                        504
            (b)                          1003
Section 318 (a)                           113


NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.


                                        i



                                TABLE OF CONTENTS



                                                                            PAGE
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........      1
   Section 101.  Definitions.............................................      1
   Section 102.  Compliance Certificates and Opinions....................     10
   Section 103.  Form of Documents Delivered to Trustee..................     11
   Section 104.  Acts of Holders.........................................     11
   Section 105.  Notices, Etc., to Trustee and Company...................     13
   Section 106.  Notice to Holders; Waiver...............................     14
   Section 107.  Effect of Headings and Table of Contents................     15
   Section 108.  Successors and Assigns..................................     15
   Section 109.  Separability Clause.....................................     15
   Section 110.  Benefits of Indenture...................................     15
   Section 111.  Governing Law...........................................     15
   Section 112.  Legal Holidays..........................................     15
   Section 113.  Conflict of Any Provision of Indenture with Trust
                 Indenture Act...........................................     16
   Section 114.  No Recourse against Others..............................     16
   Section 115.  Waiver of Trial by Jury.................................     16

ARTICLE II SECURITIES FORMS..............................................     16
   Section 201.  Forms of Securities.....................................     16
   Section 202.  Form of Trustee's Certificate of Authentication.........     17
   Section 203.  Securities Issuable in Global Form......................     17
   Section 204.  Form of Legend for Book-Entry Securities................     18

ARTICLE III THE SECURITIES...............................................     19
   Section 301.  Amount Unlimited; Issuable in Series....................     19



                                       ii




                                                                         
   Section 302.  Denominations...........................................     23
   Section 303.  Execution, Authentication, Delivery and Dating..........     23
   Section 304.  Temporary Securities....................................     25
   Section 305.  Registration, Registration of Transfer and Exchange.....     28
   Section 306.  Mutilated, Destroyed, Lost and Stolen Securities........     32
   Section 307.  Payment of Interest; Interest Rights Preserved; Optional
                 Interest Reset..........................................     34
   Section 308.  Optional Extension of Maturity..........................     37
   Section 309.  Persons Deemed Owners...................................     38
   Section 310.  Cancellation............................................     38
   Section 311.  Computation of Interest.................................     39
   Section 312.  Currency and Manner of Payments in Respect of
                 Securities..............................................     39
   Section 313.  Appointment and Resignation of Successor Exchange Rate
                 Agent...................................................     42
   Section 314.  CUSIP Numbers...........................................     43

ARTICLE IV SATISFACTION AND DISCHARGE....................................     43
   Section 401.  Satisfaction and Discharge of Indenture.................     43
   Section 402.  Application of Trust Funds..............................     45

ARTICLE V REMEDIES.......................................................     45
   Section 501.  Events of Default.......................................     45
   Section 502.  Acceleration of Maturity; Rescission and Annulment......     47
   Section 503.  Collection of Indebtedness and Suits for Enforcement by
                 Trustee.................................................     47
   Section 504.  Trustee May File Proofs of Claim........................     48
   Section 505.  Trustee May Enforce Claims Without Possession of
                 Securities or Coupons...................................     49
   Section 506.  Application of Money Collected..........................     49
   Section 507.  Limitation on Suits.....................................     50



                                      iii




                                                                         
   Section 508.  Unconditional Right of Holders to Receive Principal,
                 Premium and Interest and Additional Amounts, if Any.....     50
   Section 509.  Restoration of Rights and Remedies......................     51
   Section 510.  Rights and Remedies Cumulative..........................     51
   Section 511.  Delay or Omission Not Waiver............................     51
   Section 512.  Control by Holders of Securities........................     51
   Section 513.  Undertaking for Costs...................................     52
   Section 514.  Waiver of Past Defaults.................................     52
   Section 515.  Waiver of Usury, Stay or Extension Laws.................     52

ARTICLE VI THE TRUSTEE...................................................     53
   Section 601.  Notice of Defaults......................................     53
   Section 602.  Certain Rights of Trustee...............................     53
   Section 603.  Not Responsible for Recitals or Issuance of Securities..     55
   Section 604.  May Hold Securities.....................................     55
   Section 605.  Money Held in Trust.....................................     55
   Section 606.  Compensation and Reimbursement..........................     56
   Section 607.  Corporate Trustee Required; Eligibility.................     56
   Section 608.  Resignation and Removal; Appointment of Successor.......     57
   Section 609.  Acceptance of Appointment by Successor..................     58
   Section 610.  Merger, Conversion, Consolidation or Succession to
                 Business................................................     59
   Section 611.  Appointment of Authenticating Agent.....................     60
   Section 612.  Conflicting Interests...................................     61
   Section 613.  Appointment of Co-Trustee...............................     61
   Section 614.  Preferential Collection of Claims Against Company.......     62
   Section 615.  Trustee's Application for Instructions from the
                 Company.................................................     62

ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............     63



                                       iv




                                                                         
   Section 701.  Disclosure of Names and Addresses of Holders............     63
   Section 702.  Reports by Trustee......................................     64
   Section 703.  Reports by Company......................................     64
   Section 704.  Calculation of Original Issue Discount..................     65

ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER...............     65
   Section 801.  Company May Consolidate, Etc., Only on Certain Terms....     65
   Section 802.  Successor Person Substituted............................     65
   Section 803.  Officers' Certificate and Opinion of Counsel............     66

ARTICLE IX SUPPLEMENTAL INDENTURES.......................................     66
   Section 901.  Supplemental Indentures Without Consent of Holders......     66
   Section 902.  Supplemental Indentures with Consent of Holders.........     68
   Section 903.  Execution of Supplemental Indentures....................     69
   Section 904.  Effect of Supplemental Indentures.......................     70
   Section 905.  Conformity with Trust Indenture Act.....................     70
   Section 906.  Reference in Securities to Supplemental Indentures......     70

ARTICLE X COVENANTS......................................................     70
   Section 1001. Payment of Principal, Premium, if any, and Interest.....     70
   Section 1002. Maintenance of Office or Agency.........................     71
   Section 1003. Money for Securities Payments to be Held in Trust.......     73
   Section 1004. Corporate Existence.....................................     74
   Section 1005. Additional Amounts......................................     74
   Section 1006. Statement as to Compliance..............................     75
   Section 1007. Waiver of Certain Covenants.............................     75
   Section 1008. Statement by Officers as to Default.....................     75

ARTICLE XI REDEMPTION OF SECURITIES......................................     76



                                        v




                                                                         
   Section 1101. Applicability of Article................................     76
   Section 1102. Election to Redeem; Notice to Trustee...................     76
   Section 1103. Selection by Trustee of Securities to be Redeemed.......     76
   Section 1104. Notice of Redemption....................................     76
   Section 1105. Deposit of Redemption Price.............................     78
   Section 1106. Securities Payable on Redemption Date...................     78
   Section 1107. Securities Redeemed in Part.............................     79

ARTICLE XII SINKING FUNDS................................................     79
   Section 1201. Applicability of Article................................     79
   Section 1202. Satisfaction of Sinking Fund Payments with Securities...     80
   Section 1203. Redemption of Securities for Sinking Fund...............     80

ARTICLE XIII REPAYMENT AT THE OPTION OF HOLDERS..........................     81
   Section 1301. Applicability of Article................................     81
   Section 1302. Repayment of Securities.................................     81
   Section 1303. Exercise of Option......................................     81
   Section 1304. When Securities Presented for Repayment Become Due and
                 Payable.................................................     82
   Section 1305. Securities Repaid in Part...............................     83

ARTICLE XIV DEFEASANCE AND COVENANT DEFEASANCE...........................     83
   Section 1401. Applicability of Article; Company's Option to Effect
                 Defeasance or Covenant Defeasance.......................     83
   Section 1402. Defeasance and Discharge................................     83
   Section 1403. Covenant Defeasance.....................................     84
   Section 1404. Conditions to Defeasance or Covenant Defeasance.........     84
   Section 1405. Deposited Money and Government Obligations to Be Held in
                 Trust; Other Miscellaneous Provisions...................     86



                                       vi




                                                                         
   Section 1406. Reinstatement...........................................     87

ARTICLE XV MEETINGS OF HOLDERS OF SECURITIES.............................     87
   Section 1501. Purposes for Which Meetings May Be Called...............     87
   Section 1502. Call, Notice and Place of Meetings......................     88
   Section 1503. Persons Entitled to Vote at Meetings....................     88
   Section 1504. Quorum; Action..........................................     88
   Section 1505. Determination of Voting Rights; Conduct and Adjournment
                 of Meetings.............................................     90
   Section 1506. Counting Votes and Recording Action of Meetings.........     90

EXHIBIT A - FORMS OF CERTIFICATES........................................    A-1



                                       vii


     INDENTURE, dated as of October 11, 2007 between MOLINA HEALTHCARE, INC., a
Delaware corporation (hereinafter called the "Company"), having its principal
office at One Golden Shore Drive, Long Beach, California 90802, and U.S. BANK
NATIONAL ASSOCIATION, as Trustee (hereinafter called the "Trustee").

                             RECITALS OF THE COMPANY

     WHEREAS, the Company deems it desirable to issue from time to time for its
lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, which may or may not
be convertible into or exchangeable for any securities of any Person (including
the Company), and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Securities, to be
issued in one or more series, unlimited as to principal amount, to bear such
rates of interest, to mature at such times and to have such other provisions as
provided in this Indenture;

     WHEREAS, this Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended, that are required to be part of this Indenture and
shall, to the extent applicable, be governed by such provisions; and WHEREAS,
all things necessary to make this Indenture a valid and legally binding
agreement of the Company, in accordance with its terms, have been done;

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     Section 101. Definitions.

          (a) For all purposes of this Indenture, except as otherwise expressly
     provided or unless the context otherwise requires or unless such definition
     is changed or amended in a supplement or amendment to this Indenture:

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

               (2) all other terms used herein which are defined in the TIA,
          either directly or by reference therein, have the meanings assigned to
          them therein, and the terms "cash transaction" and "self-liquidating
          paper", as used in TIA Section 311, shall have the meanings assigned
          to them in the rules of the Commission adopted under the TIA;

               (3) all accounting terms not otherwise defined herein have the
          meanings assigned to them in accordance with generally accepted
          accounting


                                        1



          principles, and, except as otherwise herein expressly provided, the
          term "generally accepted accounting principles" with respect to any
          computation required or permitted hereunder shall mean such accounting
          principles as are generally accepted in the United States at the date
          of such computation; and

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

          (b) Certain terms, used principally in Article III, Article V and
     Article VI are defined in those Articles.

          (c) Other terms are defined as follows:

     "Act", when used with respect to any Holder, has the meaning specified in
Section 104.

     "Additional Amounts" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.

     "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 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.

     "Authenticating Agent" means any Person appointed by the Trustee to act on
behalf of the Trustee pursuant to Section 611 to authenticate Securities.

     "Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

     "Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer or that is otherwise not a Registered Security.

     "Board of Directors" means the board of directors of the Company or the
executive committee or any committee of that board duly authorized to act
hereunder.

     "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary or any Vice President of the Company to have been duly
adopted by the


                                        2



Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

     "Business Day", when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
301, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.

     "Clearstream" means Clearstream Banking societe anonyme or its successor.

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.

     "Common Depository" has the meaning specified in Section 304.

     "Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter, "Company" shall
mean such successor corporation.

     "Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chairman, the President, the
Chief Executive Officer, the Chief Financial Officer or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller or an Assistant
Controller, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.

     "Conversion Date" has the meaning specified in Section 312(d).

     "Conversion Event" means the cessation of use of (1) a Foreign Currency
both by the government of the country which issued such Currency and by a
central bank or other public institutions of or within the international banking
community for the settlement of transactions, (2) the euro for the settlement of
transactions by public institutions of or within the European Communities or (3)
any currency unit (or composite currency) other than the euro for the purposes
for which such currency unit was established.

     "Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at 633 W. Fifth Street, 24th Floor,
Los Angeles, CA 90071.

     "Corporation" includes corporations, associations, limited liability
companies, companies and business trusts.

     "Coupon" means any interest coupon appertaining to a Bearer Security.


                                        3



     "Currency" means any currency or currencies, composite currency or currency
unit or currency units, including, without limitation, the euro, issued by the
government of one or more countries or by any reorganized confederation or
association of such governments.

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

     "Defaulted Interest" has the meaning specified in Section 307(a).

     "Depository Participant" means, with respect to the Depository Trust
Company (the "Depository") or its nominee, an institution that has an account
therewith.

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

     "Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 312(g).

     "Dollar Equivalent of the Foreign Currency" has the meaning specified in
Section 312(f).

     "Election Date" has the meaning specified in Section 312(h).

     "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.

     "European Communities" means the European Union, the European Coal and
Steel Community and the European Atomic Energy Community.

     "Event of Default" has the meaning specified in Section 501.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exchange Date" has the meaning specified in Section 304.

     "Exchange Rate Agent" means, with respect to Securities of or within any
series, unless otherwise specified with respect to any Securities pursuant to
Section 301, a New York Clearing House bank designated pursuant to Section 301
or Section 313.

     "Exchange Rate Officer's Certificate" means a certificate setting forth (1)
the applicable Market Exchange Rate or the applicable bid quotation and (2) the
Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount determined in accordance with Section
302 in the relevant Currency), payable with respect to a Security of any series
on the basis of such Market Exchange Rate signed by the Chief Financial Officer,
the Treasurer, the Controller, any Vice President or any Assistant Treasurer or
Assistant Controller of the Company.


                                        4



     "Foreign Currency" means any Currency, including, without limitation, the
euro, issued by the government of one or more countries other than the United
States or by any recognized confederation or association of such governments.

     "Government Obligations" means, unless otherwise specified with respect to
any series of Securities pursuant to Section 301, securities which are:

          (1) direct obligations of the government which issued the Currency in
     which the Securities of a particular series are payable, or

          (2) obligations of a Person controlled or supervised by and acting as
     an agency or instrumentality of such government which issued the Currency
     in which the Securities of such series are payable, the payment of which is
     unconditionally guaranteed by such government,

which, in either case, are full faith and credit obligations of such government
payable in such Currency and are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.

     "Holder" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.

     "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, that, if at any time more than one Person is acting as
Trustee under this instrument, "Indenture" shall mean, with respect to any one
or more series of Securities for which such Person is Trustee, this instrument
as originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of the or those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.

     "Indexed Security" means a Security as to which all or certain interest
payments and/or the principal amount payable at Maturity are determined by
reference to prices, changes in prices, or differences between prices, of
securities, Currencies, intangibles, goods, articles or


                                        5



commodities or by such other objective price, economic or other measures as are
specified in Section 301 hereof.

     "Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 1005 or otherwise,
includes such Additional Amounts.

     "Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

     "Market Exchange Rate" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, (1) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 301 for the
Securities of the relevant series, (2) for any conversion of Dollars into any
Foreign Currency, the noon (New York City time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for customs
purposes by the Federal Reserve Bank of New York and (3) for any conversion of
one Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion is
being made from major banks located in either New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Exchange Rate Agent. Unless otherwise specified with respect
to any Securities pursuant to Section 301, in the event of the unavailability of
any of the exchange rates provided for in clauses (1), (2) and (3) of this
definition, the Exchange Rate Agent shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve Bank of New
York as of the most recent available date, or quotations from one or more major
banks in New York City, London or another principal market for the Currency in
question, or such other quotations as the Exchange Rate Agent shall deem
appropriate. Unless otherwise specified by the Exchange Rate Agent, if there is
more than one market for dealing in any Currency by reason of foreign exchange
regulations or otherwise, the market to be used in respect of such Currency
shall be that upon which a non-resident issuer of securities designated in such
Currency would purchase such Currency in order to make payments in respect of
such securities.

     "Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment, notice of exchange or conversion or otherwise.

     "Officers' Certificate" means a certificate signed by the Chairman, the
President, the Chief Executive Officer or the Chief Financial Officer and by the
Treasurer, the Controller, an Assistant Treasurer, the Assistant Controller, the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee.


                                        6



     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company.

     "Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

     "Outstanding", when used with respect to Securities or any series of any
Securities, means, as of the date of determination, all Securities or all
Securities of such series, as the case may be, theretofore authenticated and
delivered under this Indenture, except:

          (1) Securities theretofore cancelled by the Trustee or delivered to
     the Trustee for cancellation;

          (2) Securities, or portions thereof, for whose payment or redemption
     or repayment at the option of the Holder money in the necessary amount has
     been theretofore deposited with the Trustee or any Paying Agent (other than
     the Company) in trust or set aside and segregated in trust by the Company
     (if the Company shall act as Paying Agent) for the Holders of such
     Securities and any coupons appertaining thereto, provided that, if such
     Securities are to be redeemed, notice of such redemption has been duly
     given pursuant to this Indenture or provision therefor satisfactory to the
     Trustee has been made;

          (3) Securities, except to the extent provided in Sections 1402 and
     1403, with respect to which the Company has effected defeasance and/or
     covenant defeasance as provided in Article XIV; and

          (4) Securities which have been paid pursuant to Section 306 or in
     exchange for or in lieu of which other Securities have been authenticated
     and delivered pursuant to this Indenture, other than any such Securities in
     respect of which there shall have been presented to the Trustee proof
     satisfactory to it that such Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of the Company;

provided that, in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined as of the date such Security is originally
issued by the Company as set forth in an Exchange Rate Officer's Certificate
delivered to the Trustee, of the principal amount (or, in the case of an
Original Issue Discount Security or Indexed Security, the Dollar equivalent as
of such date of


                                        7



original issuance of the amount determined as provided in clause (i) or clause
(iii) of this definition, respectively) of such Security, (iii) the principal
amount of any Indexed Security that may be counted in making such determination
or calculation and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided with respect to such Security pursuant to
Section 301, and (iv) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making such calculation or in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.

     "Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (or premium, if any) or
interest, if any, on any Securities or coupons on behalf of the Company.

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

     "Place of Payment" means, when used with respect to the Securities of or
within any series, the place or places where the principal of (and premium, if
any) and interest, if any, on such Securities are payable as specified and as
contemplated by Sections 301 and 1002.

     "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.

     "Redemption Date", when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.

     "Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Registered Security" means any Security that is registered in the Security
Register.

     "Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 301, whether or not a Business Day.


                                        8



     "Repayment Date" means, when used with respect to any Security to be repaid
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.

     "Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.

     "Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant treasurer, trust officer or
any other officer of the Trustee who customarily performs functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Indenture.

     "Security" or "Securities" has the meaning stated in the first recital of
this Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.

     "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

     "Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.

     "Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of Section 308.

     "Subsidiary" means any corporation of which at the time of determination
the Company, directly and/or indirectly through one or more Subsidiaries, owns
more than 50% of the shares of Voting Stock.

     "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed, except as provided in
Section 905.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, that if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean only the Trustee with respect to Securities
of that series.


                                        9



     "United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.

     "United States Person" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate the
income of which is subject to United States federal income taxation regardless
of its source or a trust whose administration is subject to the primary
supervision of a United States court and which has one or more United States
persons who have the authority to control all of its decisions.

     "Valuation Date" has the meaning specified in Section 312(c).

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

     "Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

     "Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.

     Section 102. Compliance Certificates and Opinions.

          (a) Upon any application or request by the Company to the Trustee to
     take any action under any provision of this Indenture, the Company shall
     furnish to the Trustee an Officers' Certificate stating that all conditions
     precedent, if any, provided for in this Indenture relating to the proposed
     action have been complied with and an Opinion of Counsel stating that in
     the opinion of such counsel all such conditions precedent, if any, have
     been complied with, except that in the case of any such application or
     request as to which the furnishing of such documents is specifically
     required by any provision of this Indenture relating to such particular
     application or request, no additional certificate or opinion need be
     furnished.

          (b) Every certificate or opinion with respect to compliance with a
     condition or covenant provided for in this Indenture (other than pursuant
     to Section 1006) shall include:

               (1) a statement that each individual signing such certificate or
          opinion has read such condition or covenant and the definitions herein
          relating thereto;


                                       10



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

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

               (4) a statement as to whether, in the opinion of each such
          individual, such condition or covenant has been complied with.

     Section 103. Form of Documents Delivered to Trustee.

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

          (b) Any certificate or opinion of an officer of the Company may be
     based, insofar as it relates to legal matters, upon an Opinion of Counsel,
     or a certificate or representations by counsel, unless such officer knows,
     or in the exercise of reasonable care should know, that the opinion,
     certificate or representations with respect to the matters upon which his
     certificate or opinion is based are erroneous. Any such Opinion of Counsel
     or certificate or representations may be based, insofar as it relates to
     factual matters, upon a certificate or opinion of, or representations by,
     an officer or officers of the Company stating that the information as to
     such factual matters is in the possession of the Company unless such
     counsel knows, or in the exercise of reasonable care should know, that the
     certificate or opinion or representations with respect to such matters are
     erroneous.

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

     Section 104. 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 of the Outstanding Securities of all series or one or more series,
     as the case may be, may be embodied in and evidenced by one or more
     instruments of substantially similar tenor signed (which may be
     electronically signed) by such Holders in person or by agents duly
     appointed in writing. If Securities of a series are issuable as Bearer
     Securities, any request, demand, authorization, direction, notice, consent,
     waiver or other action provided by this Indenture to be given or taken by
     Holders of Securities of such series may,


                                       11



     alternatively, be embodied in and evidenced by the record of Holders of
     Securities of such series voting in favor thereof, either in person or by
     proxies duly appointed in writing, at any meeting of Holders of Securities
     of such series duly called and held in accordance with the provisions of
     Article XV, or a combination of such instruments and any such record.
     Except as herein otherwise expressly provided, such action shall become
     effective when such instrument or instruments or record or both are
     delivered to the Trustee and, where it is hereby expressly required, to the
     Company. Such instrument or instruments and any such record (and the action
     embodied therein and evidenced thereby) are herein sometimes referred to as
     the "Act" of the Holders signing such instrument or instruments or so
     voting at any such meeting. Proof of execution of any such instrument or of
     a writing appointing any such agent, or of the holding by any Person of a
     Security, shall be sufficient for any purpose of this Indenture and
     conclusive in favor of the Trustee and the Company and any agent of the
     Trustee or the Company, if made in the manner provided in this Section. The
     record of any meeting of Holders of Securities shall be proved in the
     manner provided in Section 1506.

          (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 him the
     execution thereof. Where such execution is by a signer acting in a capacity
     other than his individual capacity, such certificate or affidavit shall
     also constitute sufficient proof of authority. The fact and date of the
     execution of any such instrument or writing, or the authority of the Person
     executing the same, may also be proved in any other manner which the
     Trustee deems reasonably sufficient.

          (c) The principal amount and serial numbers of Registered Securities
     held by any Person, and the date of holding the same, shall be proved by
     the Security Register.

          (d) The principal amount and serial numbers of Bearer Securities held
     by any Person, and the date of holding the same, may be proved by the
     production of such Bearer Securities or by a certificate executed, as
     depositary, by any trust company, bank, banker or other depositary,
     wherever situated, if such certificate shall be deemed by the Trustee to be
     satisfactory, showing that at the date therein mentioned such Person had on
     deposit with such depositary, or exhibited to it, the Bearer Securities
     therein described; or such facts may be proved by the certificate or
     affidavit of the Person holding such Bearer Securities, if such certificate
     or affidavit is deemed by the Trustee to be satisfactory. The Trustee and
     the Company may assume that such ownership of any Bearer Security continues
     until (1) another certificate or affidavit bearing a later date issued in
     respect of the same Bearer Security is produced, or (2) such Bearer
     Security is produced to the Trustee by some other Person, or (3) such
     Bearer Security is surrendered in exchange for a Registered Security, or
     (4) such Bearer Security is no longer Outstanding. The principal amount and
     serial numbers of Bearer Securities held by any Person, and the date of
     holding the same, may also be proved in any other manner that the Trustee
     deems sufficient.


                                       12



          (e) If the Company shall solicit from the Holders of Registered
     Securities any request, demand, authorization, direction, notice, consent,
     waiver or other Act, the Company may, at its option, in 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. Notwithstanding TIA Section 316(c), such record date
     shall be the record date specified in or pursuant to such Board Resolution,
     which shall be a date not earlier than the date 30 days prior to the first
     solicitation of Holders generally in connection therewith and not later
     than the date such solicitation is completed. 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 180 days after the record date.

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

     Section 105. Notices, Etc., to Trustee and Company.

          (a) Any request, demand, authorization, direction, notice, consent,
     waiver or Act of Holders or other document provided or permitted by this
     Indenture to be made upon, given or furnished to, or filed with,

               (1) the Trustee by any Holder or by the Company shall be
          sufficient for every purpose hereunder if made, given, furnished or
          filed in writing (which may be via facsimile) to or with the Trustee
          at its Corporate Trust Office, Attention: Corporate Trust
          Administration, or at any other address previously furnished in
          writing by the Trustee to the Holders or the Company, or

               (2) the Company by the Trustee or by any Holder shall be
          sufficient for every purpose hereunder (unless otherwise herein
          expressly provided) if in writing and mailed, first-class postage
          prepaid, to the Company addressed to it at the address of the
          Company's principal office specified in the first paragraph of this
          Indenture or at any other address previously furnished in writing to
          the Trustee by the Company.


                                       13



     Section 106. Notice to Holders; Waiver.

          (a) Where this Indenture provides for notice of any event to Holders
     of Registered Securities by the Company or the Trustee, such notice shall
     be sufficiently given (unless otherwise herein expressly provided) if in
     writing and mailed, first-class postage prepaid, or by email, to each such
     Holder affected by such event, at his physical address or email address as
     such address appears in the Security Register, not later than the latest
     date, and not earlier than the earliest date, prescribed for the giving of
     such notice. In any case where notice to Holders of Registered Securities
     is given by mail, neither the failure to mail such notice, nor any defect
     in any notice so mailed, to any particular Holder shall affect the
     sufficiency of such notice with respect to other Holders of Registered
     Securities or the sufficiency of any notice to Holders of Bearer Securities
     given as provided herein. Any notice mailed to a Holder in the manner
     herein prescribed shall be conclusively deemed to have been received by
     such Holder, whether or not such Holder actually receives such notice.

          (b) In case, by reason of the suspension of or irregularities in
     regular mail service or by reason of any other cause, it shall be
     impracticable to mail notice of any event to Holders of Registered
     Securities when such notice is required to be given pursuant to any
     provision of this Indenture, then any manner of giving such notice as shall
     be satisfactory to the Trustee shall be deemed to be sufficient giving of
     such notice for every purpose hereunder.

          (c) Except as otherwise expressly provided herein or otherwise
     specified with respect to any Securities pursuant to Section 301, where
     this Indenture provides for notice to Holders of Bearer Securities of any
     event, such notice shall be sufficiently given to Holders of Bearer
     Securities if published at least twice in an Authorized Newspaper in The
     City of New York and in such other city or cities as may be specified in
     such Securities on a Business Day, the first such publication to be not
     earlier than the earliest date, and not later than the latest date,
     prescribed for the giving of such notice. Any such notice shall be deemed
     to have been given on the date of the first such publication.

          (d) If by reason of the suspension of publication of any Authorized
     Newspaper or Authorized Newspapers or by reason of any other cause it shall
     be impracticable to publish any notice to Holders of Bearer Securities as
     provided above, then such notification to Holders of Bearer Securities as
     shall be given with the approval of the Trustee shall constitute sufficient
     notice to such Holders for every purpose hereunder. Neither the failure to
     give notice by publication to any Holder of Bearer Securities as provided
     above, nor any defect in any notice so published, shall affect the
     sufficiency of such notice with respect to other Holders of Bearer
     Securities or the sufficiency of any notice to Holders of Registered
     Securities given as provided herein.

          (e) Any request, demand, authorization, direction, notice, consent or
     waiver required or permitted under this Indenture shall be in the English
     language, except that any published notice may be in an official language
     of the country of publication.


                                       14



          (f) Where this Indenture provides for notice in any manner, such
     notice may be waived in writing by the Person entitled to receive such
     notice, either before or after the event, and such waiver shall be the
     equivalent of such notice. Waivers of notice by Holders shall be filed with
     the Trustee, but such filing shall not be a condition precedent to the
     validity of any action taken in reliance upon such waiver.

     Section 107. Effect of Headings and Table of Contents.

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

     Section 108. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.

     Section 109. Separability Clause.

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

     Section 110. Benefits of Indenture.

     Nothing in this Indenture or in the Securities, or coupons, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent, any Authenticating Agent and their successors
hereunder and the Holders any benefit or any legal or equitable right, remedy or
claim under this Indenture.

     Section 111. Governing Law.

     This Indenture, the Securities, and coupons shall be governed by and
construed in accordance with the law of the State of New York. This Indenture is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Indenture and shall, to the extent applicable, be governed by such
provisions.

     Section 112. Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu of this Section), payment of principal (or
premium, if any) or interest, if any, need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at such Place
of Payment with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repayment Date or sinking fund payment date, or at the
Stated Maturity or Maturity; provided that no interest shall accrue on the
amount


                                       15



so payable for the period from and after such Interest Payment Date, Redemption
Date, Repayment Date, sinking fund payment date, Stated Maturity or Maturity, as
the case may be.

     Section 113. Conflict of Any Provision of Indenture with Trust Indenture
Act.

     If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with any provision (an "incorporated provision") required by or
deemed to be included in this Indenture by operation of the TIA, such imposed
duties or incorporated provisions shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or excluded, as the case may be.

     Section 114. No Recourse against Others.

     A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities,
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting any of the Securities
waives and releases all such liability.

     Section 115. Waiver of Trial by Jury.

     To the extent permitted by applicable law, the Company, the Trustee, and
Holders hereby irrevocably and unconditionally waive the right to trial by jury
in connection with any claim arising out of or relating to the Securities and
under this Indenture.

                                   ARTICLE II

                                SECURITIES FORMS

     Section 201. Forms of Securities.

          (a) The Registered Securities, if any, of each series, the Bearer
     Securities, if any, of each series and related coupons shall be in
     substantially the forms as shall be established in one or more indentures
     supplemental hereto or approved from time to time by or pursuant to a Board
     Resolution in accordance with Section 301, shall have such appropriate
     insertions, omissions, substitutions and other variations as are required
     or permitted by this Indenture or any indenture supplemental hereto, and
     may have such letters, numbers or other marks of identification or
     designation and such legends or endorsements placed thereon as the Company,
     as the case may be, may deem appropriate and as are not inconsistent with
     the provisions of this Indenture, or as may be required to comply with any
     law or with any rule or regulation made pursuant thereto or with any rule
     or regulation of any stock exchange on which the Securities may be listed,
     or to conform to usage.

          (b) Unless otherwise specified as contemplated by Section 301, Bearer
     Securities shall have interest coupons attached.


                                       16


          (c) The definitive Securities and coupons shall be printed,
     lithographed or engraved or produced by any combination of these methods on
     a steel engraved border or steel engraved borders or may be produced in any
     other manner, all as determined by the officers executing such Securities
     or coupons, as evidenced by their execution of such Securities or coupons.

     Section 202. Form of Trustee's Certificate of Authentication.

Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:

This is one of the Securities of the series designated herein and referred to in
the within-mentioned Indenture.

                                        [TRUSTEE]
                                        as Trustee


                                        By
                                           -------------------------------------
                                           Authorized Signatory

Dated:
       ------------------------------

     Section 203. Securities Issuable in Global Form.

          (a) If Securities of or within a series are issuable in global form,
     as specified as contemplated by Section 301, then, notwithstanding clause
     (8) of Section 301(b) and the provisions of Section 302, any such Security
     shall represent such of the Outstanding Securities of such series as shall
     be specified therein and may provide that it shall represent the aggregate
     amount of Outstanding Securities of such series from time to time endorsed
     thereon and that the aggregate amount of Outstanding Securities of such
     series represented thereby may from time to time be increased or decreased
     to reflect exchanges. Any endorsement of a Security in global form to
     reflect the amount, or any increase or decrease in the amount, of
     Outstanding Securities represented thereby shall be made by the Trustee in
     such manner and upon instructions given by such Person or Persons as shall
     be specified therein or in the Company Order to be delivered to the Trustee
     pursuant to Section 303 or Section 304. Subject to the provisions of
     Section 303 and, if applicable, Section 304, the Trustee shall deliver and
     redeliver any Security in permanent global form in the manner and upon
     instructions given by the Person or Persons specified therein or in the
     applicable Company Order. If a Company Order pursuant to Section 303 or
     Section 304 has been, or simultaneously is, delivered, any instructions by
     the Company with respect to endorsement, delivery or redelivery of a
     Security in global form shall be in writing but need not comply with
     Section 102 and need not be accompanied by an Opinion of Counsel.

          (b) The provisions of Section 303(h) shall apply to any Security
     represented by a Security in global form if such Security was never issued
     and sold by the Company and the Company delivers to the Trustee the
     Security in global form together with written instructions (which need not
     comply with Section 102 and need not be accompanied by


                                       17



     an Opinion of Counsel) with regard to the reduction in the principal amount
     of Securities represented thereby, together with the written statement
     contemplated by the last sentence of Section 303.

          (c) Notwithstanding the provisions of Section 307, unless otherwise
     specified as contemplated by Section 301, payment of principal of (and
     premium, if any) and interest, if any, on any Security in permanent global
     form shall be made to the Person or Persons specified therein.

          (d) Notwithstanding the provisions of Section 309 and except as
     provided in Subsection (c) of this Section, the Company, the Trustee and
     any agent of the Company and the Trustee shall treat as the Holder of such
     principal amount of Outstanding Securities represented by a permanent
     global Security (1) in the case of a permanent global Security in
     registered form, the Holder of such permanent global Security in registered
     form, or (2) in the case of a permanent global Security in bearer form,
     Euroclear or Clearstream.

     Section 204. Form of Legend for Book-Entry Securities.

     Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a restricted Security) in substantially the following form:

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
     HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
     NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
     A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
     MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR
     ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

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


                                       18



                                   ARTICLE III

                                 THE SECURITIES

     Section 301. Amount Unlimited; Issuable in Series.

          (a) The aggregate principal amount of Securities which may be
     authenticated and delivered under this Indenture is unlimited.

          (b) The Securities shall rank equally and pari passu and may be issued
     in one or more series. There shall be established in one or more Board
     Resolutions or pursuant to authority granted by one or more Board
     Resolutions and, subject to Section 303, set forth, or determined in the
     manner provided, in an Officers' Certificate, or established in one or more
     indentures supplemental hereto, prior to the issuance of Securities of any
     series, any or all of the following, as applicable (each of which (except
     for the matters set forth in clauses (1), (2) and (15) of this Section
     301(b)), if so provided, may be determined from time to time by the Company
     with respect to unissued Securities of the series and set forth in such
     Securities of the series when issued from time to time):

               (1) the title of the Securities of the series, including CUSIP
          Numbers (which shall distinguish the Securities of such series from
          all other series of Securities);

               (2) any limit upon the aggregate principal amount of the
          Securities of the series that may be authenticated and delivered under
          this Indenture (except for Securities authenticated and delivered upon
          registration of transfer of, or in exchange for, or in lieu of, other
          Securities of the series pursuant to Section 304, 305, 306, 906, 1107
          or 1305) and whether any series may be reopened for additional
          Securities of that series; in the event that such series of Securities
          may be reopened from time to time for issuances of additional
          Securities of such series, the terms thereof shall indicate whether
          any such additional Securities shall have the same terms as the prior
          Securities of such series or whether the Company may establish
          additional or different terms with respect to such additional
          Securities;

               (3) the date or dates, or the method by which such date or dates
          will be determined or extended, on which the principal (and premium,
          if any,) of the Securities of the series shall be payable;

               (4) the rate or rates at which the Securities of the series shall
          bear interest, if any, or the method by which such rate or rates shall
          be determined, the date or dates from which such interest shall accrue
          or the method by which such date or dates shall be determined, the
          Interest Payment Dates on which such interest shall be payable and the
          Regular Record Date, if any, for the interest payable on any
          Registered Security on any Interest Payment Date, or the method by
          which such date shall be determined, and the basis upon which interest
          shall be calculated if other than on the basis of a 360-day year of
          twelve 30-day months;


                                       19



               (5) the place or places, if any, other than or in addition to the
          Borough of Manhattan, The City of New York, where the principal of
          (and premium, if any) and interest, if any, on Securities of the
          series shall be payable, where any Registered Securities of the series
          may be surrendered for registration of transfer, where Securities of
          the series may be surrendered for exchange, where Securities of the
          series that are convertible or exchangeable may be surrendered for
          conversion or exchange, as applicable, and where notices or demands to
          or upon the Company in respect of the Securities of the series and
          this Indenture may be served;

               (6) the period or periods within which, or the date or dates on
          which, the price or prices at which, the Currency or Currencies in
          which, and other terms and conditions upon which Securities of the
          series may be redeemed, in whole or in part, at the option of the
          Company, if the Company is to have that option;

               (7) the obligation, if any, of the Company to redeem, repay or
          purchase Securities of the series pursuant to any sinking fund or
          analogous provision or at the option of a Holder thereof, and the
          period or periods within which or the date or dates on which, the
          price or prices at which, the Currency or Currencies in which, and
          other terms and conditions upon which Securities of the series shall
          be redeemed, repaid or purchased, in whole or in part, pursuant to
          such obligation;

               (8) if other than denominations of $1,000 and any integral
          multiple thereof, the denomination or denominations in which any
          Registered Securities of the series shall be issuable and, if other
          than denominations of $5,000 and any integral multiple thereof, the
          denomination or denominations in which any Bearer Securities of the
          series shall be issuable;

               (9) if other than the Trustee, the identity of each Security
          Registrar and/or Paying Agent;

               (10) if other than the principal amount thereof, the portion of
          the principal amount of Securities of the series that shall be payable
          upon declaration of acceleration of the Maturity thereof pursuant to
          Section 502 or the method by which such portion shall be determined;

               (11) if other than Dollars, the Currency or Currencies in which
          payment of the principal of (or premium, if any) or interest, if any,
          on the Securities of the series shall be made or in which the
          Securities of the series shall be denominated and the particular
          provisions applicable thereto in accordance with, in addition to or in
          lieu of any of the provisions of Section 312;

               (12) whether the amount of payments of principal of (or premium,
          if any) or interest, if any, on the Securities of the series may be
          determined with reference to an index, formula or other method (which
          index, formula or method may be based, without limitation, on one or
          more Currencies, commodities, equity


                                       20



          indices or other indices), and the manner in which such amounts shall
          be determined;

               (13) whether the principal of (or premium, if any) or interest,
          if any, on the Securities of the series are to be payable, at the
          election of the Company or a Holder thereof, in a Currency other than
          that in which such Securities are denominated or stated to be payable,
          the period or periods within which (including the Election Date), and
          the terms and conditions upon which, such election may be made, and
          the time and manner of determining the exchange rate between the
          Currency in which such Securities are denominated or stated to be
          payable and the Currency in which such Securities are to be so
          payable, in each case in accordance with, in addition to or in lieu of
          any of the provisions of Section 312;

               (14) provisions, if any, granting special rights to the Holders
          of Securities of the series upon the occurrence of such events as may
          be specified;

               (15) any deletions from, modifications of or additions to the
          Events of Default or covenants or other provisions (including any
          deletions from, modifications of or additions to any of the provisions
          of Section 1007) of the Company with respect to Securities of the
          series, whether or not such Events of Default or covenants or other
          provisions are consistent with the Events of Default or covenants or
          other provisions set forth herein;

               (16) whether Securities of the series are to be issuable as
          Registered Securities, Bearer Securities or both, any restrictions
          applicable to the offer, sale or delivery of Bearer Securities,
          whether any Securities of the series are to be issuable initially in
          temporary global form and whether any Securities of the series are to
          be issuable in permanent global form with or without coupons and, if
          so, whether beneficial owners of interests in any such permanent
          global Security may exchange such interests for Securities of such
          series and of like tenor of any authorized form and denomination and
          the circumstances under which any such exchanges may occur, if other
          than in the manner provided in Section 305, whether Registered
          Securities of the series may be exchanged for Bearer Securities of the
          series (if permitted by applicable laws and regulations), whether
          Bearer Securities of the series may be exchanged for Registered
          Securities of such series, and the circumstances under which and the
          place or places where any such exchanges may be made and if Securities
          of the series are to be issuable in global form, the identity of any
          initial depository therefor;

               (17) the date as of which any Bearer Securities of the series and
          any temporary global Security representing Outstanding Securities of
          the series shall be dated if other than the date of original issuance
          of the first Security of the series to be issued;

               (18) the Person to whom any interest on any Registered Security
          of the series shall be payable, if other than the Person in whose name
          such Security (or


                                       21



          one or more Predecessor Securities) is registered at the close of
          business on the Regular Record Date for such interest, the manner in
          which, or the Person to whom, any interest on any Bearer Security of
          the series shall be payable, if otherwise than upon presentation and
          surrender of the coupons appertaining thereto as they severally
          mature, and the extent to which, or the manner in which, any interest
          payable on a temporary global Security on an Interest Payment Date
          will be paid if other than in the manner provided in Section 304;

               (19) the applicability, if any, of Sections 1402 and 1403 to the
          Securities of the series and any provisions in modification of, in
          addition to or in lieu of any of the provisions of Article XIV;

               (20) if the Securities of such series are to be issuable in
          definitive form (whether upon original issue or upon exchange of a
          temporary Security of such series) only upon receipt of certain
          certificates or other documents or satisfaction of other conditions,
          then the form and/or terms of such certificates, documents or
          conditions;

               (21) whether, under what circumstances and the Currency in which,
          the Company will pay Additional Amounts as contemplated by Section
          1005 on the Securities of the series to any Holder who is not a United
          States person (including any modification to the definition of such
          term) in respect of any tax, assessment or governmental charge and, if
          so, whether the Company will have the option to redeem such Securities
          rather than pay such Additional Amounts (and the terms of any such
          option);

               (22) the designation of the initial Exchange Rate Agent, if any;

               (23) if the Securities of the series are to be convertible into
          or exchangeable for any securities of any Person (including the
          Company), the terms and conditions upon which such Securities of the
          series will be so convertible or exchangeable (including, without
          limitation, the initial conversion price or rate, the conversion
          period, the conversion agent, if any, adjustments of the applicable
          conversion price or rate and any requirements with respect to the
          reservation of shares or Securities for purposes of conversion);

               (24) if the Securities of the series are to be issued upon the
          exercise of warrants, the time, manner and place for such Securities
          to be authenticated and delivered; and

               (25) any other terms of the series (which terms shall not be
          inconsistent with the requirements of the TIA).

          (c) All Securities of any one series and the coupons appertaining to
     any Bearer Securities of such series shall be substantially identical
     except, in the case of Registered Securities, as to denomination and except
     as may otherwise be provided in or pursuant to such Board Resolution
     (subject to Section 303) and set forth in such Officers' Certificate or in
     any such indenture supplemental hereto. Not all Securities of any one


                                       22



     series need to be issued at the same time and, unless otherwise provided, a
     series may be reopened, without the consent of the Holders, for issuances
     of additional Securities of such series or to establish additional terms of
     such series of Securities (which additional terms shall only be applicable
     to unissued or additional Securities of such series).

          (d) If any of the terms of the Securities of any series are
     established by action taken pursuant to one or more Board Resolutions, a
     copy of an appropriate record of such action(s) shall be certified by the
     Secretary or an Assistant Secretary or any Vice President of the Company
     and delivered to the Trustee at or prior to the delivery of the Officers'
     Certificate setting forth the terms of the Securities of such series.

     Section 302. Denominations.

     The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 301. In the absence of any such
provision with respect to Securities of any series, the principal, premium and
interest and Additional Amounts with respect to the Securities shall be payable
in Dollars. With respect to Securities of any series denominated in Dollars, in
the absence of any such provisions with respect to the Securities of any series,
the Registered Securities of such series, other than Registered Securities
issued in global form (which may be of any denomination) shall be issuable in
denominations of $1,000 and any integral multiple thereof, and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000 and any integral multiple thereof.

     Section 303. Execution, Authentication, Delivery and Dating.

          (a) The Securities and any coupons appertaining thereto shall be
     executed on behalf of the Company by its Chairman, its President or Chief
     Executive Officer. The signature of any of these officers on the Securities
     and coupons may be manual or facsimile signatures of the present or any
     future such authorized officer and may be imprinted or otherwise reproduced
     on the Securities.

          (b) Securities or coupons bearing the manual or facsimile signatures
     of individuals who were at any time the proper officers of the Company
     shall bind the Company, notwithstanding that such individuals or any of
     them have ceased to hold such offices prior to the authentication and
     delivery of such Securities or did not hold such offices at the date of
     such Securities or coupons.

          (c) At any time and from time to time after the execution and delivery
     of this Indenture, the Company may deliver Securities of any series,
     together with any coupon appertaining thereto, executed by the Company, to
     the Trustee for authentication, together with a Company Order for the
     authentication and delivery of such Securities, and the Trustee in
     accordance with the Company Order shall authenticate and deliver such
     Securities; provided, that, in connection with its original issuance, no
     Bearer Security shall be mailed or otherwise delivered to any location in
     the United States; and provided further that, unless otherwise specified
     with respect to any series of Securities pursuant to Section 301, a Bearer
     Security may be delivered in connection with its


                                       23



     original issuance only if the Person entitled to receive such Bearer
     Security shall have furnished a certificate in the form set forth in
     Exhibit A-1 to this Indenture or such other certificate as may be specified
     with respect to any series of Securities pursuant to Section 301, dated no
     earlier than 15 days prior to the earlier of the date on which such Bearer
     Security is delivered and the date on which any temporary Security first
     becomes exchangeable for such Bearer Security in accordance with the terms
     of such temporary Security and this Indenture. If any Security shall be
     represented by a permanent global Bearer Security, then, for purposes of
     this Section and Section 304, the notation of a beneficial owner's interest
     therein upon original issuance of such Security or upon exchange of a
     portion of a temporary global Security shall be deemed to be delivery in
     connection with its original issuance of such beneficial owner's interest
     in such permanent global Bearer Security. Except as permitted by Section
     306, the Trustee shall not authenticate and deliver any Bearer Security
     unless all appurtenant coupons for interest then matured have been detached
     and cancelled. If all the Securities of any series are not to be issued at
     one time and if the Board Resolution or supplemental indenture establishing
     such series shall so permit, such Company Order may set forth procedures
     acceptable to the Trustee for the issuance of such Securities and
     determining the terms of particular Securities of such series, such as
     interest rate, maturity date, date of issuance and date from which interest
     shall accrue. In authenticating such Securities, and accepting the
     additional responsibilities under this Indenture in relation to such
     Securities, the Trustee shall be entitled to receive, and (subject to TIA
     Sections 315(a) through 315(d)) shall be fully protected in relying upon,

               (1) an Opinion of Counsel stating,

                    (i) that the form or forms of such Securities and any
               coupons have been established in conformity with the provisions
               of this Indenture;

                    (ii) that the terms of such Securities and any coupons have
               been established in conformity with the provisions of this
               Indenture; and

                    (iii) that such Securities, together with any coupons
               appertaining thereto, when completed by appropriate insertions
               and executed and delivered by the Company to the Trustee for
               authentication in accordance with this Indenture, authenticated
               and delivered by the Trustee in accordance with this Indenture
               and issued by the Company in the manner and subject to any
               conditions specified in such Opinion of Counsel, will constitute
               legal, valid and binding obligations of the Company, enforceable
               in accordance with their terms, subject to applicable bankruptcy,
               insolvency, reorganization and other similar laws of general
               applicability relating to or affecting the enforcement of
               creditors' rights, to general equitable principles and to such
               other qualifications as such counsel shall conclude do not
               materially affect the rights of Holders of such Securities and
               any coupons;


                                       24



               (2) an Officers' Certificate stating, to the best of the
          knowledge of the signers of such certificate, that no Event of Default
          with respect to any of the Securities shall have occurred and be
          continuing; and

               (3) an executed supplemental indenture (if any).

          (d) Notwithstanding the provisions of Section 301 and of this Section
     303, if all the Securities of any series are not to be issued at one time,
     it shall not be necessary to deliver an Officers' Certificate otherwise
     required pursuant to Section 301 or the Company Order, Opinion of Counsel
     or Officers' Certificate otherwise required pursuant to Subsection (c) of
     this Section at the time of issuance of each Security of such series, but
     such order, opinion and certificates, with appropriate modifications to
     cover such future issuances, shall be delivered at or before the time of
     issuance of the first Security of such series.

          (e) The Trustee shall not be required to authenticate such Securities
     if the issue of such Securities pursuant to this Indenture will affect the
     Trustee's own rights, duties or immunities under the Securities and this
     Indenture or otherwise in a manner which is not reasonably acceptable to
     the Trustee. Notwithstanding the generality of the foregoing, the Trustee
     will not be required to authenticate Securities denominated in a Foreign
     Currency if the Trustee reasonably believes that it would be unable to
     perform its duties with respect to such Securities.

          (f) Each Registered Security shall be dated the date of its
     authentication and each Bearer Security shall be dated as of the date
     specified as contemplated by Section 301.

          (g) No Security or coupon shall be entitled to any benefit under this
     Indenture or be valid or obligatory for any purpose unless there appears on
     such Security or Security to which such coupon appertains a certificate of
     authentication substantially in the form provided for herein duly executed
     by the Trustee or an Authenticating Agent 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 and is entitled to the benefits
     of this Indenture.

          (h) Notwithstanding the foregoing, if any Security shall have been
     authenticated and delivered hereunder but never issued and sold by the
     Company, and the Company shall deliver such Security to the Trustee for
     cancellation as provided in Section 310 together with a written statement
     (which need not comply with Section 102 and need not be accompanied by an
     Opinion of Counsel) stating that such Security has never been issued and
     sold by the Company, for all purposes of this Indenture such Security shall
     be deemed never to have been authenticated and delivered hereunder and
     shall never be entitled to the benefits of this Indenture.

     Section 304. Temporary Securities.

          (a) Pending the preparation of definitive Securities of any series,
     the Company may execute, and upon Company Order the Trustee shall
     authenticate and


                                       25



     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, in registered form, or, if authorized, in bearer form with
     one or more coupons or without coupons, 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. Such temporary Securities may be in global
     form.

          (b) Except in the case of temporary Securities in global form (which
     shall be exchanged in accordance with Section 304(c) or as otherwise
     provided in or pursuant to a Board Resolution), if temporary Securities of
     any series are issued, the Company will cause definitive Securities of that
     series to be prepared without unreasonable delay. After the preparation of
     definitive Securities of such series, the temporary Securities of such
     series shall be exchangeable for definitive Securities of such series upon
     surrender of the temporary Securities of such series at the office or
     agency of the Company in a Place of Payment for that series, without charge
     to the Holder. Upon surrender for cancellation of any one or more temporary
     Securities of any series (accompanied by any non-matured coupons
     appertaining thereto), the Company shall execute and the Trustee shall
     authenticate and deliver in exchange therefor a like principal amount of
     definitive Securities of the same series of authorized denominations;
     provided, that, no definitive Bearer Security shall be delivered in
     exchange for a temporary Registered Security; and provided further that a
     definitive Bearer Security shall be delivered in exchange for a temporary
     Bearer Security only in compliance with the conditions set forth in Section
     303. Until so exchanged, the temporary Securities of any series shall in
     all respects be entitled to the same benefits under this Indenture as
     definitive Securities of such series.

          (c) (1) Unless otherwise provided in or pursuant to a Board
     Resolution, this Section 304(c) shall govern the exchange of temporary
     Securities issued in global form.

               (2) If temporary Securities of any series are issued in global
          form, any such temporary global Security shall, unless otherwise
          provided therein, be delivered to the London office of a depositary or
          common depositary (the "Common Depository"), for the benefit of
          Euroclear and Clearstream, for credit to the respective accounts of
          the beneficial owners of such Securities (or to such other accounts as
          they may direct).

               (3) Without unnecessary delay but in any event not later than the
          date specified in, or determined pursuant to the terms of, any such
          temporary global Security (the "Exchange Date"), the Company shall
          deliver to the Trustee definitive Securities, in aggregate principal
          amount equal to the principal amount of such temporary global
          Security, executed by the Company. On or after the Exchange Date, such
          temporary global Security shall be surrendered by the Common
          Depository to the Trustee, as the Company's agent for such purpose, to
          be exchanged, in whole or from time to time in part, for definitive
          Securities without charge, and the Trustee shall authenticate and
          deliver, in exchange for each portion of such temporary global
          Security and upon receipt of the Company Order described in Section
          303, an equal aggregate principal amount of definitive


                                       26



          Securities of the same series of authorized denominations and of like
          tenor as the portion of such temporary global Security to be
          exchanged. The definitive Securities to be delivered in exchange for
          any such temporary global Security shall be in bearer form, registered
          form, permanent global bearer form or permanent global registered
          form, or any combination thereof, as specified as contemplated by
          Section 301, and, if any combination thereof is so specified, as
          requested by the beneficial owner thereof; provided, that, unless
          otherwise specified in such temporary global Security, upon such
          presentation by the Common Depository, such temporary global Security
          is accompanied by a certificate dated the Exchange Date or a
          subsequent date and signed by Euroclear as to the portion of such
          temporary global Security held for its account then to be exchanged
          and a certificate dated the Exchange Date or a subsequent date and
          signed by Clearstream as to the portion of such temporary global
          Security held for its account then to be exchanged, each in the form
          set forth in Exhibit A-2 to this Indenture or in such other form as
          may be established pursuant to Section 301; and provided further that
          definitive Bearer Securities shall be delivered in exchange for a
          portion of a temporary global Security only in compliance with the
          requirements of Section 303.

               (4) Unless otherwise specified in such temporary global Security,
          the interest of a beneficial owner of Securities of a series in a
          temporary global Security shall be exchanged for definitive Securities
          of the same series and of like tenor following the Exchange Date when
          the account holder instructs Euroclear or Clearstream, as the case may
          be, to request such exchange on his behalf and delivers to Euroclear
          or Clearstream, as the case may be, a certificate in the form set
          forth in Exhibit A-1 to this Indenture (or in such other form as may
          be established pursuant to Section 301), dated no earlier than 15 days
          prior to the Exchange Date, copies of which certificate shall be
          available from the offices of Euroclear and Clearstream, the Trustee,
          any Authenticating Agent appointed for such series of Securities and
          each Paying Agent. Unless otherwise specified in such temporary global
          Security, any such exchange shall be made free of charge to the
          beneficial owners of such temporary global Security, except that a
          Person receiving definitive Securities must bear the cost of
          insurance, postage, transportation and the like in the event that such
          Person does not take delivery of such definitive Securities in person
          at the offices of Euroclear or Clearstream. Definitive Securities in
          bearer form to be delivered in exchange for any portion of a temporary
          global Security shall be delivered only outside the United States.

               (5) Until exchanged in full as hereinabove provided, the
          temporary Securities of any series shall in all respects be entitled
          to the same benefits under this Indenture as definitive Securities of
          the same series and of like tenor authenticated and delivered
          hereunder, except that, unless otherwise specified as contemplated by
          Section 301, interest payable on a temporary global Security on an
          Interest Payment Date for Securities of such series occurring prior to
          the applicable Exchange Date shall be payable to Euroclear and
          Clearstream on such Interest Payment Date upon delivery by Euroclear
          and Clearstream to the Trustee of a certificate or certificates in the
          form set forth in Exhibit A-2 to this Indenture


                                       27



          (or in such other forms as may be established pursuant to Section
          301), for credit without further interest thereon on or after such
          Interest Payment Date to the respective accounts of the Persons who
          are the beneficial owners of such temporary global Security on such
          Interest Payment Date and who have each delivered to Euroclear or
          Clearstream, as the case may be, a certificate dated no earlier than
          15 days prior to the Interest Payment Date occurring prior to such
          Exchange Date in the form set forth in Exhibit A-1 to this Indenture
          (or in such other forms as may be established pursuant to Section
          301). Notwithstanding anything to the contrary herein contained, the
          certifications made pursuant to this clause (5) of Section 304(c)
          shall satisfy the certification requirements of clauses (3) and (4) of
          this Section 304(c) and of Section 303(c) of this Indenture and the
          interests of the Persons who are the beneficial owners of the
          temporary global Security with respect to which such certification was
          made will be exchanged for definitive Securities of the same series
          and of like tenor on the Exchange Date or the date of certification if
          such date occurs after the Exchange Date, without further act or deed
          by such beneficial owners. Except as otherwise provided in this clause
          (5) of Section 304(c), no payments of principal (or premium, if any)
          or interest, if any, owing with respect to a beneficial interest in a
          temporary global Security will be made unless and until such interest
          in such temporary global Security shall have been exchanged for an
          interest in a definitive Security. Any interest so received by
          Euroclear and Clearstream and not paid as herein provided shall be
          returned to the Trustee prior to the expiration of two years after
          such Interest Payment Date in order to be repaid to the Company.

     Section 305. Registration, Registration of Transfer and Exchange.

          (a) The Company shall cause to be kept at the Corporate Trust Office
     of the Trustee or in any office or agency of the Company in a Place of
     Payment a register for each series of Securities (the registers maintained
     in such office or in any such office or agency of the Company in a Place of
     Payment being herein sometimes referred to collectively as the "Security
     Register") in which, subject to such reasonable regulations as it may
     prescribe, the Company shall provide for the registration of Registered
     Securities and of transfers of Registered Securities. The Security Register
     shall be in written form or any other form capable of being converted into
     written form within a reasonable time. The Trustee, at its Corporate Trust
     Office, is hereby initially appointed "Security Registrar" for the purpose
     of registering Registered Securities and transfers of Registered Securities
     on such Security Register as herein provided. In the event that the Trustee
     shall cease to be Security Registrar, it shall have the right to examine
     the Security Register at all reasonable times.

          (b) Upon surrender for registration of transfer of any Registered
     Security of any series at any office or agency in a Place of Payment for
     the register and transfer of Securities that series, the Company shall
     execute, and the Trustee shall authenticate and deliver, subject to the
     terms and conditions of this Article III, in the name of the designated
     transferee or transferees, one or more new Registered Securities of the
     same series, of any authorized denominations and of a like aggregate
     principal amount, and tenor.


                                       28



          (c) At the option of the Holder, Registered Securities of any series
     may be exchanged for other Registered Securities of the same series, of any
     authorized denomination and of a like aggregate principal amount,
     containing identical terms and provisions, upon surrender of the Registered
     Securities to be exchanged at such office or agency. Whenever any
     Registered Securities are so surrendered for exchange, the Company shall
     execute, and the Trustee shall authenticate and deliver, the Registered
     Securities which the Holder making the exchange is entitled to receive.
     Unless otherwise specified with respect to any series of Securities as
     contemplated by Section 301, Bearer Securities may not be issued in
     exchange for Registered Securities.

          (d) If (but only if) expressly permitted in or pursuant to the
     applicable Board Resolution and (subject to Section 303) set forth in the
     applicable Officers' Certificate, or in any indenture supplemental hereto,
     delivered as contemplated by Section 301, at the option of the Holder,
     Bearer Securities of any series may be exchanged for Registered Securities
     of the same series of any authorized denomination and of a like aggregate
     principal amount and tenor, upon surrender of the Bearer Securities to be
     exchanged at any such office or agency, with all unmatured coupons and all
     matured coupons in default thereto appertaining. If the Holder of a Bearer
     Security is unable to produce any such unmatured coupon or coupons or
     matured coupon or coupons in default, any such permitted exchange may be
     effected if the Bearer Securities are accompanied by payment in funds
     acceptable to the Company in an amount equal to the face amount of such
     missing coupon or coupons, or the surrender of such missing coupon or
     coupons may be waived by the Company and the Trustee if there is furnished
     to them such security or indemnity as they may require to save each of them
     and any Paying Agent harmless. If thereafter the Holder of such Security
     shall surrender to any Paying Agent any such missing coupon in respect of
     which such a payment shall have been made, such Holder shall be entitled to
     receive the amount of such payment; provided, that, except as otherwise
     provided in Section 1002, interest represented by coupons shall be payable
     only upon presentation and surrender of those coupons at an office or
     agency located outside the United States. Notwithstanding the foregoing, in
     case a Bearer Security of any series is surrendered at any such office or
     agency in a permitted exchange for a Registered Security of the same series
     and like tenor after the close of business at such office or agency on (i)
     any Regular Record Date and before the opening of business at such office
     or agency on the relevant Interest Payment Date, or (ii) any Special Record
     Date and before the opening of business at such office or agency on the
     related proposed date for payment of Defaulted Interest, such Bearer
     Security shall be surrendered without the coupon relating to such Interest
     Payment Date or proposed date for payment, as the case may be, and interest
     or Defaulted Interest, as the case may be, will not be payable on such
     Interest Payment Date or proposed date for payment, as the case may be, in
     respect of the Registered Security issued in exchange for such Bearer
     Security, but will be payable only to the Holder of such coupon when due in
     accordance with the provisions of this Indenture.

          (e) Whenever any Securities are so surrendered for exchange, the
     Company shall execute, and the Trustee shall authenticate and deliver, the
     Securities which the Holder making the exchange is entitled to receive.


                                       29



          (f) Notwithstanding the foregoing, except as otherwise specified as
     contemplated by Section 301:

               (1) Each global Security authenticated under this Indenture shall
          be registered in the name of the Depository designated for such global
          Security or a nominee thereof and delivered to such Depository or a
          nominee thereof or custodian therefor, and each such global Security
          shall constitute a single Security for all purposes of this Indenture.

               (2) Notwithstanding any other provision in this Indenture, no
          global Security may be exchanged in whole or in part for Securities
          registered, and no transfer of a global Security in whole or in part
          may be registered, in the name of any Person other than the Depository
          for such global Security or a nominee thereof unless (A) such
          Depository (i) has notified the Company that it is unwilling or unable
          to continue as Depository for such global Security or (ii) has ceased
          to be a clearing agency registered under the Exchange Act, and in
          either case the Company has not appointed a successor Depository
          within 90 days of receipt of such notice or cessation, as the case may
          be, (B) there shall have occurred and be continuing an Event of
          Default with respect to such global Security or (C) there shall exist
          such circumstances, if any, in addition to or in lieu of the foregoing
          as have been specified for this purpose as contemplated by Section
          301. Notwithstanding the foregoing, the Company may at any time in its
          sole discretion determine that Securities issued in the form of a
          global Security shall no longer be represented in whole or in party by
          such global Security, and the Trustee, upon receipt of a Company Order
          therefor, shall authenticate and deliver definitive Securities in
          exchange in whole or in part for such Global Security.

               (3) Subject to clause (2) above, any exchange or transfer of a
          global Security for other Securities may be made in whole or in part,
          and all Securities issued in exchange for a global Security or any
          portion thereof shall be registered in such names as the Depository
          for such global Security shall direct.

               (4) Every Security authenticated and delivered upon registration
          of transfer of, or in exchange for or in lieu of, a global Security or
          any portion thereof, whether pursuant to this Section, Section 304,
          306, 906 or 1107 or otherwise, shall be authenticated and delivered in
          the form of, and shall be, a global Security, unless such Security is
          registered in the name of a Person other than the Depository for such
          global Security or a nominee thereof.

               (5) If any beneficial owner of an interest in a permanent global
          Security is entitled to exchange such interest for Securities of such
          series and of like tenor and principal amount of another authorized
          form and denomination, as specified as contemplated by Section 301 and
          this Section 305 and provided that any applicable notice provided in
          the permanent global Security shall have been given, then without
          unnecessary delay but in any event not later than the earliest date on
          which such interest may be so exchanged, the Company shall deliver to


                                       30



          the Trustee definitive Securities in aggregate principal amount equal
          to the principal amount of such beneficial owner's interest in such
          permanent global Security, executed by the Company. On or after the
          earliest date on which such interests may be so exchanged, such
          permanent global Security shall be surrendered by the Common
          Depository or such other depositary as shall be specified in the
          Company Order with respect thereto to the Trustee, as the Company's
          agent for such purpose, to be exchanged, in whole or from time to time
          in part, for definitive Securities without charge and the Trustee
          shall authenticate and deliver, in exchange for each portion of such
          permanent global Security, an equal aggregate principal amount of
          definitive Securities of the same series of authorized denominations
          and of like tenor as the portion of such permanent global Security to
          be exchanged which, unless the Securities of the series are not
          issuable both as Bearer Securities and as Registered Securities, as
          specified as contemplated by Section 301, shall be in the form of
          Bearer Securities or Registered Securities, or any combination
          thereof, as shall be specified by the beneficial owner thereof;
          provided, that, no such exchanges may occur during a period beginning
          at the opening of business 15 days before any selection of Securities
          to be redeemed and ending on the relevant Redemption Date if the
          Security for which exchange is requested may be among those selected
          for redemption; and provided further that no Bearer Security delivered
          in exchange for a portion of a permanent global Security shall be
          mailed or otherwise delivered to any location in the United States. If
          a Registered Security is issued in exchange for any portion of a
          permanent global Security after the close of business at the office or
          agency where such exchange occurs on (1) any Regular Record Date and
          before the opening of business at such office or agency on the
          relevant Interest Payment Date, or (2) any Special Record Date and
          before the opening of business at such office or agency on the related
          proposed date for payment of Defaulted Interest, interest or Defaulted
          Interest, as the case may be, will not be payable on such Interest
          Payment Date or proposed date for payment, as the case may be, in
          respect of such Registered Security, but will be payable on such
          Interest Payment Date or proposed date for payment, as the case may
          be, only to the Person to whom interest in respect of such portion of
          such permanent global Security is payable in accordance with the
          provisions of this Indenture.

          (g) All Securities issued upon any registration of 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 registration of transfer
     or exchange.

          (h) Every Registered Security presented or surrendered for
     registration of transfer or for exchange shall (if so required by the
     Company or the Security Registrar) be duly endorsed, or be accompanied by a
     written instrument of transfer in form satisfactory to the Company and the
     Security Registrar, duly executed by the Holder thereof or his attorney
     duly authorized in writing.

          (i) No service charge shall be made for any registration of transfer
     or exchange of Securities, but the Company may require payment of a sum
     sufficient to


                                       31



     cover any tax or other governmental charge that may be imposed in
     connection with any registration of transfer or exchange of Securities,
     other than exchanges pursuant to Section 304, 906, 1107 or 1305 not
     involving any transfer.

          (j) The Company shall not be required (1) to issue, register the
     transfer of or exchange any Security if such Security may be among those
     selected for redemption during a period beginning at the opening of
     business 15 days before, and ending at the close of business on (i) if such
     Securities are issuable only as Registered Securities, the day of the
     mailing of the relevant notice of redemption and (ii) if such Securities
     are issuable as Bearer Securities, the day of the first publication of the
     relevant notice of redemption or, if such Securities are also issuable as
     Registered Securities and there is no publication, the mailing of the
     relevant notice of redemption, or (2) to register the transfer of or
     exchange any Registered Security so selected for redemption in whole or in
     part, except, in the case of any Registered Security to be redeemed in
     part, the unredeemed portion thereof, or (3) to exchange any Bearer
     Security so selected for redemption except that such a Bearer Security may
     be exchanged for a Registered Security of that series and like tenor,
     provided that such Registered Security shall be simultaneously surrendered
     for redemption, or (4) to issue, register the transfer of or exchange any
     Security which has been surrendered for repayment at the option of the
     Holder, except the portion, if any, of such Security not to be so repaid.

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

          (l) The Trustee shall have no obligation or duty to monitor, determine
     or inquire as to compliance with any restrictions on transfer imposed under
     this Indenture or under applicable law with respect to any transfer of any
     interest in any Security (including any transfers between or among
     Depository Participants or beneficial owners of interests in any Global
     Security) other than to require delivery of such certificates and other
     documentation or evidence as are expressly required by, and 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 306. Mutilated, Destroyed, Lost and Stolen Securities.

          (a) If any mutilated Security or a Security with a mutilated coupon
     appertaining to it is surrendered to the Trustee or the Company, together
     with, in proper cases, such security or indemnity as may be required by the
     Company or the Trustee to save each of them or any agent of either of them
     harmless, the Company shall execute and the Trustee shall authenticate and
     deliver in exchange therefor a new Security of the same series and of like
     tenor and principal amount, and bearing a number not contemporaneously
     outstanding, with coupons corresponding to the coupons, if any,
     appertaining to the surrendered Security.


                                       32


          (b) If there shall be delivered to the Company and to the Trustee (1)
     evidence to their satisfaction of the destruction, loss or theft of any
     Security or coupon, and (2) such security or indemnity as may be required
     by them to save each of them and any agent of either of them harmless,
     then, in the absence of notice to the Company or the Trustee that such
     Security or coupon has been acquired by a bona fide purchaser, the Company
     shall execute and upon Company Order the Trustee shall authenticate and
     deliver, in lieu of any such destroyed, lost or stolen Security or in
     exchange for the Security to which a destroyed, lost or stolen coupon
     appertains (with all appurtenant coupons not destroyed, lost or stolen), a
     new Security of the same series and of like tenor and principal amount and
     bearing a number not contemporaneously outstanding, with coupons
     corresponding to the coupons, if any, appertaining to such destroyed, lost
     or stolen Security or to the Security to which such destroyed, lost or
     stolen coupon appertains.

          (c) Notwithstanding the provisions of the Sections 306(a) and (b), in
     case any such mutilated, destroyed, lost or stolen Security or coupon has
     become or is about to become due and payable, the Company in its discretion
     may, instead of issuing a new Security, with coupons corresponding to the
     coupons, if any, appertaining to such mutilated, destroyed, lost or stolen
     Security or to the Security to which such mutilated, destroyed, lost or
     stolen coupon appertains, pay such Security or coupon; provided, that,
     payment of principal of (and premium, if any) and interest, if any, on
     Bearer Securities shall, except as otherwise provided in Section 1002, be
     payable only at an office or agency located outside the United States and,
     unless otherwise specified as contemplated by Section 301, any interest on
     Bearer Securities shall be payable only upon presentation and surrender of
     the coupons appertaining thereto.

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

          (e) Every new Security of any series, together with its coupons, if
     any, issued pursuant to this Section in lieu of any mutilated, destroyed,
     lost or stolen Security, or in exchange for a Security to which a
     mutilated, destroyed, lost or stolen coupon appertains, shall constitute an
     original additional contractual obligation of the Company, whether or not
     the mutilated, destroyed, lost or stolen Security and its coupons, if any,
     or the mutilated, destroyed, lost or stolen coupon shall be at any time
     enforceable by anyone, and shall be entitled to all the benefits of this
     Indenture equally and proportionately with any and all other Securities of
     that series and their coupons, if any, duly issued hereunder.

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


                                       33



     Section 307. Payment of Interest; Interest Rights Preserved; Optional
     Interest Reset.

          (a) Except as otherwise specified with respect to a series of
     Securities in accordance with the provisions of Section 301, interest, if
     any, on any Registered Security that is payable, and is punctually paid or
     duly provided for, on any Interest Payment Date shall be paid to the Person
     in whose name that Security (or one or more Predecessor Securities) is
     registered at the close of business on the Regular Record Date for such
     interest at the office or agency of the Company maintained for such purpose
     pursuant to Section 1002; provided, that, each installment of interest, if
     any, on any Registered Security may at the Company's option be paid by (1)
     mailing a check for such interest, payable to or upon the written order of
     the Person entitled thereto pursuant to Section 309, to the address of such
     Person as it appears on the Security Register or (2) transfer to an account
     located in the United States maintained by the payee.

          (b) Unless otherwise provided as contemplated by Section 301 with
     respect to the Securities of any series, payment of interest, if any, may
     be made, in the case of a Bearer Security, by transfer to an account
     located outside the United States maintained by the payee.

          (c) Unless otherwise provided as contemplated by Section 301, every
     permanent global Security will provide that interest, if any, payable on
     any Interest Payment Date will be paid to each of Euroclear and Clearstream
     with respect to that portion of such permanent global Security held for its
     account by the Common Depository, for the purpose of permitting each of
     Euroclear and Clearstream to credit the interest, if any, received by it in
     respect of such permanent global Security to the accounts of the beneficial
     owners thereof.

          (d) In case a Bearer Security of any series is surrendered in exchange
     for a Registered Security of such series after the close of business (at an
     office or agency in a Place of Payment for such series) on any Regular
     Record Date and before the opening of business (at such office or agency)
     on the next succeeding Interest Payment Date, such Bearer Security shall be
     surrendered without the coupon relating to such Interest Payment Date and
     interest will not be payable on such Interest Payment Date in respect of
     the Registered Security issued in exchange for such Bearer Security, but
     will be payable only to the Holder of such coupon when due in accordance
     with the provisions of this Indenture.

          (e) Except as otherwise specified with respect to a series of
     Securities in accordance with the provisions of Section 301, any interest
     on any Registered Security of any series that is payable, but is not
     punctually paid or duly provided for, on any Interest Payment Date (herein
     called "Defaulted Interest") shall forthwith cease to be payable to the
     registered Holder thereof on the relevant Regular Record Date by virtue of
     having been such Holder, and such Defaulted Interest may be paid by the
     Company, at its election in each case, as provided in clause (1) or (2) of
     this Subsection:

               (1) The Company may elect to make payment of any Defaulted
          Interest to the Persons in whose names the Registered Securities of
          such series (or


                                       34



          their respective Predecessor Securities) are registered at the close
          of business on a Special Record Date for the payment of such Defaulted
          Interest, which shall be fixed in the following manner. The Company
          shall notify the Trustee in writing of the amount of Defaulted
          Interest proposed to be paid on each Registered Security of such
          series and the date of the proposed payment (which shall not be less
          than 20 days after such notice is received by the Trustee), and at the
          same time the Company shall deposit with the Trustee an amount of
          money in the Currency in which the Securities of such series are
          payable (except as otherwise specified pursuant to Section 301 for the
          Securities of such series and except, if applicable, as provided in
          Sections 312(b), 312(d) and 312(e)) equal to the aggregate amount
          proposed to be paid in respect of such Defaulted Interest or shall
          make arrangements satisfactory to the Trustee for such deposit on or
          prior to the date of the proposed payment, such money when deposited
          to be held in trust for the benefit of the Persons entitled to such
          Defaulted Interest as in this clause provided. Thereupon the Trustee
          shall fix a Special Record Date for the payment of such Defaulted
          Interest which shall be not more than 15 days and not less than 10
          days prior to the date of the proposed payment and not less than 10
          days after the receipt by the Trustee of the notice of the proposed
          payment. The Trustee shall promptly notify the Company of such Special
          Record Date and, in the name and at the expense of the Company, shall
          cause notice of the proposed payment of such Defaulted Interest and
          the Special Record Date therefor to be given in the manner provided in
          Section 106, not less than 10 days prior to such Special Record Date.
          Notice of the proposed payment of such Defaulted Interest and the
          Special Record Date therefor having been so given, such Defaulted
          Interest shall be paid to the Persons in whose names the Registered
          Securities of such series (or their respective Predecessor Securities)
          are registered at the close of business on such Special Record Date
          and shall no longer be payable pursuant to the following clause (2) of
          this Subsection. In case a Bearer Security of any series is
          surrendered at the office or agency in a Place of Payment for such
          series in exchange for a Registered Security of such series after the
          close of business at such office or agency on any Special Record Date
          and before the opening of business at such office or agency on the
          related proposed date for payment of Defaulted Interest, such Bearer
          Security shall be surrendered without the coupon relating to such
          proposed date of payment and Defaulted Interest will not be payable on
          such proposed date of payment in respect of the Registered Security
          issued in exchange for such Bearer Security, but will be payable only
          to the Holder of such coupon when due in accordance with the
          provisions of this Indenture.

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


                                       35



          (f) The provisions of this Section 307(f) may be made applicable to
     any series of Securities pursuant to Section 301 (with such modifications,
     additions or substitutions as may be specified pursuant to such Section
     301). The interest rate (or the spread or spread multiplier used to
     calculate such interest rate, if applicable) on any Security of such series
     may be reset by the Company on the date or dates specified on the face of
     such Security (each an "Optional Reset Date"). The Company may exercise
     such option with respect to such Security by notifying the Trustee of such
     exercise at least 45 but not more than 60 days prior to an Optional Reset
     Date for such Security. Not later than 40 days prior to each Optional Reset
     Date, the Trustee shall transmit, in the manner provided for in Section
     106, to the Holder of any such Security a notice (the "Reset Notice")
     indicating whether the Company has elected to reset the interest rate (or
     the spread or spread multiplier used to calculate such interest rate, if
     applicable), and if so (1) such new interest rate (or such new spread or
     spread multiplier, if applicable) and (2) the provisions, if any, for
     redemption during the period from such Optional Reset Date to the next
     Optional Reset Date or if there is no such next Optional Reset Date, to the
     Stated Maturity of such Security (each such period a "Subsequent Interest
     Period"), including the date or dates on which or the period or periods
     during which and the price or prices at which such redemption may occur
     during the Subsequent Interest Period.

          (g) Notwithstanding the foregoing, not later than 20 days prior to the
     Optional Reset Date, the Company may, at its option, revoke the interest
     rate (or the spread or spread multiplier used to calculate such interest
     rate, if applicable) provided for in the Reset Notice and establish a
     higher interest rate (or a spread or spread multiplier providing for a
     higher interest rate, if applicable) for the Subsequent Interest Period by
     causing the Trustee to transmit, in the manner provided for in Section 106,
     notice of such higher interest rate (or such spread or spread multiplier
     providing for a higher interest rate, if applicable) to the Holder of such
     Security. Such notice shall be irrevocable. All Securities with respect to
     which the interest rate (or the spread or spread multiplier used to
     calculate such interest rate, if applicable) is reset on an Optional Reset
     Date, and with respect to which the Holders of such Securities have not
     tendered such Securities for repayment (or have validly revoked any such
     tender) pursuant to Section 307(h), will bear such higher interest rate (or
     such spread or spread multiplier providing for a higher interest rate, if
     applicable).

          (h) The Holder of any such Security may have the option to elect
     repayment by the Company of the principal of such Security on each Optional
     Reset Date at a price equal to the principal amount thereof plus interest
     accrued to such Optional Reset Date. In order to obtain repayment on an
     Optional Reset Date, the Holder must follow the procedures set forth in
     Article XIII for repayment at the option of Holders except that the period
     for delivery or notification to the Trustee shall be at least 25 but not
     more than 35 days prior to such Optional Reset Date and except that, if the
     Holder has tendered any Security for repayment pursuant to the Reset
     Notice, the Holder may, by written notice to the Trustee, revoke such
     tender or repayment until the close of business on the tenth day before
     such Optional Reset Date.

          (i) Subject to the foregoing provisions of this Section and Section
     305, each Security delivered under this Indenture upon registration of
     transfer of or in exchange for


                                       36



     or in lieu of any other Security shall carry the rights to interest accrued
     and unpaid, and to accrue, which were carried by such other Security.

     Section 308. Optional Extension of Maturity.

          (a) The provisions of this Section 308 may be made applicable to any
     series of Securities pursuant to Section 301 (with such modifications,
     additions or substitutions as may be specified pursuant to such Section
     301). The Stated Maturity of any Security of such series may be extended at
     the option of the Company for the period or periods specified on the face
     of such Security (each an "Extension Period") up to but not beyond the date
     (the "Final Maturity") set forth on the face of such Security. The Company
     may exercise such option with respect to any Security by notifying the
     Trustee of such exercise at least 45 but not more than 60 days prior to the
     Stated Maturity of such Security in effect prior to the exercise of such
     option (the "Original Stated Maturity"). If the Company exercises such
     option, the Trustee shall transmit, in the manner provided for in Section
     106, to the Holder of such Security not later than 40 days prior to the
     Original Stated Maturity a notice (the "Extension Notice") indicating (i)
     the election of the Company to extend the Stated Maturity, (ii) the new
     Stated Maturity, (iii) the interest rate (or spread, spread multiplier or
     other formula used to calculate such interest rate, if applicable), if any,
     applicable to the Extension Period and (iv) the provisions, if any, for
     redemption during such Extension Period. Upon the Trustee's transmittal of
     the Extension Notice, the Stated Maturity of such Security shall be
     extended automatically and, except as modified by the Extension Notice and
     as described in Section 308(b), such Security will have the same terms as
     prior to the transmittal of such Extension Notice.

          (b) Notwithstanding the foregoing, not later than 20 days before the
     Original Stated Maturity of such Security, the Company may, at its option,
     revoke the interest rate (or spread, spread multiplier or other formula
     used to calculate such interest rate, if applicable) provided for in the
     Extension Notice and establish a higher interest rate (or spread, spread
     multiplier or other formula used to calculate such higher interest rate, if
     applicable) for the Extension Period by causing the Trustee to transmit, in
     the manner provided for in Section 106, notice of such higher interest rate
     (or spread, spread multiplier or other formula used to calculate such
     interest rate, if applicable) to the Holder of such Security. Such notice
     shall be irrevocable. All Securities with respect to which the Stated
     Maturity is extended will bear such higher interest rate.

          (c) If the Company extends the Stated Maturity of any Security, the
     Holder will have the option to elect repayment of such Security by the
     Company on the Original Stated Maturity at a price equal to the principal
     amount thereof, plus interest accrued to such date. In order to obtain
     repayment on the Original Stated Maturity once the Company has extended the
     Stated Maturity thereof, the Holder must follow the procedures set forth in
     Article XIII for repayment at the option of Holders, except that the period
     for delivery or notification to the Trustee shall be at least 25 but not
     more than 35 days prior to the Original Stated Maturity and except that, if
     the Holder has tendered any Security for repayment pursuant to an Extension
     Notice, the Holder may by written notice to the Trustee revoke such tender
     for repayment until the close of business on the tenth day before the
     Original Stated Maturity.


                                       37



     Section 309. Persons Deemed Owners.

          (a) Prior to due presentment of a Registered 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 Registered Security is
     registered as the owner of such Registered Security for the purpose of
     receiving payment of principal of (and premium, if any) and (subject to
     Sections 305 and 307) interest, if any, on such Registered Security and for
     all other purposes whatsoever, whether or not such Registered Security be
     overdue, and none of the Company, the Trustee nor any agent of the Company,
     or the Trustee shall be affected by notice to the contrary.

          (b) Title to any Bearer Security and any coupons appertaining thereto
     shall pass by delivery. The Company, the Trustee and any agent of the
     Company, or the Trustee may treat the bearer of any Bearer Security and the
     bearer of any coupon as the absolute owner of such Security or coupon for
     the purpose of receiving payment thereof or on account thereof and for all
     other purposes whatsoever, whether or not such Security or coupon be
     overdue, and none of the Company, the Trustee nor any agent of the Company,
     or the Trustee shall be affected by notice to the contrary.

          (c) None of the Company, the Trustee, any Paying Agent or the Security
     Registrar will have any responsibility or liability for any aspect of the
     records relating to or payments made on account of beneficial ownership
     interests of a Security in global form or for maintaining, supervising or
     reviewing any records relating to such beneficial ownership interests.

          (d) Notwithstanding the foregoing, with respect to any global
     Security, nothing herein shall prevent the Company, the Trustee, or any
     agent of the Company, or the Trustee, from giving effect to any written
     certification, proxy or other authorization furnished by any depositary, as
     a Holder, with respect to such global Security or impair, as between such
     depositary and owners of beneficial interests in such global Security, the
     operation of customary practices governing the exercise of the rights of
     such depositary (or its nominee) as Holder of such global Security.

     Section 310. Cancellation.

          (a) All Securities and coupons surrendered for payment, redemption,
     repayment at the option of the Holder, registration of transfer or exchange
     or for credit against any sinking fund payment shall, if surrendered to any
     Person other than the Trustee, be delivered to the Trustee, and any such
     Securities and coupons and Securities and coupons surrendered directly to
     the Trustee for any such purpose 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 may deliver to the
     Trustee (or to any other Person for delivery to the Trustee) for
     cancellation any Securities previously authenticated hereunder which the
     Company has not issued and sold, and all Securities so delivered shall be
     promptly cancelled by the Trustee. If the Company shall so acquire any of
     the Securities, however, such acquisition shall not operate as a redemption
     or


                                       38



     satisfaction of the indebtedness represented by such Securities unless and
     until the same are surrendered to the Trustee for cancellation. 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. Cancelled Securities and coupons held by the
     Trustee shall be disposed of by the Trustee in its customary manner, unless
     by a Company Order the Company directs that cancelled Securities be
     returned to the Company.

     Section 311. Computation of Interest.

     Except as otherwise specified as contemplated by Section 301 with respect
to Securities of any series, interest, if any, on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.

     Section 312. Currency and Manner of Payments in Respect of Securities.

          (a) Unless otherwise specified with respect to any Securities pursuant
     to Section 301, with respect to Registered Securities of any series not
     permitting the election provided for in Subsection (b) of this Section or
     the Holders of which have not made the election provided for in Subsection
     (b) of this Section, and with respect to Bearer Securities of any series,
     except as provided in Subsection (d) of this Section, payment of the
     principal of (and premium, if any) and interest, if any, on any Registered
     or Bearer Security of such series will be made in the Currency in which
     such Registered Security or Bearer Security, as the case may be, is
     payable. The provisions of this Section 312 may be modified or superseded
     with respect to any Securities pursuant to Section 301.

          (b) It may be provided pursuant to Section 301 with respect to
     Registered Securities of any series that Holders shall have the option,
     subject to Subsection (d) and (e) of this Section, to receive payments of
     principal of (or premium, if any) or interest, if any, on such Registered
     Securities in any of the Currencies which may be designated for such
     election by delivering to the Trustee a written election with signature
     guarantees and in the applicable form established pursuant to Section 301,
     not later than the close of business on the Election Date immediately
     preceding the applicable payment date. If a Holder so elects to receive
     such payments in any such Currency, such election will remain in effect for
     such Holder or any transferee of such Holder until changed by such Holder
     or such transferee by written notice to the Trustee (but any such change
     must be made not later than the close of business on the Election Date
     immediately preceding the next payment date to be effective for the payment
     to be made on such payment date and no such change of election may be made
     with respect to payments to be made on any Registered Security of such
     series with respect to which an Event of Default has occurred or with
     respect to which the Company has deposited funds pursuant to Article IV or
     XIV or with respect to which a notice of redemption has been given by the
     Company or a notice of option to elect repayment has been sent by such
     Holder or such transferee). Any Holder of any such Registered Security who
     shall not have delivered any such election to the Trustee of such series of
     Registered Securities not later than the close of business on the
     applicable Election Date will be paid the amount due on the applicable
     payment date in the relevant Currency as provided in Subsection (a) of this
     Section. The Trustee shall


                                       39



     notify the Exchange Rate Agent as soon as practicable after the Election
     Date of the aggregate principal amount of Registered Securities for which
     Holders have made such written election.

          (c) Unless otherwise specified pursuant to Section 301, if the
     election referred to in Subsection (b) of this Section has been provided
     for pursuant to Section 301, then, unless otherwise specified pursuant to
     Section 301, not later than the fourth Business Day after the Election Date
     for each payment date for Registered Securities of any series, the Exchange
     Rate Agent will deliver to the Company a written notice specifying the
     Currency in which Registered Securities of such series are payable, the
     respective aggregate amounts of principal of (and premium, if any) and
     interest, if any, on the Registered Securities to be paid on such payment
     date, specifying the amounts in such Currency so payable in respect of the
     Registered Securities as to which the Holders of Registered Securities of
     such Series shall have elected to be paid in another Currency as provided
     in Subsection (b) of this Section. If the election referred to in
     Subsection (b) of this Section has been provided for pursuant to Section
     301 and if at least one Holder has made such election, then, unless
     otherwise specified pursuant to Section 301, on the second Business Day
     preceding such payment date the Company will deliver to the Trustee for
     such series of Registered Securities an Exchange Rate Officer's Certificate
     in respect of the Dollar or Foreign Currency payments to be made on such
     payment date. Unless otherwise specified pursuant to Section 301, the
     Dollar or Foreign Currency amount receivable by Holders of Registered
     Securities who have elected payment in a Currency as provided in Subsection
     (b) of this Section shall be determined by the Company on the basis of the
     applicable Market Exchange Rate in effect on the second Business Day (the
     "Valuation Date") immediately preceding each payment date, and such
     determination shall be conclusive and binding for all purposes, absent
     manifest error.

          (d) If a Conversion Event occurs with respect to a Foreign Currency in
     which any of the Securities are denominated or payable other than pursuant
     to an election provided for pursuant to Subsection (b) of this Section,
     then with respect to each date for the payment of principal of (and
     premium, if any) and interest, if any on the applicable Securities
     denominated or payable in such Foreign Currency occurring after the last
     date on which such Foreign Currency was used (the "Conversion Date"), the
     Dollar shall be the currency of payment for use on each such payment date.
     Unless otherwise specified pursuant to Section 301, the Dollar amount to be
     paid by the Company to the Trustee and by such Trustee or any Paying Agent
     to the Holders of such Securities with respect to such payment date shall
     be, in the case of a Foreign Currency other than a currency unit, the
     Dollar Equivalent of the Foreign Currency or, in the case of a currency
     unit, the Dollar Equivalent of the Currency Unit, in each case as
     determined by the Exchange Rate Agent in the manner provided in Subsection
     (f) or (g) of this Section.

          (e) Unless otherwise specified pursuant to Section 301, if the Holder
     of a Registered Security denominated in any Currency shall have elected to
     be paid in another Currency as provided in Subsection (b) of this Section,
     and a Conversion Event occurs with respect to such elected Currency, such
     Holder shall receive payment in the Currency in which payment would have
     been made in the absence of such election; and if a Conversion Event occurs
     with respect to the Currency in which payment would have


                                       40



     been made in the absence of such election, such Holder shall receive
     payment in Dollars as provided in Subsection (d) of this Section.

          (f) The "Dollar Equivalent of the Foreign Currency" shall be
     determined by the Exchange Rate Agent and shall be obtained for each
     subsequent payment date by converting the specified Foreign Currency into
     Dollars at the Market Exchange Rate on the Conversion Date.

          (g) The "Dollar Equivalent of the Currency Unit" shall be determined
     by the Exchange Rate Agent and subject to the provisions of Subsection (h)
     of this Section shall be the sum of each amount obtained by converting the
     Specified Amount of each Component Currency into Dollars at the Market
     Exchange Rate for such Component Currency on the Valuation Date with
     respect to each payment.

          (h) For purposes of this Section 312, the following terms shall have
     the following meanings:

     A "Component Currency" shall mean any currency which, on the Conversion
Date, was a component currency of the relevant currency unit, including, but not
limited to, the euro.

     A "Specified Amount" of a Component Currency shall mean the number of units
of such Component Currency or fractions thereof which were represented in the
relevant currency unit, including, but not limited to, the euro, on the
Conversion Date. If after the Conversion Date the official unit of any Component
Currency is altered by way of combination or subdivision, the Specified Amount
of such Component Currency shall be divided or multiplied in the same
proportion. If after the Conversion Date two or more Component Currencies are
consolidated into a single Currency, the respective Specified Amounts of such
Component Currencies shall be replaced by an amount in such single Currency
equal to the sum of the respective Specified Amounts of such consolidated
Component Currencies expressed in such single Currency, and such amount shall
thereafter be a Specified Amount and such single Currency shall thereafter be a
Component Currency. If after the Conversion Date any Component Currency shall be
divided into two or more currencies, the Specified Amount of such Component
Currency shall be replaced by amounts of such two or more currencies, having an
aggregate Dollar Equivalent value at the Market Exchange Rate on the date of
such replacement equal to the Dollar Equivalent of the Specified Amount of such
former Component Currency at the Market Exchange Rate immediately before such
division, and such amounts shall thereafter be Specified Amounts and such
currencies shall thereafter be Component Currencies. If, after the Conversion
Date of the relevant currency unit, including, but not limited to, the euro, a
Conversion Event (other than any event referred to above in this definition of
"Specified Amount") occurs with respect to any Component Currency of such
currency unit and is continuing on the applicable Valuation Date, the Specified
Amount of such Component Currency shall, for purposes of calculating the Dollar
Equivalent of the Currency Unit, be converted into Dollars at the Market
Exchange Rate in effect on the Conversion Date of such Component Currency.

     "Election Date" shall mean the Regular Record Date for the applicable
series of Registered Securities or at least 16 days prior to Maturity, as the
case may be, or such other prior


                                       41



date for any series of Registered Securities as specified pursuant to clause 13
of Section 301 by which the written election referred to in Section 312(b) may
be made.

          (i) All decisions and determinations of the Exchange Rate Agent
     regarding the Dollar Equivalent of the Foreign Currency, the Dollar
     Equivalent of the Currency Unit, the Market Exchange Rate and changes in
     the Specified Amounts as specified above shall be in its sole discretion
     and shall, in the absence of manifest error, be conclusive for all purposes
     and irrevocably binding upon the Company, the Trustee and all Holders of
     such Securities denominated or payable in the relevant Currency. The
     Exchange Rate Agent shall promptly give written notice to the Company and
     the Trustee of any such decision or determination.

          (j) In the event that the Company determines in good faith that a
     Conversion Event has occurred with respect to a Foreign Currency, the
     Company will immediately give written notice thereof to the Trustee and to
     the Exchange Rate Agent (and such Trustee will promptly thereafter give
     notice in the manner provided for in Section 106 to the affected Holders)
     specifying the Conversion Date. In the event the Company so determines that
     a Conversion Event has occurred with respect to the euro or any other
     currency unit in which Securities are denominated or payable, the Company
     will immediately give written notice thereof to the Trustee and to the
     Exchange Rate Agent (and such Trustee will promptly thereafter give notice
     in the manner provided in Section 106 to the affected Holders) specifying
     the Conversion Date and the Specified Amount of each Component Currency on
     the Conversion Date. In the event the Company determines in good faith that
     any subsequent change in any Component Currency as set forth in the
     definition of Specified Amount above has occurred, the Company will
     similarly give written notice to the Trustee and the Exchange Rate Agent.

          (k) The Trustee of the appropriate series of Securities shall be fully
     justified and protected in conclusively relying and acting upon information
     received by it from the Company and the Exchange Rate Agent and shall not
     otherwise have any duty or obligation to determine the accuracy or validity
     of such information independent of the Company or the Exchange Rate Agent.

     Section 313. Appointment and Resignation of Successor Exchange Rate Agent.

          (a) Unless otherwise specified pursuant to Section 301, if and so long
     as the Securities of any series (1) are denominated in a Foreign Currency
     or (2) may be payable in a Foreign Currency, or so long as it is required
     under any other provision of this Indenture, then the Company will maintain
     with respect to each such series of Securities, or as so required, at least
     one Exchange Rate Agent. The Company will cause the Exchange Rate Agent to
     make the necessary foreign exchange determinations at the time and in the
     manner specified pursuant to Section 301 for the purpose of determining the
     applicable rate of exchange and, if applicable, for the purpose of
     converting the issued Foreign Currency into the applicable payment Currency
     for the payment of principal (and premium, if any) and interest, if any,
     pursuant to Section 312.


                                       42



          (b) No resignation of the Exchange Rate Agent and no appointment of a
     successor Exchange Rate Agent pursuant to this Section shall become
     effective until the acceptance of appointment by the successor Exchange
     Rate Agent as evidenced by a written instrument delivered to the Company
     and the Trustee of the appropriate series of Securities accepting such
     appointment executed by the successor Exchange Rate Agent.

          (c) If the Exchange Rate Agent shall resign, be removed or become
     incapable of acting, or if a vacancy shall occur in the office of the
     Exchange Rate Agent for any cause, with respect to the Securities of one or
     more series, the Company, by or pursuant to a Board Resolution, shall
     promptly appoint a successor Exchange Rate Agent or Exchange Rate Agents
     with respect to the Securities of that or those series (it being understood
     that any such successor Exchange Rate Agent may be appointed with respect
     to the Securities of one or more or all of such series and that, unless
     otherwise specified pursuant to Section 301, at any time there shall only
     be one Exchange Rate Agent with respect to the Securities of any particular
     series that are originally issued by the Company on the same date and that
     are initially denominated and/or payable in the same Currency).

     Section 314. CUSIP Numbers.

     The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of
the Securities in notices of redemption as a convenience to Holders; provided
that, any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

     Section 401. 401. Satisfaction and Discharge of Indenture.

          (a) Unless otherwise specified pursuant to Section 301, this Indenture
     shall upon Company Request cease to be of further effect with respect to
     any series of Securities specified in such Company Request (except as to
     any surviving rights of registration of transfer or exchange of Securities
     of such series expressly provided for herein or pursuant hereto and any
     right to receive Additional Amounts, as provided in Section 1005), and the
     Trustee, upon receipt of a Company Order, and at the expense of the
     Company, shall execute proper instruments acknowledging satisfaction and
     discharge of this Indenture as to such series when

               (1) either

                    (i) all Securities of such series theretofore authenticated
               and delivered and all coupons, if any, appertaining thereto
               (other than (A) coupons appertaining to Bearer Securities
               surrendered for exchange for


                                       43



               Registered Securities and maturing after such exchange, whose
               surrender is not required or has been waived as provided in
               Section 305, (B) Securities and coupons of such series which have
               been destroyed, lost or stolen and which have been replaced or
               paid as provided in Section 306, (C) coupons appertaining to
               Securities called for redemption and maturing after the relevant
               Redemption Date, whose surrender has been waived as provided in
               Section 1106, and (D) Securities and coupons of such series for
               whose payment money has theretofore been deposited with the
               Trustee or any Paying Agent in trust or segregated and held in
               trust by the Company and thereafter repaid to the Company or
               discharged from such trust, as provided in Section 1003) have
               been delivered to the Trustee for cancellation; or

                    (ii) all Securities of such series and, in the case of
               subclause (A) or (B) of this clause (ii), any coupons
               appertaining thereto not theretofore delivered to the Trustee for
               cancellation

                         (A) have become due and payable, or

                         (B) will become due and payable at their Stated
                    Maturity within one year, or

                         (C) if redeemable at the option of the Company, are to
                    be called for redemption within one year under arrangements
                    satisfactory to the Trustee for the giving of notice of
                    redemption by the Trustee in the name, and at the expense,
                    of the Company, and the Company, in the case of subclause
                    (A), (B) or (C) of this clause (ii), has irrevocably
                    deposited or caused to be deposited with the Trustee as
                    trust funds in trust for such purpose an amount in the
                    Currency in which the Securities of such series are payable,
                    sufficient to pay and discharge the entire indebtedness on
                    such Securities and such coupons not theretofore delivered
                    to the Trustee for cancellation, including the principal
                    (and premium, if any) and interest, if any, to the date of
                    such deposit (in the case of Securities which have become
                    due and payable) or to the Stated Maturity or Redemption
                    Date, as the case may be;

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

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

          (b) Notwithstanding the satisfaction and discharge of this Indenture,
     the obligations of the Company to the Trustee and any predecessor Trustee
     under Section


                                       44



     606, the obligations of the Company to any Authenticating Agent under
     Section 611 if money shall have been deposited with the Trustee pursuant to
     clause (1) of Section 401(a), the obligations of the Trustee under Section
     402 and Section 1003(d) and the obligations of the Company and the Trustee
     with respect to Securities of such series under Sections 305, 306, 1002 and
     1005, with respect to the payment of Additional Amounts, if any, with
     respect to any rights of Holders to require the Company to repay such
     Securities as contemplated by Section 1301 and with respect to any rights
     of Holders to convert or exchange such Securities into other Securities,
     shall survive such satisfaction and discharge. These obligations shall
     continue to be governed and construed in accordance with Section 111.

     Section 402. Application of Trust Funds.

     Subject to the provisions of Section 1003(d), all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest, if any, for whose payment such money has been deposited with
or received by the Trustee, but such money need not be segregated from other
funds except to the extent required by law.

                                   ARTICLE V

                                    REMEDIES

     Section 501. Events of Default.

          (a) "Event of Default", wherever used herein with respect to any
     particular series of Securities, means any one of the following events as
     such events may be otherwise amended in accordance with Section 301
     (whatever the reason for such Event of Default and whether or not it shall
     be voluntary or involuntary or be effected by operation of law or pursuant
     to any judgment, decree or order of any court or any order, rule or
     regulation of any administrative or governmental body):

               (1) default in the payment of any interest upon, or any
          Additional Amount payable in respect of, any Security of that series
          or of any coupon appertaining thereto, when such interest or coupon
          becomes due and payable, and continuance of such default for a period
          of 30 days; or

               (2) default in the payment of the principal of (or premium, if
          any, on) any Security of that series at its Maturity; or

               (3) default in the deposit of any sinking fund payment, when and
          as due by the terms of any Security of that series; or

               (4) default in the performance, or breach, of any covenant or
          agreement of the Company in this Indenture with respect to any
          Security of that series (other than a covenant or agreement a default
          in whose performance or


                                       45



          whose breach is elsewhere in this Section specifically dealt with),
          and continuance of such default or breach for a period of 60 days
          after there has been given, by registered or certified mail, to the
          Company by the Trustee or to the Company and the Trustee by the
          Holders of at least 25% in principal amount of the Outstanding
          Securities of that series a written notice specifying such default or
          breach and requiring it to be remedied and stating that such notice is
          a "Notice of Default" hereunder; or

               (5) the Company pursuant to or within the meaning of any
          Bankruptcy Law:

                    (i) commences a voluntary case or proceedings,

                    (ii) consents to the entry of an order for relief against it
               in an involuntary case or proceedings,

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

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

                    (v) issues a public announcement admitting its inability to
               pay its debts generally as they become due; or

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

                    (i) is for relief against the Company in an involuntary
               case,

                    (ii) appoints a Custodian of the Company or for all or
               substantially all of its property, or

                    (iii) orders the winding-up or liquidation of the Company,

                    (iv) and the order or decree remains unstayed and in effect
               for 90 days; or

               (7) any other Event of Default provided with respect to
          Securities of that series.

          (b) The term "Bankruptcy Law" means title 11, U.S. Code, as amended
     from time to time, or any similar foreign, Federal or State law for the
     relief of debtors. The term "Custodian" means any custodian, receiver,
     trustee, assignee, liquidator or other similar official under any
     Bankruptcy Law.


                                       46


     Section 502. Acceleration of Maturity; Rescission and Annulment.

          (a) If an Event of Default (other than an Event of Default specified
     in clauses (5) and (6) of Section 501(a) with respect to the Company) with
     respect to Securities of any series at the time Outstanding occurs and is
     continuing, then and in every such case the Trustee or the Holders of not
     less than 25% in principal amount of the Outstanding Securities of that
     series may declare the principal (or, if any Securities are Original Issue
     Discount Securities or Indexed Securities, such portion of the principal
     amount as may be specified in the terms of that series) plus accrued and
     unpaid interest of all the Securities of that series to be due and payable
     immediately, by a notice in writing to the Company (and to the Trustee if
     given by the Holders), and upon any such declaration such principal amount
     plus accrued and unpaid interests or specified portion thereof shall become
     immediately due and payable. If an Event of Default specified in clauses
     (5) and (6) of Section 501(a) with respect to the Company occurs, the
     amounts described above with respect to the Outstanding Securities of all
     series shall ipso facto become and be immediately due and payable without
     any declaration or other act on the part of the Trustee or any Holder. Upon
     payment of such principal and interest, all of the Company's obligations
     under the Securities of such Series and this Indenture, other than
     obligations under Section 606, shall terminate.

          (b) At any time after such a declaration of acceleration with respect
     to Securities of any series has been made and before a judgment or decree
     for payment of the money due has been obtained by the Trustee as
     hereinafter provided in this Article, the Holders of a majority in
     principal amount of the Outstanding Securities of that series, by written
     notice to the Company and the Trustee, may rescind and annul such
     declaration and its consequences if:

               (1) the Company has paid or deposited with the Trustee a sum
          sufficient in cash to pay all principal, interest and Additional
          Amounts which have become due other than by such declaration of
          acceleration, interest or any such overdue amounts, and amounts owing
          the Trustee;

               (2) all Events of Default with respect to Securities of that
          series, other than the nonpayment of the principal of (or premium, if
          any) or interest on Securities of that series which have become due
          solely by such declaration of acceleration, have been cured or waived
          as provided in Section 514; and

               (3) such rescission would not conflict with any judgment or
          decree of a court of competent jurisdiction.

     No such rescission shall affect any subsequent default or impair any right
consequent thereon.

     Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.

          (a) The Company covenants that if:


                                       47



               (1) default is made in the payment of any installment of interest
          or Additional Amounts on any Security of any series and any related
          coupon when such interest or Additional Amounts becomes due and
          payable and such default continues for a period of 30 days, or

               (2) default is made in the payment of the principal of (or
          premium, if any, on) any Security of any series at its Maturity,

then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest, if any, with interest upon any overdue principal
(and premium, if any) and, to the extent that payment of such interest shall be
legally enforceable, upon any overdue installments of interest, if any, at the
rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

          (b) If the Company fails to pay such amounts forthwith upon such
     demand, the Trustee, in its own name and as trustee of an express trust,
     may institute a judicial proceeding for the collection of the sums so due
     and unpaid, and may prosecute such proceeding to judgment or final decree,
     and may enforce the same against the Company or any other obligor upon
     Securities of such series and collect the moneys adjudged or decreed to be
     payable in the manner provided by law out of the property of the Company or
     any other obligor upon such Securities of such series, wherever situated.

          (c) If an Event of Default with respect to Securities of any series
     occurs and is continuing, the Trustee may in its discretion proceed to
     protect and enforce its rights and the rights of the Holders of Securities
     of such series and any related coupons by such appropriate judicial
     proceedings as the Trustee shall deem necessary to protect and enforce any
     such rights, whether for the specific enforcement of any covenant or
     agreement in this Indenture or in aid of the exercise of any power granted
     herein, or to enforce any other proper remedy.

     Section 504. Trustee May File Proofs of Claim.

          (a) 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 of the Securities of any series 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 overdue principal, premium, if any, or interest) shall be
     entitled and empowered, by intervention in such proceeding or otherwise:

               (1) to file and prove a claim for the whole amount of principal
          and premium, if any, or in the case of Original Issue Discount
          Securities or Indexed


                                       48



          Securities, such portion of the principal as may be provided for in
          the terms thereof and premium, if any, and interest, if any, owing and
          unpaid in respect of the Securities 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) and of the Holders allowed in such judicial proceeding, and

               (2) 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
other 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 to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 606.

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

     Section 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.

     All rights of action and claims under this Indenture or the Securities or
coupons may be prosecuted and enforced by the Trustee without the possession of
any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.

     Section 506. Application of Money Collected.

     Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, if any, upon presentation of the Securities or coupons, or
both, as the case may be, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

          FIRST: To the payment of all amounts due the Trustee and any
     predecessor Trustee under Section 606;


                                       49



          SECOND: To the payment of the amounts then due and unpaid upon the
     Securities and coupons for principal (and premium, if any) and interest, if
     any, in respect of which or for the benefit of which such money has been
     collected, ratably, without preference or priority of any kind, according
     to the aggregate amounts due and payable on such Securities and coupons for
     principal (and premium, if any) and interest, if any, respectively; and

          THIRD: To the payment of the remainder, if any, to the Company.

     Section 507. Limitation on Suits.

     No Holder of any Security of any series or any related coupon shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

          (a) such Holder has previously given written notice to the Trustee of
     a continuing Event of Default with respect to the Securities of that
     series;

          (b) the Holders of not less than 25% in principal amount of the
     Outstanding Securities of that series shall have made written request to
     the Trustee to institute proceedings in respect of such Event of Default in
     its own name as Trustee hereunder;

          (c) such Holder or Holders have offered to the Trustee reasonable
     indemnity satisfactory to it against the costs, expenses and liabilities to
     be incurred in compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been given
     to the Trustee during such 60-day period by the Holders of a majority in
     principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

     Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest and Additional Amounts, if Any.

     Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right which is absolute and unconditional to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest, if any, and Additional Amounts, if any, on such
Security or payment of such coupon on the respective due dates expressed in such
Security or coupon (or, in the case of redemption, on the Redemption


                                       50



Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.

     Section 509. Restoration of Rights and Remedies.

     If the Trustee or any Holder of a Security or coupon has instituted any
proceeding 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 such
case the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, 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.

     Section 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306(f), no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

     Section 511. Delay or Omission Not Waiver.

     No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities or coupons, as the case may be.

     Section 512. Control by Holders of Securities.

     With respect to any series, the Holders of not less than a majority in
principal amount of the Outstanding Securities of such series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series, provided that

          (a) such direction shall not be in conflict with any rule of law or
     with this Indenture,

          (b) the Trustee may take any other action deemed proper by the Trustee
     which is not inconsistent with such direction, and


                                       51



          (c) the Trustee need not take any action which might involve it in
     personal liability or be unjustly prejudicial to the Holders of Securities
     of such series not consenting.

     Section 513. Undertaking for Costs.

     All parties to this Indenture agree that 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 a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorney's 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, provided that this Section 513
shall not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
508 hereof, or a suit by Holders of more than 10% in principal amount of the
then Outstanding Securities.

     Section 514. Waiver of Past Defaults.

          (a) The Holders of not less than a majority in principal amount of the
     Outstanding Securities of any series may on behalf of the Holders of all
     the Securities of such series and any related coupons waive any past
     default hereunder with respect to such series and its consequences, except
     a default

               (1) in the payment of the principal of (or premium, if any) or
          interest, if any, or Additional Amounts on any Security of such series
          or any related coupons, or

               (2) in respect of a covenant or provision hereof which under
          Article IX cannot be modified or amended without the consent of the
          Holder of each Outstanding Security of such series affected.

          (b) Upon any such waiver, such default shall cease to exist, and any
     Event of Default arising therefrom shall be deemed to have been cured, for
     every purpose of this Indenture; but no such waiver shall extend to any
     subsequent or other default or Event of Default or impair any right
     consequent thereon.

     Section 515. Waiver of Usury, Stay or Extension 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 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.


                                       52



                                   ARTICLE VI

                                   THE TRUSTEE

     Section 601. Notice of Defaults.

     Within five days after the earlier of receipt from the Company of notice of
the occurrence of a Default or Event of Default hereunder or the date such
occurrence hereunder actually becomes known to a Responsible Officer of the
Trustee, the Trustee shall transmit to all Holders of Securities of such series,
in the manner and to the extent provided in TIA Section 313(c), notice of such
Default hereunder known to the Trustee, unless such Default shall have been
cured or waived; provided, that, except in the case of a Default in the payment
of the principal of (or premium, if any) or interest, if any, on any Security of
such series, or in the payment of any sinking or purchase fund installment with
respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities and coupons of such series; and
provided further that in the case of any Default or breach of the character
specified in clause (4) of Section 501(a) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof unless otherwise specified in accordance
with Section 301.

     Section 602. Certain Rights of Trustee.

          (a) Subject to the provisions of TIA Sections 315(a) through 315(d):

               (1) 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.

               (2) 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, coupon or other paper or
          document (whether in its original or facsimile form) believed by it to
          be genuine and to have been signed or presented by the proper party or
          parties.

               (3) Any request or direction of the Company mentioned herein
          shall be sufficiently evidenced by a Company Request or Company Order
          (other than delivery of any Security, together with any coupons
          appertaining thereto, to the Trustee for authentication and delivery
          pursuant to Section 303 which shall be sufficiently evidenced as
          provided therein) and any resolution of the Board of Directors may be
          sufficiently evidenced by a Board Resolution.

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


                                       53



               (5) The Trustee shall not be liable with respect to any action
          taken or omitted to be taken by it in good faith in accordance with
          the direction of the Holders of a majority in principal amount of the
          Outstanding Securities of any series, determined as provided in
          Sections 101 and 104.

               (6) 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, rely upon a Board Resolution, an
          Opinion of Counsel or an Officers' Certificate.

               (7) The Trustee may consult with counsel of its choosing and the
          advice of such counsel or any Opinion of Counsel shall be full and
          complete authorization and protection in respect of any action taken,
          suffered or omitted by it hereunder in good faith and in reliance
          thereon.

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

               (9) 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, coupon 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 but in the
          case of any certificate or opinion specifically required by the
          Indenture to be delivered to the Trustee, the Trustee shall have a
          duty to examine the same to determine whether they conform to the
          Indenture requirements.

               (10) 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.

               (11) The Trustee shall not be liable for any action taken,
          suffered or omitted by it in good faith and believed by it to be
          authorized or within the discretion or rights or powers conferred upon
          it by this Indenture other than any liabilities arising out of the
          negligence of the Trustee.


                                       54



               (12) 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.

               (13) 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.

          (b) The Trustee shall not be required to expend or risk its own funds
     or otherwise incur any financial liability in the performance of any of its
     duties hereunder, or in the exercise of any of its rights or powers, if it
     shall have reasonable grounds for believing that repayment of such funds or
     adequate indemnity against such risk or liability is not reasonably assured
     to it.

     Section 603. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. Neither the Trustee
nor any Authenticating Agent shall be accountable for the use or application by
the Company of Securities or the proceeds thereof.

     Section 604. May Hold Securities.

     The Trustee, any Paying Agent, Security Registrar, Authenticating Agent or
any other agent of the Company in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.

     Section 605. Money Held in Trust.

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


                                       55



     Section 606. Compensation and Reimbursement.

          (a) The Company agrees:

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

               (2) except as otherwise expressly provided herein, to reimburse
          each of the Trustee and any predecessor 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 and
          disbursements of its agents and counsel), except any such expense,
          disbursement or advance as shall be determined to have been caused by
          its own negligence or willful misconduct; and

               (3) to indemnify each of the Trustee and any predecessor Trustee
          for, and to hold it harmless against, any and all loss, damage,
          claims, liability or expense incurred without negligence or bad faith
          on its own part, arising out of or in connection with the acceptance
          or administration of the trust or trusts hereunder, including the
          costs and expenses of defending itself against any claim (whether
          asserted by the Company or any Holder or any other Person) or
          liability in connection with the exercise or performance of any of its
          powers or duties hereunder.

          (b) As security for the performance of the obligations of the Company
     under this Section, the Trustee shall have a claim prior to the Securities
     upon all property and funds held or collected by the Trustee as such,
     except funds held in trust for the payment of principal of (or premium, if
     any) or interest, if any, on particular Securities or any coupons.

          (c) When the Trustee incurs expenses or renders services after an
     Event of Default specified in clause (5) or (6) of Section 501(a) occurs,
     the expenses and compensation for the services are intended to constitute
     expenses of administration under any Bankruptcy Law.

     Section 607. Corporate Trustee Required; Eligibility.

     There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.


                                       56



     Section 608. Resignation and Removal; Appointment of Successor.

          (a) No resignation or removal of the Trustee and no appointment of a
     successor Trustee pursuant to this Article shall become effective until the
     acceptance of appointment by the successor Trustee in accordance with the
     applicable requirements of Section 609.

          (b) The Trustee may resign at any time with respect to the Securities
     of one or more series by giving written notice thereof to the Company.

          (c) The Trustee may be removed at any time with respect to the
     Securities of any series by Act of the Holders of a majority in principal
     amount of the Outstanding Securities of such series delivered to the
     Trustee and to the Company.

          (d) If at any time:

               (1) the Trustee shall fail to comply with the provisions of TIA
          Section 310(b) after written request therefor by the Company or by any
          Holder of a Security who has been a bona fide Holder of a Security for
          at least six months, or

               (2) the Trustee shall cease to be eligible under Section 607 and
          shall fail to resign after written request therefor by the Company or
          by any Holder of a Security who has been a bona fide Holder of a
          Security for at least six months, or

               (3) the Trustee shall become incapable of acting or shall be
          adjudged a bankrupt or insolvent or a receiver of the Trustee or of
          its property shall be appointed or any public officer shall take
          charge or control of the Trustee or of its property or affairs for the
          purpose of rehabilitation, conservation or liquidation, then, in any
          such case, (i) the Company by or pursuant to a Board Resolution may
          remove the Trustee and appoint a successor Trustee with respect to all
          Securities, or (ii) subject to TIA Section 315(e), any Holder of a
          Security who has been a bona fide Holder of a Security for at least
          six months may, on behalf of himself and all others similarly
          situated, petition any court of competent jurisdiction for the removal
          of the Trustee with respect to all Securities and the appointment of a
          successor Trustee or Trustees.

          (e) If an instrument of acceptance by a successor Trustee shall not
     have been delivered to the Trustee within 30 days after the giving of a
     notice of resignation or the delivery of an Act of removal, the Trustee
     resigning or being removed or any Holder who has been a bona fide Holder of
     Securities for at least six months, may petition at the expense of the
     Company any court of competent jurisdiction for the appointment of a
     successor Trustee.

          (f) If the Trustee shall resign, be removed or become incapable of
     acting, or if a vacancy shall occur in the office of Trustee for any cause
     with respect to the Securities of one or more series, the Company, by or
     pursuant to a Board Resolution, shall promptly appoint a successor Trustee
     or Trustees with respect to the Securities of that or those series (it
     being understood that any such successor Trustee may be appointed with
     respect


                                       57



     to the Securities of one or more or all of such series and that at any
     time, except as provided in Section 613, there shall be only one Trustee
     with respect to the Securities of any particular series). If, within one
     year after such resignation, removal or incapability, or the occurrence of
     such vacancy, a successor Trustee with respect to the Securities of any
     series shall be appointed by Act of the Holders of a majority in principal
     amount of the Outstanding Securities of such series delivered to the
     Company and the retiring Trustee, the successor Trustee so appointed shall,
     forthwith upon its acceptance of such appointment, become the successor
     Trustee with respect to the Securities of such series and to that extent
     supersede the successor Trustee appointed by the Company. If no successor
     Trustee with respect to the Securities of any series shall have been so
     appointed by the Company or the Holders of Securities and accepted
     appointment in the manner hereinafter provided, any Holder of a Security
     who has been a bona fide Holder of a Security of such series for at least
     six months may, on behalf of himself and all others similarly situated,
     petition any court of competent jurisdiction for the appointment of a
     successor Trustee with respect to Securities of such series.

          (g) The Company shall give notice of each resignation and each removal
     of the Trustee with respect to the Securities of any series and each
     appointment of a successor Trustee with respect to the Securities of any
     series in the manner provided for notices to the Holders of Securities in
     Section 106. Each notice shall include the name of the successor Trustee
     with respect to the Securities of such series and the address of its
     Corporate Trust Office.

     Section 609. Acceptance of Appointment by Successor.

          (a) In case of the appointment hereunder of a successor Trustee with
     respect to all Securities, every such successor Trustee shall execute,
     acknowledge and deliver to the Company and to the retiring Trustee an
     instrument accepting such appointment, and thereupon the resignation or
     removal of the retiring Trustee shall become effective and such successor
     Trustee, without any further act, deed or conveyance, shall become vested
     with all the rights, powers, trusts and duties of the retiring Trustee;
     but, on request of the Company or the successor Trustee, such retiring
     Trustee shall, upon payment of its charges, execute and deliver an
     instrument transferring to such successor Trustee all the rights, powers
     and trusts of the retiring Trustee, and shall duly assign, transfer and
     deliver to such successor Trustee all property and money held by such
     retiring Trustee hereunder, subject nevertheless to its claim, if any,
     provided for in Section 606.

          (b) In case of the appointment hereunder of a successor Trustee with
     respect to the Securities of one or more (but not all) series, the Company,
     the retiring Trustee and each successor Trustee with respect to the
     Securities of one or more series shall execute and deliver an indenture
     supplemental hereto wherein each successor Trustee shall accept such
     appointment and which

               (1) shall contain such provisions as shall be necessary or
          desirable to transfer and confirm to, and to vest in, each successor
          Trustee all the rights, powers, trusts and duties of the retiring
          Trustee with respect to the Securities of that or those series to
          which the appointment of such successor Trustee relates,


                                       58



               (2) if the retiring Trustee is not retiring with respect to all
          Securities, shall contain such provisions as shall be deemed necessary
          or desirable to confirm that all the rights, powers, trusts and duties
          of the retiring Trustee with respect to the Securities of that or
          those series as to which the retiring Trustee is not retiring shall
          continue to be vested in the retiring Trustee, and

               (3) shall add to or change any of the provisions of this
          Indenture as shall be necessary to provide for or facilitate the
          administration of the trusts hereunder by more than one Trustee, it
          being understood that nothing herein or in such supplemental indenture
          shall constitute such Trustees co-trustees of the same trust and that
          each such Trustee shall be trustee of a trust or trusts hereunder
          separate and apart from any trust or trusts hereunder administered by
          any other such Trustee; and upon the execution and delivery of such
          supplemental indenture the resignation or removal of the retiring
          Trustee shall become effective to the extent provided therein and each
          such successor Trustee, without any further act, deed or conveyance,
          shall become vested with all the rights, powers, trusts and duties of
          the retiring Trustee with respect to the Securities of that or those
          series to which the appointment of such successor Trustee relates;
          but, on request of the Company or any successor Trustee, such retiring
          Trustee shall duly assign, transfer and deliver to such successor
          Trustee all property and money held by such retiring Trustee hereunder
          with respect to the Securities of that or those series to which the
          appointment of such successor Trustee relates.

          (c) Upon request of any such successor Trustee, the Company shall
     execute any and all instruments for more fully and certainly vesting in and
     confirming to such successor Trustee all such rights, powers and trusts
     referred to in Subsection (a) or (b) of this Section, as the case may be.

          (d) No successor Trustee shall accept its appointment unless at the
     time of such acceptance such successor Trustee shall be qualified and
     eligible under this Article.

     Section 610. Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.


                                       59



     Section 611. Appointment of Authenticating Agent.

          (a) At any time when any of the Securities remain Outstanding, the
     Trustee may appoint an Authenticating Agent or Agents with respect to one
     or more series of Securities which shall be authorized to act on behalf of
     the Trustee to authenticate Securities of such series issued upon exchange,
     registration of transfer or partial redemption thereof, and Securities so
     authenticated shall be entitled to the benefits of this Indenture and shall
     be valid and obligatory for all purposes as if authenticated by the Trustee
     hereunder. Any such appointment shall be evidenced by an instrument in
     writing signed by a Responsible Officer of the Trustee, a copy of which
     instrument shall be promptly furnished to the Company. Wherever reference
     is made in this Indenture to the authentication and delivery of Securities
     by the Trustee or the Trustee's certificate of authentication, such
     reference shall be deemed to include authentication and delivery on behalf
     of the Trustee by an Authenticating Agent and a certificate of
     authentication executed on behalf of the Trustee by an Authenticating
     Agent. Each Authenticating Agent shall be reasonably acceptable to the
     Company and, except as may otherwise be provided pursuant to Section 301,
     shall at all times be a bank or trust company or corporation organized and
     doing business and in good standing under the laws of the United States of
     America or of any State or the District of Columbia, authorized under such
     laws to act as Authenticating Agent, having a combined capital and surplus
     of not less than $50,000,000 and subject to supervision or examination by
     Federal or State authorities. If such Authenticating Agent publishes
     reports of condition at least annually, pursuant to law or the requirements
     of the aforesaid supervising or examining authority, then for the purposes
     of this Section, the combined capital and surplus of such Authenticating
     Agent shall be deemed to be its combined capital and surplus as set forth
     in its most recent report of condition so published. In case at any time an
     Authenticating Agent shall cease to be eligible in accordance with the
     provisions of this Section, such Authenticating Agent shall resign
     immediately in the manner and with the effect specified in this Section.

          (b) Any corporation into which an Authenticating Agent may be merged
     or converted or with which it may be consolidated, or any corporation
     resulting from any merger, conversion or consolidation to which such
     Authenticating Agent shall be a party, or any corporation succeeding to the
     corporate agency or corporate trust business of an Authenticating Agent,
     shall continue to be an Authenticating Agent, provided such corporation
     shall be otherwise eligible under this Section, without the execution or
     filing of any paper or further act on the part of the Trustee or the
     Authenticating Agent.

          (c) An Authenticating Agent for any series of Securities may at any
     time resign by giving written notice of resignation to the Trustee for such
     series and to the Company. The Trustee for any series of Securities may at
     any time terminate the agency of an Authenticating Agent by giving written
     notice of termination to such Authenticating Agent and to the Company. Upon
     receiving such a notice of resignation or upon such a termination, or in
     case at any time such Authenticating Agent shall cease to be eligible in
     accordance with the provisions of this Section, the Trustee for such series
     may appoint a successor Authenticating Agent which shall be acceptable to
     the Company and shall give notice of such appointment to all Holders of
     Securities of the series with respect to which


                                       60



     such Authenticating Agent will serve in the manner set forth in Section
     106. Any successor Authenticating Agent upon acceptance of its appointment
     hereunder shall become vested with all the rights, powers and duties of its
     predecessor hereunder, with like effect as if originally named as an
     Authenticating Agent herein. No successor Authenticating Agent shall be
     appointed unless eligible under the provisions of this Section.

          (d) The Company agrees to pay to each Authenticating Agent from time
     to time reasonable compensation including reimbursement of its reasonable
     expenses for its services under this Section.

          (e) If an appointment with respect to one or more series is made
     pursuant to this Section, the Securities of such series may have endorsed
     thereon, in addition to or in lieu of the Trustee's certificate of
     authentication, an alternate certificate of authentication substantially in
     the following form:

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

                                        [                                      ]
                                         --------------------------------------
                                        as Trustee


                                        By
                                           -------------------------------------
                                                 as Authenticating Agent


                                        By
                                           -------------------------------------
                                                  Authorized Signatory

     Section 612. Conflicting Interests.

     The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.

     Section 613. Appointment of Co-Trustee.

          (a) For the purpose of meeting any legal requirements of any
     jurisdiction in which the Company may at the time be located in connection
     with the enforcement of any right or the taking of any action on behalf of
     the Holders of any Securities issued hereunder, the Trustee shall have the
     power and may execute and deliver all instruments necessary to appoint one
     or more Persons to act as a co-trustee or co-trustees, or separate trustee
     or separate trustees, such powers, duties, obligations, rights and trusts
     as the Trustee may consider necessary or desirable. Each co-trustee or
     separate trustee hereunder shall be required to meet the terms of
     eligibility as a trustee under Section 607. The Trustee shall promptly
     notify the Holders and the Company of the appointment of a co-trustee or
     separate trustee under this section.

          (b) Every separate trustee and co-trustee shall, to the extent
     permitted by law, be appointed and act subject to the following provisions
     and conditions:


                                       61


               (1) all rights, powers, duties and obligations conferred or
          imposed upon the Trustee shall be conferred or imposed upon and
          exercised or performed by the Trustee and such separate trustee or
          co-trustee jointly (it being understood that such separate trustee or
          co-trustee is not authorized to act separately without the Trustee
          joining in such act), except to the extent that under any law of any
          jurisdiction in which any particular act or acts are to be performed
          the Trustee shall be incompetent or unqualified to perform such act or
          acts, in which event such rights, powers, duties and obligations shall
          be exercised and performed singly by such separate trustee or
          co-trustee, but solely at the direction of the Trustee;

               (2) no trustee hereunder shall be personally liable by reason of
          any act or omission of any other trustee hereunder;

               (3) the Trustee may at any time accept the resignation of or
          remove any separate trustee or co-trustee;

               (4) any notice, request or other writing given to the Trustee
          shall be deemed to have been given to each of the then separate
          trustees and co-trustees, as effectively as if given to each of them.
          Every instrument appointing any separate trustee or co-trustee shall
          refer to this Indenture and the conditions of this Article VI. Each
          separate trustee and co-trustee, upon its acceptance of the trusts
          conferred, shall be vested with the estates or property specified in
          its instrument of appointment, either jointly with the Trustee or
          separately, as may be provided therein, subject to all the provisions
          of this Indenture, specifically including every provision of this
          Indenture relating to the conduct of, affecting the liability of, or
          affording protection or rights (including the rights to compensation,
          reimbursement and indemnification hereunder) to, the Trustee. Every
          such instrument shall be filed with the Trustee; and

               (5) any separate trustee or co-trustee may at any time constitute
          the Trustee its agent or attorney-in-fact with full power and
          authority, to the extent not prohibited by law, to do any lawful act
          under or in respect of this Indenture on its behalf and in its name
          for the purposes of enforcing any rights or taking any other action on
          behalf of the Holders of any Securities issued hereunder.

     Section 614. Preferential Collection of Claims Against Company.

     If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to and
shall take all actions necessary to comply with the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).

     Section 615. Trustee's Application for Instructions from the Company.

     Any application by the Trustee for written instructions from the Company
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such


                                       62



omission shall be effective. The Trustee shall not be liable for any action
taken by, or omission of, the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

     Section 701. Disclosure of Names and Addresses of Holders.

          (a) The Company will furnish or cause to be furnished to the Trustee:

               (1) semiannually, not later than 15 days after each Regular
          Record Date for Securities of each series at the time Outstanding, a
          list in such form as the Trustee may reasonably require, of the names
          and addresses of the Holders of Registered Securities as of such
          Regular Record Date, or if there is no Regular Record Date for
          interest for such series of Securities, semiannually, upon such dates
          as are set forth in the Board Resolution, Officers' Certificates
          indenture supplemental hereto authorizing such series, and

               (2) at such other times as the Trustee may request in writing,
          within 30 days after the receipt by the Company of any such request, a
          list of similar form and content as of a date not more than 15 days
          prior to the time such list is furnished; provided, that, so long as
          the Trustee is the Security Registrar, no such list shall be required
          to be furnished.

          (b) The Trustee shall preserve, in as current a form as is reasonably
     practicable, the names and addresses of Holders contained in the most
     recent list furnished to the Trustee as provided in Section 701 and the
     names and addresses of Holders received by the Trustee in its capacity as
     Security Registrar. The Trustee may destroy any list furnished to it as
     provided in Section 701 upon receipt of a new list so furnished.

          (c) The rights of the Holders to communicate with other Holders with
     respect to their rights under this Indenture or under the Securities, and
     the corresponding rights and privileges of the Trustee, shall be as
     provided by the Trust Indenture Act.

          (d) Every Holder of Securities or coupons, by receiving and holding
     the same, agrees with the Company and the Trustee that neither the Company
     nor the Trustee nor any Authenticating Agent nor any Paying Agent nor any
     Security Registrar shall be held accountable by reason of the disclosure of
     any information as to the names and addresses of the Holders of Securities
     in accordance with TIA Section 312, regardless of the source from which
     such information was derived, and that the Trustee shall not be held


                                       63



     accountable by reason of mailing any material pursuant to a request made
     under TIA Section 312(b).

     Section 702. Reports by Trustee.

     Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Securities pursuant to this Indenture, the Trustee
shall transmit by mail to all Holders of Securities as provided in TIA Section
313(c) a brief report dated as of such May 15 if required by TIA Section 313(a).
A copy of each such report shall, at the time of such transmission to Holders,
be filed by the Trustee with each stock exchange, if any, upon which the
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee of the listing or de-listing of the Securities
on any stock exchange.

     Section 703. Reports by Company.

          (a) The Company will:

               (1) file with the Trustee, within 15 days after the Company is
          required to file the same with the Commission, copies of the annual
          reports and of the information, documents, and other reports (or
          copies of such portions of any of the foregoing as the Commission may
          from time to time by rules and regulations prescribe) which the
          Company may be required to file with the Commission pursuant to
          Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
          or, if the Company is not required to file information, documents or
          reports pursuant to either of such Sections, then it will file with
          the Trustee and the Commission, in accordance with rules and
          regulations prescribed from time to time by the Commission, such of
          the supplementary and periodic information, documents and reports
          which may be required pursuant to Section 13 of the Securities
          Exchange Act of 1934 in respect of a security listed and registered on
          a national securities exchange as may be prescribed from time to time
          in such rules and regulations;

               (2) file with the Trustee and the Commission, in accordance with
          rules and regulations prescribed from time to time by the Commission,
          such additional information, documents and reports with respect to
          compliance by the Company with the conditions and covenants of this
          Indenture as may be required from time to time by such rules and
          regulations; and

               (3) transmit by mail to the Holders of Securities, within 30 days
          after the filing thereof with the Trustee, in the manner and to the
          extent provided in TIA Section 313(c), such summaries of any
          information, documents and reports required to be filed by the Company
          pursuant to clauses (1) and (2) of this Section 703(a) as may be
          required by rules and regulations prescribed from time to time by the
          Commission.

          (b) Delivery of such reports, information and documents to the Trustee
     pursuant to Section 703(a) is for informational purposes only and the
     Trustee's receipt of such shall not constitute constructive notice of any
     information contained therein or


                                       64



     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 704. Calculation of Original Issue Discount.

     Upon request of the Trustee, 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
     (including daily rates and accrual periods), if any, accrued on Outstanding
     Securities as of the end of such year and

          (b) such other specific information relating to such original issue
     discount as may then be relevant under the Internal Revenue Code of 1986,
     as amended from time to time.

                                  ARTICLE VIII

                  CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

     Section 801. Company May Consolidate, Etc., Only on Certain Terms.

     The Company shall not consolidate with or merge with or into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:

          (a) either the Company shall be the continuing corporation, or the
     corporation (if other than the Company) formed by such consolidation or
     into which the Company is merged or the Person which acquires by conveyance
     or transfer the properties and assets of the Company substantially as an
     entirety shall expressly assume, by an indenture supplemental hereto,
     executed and delivered to the Trustee, in form satisfactory to the Trustee,
     all of the obligations of the Company under this Indenture and on all the
     Securities;

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

          (c) the Company and the successor Person have delivered to the Trustee
     an Officers' Certificate and an Opinion of Counsel each stating that such
     consolidation, merger, conveyance or transfer and such supplemental
     indenture comply with this Article and that all conditions precedent herein
     provided for relating to such transaction have been complied with.

     Section 802. Successor Person Substituted.

          (a) Upon any consolidation or merger, or any conveyance or transfer of
     the properties and assets of the Company substantially as an entirety in
     accordance with Section 801, the successor corporation formed by such
     consolidation or into which the


                                       65



     Company is merged or the successor Person to which such conveyance or
     transfer is made shall succeed to, and be substituted for, and may exercise
     every right and power of, the Company under this Indenture with the same
     effect as if such successor had been named as the Company herein; and in
     the event of any such conveyance or transfer (except by a lease), the
     Company shall be discharged from all its obligations and covenants under
     this Indenture and the Securities and coupons and may be dissolved and
     liquidated.

          (b) Such successor entity thereupon may cause to be signed, and may
     issue either in its own name or in the name of the Company, any or all of
     the Securities issuable hereunder which theretofore shall not have been
     signed by the Company and delivered to the Trustee; and, upon the order of
     such successor entity, instead of the Company, and subject to all the
     terms, conditions and limitations prescribed in this Indenture, the Trustee
     shall authenticate and shall deliver any Securities which previously shall
     have been signed and delivered by the officers of the Company to the
     Trustee for authentication, and any Securities which such successor entity
     thereafter shall cause to be signed and delivered to the Trustee for that
     purpose. All the Securities of any series so issued shall in all respects
     have the same legal rank and benefit under this Indenture as the Securities
     of such series theretofore or thereafter issued in accordance with the
     terms of this Indenture as though all of such Securities had been issued at
     the date of the execution hereof.

          (c) In case of any such merger in which the Company is not the
     surviving corporation or any such consolidation, sale, lease, assignment,
     transfer or conveyance, such changes in phraseology and form (but not in
     substance) may be made in the Securities thereafter to be issued as may be
     appropriate.

     Section 803. Officers' Certificate and Opinion of Counsel.

     Any consolidation, merger, sale, conveyance, assignment, transfer or lease
permitted under Section 801 is also subject to the condition that the Trustee
shall have received an Officers' Certificate and an Opinion of Counsel to the
effect that any such consolidation, merger, sale, conveyance, transfer,
assignment or lease, and the assumption by any successor Person and any such
supplemental indenture, comply with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

     Section 901. Supplemental Indentures Without Consent of Holders.

     Without the consent of any Holders of Securities or coupons, the Company
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:


                                       66



          (a) to evidence the succession of another Person to the Company and
     the assumption by any such successor of the covenants of the Company herein
     and in the Securities contained; or

          (b) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Securities (and if such covenants are to be
     for the benefit of less than all series of Securities, stating that such
     covenants are expressly being included solely for the benefit of such
     series) or to surrender any right or power herein conferred upon the
     Company; or

          (c) to add any additional Events of Default for the benefit of the
     Holders of all or any series of Securities (and if such Events of Default
     are to be for the benefit of less than all series of Securities, stating
     that such Events of Default are expressly being included solely for the
     benefit of such series); provided, that, in respect of any such additional
     Events of Default such supplemental indenture may provide for a particular
     period of grace after default (which period may be shorter or longer than
     that allowed in the case of other defaults) or may provide for an immediate
     enforcement upon such default or may limit the remedies available to the
     Trustee upon such default or may limit the right of the Holders of a
     majority in aggregate principal amount of that or those series of
     Securities to which such additional Events of Default apply to waive such
     default; or

          (d) to add to or change any of the provisions of this Indenture to
     provide that Bearer Securities may be registrable as to principal, to
     change or eliminate any restrictions on the payment of principal of or any
     premium or interest on Bearer Securities, to permit Bearer Securities to be
     issued in exchange for Registered Securities, to permit Bearer Securities
     to be issued in exchange for Bearer Securities of other authorized
     denominations or to permit or facilitate the issuance of Securities in
     uncertificated form; provided that any such action shall not adversely
     affect the interests of the Holders of Securities of any series or any
     related coupons in any material respect; or

          (e) to change or eliminate any of the provisions of this Indenture;
     provided that any such change or elimination shall become effective only
     when there is no Security Outstanding of any series created prior to the
     execution of such supplemental indenture which is entitled to the benefit
     of such provision; or

          (f) to secure the Securities pursuant to the requirements of such
     indenture supplement, if applicable; or

          (g) to establish the form or terms of Securities of any series and any
     related coupons as permitted by Sections 201 and 301, including the
     provisions and procedures relating to Securities convertible into or
     exchangeable for any securities of any Person (including the Company); or

          (h) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or


                                       67



     change any of the provisions of this Indenture as shall be necessary to
     provide for or facilitate the administration of the trusts hereunder by
     more than one Trustee; or

          (i) to close this indenture with respect to the authentication and
     delivery of additional series of Securities, to cure any ambiguity, to
     correct or supplement any provision herein which may be inconsistent with
     any other provision herein, or to make any other provisions with respect to
     matters or questions arising under this Indenture; provided that such
     action shall not adversely affect the interests of the Holders of
     Securities of any series or any related coupons in any material respect; or

          (j) to supplement any of the provisions of this Indenture to such
     extent as shall be necessary to permit or facilitate the defeasance and
     discharge of any series of Securities pursuant to Sections 401, 1402 and
     1403; provided that any such action shall not adversely affect the
     interests of the Holders of Securities of such series and any related
     coupons or any other series of Securities in any material respect; or

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

     Section 902. Supplemental Indentures with Consent of Holders.

          (a) With the consent of the Holders of not less than a majority in
     principal amount of all Outstanding Securities affected by such
     supplemental indenture, with each series voting separately, by Act of said
     Holders delivered to the Company and the Trustee, the Company, when
     authorized by or pursuant to a Board Resolution, and the Trustee may enter
     into an indenture or indentures supplemental hereto for the purpose of
     adding any provisions to or changing in any manner or eliminating any of
     the provisions of this Indenture which affects such series of Securities or
     of modifying in any manner the rights of the Holders of Securities of such
     series under this Indenture; provided, that, no such supplemental indenture
     shall, without the consent of the Holder of each Outstanding Security of
     such series affected thereby:

               (1) change the Stated Maturity of the principal of (or premium,
          if any, on) or any installment of principal of or interest on, any
          Security, subject to the provisions of Section 308; or reduce the
          principal amount thereof (or premium, if any) or the rate of interest
          (or change the manner of calculation of interest), thereon, or any
          Additional Amounts with respect thereto, or any premium payable upon
          the redemption thereof, or change any obligation of the Company to pay
          Additional Amounts pursuant to Section 1005 (except as contemplated by
          Section 801(a) and permitted by Section 901(a)), or reduce the amount
          of the principal of an Original Issue Discount Security or Indexed
          Security that would be due and payable upon a declaration of
          acceleration of the Maturity thereof pursuant to Section 502 or the
          amount thereof provable in bankruptcy pursuant to Section 504, or
          adversely affect any right of repayment at the option of the Holder of
          any Security, or change any Place of Payment where, or the Currency in
          which, any Security or any premium or interest or Additional Amount
          thereon is payable, or impair the right to institute suit for the
          enforcement of any such payment on or


                                       68



          after the Stated Maturity thereof (or, in the case of redemption or
          repayment at the option of the Holder, on or after the Redemption Date
          or the Repayment Date, as the case may be), or adversely affect any
          right to convert or exchange any Security as may be provided pursuant
          to Section 301 herein, or

               (2) reduce the percentage in principal amount of the Outstanding
          Securities of any series, the consent of whose Holders is required for
          any such supplemental indenture, or the consent of whose Holders is
          required for any waiver with respect to such series (of compliance
          with certain provisions of this Indenture or certain defaults
          hereunder and their consequences) provided for in this Indenture, or
          reduce the requirements of Section 1504 for quorum or voting, or

               (3) modify any of the provisions of this Section, Section 514 or
          Section 1007, except to increase any such percentage or to provide
          that certain other provisions of this Indenture that affect such
          series cannot be modified or waived without the consent of the Holder
          of each Outstanding Security affected thereby, or

               (4) cause the Securities to be expressly subordinated to other
          indebtedness of the Company.

          (b) It shall not be necessary for any Act of Holders under this
     Section to approve the particular form of any proposed supplemental
     indenture, but it shall be sufficient if such Act shall approve the
     substance thereof.

          (c) A supplemental indenture which changes or eliminates any covenant
     or other provision of this Indenture which has expressly been included
     solely for the benefit of one or more particular series of Securities, or
     which modifies the rights of the Holders of Securities of such series with
     respect to such covenant or other provision, shall be deemed not to affect
     the rights under this Indenture of the Holders of Securities of any other
     series.

          (d) The Company may, but shall not be obligated to, fix a record date
     for the purpose of determining the Persons entitled to consent to any
     indenture supplemental hereto. If a record date is fixed, the Holders at
     the close of Business on such record date, or their duly designated
     proxies, and only such Persons, shall be entitled to consent to such
     supplemental indenture, whether or not such Holders remain Holders after
     such record date; provided that unless such consent shall have become
     effective by virtue of the requisite percentage having been obtained prior
     to the date which is 90 days after such record date, any such consent
     previously given shall automatically and without further action by any
     Holder be cancelled and of no further effect.

     Section 903. Execution of Supplemental Indentures.

     In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon (subject to the


                                       69



provisions of Article VI hereof), an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

     Section 904. 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
and of any coupon appertaining thereto shall be bound thereby.

     Section 905. Conformity with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

     Section 906. Reference in Securities to Supplemental Indentures.

     Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article 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 of any series so modified as to conform, in the opinion of the
Trustee and the Company, 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 of such series.

                                    ARTICLE X

                                    COVENANTS

     Section 1001. Payment of Principal, Premium, if any, and Interest.

     The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest and Additional Amounts, if any, on the Securities
of that series in accordance with the terms of such series of Securities, any
coupons appertaining thereto and this Indenture. Any interest due on Bearer
Securities on or before Maturity, other than Additional Amounts, if any, payable
as provided in Section 1005 in respect of principal of (or premium, if any, on)
such a Security, shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they
severally mature. Unless otherwise specified with respect to Securities of any
series pursuant to Section 301, at the option of the Company, all payments of
principal may be paid by check to the registered Holder of the Registered
Security or other person entitled thereto against surrender of such Security or
wire transfer to an account in the United States maintained by the Payee.


                                       70



     Section 1002. Maintenance of Office or Agency.

          (a) If Securities of a series are issuable only as Registered
     Securities, the Company shall maintain in each Place of Payment for any
     series of Securities an office or agency where Securities of that series
     may be presented or surrendered for payment, where Securities of that
     series may be surrendered for registration of transfer or exchange, where
     Securities of that series that are convertible or exchangeable may be
     surrendered for conversion or exchange, as applicable, and where notices
     and demands to or upon the Company in respect of the Securities of that
     series and this Indenture may be served. If Securities of a series are
     issuable as Bearer Securities, the Company will maintain:

               (1) in the Borough of Manhattan, The City of New York, an office
          or agency where any Registered Securities of that series may be
          presented or surrendered for payment, where any Registered Securities
          of that series may be surrendered for registration of transfer, where
          Securities of that series may be surrendered for exchange, where
          Securities of that series that are convertible or exchangeable may be
          surrendered for conversion or exchange, as applicable, and where
          notices and demands to or upon the Company in respect of the
          Securities of that series and this Indenture may be served and where
          Bearer Securities of that series and related coupons may be presented
          or surrendered for payment in the circumstances described in the
          clause (2) of this Subsection (and not otherwise),

               (2) subject to any laws or regulations applicable thereto, in a
          Place of Payment for that series which is located outside the United
          States, an office or agency where Securities of that series and
          related coupons may be presented and surrendered for payment;
          provided, that, if the Securities of that series are listed on the
          Luxembourg Stock Exchange or any other stock exchange located outside
          the United States and such stock exchange shall so require, the
          Company will maintain a Paying Agent for the Securities of that series
          in Luxembourg or any other required city located outside the United
          States, as the case may be, so long as the Securities of that series
          are listed on such exchange, and

               (3) subject to any laws or regulations applicable thereto, in a
          Place of Payment for that series located outside the United States an
          office or agency where any Registered Securities of that series may be
          surrendered for registration of transfer, where Securities of that
          series may be surrendered for exchange, where Securities of that
          series that are convertible or exchangeable may be surrendered for
          conversion or exchange, as applicable and where notices and demands to
          or upon the Company in respect of the Securities of that series and
          this Indenture may be served. The Company will give prompt written
          notice to the Trustee of the location, and any change in the location,
          of each such office or agency.

          (b) 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 Corporate Trust Office of


                                       71



     the Trustee, except that Bearer Securities of that series and the related
     coupons may be presented and surrendered for payment at the offices
     specified in the Security, in London, England, and the Company hereby
     appoints the same as its agent to receive such respective presentations,
     surrenders, notices and demands, and the Company hereby appoints the
     Trustee its agent to receive all such presentations, surrenders, notices
     and demands.

          (c) Unless otherwise specified with respect to any Securities pursuant
     to Section 301, no payment of principal, premium or interest on Bearer
     Securities shall be made at any office or agency of the Company in the
     United States or by check mailed to any address in the United States or by
     transfer to an account maintained with a bank located in the United States;
     provided, that, if the Securities of a series are payable in Dollars,
     payment of principal of (and premium, if any) and interest, if any, on any
     Bearer Security shall be made at the office of the Company's Paying Agent
     in the Borough of Manhattan, The City of New York, if (but only if) payment
     in Dollars of the full amount of such principal, premium or interest, as
     the case may be, at all offices or agencies outside the United States
     maintained for such purpose by the Company in accordance with this
     Indenture, is illegal or effectively precluded by exchange controls or
     other similar restrictions.

          (d) The Company may from time to time designate one or more other
     offices or agencies where the Securities of one or more series may be
     presented or surrendered for any or all of such purposes, and may from time
     to time rescind such designations; provided, that, no such designation or
     rescission shall in any manner relieve the Company of its obligation to
     maintain an office or agency in accordance with the requirements set forth
     above for Securities of any series for such purposes. The Company will give
     prompt written notice to the Trustee of any such designation or rescission
     and of any change in the location of any such other office or agency.
     Unless otherwise specified with respect to any Securities pursuant to
     Section 301 with respect to a series of Securities, the Company hereby
     designates as a Place of Payment for each series of Securities the office
     or agency of the Company in the Borough of Manhattan, The City of New York,
     and initially appoints the Trustee at its Corporate Trust Office as Paying
     Agent in such city and as its agent to receive all such presentations,
     surrenders, notices and demands.

          (e) Unless otherwise specified with respect to any Securities pursuant
     to Section 301, if and so long as the Securities of any series

               (1)  are denominated in a Currency other than Dollars,

               (2)  may be payable in a Currency other than Dollars, or

               (3)  so long as it is required under any other provision of the
                    Indenture,

the Company will maintain with respect to each such series of Securities, or as
so required, at least one Exchange Rate Agent.


                                       72



     Section 1003. Money for Securities Payments to be Held in Trust.

          (a) If the Company or any Subsidiary or any Affiliate of any of them
     shall at any time act as Paying Agent with respect to any series of any
     Securities and any related coupons, it will, on or before each due date of
     the principal of (or premium, if any) or interest, if any, on any of the
     Securities of that series, segregate and hold in trust for the benefit of
     the Persons entitled thereto a sum in the Currency in which the Securities
     of such series are payable (except as otherwise specified pursuant to
     Section 301 for the Securities of such series and except, if applicable, as
     provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay the
     principal (and premium, if any) and interest, if any, on Securities of such
     series so becoming due until such sums shall be paid to such Persons or
     otherwise disposed of as herein provided, and will promptly notify the
     Trustee of its action or failure so to act.

          (b) Whenever the Company shall have one or more Paying Agents for any
     series of Securities and any related coupons, it will, on or before each
     due date of the principal of (or premium, if any) or interest, if any, on
     any Securities of that series, deposit with a Paying Agent a sum (in the
     Currency described in Section 1003(a)) sufficient to pay the principal (or
     premium, if any) or interest, if any, so becoming due, such sum to be held
     in trust for the benefit of the Persons entitled to such principal, premium
     or interest and (unless such Paying Agent is the Trustee) the Company will
     promptly notify the Trustee of its action or failure so to act.

          (c) The Company may at any time, for the purpose of obtaining the
     satisfaction and discharge of this Indenture or for any other purpose, pay,
     or by Company Order direct any Paying Agent to pay, to the Trustee all sums
     held in trust by the Company or such Paying Agent, such sums to be held by
     the Trustee upon the same trusts as those upon which such sums were held by
     the Company or such Paying Agent; and, upon such payment by any Paying
     Agent to the Trustee, such Paying Agent shall be released from all further
     liability with respect to such sums.

          (d) Except as otherwise provided in the Securities of any series, any
     money deposited with the Trustee or any Paying Agent, or then held by the
     Company, in trust for the payment of the principal of (or premium, if any)
     or interest, if any, on any Security of any series and remaining unclaimed
     for two years after such principal, premium or interest has become due and
     payable shall be paid to the Company upon Company Request or (if then held
     by the Company) shall be discharged from such trust; and the Holder of such
     Security shall thereafter, as an unsecured general creditor, look only to
     the Company for payment of such principal, premium or interest on any
     Security, without interest thereon, and all liability of the Trustee or
     such Paying Agent with respect to such trust money, and all liability of
     the Company as trustee thereof, shall thereupon cease; provided, that, the
     Trustee or such Paying Agent, before being required to make any such
     repayment, may at the expense of the Company cause to be published once, in
     an Authorized Newspaper in each Place of Payment for such series, or mailed
     to each Holder of Registered Securities of such series, notice that such
     money remains unclaimed and that, after a date specified therein, which
     shall not be less than 30 days from the date


                                       73



     of such publication, any unclaimed balance of such money then remaining
     will be repaid to the Company.

     Section 1004. Corporate Existence.

     Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and material rights and franchises (charter and statutory); provided,
that, neither the Company shall be required to preserve any such right or
franchise if it shall determine that the preservation thereof is no longer
necessary or desirable in the conduct of the business of the Company; and
provided further, however, that the foregoing shall not prohibit a sale,
transfer or conveyance of a Subsidiary or any of its assets in compliance with
the terms of the Indenture.

     Section 1005. Additional Amounts.

          (a) If any Securities of a series provide for the payment of
     Additional Amounts, the Company will pay to the Holder of a Security of
     such series or any coupon appertaining thereto Additional Amounts as may be
     specified as contemplated by Section 301. Whenever in this Indenture there
     is mentioned, in any context, the payment of the principal of (or premium,
     if any) or interest, if any, on any Security of any series or payment of
     any related coupon or the net proceeds received on the sale or exchange of
     any Security of any series, such mention shall be deemed to include mention
     of the payment of Additional Amounts provided by the terms of such series
     established pursuant to Section 301 to the extent that, in such context,
     Additional Amounts are, were or would be payable in respect thereof
     pursuant to such terms and express mention of the payment of Additional
     Amounts (if applicable) in any provisions hereof shall not be construed as
     excluding Additional Amounts in those provisions hereof where such express
     mention is not made.

          (b) Except as otherwise specified as contemplated by Section 301, if
     the Securities of a series provide for the payment of Additional Amounts,
     at least 10 days prior to the first Interest Payment Date with respect to
     that series of Securities (or if the Securities of that series will not
     bear interest prior to Maturity, the first day on which a payment of
     principal and any premium is made), and at least 10 days prior to each date
     of payment of principal, premium or interest if there has been any change
     with respect to the matters set forth in the below-mentioned Officers'
     Certificate, the Company will furnish the Trustee and the Company's
     principal Paying Agent or Paying Agents, if other than the Trustee, with an
     Officers' Certificate instructing the Trustee and such Paying Agent or
     Paying Agents whether such payment of principal, premium or interest on the
     Securities of that series shall be made to Holders of Securities of that
     series or any related coupons who are not United States persons without
     withholding for or on account of any tax, assessment or other governmental
     charge described in the Securities of the series. If any such withholding
     shall be required, then such Officers' Certificate shall specify by country
     the amount, if any, required to be withheld on such payments to such
     Holders of Securities of that series or related coupons and the Company
     will pay to the Trustee or such Paying Agent the Additional Amounts
     required by the terms of such Securities. In the event that the Trustee or
     any Paying Agent, as the case may be, shall not so receive


                                       74



     the above-mentioned certificate, then the Trustee or such Paying Agent
     shall be entitled (1) to assume that no such withholding or deduction is
     required with respect to any payment of principal of (or premium, if any)
     or interest with respect to any Securities of a series or related coupons
     until it shall have received a certificate advising otherwise and (2) to
     make all payments of principal of (or premium, if any) and interest with
     respect to the Securities of a series or related coupons without
     withholding or deductions until otherwise advised. The Company covenants to
     indemnify the Trustee and any Paying Agent for, and to hold them harmless
     against, any loss, liability or expense reasonably incurred without
     negligence or bad faith on their part arising out of or in connection with
     actions taken or omitted by any of them in reliance on any Officers'
     Certificate furnished pursuant to this Section.

     Section 1006. Statement as to Compliance.

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and, if the Company is in default, specifying all such defaults
and the nature and status thereof of which he or she may have knowledge. For
purposes of this Section 1006, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.

     Section 1007. Waiver of Certain Covenants.

     With respect to the Securities of any series, the Company may omit in any
particular instance to comply with any term, provision or condition specified
pursuant to Section 301 as being subject to this Section 1007, if before or
after the time for such compliance the Holders of at least a majority in
principal amount of all Outstanding Securities of such series affected by such
term, provision or condition, by Act of such Holders, waive such compliance in
such instance or generally waive compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.

     Section 1008. Statement by Officers as to Default.

     The Company shall deliver to the Trustee, as soon as possible and in any
event within ten days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.


                                       75


                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

     Section 1101. Applicability of Article.

     Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.

     Section 1102. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.

     Section 1103. Selection by Trustee of Securities to be Redeemed.

          (a) If less than all the Securities of any series issued on the same
     day with the same terms are to be redeemed, the particular Securities to be
     redeemed shall be selected not more than 60 days prior to the Redemption
     Date by the Trustee, from the Outstanding Securities of such series issued
     on such date with the same terms not previously called for redemption, by
     such method as the Trustee shall deem fair and appropriate and which may
     provide for the selection for redemption of portions (equal to the minimum
     authorized denomination for Securities of that series or any integral
     multiple thereof) of the principal amount of Securities of such series of a
     denomination larger than the minimum authorized denomination for Securities
     of that series.

          (b) The Trustee shall promptly notify the Company and the Security
     Registrar (if other than itself) in writing of the Securities selected for
     redemption and, in the case of any Securities selected for partial
     redemption, the principal amount thereof to be redeemed.

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

     Section 1104. Notice of Redemption.

          (a) Notice of redemption shall be given in the manner provided in
     Section 106, not less than 30 days nor more than 60 days prior to the
     Redemption Date, unless a


                                       76



     shorter period is specified by the terms of such series established
     pursuant to Section 301, to each Holder of Securities to be redeemed, but
     failure to give such notice in the manner herein provided to the Holder of
     any Security designated for redemption as a whole or in part, or any defect
     in the notice to any such Holder, shall not affect the validity of the
     proceedings for the redemption of any other such Security or portion
     thereof.

          (b) Any notice that is mailed to the Holders of Registered Securities
     in the manner herein provided shall be conclusively presumed to have been
     duly given, whether or not the Holder receives the notice. All notices of
     redemption shall state:

               (1) the Redemption Date,

               (2) the Redemption Price and the amount of accrued interest, if
          any, to the Redemption Date payable as provided in Section 1106,

               (3) if less than all the Outstanding Securities of any series are
          to be redeemed, the identification (and, in the case of partial
          redemption, the principal amount) of the particular Securities to be
          redeemed,

               (4) in case any Security is to be redeemed in part only, the
          notice which relates to such Security shall state that on and after
          the Redemption Date, upon surrender of such Security, the Holder will
          receive, without a charge, a new Security or Securities of authorized
          denominations for the principal amount thereof remaining unredeemed,

               (5) that on the Redemption Date, the Redemption Price and accrued
          interest, if any, to the Redemption Date payable as provided in
          Section 1106 will become due and payable upon each such Security, or
          the portion thereof, to be redeemed and, if applicable, that interest
          thereon shall cease to accrue on and after said date,

               (6) the Place or Places of Payment where such Securities,
          together in the case of Bearer Securities with all coupons
          appertaining thereto, if any, maturing after the Redemption Date, are
          to be surrendered for payment of the Redemption Price and accrued
          interest, if any,

               (7) that the redemption is for a sinking fund, if such is the
          case,

               (8) that, unless otherwise specified in such notice, Bearer
          Securities of any series, if any, surrendered for redemption must be
          accompanied by all coupons maturing subsequent to the Redemption Date
          or the amount of any such missing coupon or coupons will be deducted
          from the Redemption Price, unless security or indemnity satisfactory
          to the Company, the Trustee for such series and any Paying Agent is
          furnished,

               (9) if Bearer Securities of any series are to be redeemed and any
          Registered Securities of such series are not to be redeemed, and if
          such Bearer Securities may be exchanged for Registered Securities not
          subject to redemption


                                       77



          on this Redemption Date pursuant to Section 305 or otherwise, the last
          date, as determined by the Company, on which such exchanges may be
          made, and

               (10) the CUSIP number of such Security, if any.

          (c) Notice of redemption of Securities to be redeemed shall be given
     by the Company or, at the Company's request, by the Trustee in the name and
     at the expense of the Company.

     Section 1105. Deposit of Redemption Price.

     On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
XII, segregate and hold in trust as provided in Section 1003) an amount of money
in the Currency in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series
and except, if applicable, as provided in Sections 312(b), 312(d) and 312(e))
sufficient to pay on the Redemption Date the Redemption Price of, and (unless
otherwise specified pursuant to Section 301) accrued and unpaid interest, if
any, on, all the Securities or portions thereof which are to be redeemed on that
date.

     Section 1106. Securities Payable on Redemption Date.

          (a) Notice of redemption having been given as aforesaid, the
     Securities of any series so to be redeemed shall, on the Redemption Date,
     become due and payable at the Redemption Price therein specified in the
     Currency in which the Securities of such series are payable (except as
     otherwise specified pursuant to Section 301 for the Securities of such
     series and except, if applicable, as provided in Sections 312(b), 312(d)
     and 312(e)) (together with accrued interest, if any, to the Redemption
     Date), and from and after such date (unless the Company shall default in
     the payment of the Redemption Price and accrued interest, if any) such
     Securities shall if the same were interest-bearing cease to bear interest
     and the coupons for such interest appertaining to any Bearer Securities so
     to be redeemed, except to the extent provided below, shall be void. Upon
     surrender of any such Security for redemption in accordance with said
     notice, together with all coupons, if any, appertaining thereto maturing
     after the Redemption Date, such Security shall be paid by the Company at
     the Redemption Price, together with accrued interest, if any, to the
     Redemption Date; provided, that, installments of interest on Bearer
     Securities whose Stated Maturity is on or prior to the Redemption Date
     shall be payable only at an office or agency located outside the United
     States (except as otherwise provided in Section 1002) and, unless otherwise
     specified as contemplated by Section 301, only upon presentation and
     surrender of coupons for such interest; and provided further that
     installments of interest on Registered Securities whose Stated Maturity is
     prior to (or, if specified pursuant to Section 301, on) the Redemption Date
     shall be payable to the Holders of such Securities, or one or more
     Predecessor Securities, registered as such at the close of business on the
     relevant Record Dates according to their terms and the provisions of
     Section 307.


                                       78



          (b) If any Bearer Security surrendered for redemption shall not be
     accompanied by all appurtenant coupons maturing after the Redemption Date,
     such Security may be paid after deducting from the Redemption Price an
     amount equal to the face amount of all such missing coupons, or the
     surrender of such missing coupon or coupons may be waived by the Company
     and the Trustee if there be furnished to them such security or indemnity as
     they may require to save each of them and any Paying Agent harmless. If
     thereafter the Holder of such Security shall surrender to the Trustee or
     any Paying Agent any such missing coupon in respect of which a deduction
     shall have been made from the Redemption Price, such Holder shall be
     entitled to receive the amount so deducted; provided, that, interest
     represented by coupons shall be payable only at an office or agency located
     outside the United States (except as otherwise provided in Section 1002)
     and, unless otherwise specified as contemplated by Section 301, only upon
     presentation and surrender of those coupons.

          (c) If any Security called for redemption shall not be so paid upon
     surrender thereof for redemption, the principal (and premium, if any)
     shall, until paid, bear interest from the Redemption Date at the rate of
     interest set forth in such Security or, in the case of an Original Issue
     Discount Security, at the Yield to Maturity of such Security.

     Section 1107. Securities Redeemed in Part.

     Any Registered Security which is to be redeemed only in part (pursuant to
the provisions of this Article or of Article XII) shall be surrendered at a
Place of Payment therefor (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 his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities of the same series, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
However, if less than all the Securities of any series with differing issue
dates, interest rates and stated maturities are to be redeemed, the Company in
its sole discretion shall select the particular Securities to be redeemed and
shall notify the Trustee in writing thereof at least 45 days prior to the
relevant redemption date.

                                  ARTICLE XII

                                  SINKING FUNDS

     Section 1201. Applicability of Article.

          (a) The provisions of this Article shall be applicable to any sinking
     fund for the retirement of Securities of a series except as otherwise
     specified as contemplated by Section 301 for Securities of such series.

          (b) The minimum amount of any sinking fund payment provided for by the
     terms of Securities of any series is herein referred to as a "mandatory
     sinking fund payment", and any payment in excess of such minimum amount
     provided for by the


                                       79



     terms of such Securities of any series is herein referred to as an
     "optional sinking fund payment". If provided for by the terms of any
     Securities of any series, the cash amount of any mandatory sinking fund
     payment may be subject to reduction as provided in Section 1202. Each
     sinking fund payment shall be applied to the redemption of Securities of
     any series as provided for by the terms of Securities of such series.

     Section 1202. Satisfaction of Sinking Fund Payments with Securities.

     Except as otherwise specifically contemplated by Section 301 for Securities
of such series, the Company may, in satisfaction of all or any part of any
mandatory sinking fund payment with respect to the Securities of a series, (a)
deliver Outstanding Securities of such series (other than any previously called
for redemption) together in the case of any Bearer Securities of such series
with all unmatured coupons appertaining thereto and (b) apply as a credit
Securities of such series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, as provided for by the terms of such Securities; provided that such
Securities so delivered or applied as a credit have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the applicable Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.

     Section 1203. Redemption of Securities for Sinking Fund.

     Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the Currency in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202, and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered and credited. If such
Officers' Certificate shall specify an optional amount to be added in cash to
the next ensuing mandatory sinking fund payment, the Company shall thereupon be
obligated to pay the amount therein specified. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.


                                       80



                                  ARTICLE XIII

                       REPAYMENT AT THE OPTION OF HOLDERS

     Section 1301. Applicability of Article.

     Repayment of Securities of any series before their Stated Maturity at the
option of Holders thereof shall be made in accordance with the terms of such
Securities and (except as otherwise specified by the terms of such series
established pursuant to Section 301) in accordance with this Article.

     Section 1302. Repayment of Securities.

     Securities of any series subject to repayment in whole or in part at the
option of the Holders thereof will, unless otherwise provided in the terms of
such Securities, be repaid at the Repayment Price thereof, together with
interest, if any, thereon accrued to the Repayment Date specified in or pursuant
to the terms of such Securities. The Company covenants that on or before the
Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if
the Company or any Subsidiary or any Affiliate of any of them is acting as
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money in the Currency in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series and except, if applicable, as provided in Sections 312(b), 312(d)
and 312(e)) sufficient to pay the Repayment Price of, and (unless otherwise
specified pursuant to Section 301) accrued interest on, all the Securities or
portions thereof, as the case may be, to be repaid on such date.

     Section 1303. Exercise of Option.

     Securities of any series subject to repayment at the option of the Holders
thereof will contain an "Option to Elect Repayment" form on the reverse of such
Securities. To be repaid at the option of the Holder, any Security so providing
for such repayment, with the "Option to Elect Repayment" form on the reverse of
such Security duly completed by the Holder (or by the Holder's attorney duly
authorized in writing), must be received by the Company at the Place of Payment
therefor specified in the terms of such Security (or at such other place or
places of which the Company shall from time to time notify the Holders of such
Securities) not earlier than 45 days nor later than 30 days prior to the
Repayment Date. If less than the entire Repayment Price of such Security is to
be repaid in accordance with the terms of such Security, the portion of the
Repayment Price of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of such Security surrendered that is not to be repaid, must be
specified. Any Security providing for repayment at the option of the Holder
thereof may not be repaid in part if, following such repayment, the unpaid
principal amount of such Security would be less than the minimum authorized
denomination of Securities of the series of which such Security to be repaid is
a part. Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of the
repayment option by the Holder shall be irrevocable unless waived by the
Company.


                                       81



     Section 1304. When Securities Presented for Repayment Become Due and
Payable.

          (a) If Securities of any series providing for repayment at the option
     of the Holders thereof shall have been surrendered as provided in this
     Article and as provided by or pursuant to the terms of such Securities,
     such Securities or the portions thereof, as the case may be, to be repaid
     shall become due and payable and shall be paid by the Company on the
     Repayment Date therein specified, and on and after such Repayment Date
     (unless the Company shall default in the payment of such Securities on such
     Repayment Date) such Securities shall, if the same were interest-bearing,
     cease to bear interest and the coupons for such interest appertaining to
     any Bearer Securities so to be repaid, except to the extent provided below,
     shall be void. Upon surrender of any such Security for repayment in
     accordance with such provisions, together with all coupons, if any,
     appertaining thereto maturing after the Repayment Date, the Repayment Price
     of such Security so to be repaid shall be paid by the Company, together
     with accrued interest, if any, to the Repayment Date; provided, that,
     coupons whose Stated Maturity is on or prior to the Repayment Date shall be
     payable only at an office or agency located outside the United States
     (except as otherwise provided in Section 1002) and, unless otherwise
     specified pursuant to Section 301, only upon presentation and surrender of
     such coupons; and provided further that installments of interest on
     Registered Securities, whose Stated Maturity is prior to (or, if specified
     pursuant to Section 301, on) the Repayment Date shall be payable (but
     without interest thereon, unless the Company shall default in the payment
     thereof) to the Holders of such Securities, or one or more Predecessor
     Securities, registered as such at the close of business on the relevant
     Record Dates according to their terms and the provisions of Section 307.

          (b) If any Bearer Security surrendered for repayment shall not be
     accompanied by all appurtenant coupons maturing after the Repayment Date,
     such Security may be paid after deducting from the amount payable therefor
     as provided in Section 1302 an amount equal to the face amount of all such
     missing coupons, or the surrender of such missing coupon or coupons may be
     waived by the Company and the Trustee if there be furnished to them such
     security or indemnity as they may require to save each of them and any
     Paying Agent harmless. If thereafter the Holder of such Security shall
     surrender to the Trustee or any Paying Agent any such missing coupon in
     respect of which a deduction shall have been made as provided in the
     preceding sentence, such Holder shall be entitled to receive the amount so
     deducted; provided, that, interest represented by coupons shall be payable
     only at an office or agency located outside the United States (except as
     otherwise provided in Section 1002) and, unless otherwise specified as
     contemplated by Section 301, only upon presentation and surrender of those
     coupons.

          (c) If any Security surrendered for repayment shall not be so repaid
     upon surrender thereof, the Repayment Price shall, until paid, bear
     interest from the Repayment Date at the rate of interest set forth in such
     Security or, in the case of an Original Issue Discount Security, at the
     Yield to Maturity of such Security.


                                       82



     Section 1305. Securities Repaid in Part.

     Upon surrender of any Registered Security which is to be repaid in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the expense of the
Company, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.

                                  ARTICLE XIV

                       DEFEASANCE AND COVENANT DEFEASANCE

     Section 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance.

     If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of or within a series under Section 1402 or (b)
covenant defeasance of the Securities of or within a series under Section 1403,
then the provisions of such Section or Sections, as the case may be, together
with the other provisions of this Article (with such modifications thereto as
may be specified pursuant to Section 301 with respect to any Securities), shall
be applicable to such Securities and any coupons appertaining thereto, and the
Company may at its option by Board Resolution, at any time, with respect to such
Securities and any coupons appertaining thereto, elect to have Section 1402 (if
applicable) or Section 1403 (if applicable) be applied to such Outstanding
Securities and any coupons appertaining thereto upon compliance with the
conditions set forth below in this Article.

     Section 1402. Defeasance and Discharge.

          (a) Upon the Company's exercise of the above option applicable to this
     Section with respect to any Securities of or within a series, the Company
     shall each be deemed to have been discharged from its obligations with
     respect to such Outstanding Securities and any coupons appertaining thereto
     on the date the conditions set forth in Section 1404 are satisfied
     (hereinafter, "defeasance"). For this purpose, such defeasance means that
     the Company shall be deemed to have paid and discharged the entire
     indebtedness represented by such Outstanding Securities and any coupons
     appertaining thereto, which shall thereafter be deemed to be "Outstanding"
     only for the purposes of Section 1405 and the other Sections of this
     Indenture referred to in clauses (a) and (b) of this Section 1402, and to
     have satisfied all its other obligations under such Securities and any
     coupons appertaining thereto and this Indenture insofar as such Securities
     and any coupons appertaining thereto are concerned (and the Trustee, at the
     expense of the Company, shall execute proper instruments acknowledging the
     same), except for the following which shall survive until otherwise
     terminated or discharged hereunder:

               (1) the rights of Holders of such Outstanding Securities and any
          coupons appertaining thereto to receive, solely from the trust fund
          described in Section 1404 and as more fully set forth in such Section,
          payments in respect of


                                       83



          the principal of (and premium, if any) and interest, if any, on such
          Securities and any coupons appertaining thereto when such payments are
          due,

               (2) the obligations of the Company with respect to such
          Securities under Sections 304, 305, 306, 1002 and 1003 and with
          respect to the payment of Additional Amounts, if any, on such
          Securities as contemplated by Section 1005 with respect to the rights,
          if any, of the holders of such Securities to require the Company to
          repay such Securities as contemplated by Article XIII and with respect
          to the rights, if any, of holders to convert or exchange such
          Securities into other Securities,

               (3) the rights, powers, trusts, duties and immunities of the
          Trustee hereunder, and

               (4) subject to compliance with this Article XIV, the Company may
          exercise its option under this Section 1402 notwithstanding the prior
          exercise of its option under Section 1403 with respect to such
          Securities and any coupons appertaining thereto.

     Section 1403. Covenant Defeasance.

     Upon the Company's exercise of the above option applicable to this Section
with respect to any Securities of or within a series, the Company shall each be
released from its obligations under any other covenant specified pursuant to
Section 301, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to not be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with any
applicable covenant, or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to such Outstanding Securities and any
coupons appertaining thereto, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such Section or such other covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such Section or such other covenant or
by reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under clauses (4) or (7) of Section
501(a) or otherwise except as specified in accordance with Section 301, as the
case may be, but, except as specified above, the remainder of this Indenture and
such Securities and any coupons appertaining thereto shall be unaffected
thereby.

     Section 1404. Conditions to Defeasance or Covenant Defeasance.

     The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:

          (a) The Company shall irrevocably have deposited or caused to be
     deposited with the Trustee (or another trustee satisfying the requirements
     of Section 607 who shall


                                       84



     agree to comply with the provisions of this Article XIV applicable to it)
     as trust funds in trust for the purpose of making the following payments,
     specifically pledged as security for, and dedicated solely to, the benefit
     of the Holders of such Securities and any coupons appertaining thereto, (1)
     an amount (in such Currency in which such Securities and any coupons
     appertaining thereto are then specified as payable at Stated Maturity), or
     (2) Government Obligations applicable to such Securities and coupons
     appertaining thereto (determined on the basis of the Currency in which such
     Securities and coupons appertaining thereto are then specified as payable
     at Stated Maturity) which through the scheduled payment of principal and
     interest in respect thereof in accordance with their terms will provide,
     not later than one day before the due date of any payment of principal of
     (and premium, if any) and interest, if any, on such Securities and any
     coupons appertaining thereto, money in an amount, or (3) a combination
     thereof in an amount, sufficient, in the opinion of a nationally recognized
     firm of independent public accountants or nationally recognized independent
     investment banking firm expressed in a written certification thereof
     delivered to the Trustee, to pay and discharge, and which shall be applied
     by the Trustee (or other qualifying trustee) to pay and discharge, (i) the
     principal of (and premium, if any) and interest, if any, on such
     Outstanding Securities and any coupons appertaining thereto on the Stated
     Maturity of such principal or installment of principal or interest and (ii)
     any mandatory sinking fund payments or analogous payments applicable to
     such Outstanding Securities and any coupons appertaining thereto on the day
     on which such payments are due and payable in accordance with the terms of
     this Indenture and of such Securities and any coupons appertaining thereto.

          (b) Such defeasance or covenant defeasance shall not result in a
     breach or violation of, or constitute a default under, this Indenture or
     any other material agreement or instrument to which the Company is a party
     or by which it is bound.

          (c) No Default or Event of Default with respect to such Securities and
     any coupons appertaining thereto shall have occurred and be continuing on
     the date of such deposit or, insofar as clauses (5) and (6) of Section
     501(a) are concerned, at any time during the period ending on the 91st day
     after the date of such deposit (it being understood that this condition
     shall not be deemed satisfied until the expiration of such period).

          (d) In the case of an election under Section 1402, the Company shall
     have delivered to the Trustee an Opinion of Counsel stating that (1) the
     Company has received from, or there has been published by, the Internal
     Revenue Service a ruling, or (2) since the date of execution of this
     Indenture, there has been a change in the applicable Federal income tax
     law, in either case to the effect that, and based thereon such opinion
     shall confirm that, the Holders of such Outstanding Securities and any
     coupons appertaining thereto will not recognize income, gain or loss for
     Federal income tax purposes as a result of such defeasance and will be
     subject to Federal income tax on the same amounts, in the same manner and
     at the same times as would have been the case if such defeasance had not
     occurred.

          (e) In the case of an election under Section 1403, the Company shall
     have delivered to the Trustee an Opinion of Counsel to the effect that the
     Holders of such


                                       85



     Outstanding Securities and any coupons appertaining thereto will not
     recognize income, gain or loss for Federal income tax purposes as a result
     of such covenant defeasance and will be subject to Federal income tax on
     the same amounts, in the same manner and at the same times as would have
     been the case if such covenant defeasance had not occurred.

          (f) The Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that all conditions
     precedent to the defeasance under Section 1402 or the covenant defeasance
     under Section 1403 (as the case may be) have been complied with and an
     Opinion of Counsel to the effect that either (i) as a result of a deposit
     pursuant to subsection (a) above and the related exercise of the Company's
     option under Section 1402 or Section 1403 (as the case may be),
     registration is not required under the Investment Company Act of 1940, as
     amended, by the Company, with respect to the trust funds representing such
     deposit or by the trustee for such trust funds or (ii) all necessary
     registrations under said Act have been effected.

          (g) Notwithstanding any other provisions of this Section, such
     defeasance or covenant defeasance shall be effected in compliance with any
     additional or substitute terms, conditions or limitations which may be
     imposed on the Company in connection therewith pursuant to Section 301.

     Section 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.

          (a) Subject to the provisions of Section 1003(d), all money and
     Government Obligations (or other property as may be provided pursuant to
     Section 301) (including the proceeds thereof) deposited with the Trustee
     (or other qualifying trustee, collectively for purposes of this Section
     1405, the "Trustee") pursuant to Section 1404 in respect of any Outstanding
     Securities of any series and any coupons appertaining thereto shall be held
     in trust and applied by the Trustee, in accordance with the provisions of
     such Securities and any coupons appertaining thereto and this Indenture, to
     the payment, either directly or through any Paying Agent (including the
     Company acting as its own Paying Agent) as the Trustee may determine, to
     the Holders of such Securities and any coupons appertaining thereto of all
     sums due and to become due thereon in respect of principal (and premium, if
     any) and interest, if any, but such money need not be segregated from other
     funds except to the extent required by law.

          (b) Unless otherwise specified with respect to any Security pursuant
     to Section 301, if, after a deposit referred to in Section 1404(a) has been
     made, (1) the Holder of a Security in respect of which such deposit was
     made is entitled to, and does, elect pursuant to Section 312(b) or the
     terms of such Security to receive payment in a Currency other than that in
     which the deposit pursuant to Section 1404(a) has been made in respect of
     such Security, or (2) a Conversion Event occurs as contemplated in Section
     312(d) or 312(e) or by the terms of any Security in respect of which the
     deposit pursuant to Section 1404(a) has been made, the indebtedness
     represented by such Security and any coupons appertaining thereto shall be
     deemed to have been, and will be, fully discharged and satisfied through
     the payment of the principal of (and premium, if any) and interest, if any,
     on such Security as the same becomes due out of the proceeds yielded by


                                       86



     converting (from time to time as specified below in the case of any such
     election) the amount or other property deposited in respect of such
     Security into the Currency in which such Security becomes payable as a
     result of such election or Conversion Event based on the applicable Market
     Exchange Rate for such Currency in effect on the second Business Day prior
     to each payment date, except, with respect to a Conversion Event, for such
     Currency in effect (as nearly as feasible) at the time of the Conversion
     Event.

          (c) The Company shall pay and indemnify the Trustee against any tax,
     fee or other charge imposed on or assessed against the Government
     Obligations deposited pursuant to Section 1404 or the principal and
     interest received in respect thereof other than any such tax, fee or other
     charge which by law is for the account of the Holders of such Outstanding
     Securities and any coupons appertaining thereto.

          (d) Anything in this Article XIV to the contrary notwithstanding, the
     Trustee shall deliver or pay to the Company from time to time upon Company
     Request any money or Government Obligations (or other property and any
     proceeds therefrom) held by it as provided in Section 1404 which, in the
     opinion of a nationally recognized firm of independent public accountants
     expressed in a written certification thereof delivered to the Trustee, are
     in excess of the amount thereof which would then be required to be
     deposited to effect a defeasance or covenant defeasance, as applicable, in
     accordance with this Article.

     Section 1406. Reinstatement.

     If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1405 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such
Securities and any related coupons shall be revived and reinstated as though no
deposit had occurred pursuant to Section 1402 or 1403, as the case may be, until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 1405; provided, that if the Company makes any payment of
principal of (or premium, if any) or interest, if any, on any such Security or
any related coupon following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities and any
related coupons to receive such payment from the money held by the Trustee or
Paying Agent.

                                   ARTICLE XV

                        MEETINGS OF HOLDERS OF SECURITIES

     Section 1501. Purposes for Which Meetings May Be Called.

     If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.


                                       87



     Section 1502. Call, Notice and Place of Meetings.

          (a) The Trustee may at any time call a meeting of Holders of
     Securities of any series for any purpose specified in Section 1501, to be
     held at such time and at such place in the Borough of Manhattan, The City
     of New York or in London as the Trustee shall determine. Notice of every
     meeting of Holders of Securities of any series, setting forth the time and
     the place of such meeting and in general terms the action proposed to be
     taken at such meeting, shall be given, in the manner provided in Section
     106, not less than 21 nor more than 180 days prior to the date fixed for
     the meeting.

          (b) In case at any time the Company, pursuant to a Board Resolution,
     or the Holders of at least 10% in principal amount of the Outstanding
     Securities of any series shall have requested the Trustee to call a meeting
     of the Holders of Securities of such series for any purpose specified in
     Section 1501, by written request setting forth in reasonable detail the
     action proposed to be taken at the meeting, and the Trustee shall not have
     made the first publication of the notice of such meeting within 21 days
     after receipt of such request or shall not thereafter proceed to cause the
     meeting to be held as provided herein, then the Company or the Holders of
     Securities of such series in the amount above specified, as the case may
     be, may determine the time and the place in the Borough of Manhattan, The
     City of New York or in London for such meeting and may call such meeting
     for such purposes by giving notice thereof as provided in Subsection (a) of
     this Section.

     Section 1503. Persons Entitled to Vote at Meetings.

     To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (a) a Holder of one or more Outstanding Securities of
such series, or (b) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

     Section 1504. Quorum; Action.

          (a) The Persons entitled to vote a majority in principal amount of the
     Outstanding Securities of a series shall constitute a quorum for a meeting
     of Holders of Securities of such series; provided, that if any action is to
     be taken at such meeting with respect to a consent or waiver which this
     Indenture expressly provides may be given by the Holders of not less than a
     specified percentage in principal amount of the Outstanding Securities of a
     series, the Persons entitled to vote such specified percentage in principal
     amount of the Outstanding Securities of such series shall constitute a
     quorum. In the absence of a quorum within 30 minutes of the time appointed
     for any such meeting, the meeting shall, if convened at the request of
     Holders of Securities of such series, be dissolved. In any other case the
     meeting may be adjourned for a period of not less than 10 days as
     determined by the chairman of the meeting prior to the adjournment of such
     meeting. In the absence of a quorum at any such adjourned meeting, such
     adjourned


                                       88



     meeting may be further adjourned for a period of not less than 10 days as
     determined by the chairman of the meeting prior to the adjournment of such
     adjourned meeting. Notice of the reconvening of any adjourned meeting shall
     be given as provided in Section 1502(a), except that such notice need be
     given only once not less than five days prior to the date on which the
     meeting is scheduled to be reconvened. Notice of the reconvening of any
     adjourned meeting shall state expressly the percentage, as provided above,
     of the principal amount of the Outstanding Securities of such series which
     shall constitute a quorum.

          (b) Subject to the foregoing, at the reconvening of any meeting
     adjourned for lack of a quorum the Persons entitled to vote 25% in
     principal amount of the Outstanding Securities at the time shall constitute
     a quorum for the taking of any action set forth in the notice of the
     original meeting.

          (c) Except as limited by the proviso to Section 902, any resolution
     presented to a meeting or adjourned meeting duly reconvened at which a
     quorum is present as aforesaid may be adopted by the affirmative vote of
     the Holders of not less than a majority in principal amount of the
     Outstanding Securities of that series; provided, that except as limited by
     the proviso to Section 902, any resolution with respect to any request,
     demand, authorization, direction, notice, consent, waiver or other action
     which this Indenture expressly provides may be made, given or taken by the
     Holders of a specified percentage, which is less than a majority, in
     principal amount of the Outstanding Securities of a series may be adopted
     at a meeting or an adjourned meeting duly reconvened and at which a quorum
     is present as aforesaid by the affirmative vote of the Holders of not less
     than such specified percentage in principal amount of the Outstanding
     Securities of that series.

          (d) Any resolution passed or decision taken at any meeting of Holders
     of Securities of any series duly held in accordance with this Section shall
     be binding on all the Holders of Securities of such series and the related
     coupons, whether or not present or represented at the meeting.

          (e) Notwithstanding the foregoing provisions of this Section 1504, if
     any action is to be taken at a meeting of Holders of Securities of any
     series with respect to any request, demand, authorization, direction,
     notice, consent, waiver or other action that this Indenture expressly
     provides may be made, given or taken by the Holders of a specified
     percentage in principal amount of all Outstanding Securities affected
     thereby, or of the Holders of such series and one or more additional
     series:

               (1) there shall be no minimum quorum requirement for such
          meeting; and

               (2) the principal amount of the Outstanding Securities of such
          series that vote in favor of such request, demand, authorization,
          direction, notice, consent, waiver or other action shall be taken into
          account in determining whether such request, demand, authorization,
          direction, notice, consent, waiver or other action has been made,
          given or taken under this Indenture.


                                       89



     Section 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.

          (a) Notwithstanding any provisions of this Indenture, the Company may
     make such reasonable regulations as it may deem advisable for any meeting
     of Holders of Securities of a series in regard to proof of the holding of
     Securities of such series and of the appointment of proxies and in regard
     to the appointment and duties of inspectors of votes, the submission and
     examination of proxies, certificates and other evidence of the right to
     vote, and such other matters concerning the conduct of the meeting as it
     shall deem appropriate. Except as otherwise permitted or required by any
     such regulations, the holding of Securities shall be proved in the manner
     specified in Section 104 and the appointment of any proxy shall be proved
     in the manner specified in Section 104 or by having the signature of the
     Person executing the proxy witnessed or guaranteed by any trust company,
     bank or banker authorized by Section 104 to certify to the holding of
     Bearer Securities. Such regulations may provide that written instruments
     appointing proxies, regular on their face, may be presumed valid and
     genuine without the proof specified in Section 104 or other proof.

          (b) The Company shall, by an instrument in writing appoint a temporary
     chairman of the meeting, unless the meeting shall have been called by
     Holders of Securities as provided in Section 1502(b), in which case the
     Holders of Securities of the series calling the meeting shall in like
     manner appoint a temporary chairman. A permanent chairman and a permanent
     secretary of the meeting shall be elected by vote of the Persons entitled
     to vote a majority in principal amount of the Outstanding Securities of
     such series represented at the meeting.

          (c) At any meeting each Holder of a Security of such series or proxy
     shall be entitled to one vote for each $1,000 principal amount of the
     Outstanding Securities of such series held or represented by him; provided,
     that, no vote shall be cast or counted at any meeting in respect of any
     Security challenged as not Outstanding and ruled by the chairman of the
     meeting to be not Outstanding. The chairman of the meeting shall have no
     right to vote, except as a Holder of a Security of such series or proxy.

          (d) Any meeting of Holders of Securities of any series duly called
     pursuant to Section 1502 at which a quorum is present may be adjourned from
     time to time by Persons entitled to vote a majority in principal amount of
     the Outstanding Securities of such series represented at the meeting, and
     the meeting may be held as so adjourned without further notice.

     Section 1506. Counting Votes and Recording Action of Meetings.

     The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at


                                       90



least in duplicate, of the proceedings of each meeting of Holders of Securities
of any series shall be prepared by the secretary of the meeting and there shall
be attached to said record the original reports of the inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502(a) and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the former to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

     This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.


                                       91



     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.

                                        MOLINA HEALTHCARE, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                           Signature Page to Indenture



                                    EXHIBIT A

                              FORMS OF CERTIFICATES


                                       A-1



                                   EXHIBIT A-1

               FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
                TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
                       PAYABLE PRIOR TO THE EXCHANGE DATE

                                   CERTIFICATE
     [Insert title or sufficient description of Securities to be delivered]

     This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate the income of which is subject
to United States federal income taxation regardless of its source or a trust
whose administration is subject to the primary supervision of a United States
court and which has one or more United States persons who have the authority to
control all of its decisions ("United States person(s)"), (ii) are owned by
United States person(s) that are (a) foreign branches of United States financial
institutions (financial institutions, as defined in United States Treasury
Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such United States financial institution hereby agrees, on its own behalf
or through its agent, that you may advise Molina Healthcare, Inc. or its agent
that such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a United States or
foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or (ii)), this is to further certify that such
financial institution has not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.

     As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

     We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account in accordance with your Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.

     This certificate excepts and does not relate to [U.S.$]_______________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and


                                      A-1-1



delivery of definitive Securities (or, if relevant, collection of any interest)
cannot be made until we do so certify.

     We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Dated:
       ------------------------------
[To be dated no earlier than the
15th day prior to (i) the Exchange
Date or (ii) the relevant Interest
Payment Date occurring prior to
the Exchange Date, as applicable]
[Name of Person Making Certification]


                                        By:
                                            ------------------------------------
                                            (Authorized Signatory)
                                        Name:
                                        Title:


                                      A-1-2



                                   EXHIBIT A-2

                FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND
           CLEARSTREAM BANKING SOCIETE ANONYME IN CONNECTION WITH THE
        EXCHANGE OF A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN
                   INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE

                                   CERTIFICATE
     [Insert title or sufficient description of Securities to be delivered]

     This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$]__________ principal
amount of the above-captioned Securities (i) is owned by person(s) that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate the income of which is subject to United States
Federal income taxation regardless of its source or a trust whose administration
is subject to the primary supervision of a United States court and which has one
or more United States persons who have the authority to control all of its
decisions ("United States person(s)"), (ii) is owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)
are herein referred to as "financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such financial institution has
agreed, on its own behalf or through its agent, that we may advise Molina
Healthcare, Inc. or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by
United States or foreign financial institution(s) for purposes of resale during
the restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.

     As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

     We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.


                                      A-2-1



We understand that this certification is required in connection with certain tax
legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy

thereof to any interested party in such proceedings.

Dated:
       -----------------------------
[To be dated no earlier than
the Exchange Date or the
relevant Interest Payment
Date occurring prior to the
Exchange Date, as applicable]

                                        [Morgan Guaranty Trust Company of New
                                        York, Brussels Office,] as Operator of
                                        the Euroclear System
                                        [Clearstream Banking societe anonyme]


                                        By:
                                            ------------------------------------


                                      A-2-2






 




Exhibit 4.2



 
 





MOLINA HEALTHCARE, INC.



as Issuer



AND



U.S. Bank National Association



as Trustee

 



FIRST SUPPLEMENTAL INDENTURE



Dated as of October 11, 2007



to



INDENTURE



Dated as of October 11, 2007



 



3.75% Convertible Senior Notes due 2014



 
 





 




 











TABLE OF CONTENTS






    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
Page





    
 
    
 
    
 
    
 
    
 


    
ARTICLE 1
    
 
    
 
    
 
    
 


    
Definitions
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 1.01.

    
 
    
 
    
4
    
 


    
Section 1.02.

    
 
    
 
    
5
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 2
    
 
    
 
    
 
    
 


    
General Terms and Conditions of the Notes
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 2.01. Designation, Form and Dating

    
 
    
 
    
13
    
 


    
Section 2.02. Stated Maturity; Interest

    
 
    
 
    
14
    
 


    
Section 2.03. Limit on Amount of Series

    
 
    
 
    
14
    
 


    
Section 2.04. Registrar, Paying Agent, Conversion Agent and Trustee

    
 
    
 
    
14
    
 


    
Section 2.05. Conversion Agent to Hold Shares in Trust

    
 
    
 
    
14
    
 


    
Section 2.06. Global Securities

    
 
    
 
    
15
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 3
    
 
    
 
    
 
    
 


    
Remedies and Defaults
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 3.01. Additional Events of Default

    
 
    
 
    
17
    
 


    
Section 3.02. Failure To File Reports

    
 
    
 
    
17
    
 


    
Section 3.03. Extension Fee

    
 
    
 
    
18
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 4
    
 
    
 
    
 
    
 


    
Conversion of Notes
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 4.01. Conversion Privilege

    
 
    
 
    
18
    
 


    
Section 4.02. Conversion Procedure

    
 
    
 
    
22
    
 


    
Section 4.03. Adjustment of Conversion Rate

    
 
    
 
    
25
    
 


    
Section 4.04. Shares to Be Fully Paid

    
 
    
 
    
33
    
 


    
Section 4.05. Effect of Reclassification, Consolidation, Merger or Sale

    
 
    
 
    
33
    
 


    
Section 4.06. Certain Covenants

    
 
    
 
    
35
    
 


    
Section 4.07. Responsibility of Trustee

    
 
    
 
    
36
    
 


    
Section 4.08. Notice to Noteholders Prior to Certain Actions

    
 
    
 
    
36
    
 


    
Section 4.09. Shareholder Rights Plans

    
 
    
 
    
37
    
 






2




 








    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
Page





    
ARTICLE 5
    
 
    
 
    
 
    
 


    
Repurchase of Notes at Option of Noteholders
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 5.01. Repurchase at Option of Noteholders Upon a Fundamental
Change

    
 
    
 
    
37
    
 


    
Section 5.02. Withdrawal of Fundamental Change Repurchase Notice

    
 
    
 
    
39
    
 


    
Section 5.03. Deposit of Fundamental Change Repurchase Price

    
 
    
 
    
40
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 6
    
 
    
 
    
 
    
 


    
Supplemental Indentures
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 6.01. Supplemental Indentures Without Consent of Noteholders

    
 
    
 
    
41
    
 


    
Section 6.02. Amendments or Supplemental Indentures with
Consent of Noteholders

    
 
    
 
    
42
    
 


    
Section 6.03. Effect of Amendments or Supplemental Indentures

    
 
    
 
    
43
    
 


    
Section 6.04. Notation on Notes

    
 
    
 
    
43
    
 


    
Section 6.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee

    
 
    
 
    
44
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 7
    
 
    
 
    
 
    
 


    
Consolidation, Merger, Sale, Conveyance And Lease
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 7.01. Company May Consolidate, Etc. On Certain Terms

    
 
    
 
    
44
    
 


    
 
    
 
    
 
    
 
    
 


    
ARTICLE 8
    
 
    
 
    
 
    
 


    
Miscellaneous Provisions
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
Section 8.01. Governing Law

    
 
    
 
    
45
    
 


    
Section 8.02. No Security Interest Created

    
 
    
 
    
45
    
 


    
Section 8.03. Table of Contents, Headings, Etc.

    
 
    
 
    
45
    
 


    
Section 8.04. Scope of First Supplemental Indenture

    
 
    
 
    
45
    
 


    
Section 8.05. Execution in Counterparts

    
 
    
 
    
45
    
 









    
 
    
 
    
 




    
Exhibit A

    
 
    
Form of Note


    
Exhibit B

    
 
    
Form of Conversion Notice


    
Exhibit C

    
 
    
Form of Option to Elect Repayment Upon a Fundamental Change


    
Schedule A

    
 
    
Table of Additional Shares


    
Schedule B

    
 
    
Schedule of Changes to Principal Amount







3






 




     FIRST SUPPLEMENTAL INDENTURE, dated as of October 11, 2007 (this “First Supplemental Indenture”),
between MOLINA HEALTHCARE, 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 of America, as trustee (the “Trustee”).


WITNESSETH



     WHEREAS, the Company and the Trustee have duly executed and delivered an Indenture, dated as
of October 11, 2007 (the “Indenture”), providing for the authentication, issuance, delivery and
administration of unsecured notes, debentures or other evidences of indebtedness to be issued in
one or more series by the Company (the “Securities”);


     WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the
establishment of a new series of Securities to be issued under the Indenture, as supplemented
hereby, in an aggregate principal amount of up to $175,000,000 (or up
to $200,000,000, if the
underwriters exercise in full their over-allotment option as set forth in the Underwriting
Agreement) which may be authenticated and delivered as provided in the Indenture;


     WHEREAS, the Company desires to supplement the provisions of the Indenture to provide for the
issuance of the Notes under the terms of the Indenture as supplemented hereby;


     WHEREAS, Section 901(g) of the Indenture expressly permits the Company and the Trustee to
enter into one or more supplemental indentures for the purposes of establishing the forms and terms
of Notes to be issued under the Indenture without the consent of the Noteholders of any Notes then
outstanding;


     WHEREAS, for the purposes hereinabove recited, and pursuant to due corporate action, the
Company has duly determined to execute and deliver to the Trustee this First Supplemental
Indenture; and


     NOW, THEREFORE, in consideration of the covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Trustee mutually covenant and agree as follows:


ARTICLE 1

Definitions



     Section 1.01. All terms contained in this First Supplemental Indenture shall, except as
specifically provided herein or except as the context may otherwise require, have the meanings
given to such terms in the Indenture. In the event of any inconsistency between the Indenture and
this First Supplemental


4




 






Indenture, this First Supplemental Indenture shall govern. The words “herein,” “hereof,”
“hereunder,” and words of similar import shall refer to this First Supplemental Indenture.

Section 1.02. Unless the context otherwise requires, the following terms shall have the following
meanings:


     (a) Definitions.


     “Additional Shares” shall have the meaning specified in Section 4.01(d)(ii).


     “Adjustment Determination Date” shall have the meaning specified in Section 4.03(i).


     “Adjustment Event” shall have the meaning specified in Section 4.03(i).


     “Applicable Price” means the price paid per share of Common Stock in connection with a
Make-Whole Change of Control pursuant to which Additional Shares shall be added to the Conversion
Rate for Notes converted pursuant to Section 4.01(d) hereof, which shall be equal to (i) if holders
of Common Stock receive only cash in such Make-Whole Change of Control, the cash amount paid per
share of Common Stock and (ii) in all other cases, the average of the Closing Sale Prices of the
Common Stock for the five consecutive Trading Days immediately preceding the related Conversion
Date for such Notes.


     “Capital Stock” means, for any entity, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
stock issued by that entity.


     “Change of Control” means the occurrence after the original issuance of the Notes of any of
the following events:



     (i) any Person or group (within the meaning of Section 13(d) of the Exchange Act)
files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that
such Person or group has become the direct or indirect “beneficial owner” through a
purchase, merger or other acquisition transaction or series of transactions, of shares of
Common Stock entitling that Person or group to exercise 50% or more of the total voting
power of all shares of the Common Stock that are entitled to vote generally in elections
of directors; or



     (ii) an event or series of events by which any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its capacity
as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 promulgated under the Exchange Act, except
that a person or group shall be deemed to


5




 






have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”),
whether such right is exercisable immediately or only after the passage of time), directly
or indirectly, of 30% or more of the equity securities of the Company entitled to vote for
members of the Board of Directors or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such person or group
has the right to acquire pursuant to any option right); provided, however, that
notwithstanding any of the foregoing, transfers of Equity Interests among members of the
Molina Family and/or trusts beneficially owned by any member of the Molina Family shall
not be considered a Change of Control hereunder; or



     (iii) consummation of any transaction or event (whether by means of a liquidation,
share exchange, tender offer, consolidation, recapitalization, reclassification, merger of
the Company or any sale or lease or other transfer of the consolidated assets of the
Company and its subsidiaries substantially as an entirety) or a series of related
transactions or events pursuant to which 50% or more of Common Stock is exchanged for,
converted into or constitutes solely the right to receive cash, securities or other
property; or



     (iv) during any period of 12 consecutive months, a majority of the members of the
Board of Directors or other equivalent governing body of the Company cease to be composed
of individuals (i) who were members of that board or equivalent governing body on the
first day of such period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of that board
or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii),
any individual whose initial nomination for, or assumption of office as, a member of that
board or equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more directors
by any Person or group other than a solicitation for the election of one or more directors
by or on behalf of the Board of Directors).



     For purposes of this definition, whether a Person is a “beneficial owner” shall be
determined in accordance with Rule 13d-3 under the Exchange Act and “Person” includes any
syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the
Exchange Act.


     “close of business” means 5:00 p.m. (New York City time).


6




 




     “Closing Sale Price” means, with respect to the Common Stock or any other security for which a
Closing Sale Price must be determined, on any date, the closing sale price per share of the Common
Stock or such other security (or, if no closing sale price is reported, the average of the bid and
asked prices or, if more than one in either case, the average of the average bid and the average
asked prices) on such date as reported in composite transactions for the principal U.S. securities
exchange on which the Common Stock or such other security is traded. If the Common Stock or such
other security is not listed or traded on a U.S. national or regional securities exchange, the
Closing Sale Price shall be determined by the last quoted bid price per share of Common Stock or
such other security in the over-the-counter market on any date, as reported by the National
Quotation Bureau or similar organization. In absence of such quotation, the Closing Sale Price
shall be determined by a nationally recognized independent investment banking firm selected from
time to time by the Board of Directors of the Company for that purpose. The Closing Sale Price
shall be determined without reference to extended or after hours market trading.


     “Common Stock” shall mean, subject to Section 4.05, shares of common stock of the Company, par
value $0.001 per share, at the date of this First Supplemental Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and that have no
preference in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and that are not subject to
redemption by the Company; provided that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from all such reclassifications.


     “Conversion Agent” shall have the meaning specified in Section 2.04.


     “Conversion Date” shall have the meaning specified in Section 4.02(c).


     “Conversion Obligation” shall have the meaning specified in Section 4.01(a).


     “Conversion Period” means, in connection with any Notes surrendered for conversion, (i) with
respect to any Conversion Date occurring during the period beginning on the 25th
Scheduled Trading Day prior to the maturity date of the Notes, the twenty (20) consecutive VWAP
Trading Day period beginning on and including the 22nd Scheduled Trading Day prior to
the maturity date of the Notes (or if such day is not a VWAP Trading Day, the next succeeding VWAP
Trading Day); and (ii) in all other instances, the twenty (20) consecutive VWAP Trading Day period
beginning on and including the third VWAP Trading Day following the Conversion Date.


7




 




     “Conversion Price” means as of any date $1,000 divided by the Conversion Rate as of such date.


     “Conversion Rate” shall have the meaning specified in Section 4.01(a).


     “Conversion Settlement Date” shall have the meaning specified in Section 4.02(c).


     “Current Market Price” means, in respect of shares of Common Stock on any day and in respect
of an issuance or distribution on the Common Stock, the average of the Closing Sale Prices per
share of Common Stock or the security issued or distributed on the Common Stock for each of the ten
consecutive Trading Days ending on the earlier of the day in question and the day before the
Ex-Dividend Date with respect to such issuance or distribution requiring such computation, except
that if any other issuance, distribution, subdivision or combination of the Common Stock to which a
Conversion Rate adjustment pursuant to Section 4.03 would apply during such consecutive Trading Day
period, the “Current Market Price” shall be calculated for such period in a manner determined by
the Company to reflect the impact of such issuance, distribution, subdivision or combination on the
Closing Sale Price during such period.


     “Custodian” means U.S. Bank National Association, as custodian for The Depository Trust
Company, with respect to the Notes in global form, or any successor entity thereto.


     “Daily Conversion Value” means, for each of the 20 consecutive VWAP Trading Days during the
Conversion Period, one-twentieth (1/20) of the product of (a) the applicable Conversion Rate on
such day and (b) the Daily VWAP of the Common Stock (or the Reference Property pursuant to Section
4.05) on such day, as determined by the Company.


     “Daily Settlement Amount” shall have the meaning specified in Section 4.02(a).


     “Daily VWAP” for the Common Stock (or the Reference Property pursuant to Section 4.05) means,
for each of the 20 consecutive VWAP Trading Days during the Conversion Period, in case of the
Common Stock, the per share volume-weighted average price as displayed under the heading “Bloomberg
VWAP” on Bloomberg page MOH.UQ <equity> AQR in respect of the period from the scheduled open
of trading on the principal trading market for the Common Stock to the scheduled close of trading
on such market on such VWAP Trading Day, or if such volume-weighted average price is unavailable,
or in the case of the Reference Property, the market value of one share of Common Stock (or of such
Reference Property) on such VWAP Trading Day as the Board of Directors determines in good faith
using, if reasonably practicable, a volume-weighted method.


8




 




     “Distributed Property” shall have the meaning specified in Section 4.03(c).


     “Effective Date” shall have the meaning specified in Section 4.01(d)(ii).


     “Ex-Dividend Date” means, with respect to any dividend, issuance or distribution on the Common
Stock or any other equity security, the first date on which the shares of Common Stock or such
other equity security trade on the applicable exchange or in the applicable market, regular way,
without the right to receive such issuance or distribution.


     “Equity Interests” means, with respect to any Person, all of the shares of capital stock of
(or other ownership or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.


     “Expiration Time” shall have the meaning specified in Section 4.03(e).


     “Fair Market Value” shall mean the amount which a willing buyer would pay a willing seller in
an arm’s-length transaction.


     “Fiscal Quarter” shall have the meaning specified in Section 4.01(a)(i).


     “Fundamental Change” means the occurrence of (a) a Change of Control or (b) a Termination of
Trading.


     “Fundamental Change Expiration Time” shall have the meaning specified in Section 5.01(b).


     “Fundamental Change Notice” shall have the meaning specified in Section 5.01(b).


     “Fundamental Change Repurchase Date” shall have the meaning specified in Section 5.01(a).


     “Fundamental Change Repurchase Notice” shall have the meaning specified in Section 5.01(a)(i).


     “Fundamental Change Repurchase Price” shall have the meaning specified in Section 5.01(a).


9




 




     “Global Security” shall mean a Security issued in Global Form, as specified and contemplated
by Section 2.01 of the Indenture.


     “Indebtedness” shall mean, with respect to any Person, and without duplication, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by debentures or similar instruments, and all
commitment, stand by and other fees due and payable to financial institutions with respect to
credit facilities available to such Person) or evidenced by bonds, debentures, or similar
instruments (whether or not the recourse of the lender is to the whole of the assets of such Person
or to only a portion thereof) (other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the obtaining of
materials or services); (b) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank guarantees or bankers’
acceptances; (c) all obligations and liabilities (contingent or otherwise) in respect of leases of
real or personal property or other assets of such Person required, in conformity with generally
accepted accounting principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person; (d) all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such Person to assure a
creditor against loss in respect of indebtedness of another Person of the kind described in clauses
(a) through (c); (e) any indebtedness described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property that is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall have been assumed
by such Person; and (f) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind
described in clauses (a) through (e).


     “Interest Payment Date” means each April 1 and October 1 of each year, beginning in April 1,
2008.


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


     “Make-Whole Change of Control” means either (i) the effective date of a Change of Control
described in clause (iv) in the definition thereof or (ii) a Change of Control described in clause
(i), (ii) or (iii) in the definition thereof in connection with which any of the consideration
received consists of cash, securities or other property (other than cash payments for fractional
shares and cash payments made in respect of dissenters’ appraisal rights) that are not, or upon
issuance will not be, traded on the New York Stock Exchange or Nasdaq Global Select Market, in each
case occurring prior to the Maturity Date.


10




 




     “Measurement Period” shall have the meaning specified in Section 4.01(a)(ii).


     “Merger Event” shall have the meaning specified in Section 4.05.


     “Molina Family” means Mary R. Molina, Joseph M. Molina, Mary Martha Bernadett, M.D., John C.
Molina, Janet M. Watt and Josephine M. Molina-Battiste, and the spouses, natural and legal issue
and other descendants and the stepchildren (including the natural and legal issue of the
stepchildren) of any of the above-named persons.


     “Net Reference Property Amount” shall have the meaning specified in Section 4.05(c)(ii).


     “Net Share Amount” shall have the meaning specified in Section 4.02(a)(ii).


     “Net Shares” shall have the meaning specified in Section 4.02(a)(ii).


     “Note” or “Notes” shall mean any Note or Notes, as the case may be, authenticated and
delivered under this First Supplemental Indenture.


     “Noteholder” or “holder” as applied to any Note, or other similar terms (but excluding the
term “beneficial holder”), shall mean any person in whose name at the time a particular Note is
registered on the Security Register.


     “Notice of Conversion” shall have the meaning specified in Section 4.02(b).


     “Opinion of Counsel” shall mean an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company, which is delivered to the Trustee. Each such opinion shall
include the statements provided for in Section 102 of the Indenture if and to the extent required
by the provisions of such Section.


     “outstanding” when used with reference to Notes, shall, subject to the provisions of Section
6.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under
this Indenture, except:


     (i) Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;


     (ii) Notes, or portions thereof, for the payment repurchase of which monies in the necessary
amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the
Company) or shall have been set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent);


11




 




     (iii) Notes in lieu of which, or in substitution for which, other Notes shall have been
authenticated and delivered pursuant to the terms of Section 306 of the Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in
due course; and


     (iv) Notes converted pursuant to Article 4.


     “Principal Return” shall have the meaning specified in Section 4.02(a)(i).


     “Purchased Shares” shall have the meaning specified in Section 4.03(e)(i).


     “Reference Property” shall have the meaning specified in Section 4.05(b).


     “Scheduled Trading Day” shall mean a day that is scheduled to be a Trading Day on the primary
U.S. national or regional securities exchange on which the Common Stock is listed or admitted to
trading.


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


     “Termination of Trading” means any time that the Common Stock is not listed for trading on The
New York Stock Exchange or the NASDAQ Global Select Market.


     “Trading Day” means, with respect to the Common Stock, a day (i) during which trading in
securities generally occurs on The New York Stock Exchange, or if the Common Stock is not then
listed on The New York Stock Exchange, the principal other United States national or regional
securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional securities exchange, on the principal other market on which the
Common Stock is then traded and (ii) on which a Closing Sale Price for the Common Stock may be
obtained.


     “Trading Price” means, with respect to each $1,000 principal amount of Notes (as used in this
definition, a “Note”) as of any date (each such date a “date of determination”), the average of the
secondary market bid quotations per Note obtained by the Trustee for $5,000,000 principal amount of
Notes at approximately 3:30 p.m., New York City time, on such determination date from three
independent nationally recognized securities dealers selected by the Company; provided that if
three such bids cannot reasonably be obtained by the Trustee, but two such bids are obtained, then
the average of the two bids shall be used, and if only one such bid can reasonably be obtained by
the Trustee, that one bid shall be used. If the Trustee cannot reasonably obtain at least one such
bid for


12




 



$5,000,000 principal amount of Notes from a nationally recognized securities dealer, then the
Trading Price of a Note will be deemed to be less than 98% of the product of (a) the
then-applicable Conversion Rate of the Notes and (b) the Closing Sale Price on such date of
determination.



     “Trigger Event” shall have the meaning specified in Section 4.03(c).


     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of
which this First Supplemental Indenture was executed.


     “Underwriters” means Citigroup Global Markets Inc., UBS Securities LLC and Bear Stearns & Co.
Inc.


     “Underwriting Agreement” means that certain Underwriting Agreement, dated as of October 4,
2007, between the Company and the Underwriters.


     “VWAP Market Disruption Event” means (i) a failure by the principal U.S. national or regional
securities exchange or market on which the Common Stock is listed or admitted to trading to open
for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00
p.m. on any Scheduled Trading Day for the Common Stock for an aggregate one half-hour period of any
suspension or limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any options contracts or
futures contracts relating to the Common Stock.


     “VWAP Trading Day” means a day during which (i) trading in the Common Stock generally occurs
on the principal U.S. national or regional securities exchange or market on which the Common Stock
is listed or admitted for trading and (ii) there is no VWAP Market Disruption Event. If the Common
Stock is not so listed or traded, then “VWAP Trading Day” means a Business Day.


ARTICLE 2

General Terms and Conditions of the Notes



     Section 2.01.  Designation, Form and Dating. The Notes shall be a series of senior unsecured
notes and are hereby authorized and designated as “3.75% Convertible Senior Notes due 2014.”


     The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be
substantially in the form set forth in Exhibit A. The terms and provisions contained in the form
of Notes attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of
this First Supplemental Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this First Supplemental Indenture, expressly agree to such terms
and provisions and to be bound thereby.


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     Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends, endorsements or changes as the Company officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this First Supplemental Indenture, the Indenture, or as may be required by the
Trustee, the Depository, or as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any securities exchange or
automated quotation system on which the Notes may be listed, or to conform to usage, or to indicate
any special limitations or restrictions to which any particular Notes are subject.


     Subject to Section 2.06 hereof, so long as the Notes are eligible for book-entry settlement
with the Depository, or unless otherwise required by law, or otherwise contemplated by the
Indenture, all of the Notes will be represented by one or more Global Securities. The transfer and
exchange of beneficial interests in any such Global Security shall be effected through the
Depository in accordance with this First Supplemental Indenture and the applicable procedures of
the Depository.


     Each Global Security shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions, purchases or conversions of such Notes.


     Section 2.02.  Stated Maturity; Interest. The maturity of the Notes shall be October 1, 2014
(the “Stated Maturity”). The Notes bear interest at
the rate of 3.75% per year from the Issue Date,
or from the most recent date to which interest had been paid or provided for. Interest is payable
semi-annually in arrears on each Interest Payment Date, commencing on April 1, 2008. The Regular
Record Date for each Interest Payment Date shall be the first day of the calendar month on which
such Interest Payment Date falls. Interest is computed on the basis of a 360-day year comprised of
twelve 30-day months.


     Section 2.03 . Limit on Amount of Series. The aggregate principal amount of Notes which may
be authenticated and delivered under this First Supplemental
Indenture is limited to $175,000,000
(or $200,000,000 if the underwriters exercise in full their over-allotment option as set forth in
the Underwriting Agreement).


     Section 2.04. Registrar, Paying Agent, Conversion Agent and Trustee. In addition to Section
1002 of the Indenture, the Company shall maintain an office or agency where Notes may be presented
for conversion (the “Conversion Agent”), which shall initially be the Trustee.


     Section 2.05. Conversion Agent to Hold Shares in Trust. The Company shall require each
Conversion Agent other than the Trustee to agree in writing that


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the Conversion Agent will hold in trust for the benefit of Noteholders or the Trustee all
shares of Common Stock held by the Conversion Agent for the delivery of Common Stock when due upon
conversion, and will notify the Trustee of any default by the Company in making any such delivery.
While any such default continues, the Trustee may require a Conversion Agent to deliver all shares
of Common Stock held by it to the Trustee. The Company at any time may require a Conversion Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Conversion Agent
(if other than the Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Conversion Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Noteholders all shares held by it as Conversion Agent. If not already
serving in such capacity, upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Conversion Agent for the Securities.


     Section 2.06. Global Securities.


     (a) Notwithstanding any other provisions of this First Supplemental Indenture, the Indenture
or the Notes, transfers of a Global Security, in whole or in part, shall be made only in accordance
with Section 305 of the Indenture and this Section 2.06. A Global Security may not be transferred,
in whole or in part, to any Person other than the Depository or a nominee or any successor thereof,
and no such transfer to any such other Person may be registered; provided that this clause (a)
shall not prohibit any transfer of a Note that is issued in exchange for a Global Security but is
not itself a Global Security. No transfer of a Note to any Person shall be effective under this
First Supplemental Indenture unless and until such Note has been registered in the name of such
Person.


     (b) Notwithstanding any other provisions of this First Supplemental Indenture, the Indenture
or the Notes, a Global Security shall not be exchanged in whole or in part for a Note registered in
the name of any Person other than the Depository or one or more nominees thereof, provided that a
Global Security may be exchanged for Notes registered in the names of any Person designated by the
Depository in the event that (i) the Depository has notified the Company that it is unwilling or
unable to continue as depository for such Global Security or the Depository ceases to be a clearing
agency registered under the Exchange Act and a successor depository is not appointed by the Company
within 90 days, (ii) the Company by notice to the Trustee elects to issue the Notes in definitive
registered form in exchange for all or any part of the Notes represented by the Global Security or
(iii) there is or continues to be an Event of Default and the Registrar receives notice from the
Depository for the issuance of definitively registered Notes in exchange for the Global Security.
Any Global Security exchanged pursuant to clause (a) above shall be so exchanged in whole and not
in part. Any Note issued in exchange for a Global Security or any portion thereof shall be a Global
Security; provided that any such Note so issued that is registered in the name of a Person other
than the Depository or a nominee or successor thereof shall not be a Global Security.


15




 




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


     (d) Subject to the provisions of Section 2.06(f) below, the registered Noteholder may grant
proxies and otherwise authorize any Person, including Agent Members (as defined below) and Persons
that may hold interests through Agent Members, to take any action which a Noteholder is entitled to
take under this First Supplemental Indenture or the Notes.


     (e) In the event of the occurrence of any of the events specified in Section 2.06(b) above,
the Company will promptly make available to the Trustee a reasonable supply of certificated Notes
in definitive, fully registered form, without interest coupons.


     (f) Neither any members of, or participants in, the Depository (collectively, the “Agent
Members”) nor any other Persons on whose behalf Agent Members may act shall have any rights under
this First Supplemental Indenture with respect to any Global Security registered in the name of the
Depository or any nominee thereof, or under any such Global Security, and the Depository 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 Noteholder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall (i) prevent the Company or
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 Depository or such nominee, as the
case may be, or (ii) impair, as between the Depository, its Agent Members and any other person on
whose behalf an Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Note.



16






 




ARTICLE 3

Remedies and Defaults



     Section 3.01. Additional Events of Default. Pursuant to Section 501 and Section 301(b)(15) of
the Indenture, in addition to the Events of Default set forth in the Indenture, the following
(without duplication to those set forth in the Indenture) shall constitute Events of Default with
respect to the Notes:


     (a) failure to pay when due, upon conversion of the Notes, in accordance with the Indenture
and the First Supplemental Indenture, the Principal Return in cash, together with any cash in lieu
of fractional shares as required under Section 4.02, or to deliver when due the Net Shares, upon
conversion of a Notes, and such failure continues for 5 days; or


     (b) a default in the payment of the Fundamental Change Repurchase Price in respect of any Note
on the Fundamental Change Repurchase Date in accordance with the provisions of Section 5.01; or


     (c) one or more judgments or orders that exceed $5 million in the aggregate (net of amounts
covered by insurance or bonded) for the payment of money have been entered by a court or courts of
competent jurisdiction against the Company or any Significant Subsidiary and such judgment or
judgments have not been satisfied, stayed, annulled or rescinded within 60 days after such judgment
or judgments have become final and nonappealable; or


     (d) any Event of Default shall have occurred in respect of the Company’s, or any of its
Significant Subsidiaries’ Indebtedness (including Indebtedness guaranteed by the Company or a
Significant Subsidiary but excluding any Indebtedness that expressly provides that such
Indebtedness is junior or subordinated to the Notes), and, as a result, an aggregate principal
amount exceeding $5.0 million of such Indebtedness is accelerated prior to its scheduled maturity
and such acceleration is not rescinded or annulled within 30 days after the Company receives
written notice; or


     (e) failure on the part of the Company to provide a written notice of a Fundamental Change in
accordance with Section 5.01.


     Section 3.02. Failure To File Reports. Notwithstanding anything to the contrary in the
Indenture or this First Supplemental Indenture, to the extent elected by the Company as a remedy
pursuant to this Section 3.02 in the manner set forth under Section 3.03 below, the sole remedy for
an Event of Default set forth in the Indenture or this First Supplemental Indenture, above relating
to any failure to comply with the requirements of Section 703 of the Indenture or Section 314(a)(1)
of the Trust Indenture Act shall, for the first 120 days after the occurrence of such an Event of
Default, consist exclusively of the right to receive an extension fee on the Notes in an amount
equal to 0.25% of the principal amount of the Notes. If the Company so elects, the extension fee shall be payable


17




 






on all outstanding Notes on the date on which an Event of Default relating to a failure to comply with the
reporting obligations in the Indenture first occurs, which will be the 60th day after written
notice to the Company of the Company’s failure to so comply as described under Section 501(a)(4) of
the Indenture. On the 120th day after such Event of Default (if the Event of Default relating to
the reporting obligations is not cured or waived prior to such 120th day), the Notes shall be
subject to acceleration as provided in this Article V of the Indenture. The provisions of this
Section 3.02 shall not affect the rights of Noteholders in the event of the occurrence of any other
Event of Default. In the event the Company does not elect to pay the extension fee upon an Event of
Default in accordance with this Section 3.02, the Notes shall be subject to acceleration as
provided in Article V of the Indenture.


     Section 3.03. Extension Fee. In order to elect to pay the extension fee as the sole remedy
during the first 120 days after the occurrence of an Event of Default relating to the failure to
comply with the reporting obligations in the Indenture in accordance with Section 3.02, the Company
must notify all Noteholders and the Trustee and Paying Agent of such election on or before the
close of business on the date on which such Event of Default occurs, which will be the 60th day
after written notice to the Company of its failure to so comply as described under Section 3.02
above.


ARTICLE 4

Conversion of Notes



     Section 4.01. Conversion Privilege.


     (a) At any time prior to July 1, 2014, subject to the conditions described below, and upon
compliance with the provisions of this Article 4, a Noteholder shall have the right, at such
holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal
amount or an integral multiple thereof) of such Note into cash and fully paid shares of Common
Stock, if any, based on a rate (the “Conversion
Rate”) of 21.3067 shares of Common Stock (subject to
adjustment as provided in this First Supplemental Indenture) per $1,000 principal amount Note (the
“Conversion Obligation”) under the circumstances set forth below. In addition, on or after July 1,
2014, a Noteholder shall have the right, at such holder’s option, to convert all or any portion (if
the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such
Note, at any time prior to the close of business on the Scheduled Trading Day immediately preceding
the maturity date, into cash and fully paid shares of Common Stock, if any, regardless of the
conditions described below.



     (i) Prior to July 1, 2014, the Notes shall be convertible during any fiscal quarter
of the Company (a “Fiscal Quarter”)(and only during such Fiscal Quarter) after the quarter
ending December 31, 2007, if the
Closing Sale Price of the Common Stock for each of at least 20 Trading


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Days in the 30 consecutive Trading Day period ending on the last Trading Day of the immediately preceding
Fiscal Quarter was greater than or equal to 120% of the Conversion Price in effect on such
30th Trading Day.



     (ii) Prior to July 1, 2014, the Notes shall be convertible during the five Business
Day period immediately after any five consecutive Trading Day period (the “Measurement
Period”) in which the Trading Price per $1,000 principal amount of Notes for each trading
day of such Measurement Period was less than 98% of the product of the Closing Sale Price
on such date and the Conversion Rate on such date, all as determined by the Trustee, as
provided below. The Trustee shall have no obligation to determine the Trading
Price of the Notes unless requested by the Company to do so in writing, and the Company
shall have no obligation to make such request unless a Noteholder of at least $1,000,000
aggregate principal amount of Notes provides the Company with reasonable evidence that the
Trading Price of the Notes would be less than 98% of the product of (a) the
then-applicable Conversion Rate of the Notes and (b) the Closing Sale Price at such time,
at which time the Company shall instruct the Trustee to determine the Trading Price of the
Notes beginning on the next Trading Day and on each successive Trading Day until the
Trading Price per Note is greater than or equal to 98% of the product of (a) the
then-applicable Conversion Rate of the Notes and (b) the Closing Sale Price on such date.



     (iii) The Notes shall also be convertible as provided in Section 4.01(b), Section
4.01(c), and Section 4.01(d).


     (b) In the event that the Company elects to:



     (i) distribute to all holders of Common Stock rights entitling them to purchase, for
a period expiring within 60 days after the record date for such distribution, Common Stock
at a price less than the Closing Sale Price of the Common Stock for the Trading Day
immediately preceding the announcement of such distribution; or



     (ii) distribute to all holders of Common Stock, assets or debt securities of the
Company or rights to purchase the Company’s securities, which distribution has a per share
value (as determined by the Board of Directors) exceeding 5% of the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the date of declaration of such
distribution,

then, in each case, the Notes may be surrendered for conversion at any time on and after the date
that the Company gives notice to the holders of such right, which shall be not less than 25
Scheduled Trading Days prior to the Ex-Dividend Date for such distribution, until the earlier of
the close of business on the Business
Day immediately preceding the Ex-Dividend Date or the date the Company

19




 





 announces that such
distribution will not take place. Notwithstanding the foregoing, the Notes will not be convertible
pursuant to clauses (i) or (ii) above if the Company provides that Noteholders shall participate in
such distribution without conversion.



     (c) In the event that the Company is a party to a transaction or event (including, without
limitation, any consolidation, merger or binding share exchange) pursuant to which all shares of
the Common Stock would be converted into or exchanged for cash, securities or other property, a
Noteholder may surrender Notes for conversion at any time from and after the date that is 20 days
prior to the anticipated effective date of the transaction until 20 days after the actual effective
date of such transaction (or, if such transaction or event also constitutes a Fundamental Change,
until the Fundamental Change Repurchase Date), unless such transaction constitutes a Make-Whole
Change of Control (in which case the Notes will instead be convertible in accordance with Section
4.01(d) below). The Company shall notify Noteholders and the Trustee (whether or not such
transaction also constitutes a Make-Whole Change of Control) at the same time the Company publicly
announces such transaction (but in no event less than 20 days prior to the effective date of such
transaction). Following the effective date of such transaction, the right to convert the Notes at
the Conversion Rate, and the settlement thereof, shall be modified as set forth under Section 4.05.



(d) (i) In the event that a Make-Whole Change of Control occurs on or prior to the
maturity date, a Noteholder may surrender Notes for conversion at any time from and after
the date that is 25 Scheduled Trading Days before the anticipated effective date of such
Make-Whole Change of Control until the Fundamental Change Repurchase Date. The Company
shall give notice to all record Noteholders and the Trustee at least 25 Scheduled Trading
Days prior to the anticipated effective date of the Make-Whole Change of Control.



     (ii) If a Noteholder elects to convert Notes (regardless of whether the other
conditions to conversion have been satisfied) at any time from and after the date that is
25 Scheduled Trading Days prior to the anticipated effective date of the transaction (in
the case of a Change of Control described in clause (iii) of the definition thereof) or
commencing on the actual effective date (in the case of a Change of Control described in
clause (i), (ii) and (iv) of the definition thereof) until 20 days after the actual
effective date of such Make-Whole Change of Control (the “Effective Date”), the Conversion
Rate applicable to each $1,000 principal amount of converted Notes shall be increased by
an additional number of shares of Common Stock (the “Additional Shares”) as described
below.


     The number of Additional Shares to be added to each $1,000 principal amount of Notes converted
shall be determined by reference to the table attached
as Schedule A hereto, based on the related Conversion Date of such Notes and the


20




 






Applicable
Price; provided that if the actual Applicable Price is between two Applicable Price amounts in the
table or the Conversion Date is between two Conversion Dates in the table, the number of Additional
Shares shall be determined by a straight-line interpolation between the number of Additional Shares
set forth for the next higher and next lower Applicable Price amounts and the two nearest
Conversion Dates, as applicable, based on a 365-day or 366-day year; provided further that if the
Applicable Price is in excess of $120.00 per share of Common Stock (subject to adjustment in the
same manner as set forth in Section 4.03), no Additional Shares will be added to the Conversion
Rate; and provided that if the Applicable Price is less than
$34.51 per share (subject to
adjustment in the same manner as set forth in Section 4.03), no Additional Shares will be added to
the Conversion Rate. In no event will Additional Shares be added to the Conversion Rate to cause
the Conversion Rate to exceed 28.9771 per $1,000 principal amount of Notes (subject to adjustment in
the same manner as set forth in Section 4.03).


     The Applicable Prices set forth in the first row of the table in Schedule A hereto shall be
adjusted as of any date on which the Conversion Rate of the Notes is adjusted. The adjusted
Applicable Prices shall equal the Applicable Prices in effect immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate in effect immediately prior
to the adjustment giving rise to the Applicable Price adjustment and the denominator of which is
the Conversion Rate as so adjusted. The number of Additional Shares within the table shall be
adjusted in the same manner as the Conversion Rate as set forth in Section 4.03 (other than by
operation of an adjustment to the Conversion Rate by adding Additional Shares).


     Settlement of Notes tendered for conversion in connection with a Make-Whole Change of Control
as provided in this subsection, shall be as follows:



     (i) if the last day of the Conversion Period related to such Notes is prior to the
third Scheduled Trading Day immediately preceding the anticipated Effective Date, the
Company shall pay the Principal Return in cash (together with cash in lieu of fractional
shares) and deliver the Net Shares, if any, all determined in accordance with Section
4.02(b) below, on the third Business Day immediately following the last day of the
Conversion Period related to such Notes; provided that the calculation of such Principal
Return and Net Shares shall not include any Additional Shares to be added to the Conversion
Rate as set forth in this subsection. As soon as practicable following the Effective Date,
the Company shall deliver the increase in such amount of cash and, if applicable, the
Common Stock or Reference Property deliverable in lieu of the Common Stock, if any, as the
case may be, for such Notes as if the Conversion Rate had been increased by the number of
Additional Shares to be added to the Conversion Rate pursuant to this subsection. If such
increased amount results in an increase to the Principal Return (determined in accordance
with Section 4.02(b) below, but based on such increased Conversion Rate)


21




 






as compared
to the Principal Return calculated without such Additional Shares, the Company shall pay,
promptly following the Effective Date, such increase to the Principal Return in cash. In
addition, if such increased amount results in an increase to the number of Net Shares
(determined in accordance with Section 4.02(b), but based on such increased Conversion
Rate) as compared to the number of Net Shares calculated without such Additional Shares,
the Company shall deliver, promptly following the Effective Date, such increase to the
number of Net Shares (and pay, in lieu of any fractional shares, cash based on the Daily
VWAP of the Common Stock on the last day of the applicable Conversion Period). Any such Net
Shares delivered following the Effective Date shall be subject to Section 4.05. In no event
shall the Company pay such increase to the Principal Return, or deliver such increase to
the number of Net Shares or Reference Property deliverable in lieu of the Common Stock, if
any, if the Make-Whole Change of Control never becomes effective.



     (ii) if the last day of the Conversion Period related to such Notes is on or after the
third Scheduled Trading Day immediately preceding the anticipated Effective Date, the
Company shall pay the Principal Return in cash (together with cash in lieu of fractional
shares) and deliver the Net Shares, if any, all in accordance with Section 4.02(b) below
(such determination, for the avoidance of doubt to include the number of Additional Shares
to be added to the Conversion Rate as set forth in this subsection), on the later to occur
of (a) the Effective Date and (b) the third Business Day immediately following the last day
of the applicable Conversion Period relating to such Notes. Any such Net Shares delivered
following the Effective Date shall be subject to Section 4.05.



     Notwithstanding the foregoing, if the consideration for the Company’s Common Stock in
a Make-Whole Change of Control is composed entirely of cash, for any conversion of Notes
following the Effective Date of such Make-Whole Change of Control, the conversion
obligation of the Company will be calculated based solely on the Applicable Price for the
transaction and will be deemed to be an amount equal to the applicable Conversion Rate
(including any adjustment) multiplied by such Applicable Price. In such event, the
Conversion Obligation will be determined and paid to Noteholders in cash on the third
Trading Day following surrender of the Notes for conversion.


     Section 4.02. Conversion Procedure.


     (a) Upon conversion of any Note, subject to this Section 4.02 and Section 4.01 and Section
4.05, the Company shall satisfy the Conversion Obligation with respect to each $1,000 principal
amount of Notes in cash and shares of fully paid Common Stock, if applicable, by delivering, no
later than the third Trading Day immediately following the last day of the applicable


22




 






Conversion Period, the aggregate Daily Settlement Amount for each of the 20 VWAP Trading Days
during the Conversion Period for such Notes.


     The “Daily Settlement Amount,” for each $1,000 principal amount of Notes and each of the 20
VWAP Trading Days in the Conversion Period for such Notes, shall consist of:



     (i) cash in an amount equal to the lesser of $50 and the Daily Conversion Value
relating to such day (the sum of such cash amount for each of the 20 VWAP Trading Days,
the “Principal Return”);



     (ii) to the extent the Daily Conversion Value exceeds $50, a number of shares of the
Common Stock equal to the excess of the Daily Conversion Value over $50, divided by the
Daily VWAP of the Common Stock (or the Reference Property) on that VWAP Trading Day (the
sum of such shares for each of the 20 VWAP Trading Days, the “Net Shares”); and



     (iii) The Company shall pay an amount in cash, in lieu of any fractional shares of
Common Stock issuable in connection with payment of the Net Shares based upon the Daily
VWAP per share of the Common Stock on the last day of the applicable Conversion Period.


     The Daily Conversion Value and the Daily Settlement Amount shall be determined by the Company
promptly following the last day of the Conversion Period.


     (b) Before any holder of a Note shall be entitled to convert the same as set forth above, such
holder shall (1) in the case of a Global Note, comply with the procedures of the Depository in
effect at that time and furnish appropriate endorsement and transfer documents, and (2) in the case
of a Note issued in certificated form, surrender such Notes, duly endorsed to the Company or in
blank (and accompanied by appropriate endorsement and transfer documents), at the office of the
Conversion Agent, and give irrevocable written notice to the Conversion Agent in the form on the
reverse of such certificated Note (or a facsimile thereof) (a “Notice of Conversion”) at said
office or place that such holder elects to convert the same and shall state in writing therein the
principal amount of Notes to be converted and the name or names (with addresses) in which such
holder wishes the certificate or certificates for the Net Shares, if any, included upon settlement
the Conversion Obligation, if any, to be registered. No Notice of Conversion with respect to any
Notes may be tendered by a holder thereof if such holder has also tendered a Fundamental Change
Repurchase Notice and not validly withdrawn such Fundamental Change Repurchase Notice in accordance
with Section 5.02.


     If more than one Note shall be surrendered for conversion at one time by the same holder, the
Conversion Obligation with respect to such Notes, if any,


23




 






that shall be payable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so
surrendered.


     (c) A Note shall be deemed to have been converted immediately prior to the close of business
on the date (the “Conversion Date”) that the holder has complied with the requirements set forth in
clause (b). Except as provided in Section 4.01(d), payment of the cash and Net Shares, if any, in
satisfaction of the Conversion Obligation shall be made by the Company in no event later than the
third Business Day following the last day of the Conversion Period (the “Conversion Settlement
Date”) by paying in cash the Principal Return (together with any cash in lieu of fractional shares)
to the holder of a Note surrendered for conversion, or such holder’s nominee or nominees, and
issue, or cause to be issued, and deliver to the Conversion Agent or to such holder, or such
holder’s nominee or nominees, certificates or a book-entry transfer through the Depository for the
number of full shares of Common Stock equal to the Net Shares, if any, to which such holder shall
be entitled as part of such Conversion Obligation.


     (d) In case any Note 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
Note so surrendered, without charge to such holder, a new Note or Notes in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the surrendered Notes.


     (e) If a holder submits a Note for conversion, the Company shall pay all stamp and other
duties, if any, which may be imposed by the United States or any political subdivision thereof or
taxing authority thereof or therein with respect to the issuance of shares of Common Stock, if any,
upon the conversion. However, the holder shall pay any such tax which is due because the holder
requests any Net Shares to be issued in a name other than the holder’s name. The Trustee 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 Trustee receives a sum sufficient to pay any tax which will be due
because the shares are to be issued in a name other than the holder’s name. Nothing herein shall
preclude any tax withholding required by law or regulations.


     (f) Except as provided in Section 4.03, no adjustment shall be made for dividends on any
shares issued upon the conversion of any Note as provided in this Article.


     (g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the
direction of the Trustee, shall make a notation on such Global Note as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in writing of any
conversion of Notes effected through any Conversion Agent other than the Trustee.


24




 




     (h) (i) Noteholders at the close of business on a record date will receive payment of interest
payable on the corresponding Interest Payment Date notwithstanding the conversion of such Notes at
any time after the close of business on such record date. Notes surrendered for conversion during
the period from the close of business on any record date to the opening of business on the
corresponding Interest Payment Date must be accompanied by payment of an amount equal to the
interest that the holder is to receive on the Notes; provided, however, that no such payment need
be made (1) with respect to any conversion following the record date immediately preceding the
maturity date, (2) if the Company has specified a Fundamental Change Repurchase Date following a
Fundamental Change that is after a record date but on or prior to the next succeeding Interest
Payment Date or (3) if any overdue interest exists at the time of conversion with respect to such
Note, only to the extent of such overdue interest. Except as described above, no payment or
adjustment will be made for accrued interest on converted Notes.



     (ii) The Person in whose name the certificate for shares of Common Stock is
registered shall be treated as a stockholder of record on and after the Conversion Date;
provided, however, that no surrender of Notes on any date when the stock transfer books of
the Company shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of Common
Stock as the record holder or holders thereof for all purposes at the close of business on
the next succeeding day on which such stock transfer books are open; such conversion shall
be at the Conversion Rate in effect on the date that such Notes shall have been
surrendered for conversion, as if the stock transfer books of the Company had not been
closed. Upon conversion of Notes, such Person shall no longer be a Noteholder.


     Section 4.03. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time
to time by the Company as follows:


     (a) In case the Company shall hereafter pay a dividend or make a distribution to all holders
of the outstanding Common Stock in shares of Common Stock, or shall effect a subdivision into a
greater number of shares of Common Stock or combination into a lesser number of shares of Common
Stock, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such
dividend, or the date on which such subdivision or combination becomes effective, as the case may
be, by a fraction,



     (i) the numerator of which shall be the number of shares of Common Stock that would
be outstanding immediately after, and solely as a result of, such event; and


25




 





     (ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the Ex-Dividend Date, or the date on which such
subdivision or combination becomes effective, as the case may be,

such increase to become effective immediately prior to the Ex-Dividend Date for such determination
or the date any such subdivision or combination becomes effective, as the case may be.



     (b) In case the Company shall issue rights or warrants to all holders of its outstanding
shares of Common Stock entitling them, for a period expiring within forty-five (45) days from the
date of issuance of such rights or warrants, to subscribe for or purchase shares of Common Stock at
a price per share less than the average Closing Sale Price of the Common Stock for the 10
consecutive Trading Days ending on the Trading Day immediately preceding the date such issuance is
announced, the Conversion Rate shall be increased so that the same shall equal the rate determined
by multiplying the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such
distribution by a fraction,



     (i) the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the Ex-Dividend Date plus the total number of additional shares of
Common Stock offered for subscription or purchase or issuable pursuant to such rights or
warrants, and



     (ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the Ex-Dividend Date plus the quotient obtained by
dividing (x) the aggregate price payable to exercise such rights or warrants, by (y) the
average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Days
prior to the Business Day immediately preceding the Ex-Dividend Date.

Such adjustment shall be successively made whenever any such rights or warrants are issued, and
shall become effective immediately after the opening of business on the Ex-Dividend Date for such
distribution. To the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would
then be in effect had the adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock actually delivered. If such
rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if no adjustment to the Conversion Rate pursuant to
this Section 4.03(a) had been made.



     (c) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock shares of any class of Capital Stock of the Company (other than Common Stock as
covered by Section 4.03(a)) or evidences of its


26




 






indebtedness, cash or other assets (including securities, but excluding dividends and
distributions covered by Section 4.03(b), Section 4.03(d) or Section 4.03(e)) (any of such shares
of Capital Stock, indebtedness, cash or other property hereinafter in this Section 4.03(c)) called
the “Distributed Property”)), then, in each such case 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 Ex-Dividend Date relating to any such distribution of Distributed Property
by a fraction,



     (i) the numerator of which shall be the Current Market Price on such Ex-Dividend
Date; and



     (ii) the denominator of which shall be the Current Market Price on such Ex-Dividend
Date less the Fair Market Value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors) on the Ex-Dividend Date of the portion of the Distributed Property so
distributed applicable to one share of Common Stock,

such adjustment to become effective immediately prior to the opening of business on the Ex-Dividend
Date; provided that if the then Fair Market Value (as so determined) of the portion of the
Distributed Property so distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Ex-Dividend Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to receive, for each
$1,000 principal amount of Notes upon conversion, the amount of Distributed Property such holder
would have received had such holder owned an amount of shares of Common Stock equal to the
Conversion Rate on the date immediately preceding the Ex-Dividend Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the Fair Market Value of any distribution for
purposes of this Section 4.03(c) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Ex-Dividend Date.



     Notwithstanding the foregoing, if the Distributed Property distributed by the Company to all
holders of its Common Stock consists of Capital Stock of, or similar equity interests in, a
Subsidiary or other business unit of the Company that are, or, when issued, will be, traded on a
U.S. securities exchange, the Conversion Rate shall be increased so that the same shall be equal to
the rate determined by multiplying the Conversion Rate in effect on the tenth Trading Day
immediately following the third Trading Day after the date on which “ex-distribution trading”
commences for such dividend or distribution on The New York Stock Exchange or such other national
or regional exchange or market on which the Common Stock is then listed or quoted by a fraction,


27




 





     (i) the numerator of which shall be the sum of (A) the average of the Closing Sale
Prices of the Capital Stock or equity interest applicable to one share of Common Stock for
the 10 consecutive Trading Days commencing on and including the third Trading Day after
the date on which “ex-distribution trading” commences for such dividend or distribution on
The New York Stock Exchange or such other national or regional exchange or market on which
the Common Stock is then listed or quoted plus (B) the average of the Closing Sale Prices
of the Common Stock for the 10 consecutive Trading Days commencing on and including the
third Trading Day after the date on which “ex-distribution trading” commences for such
dividend or distribution on The New York Stock Exchange or such other national or regional
exchange or market on which the Common Stock is then listed or quoted; and



     (ii) the denominator of which shall be the average of the Closing Sale Prices of the
Common Stock for the 10 consecutive Trading Days commencing on and including the third
Trading Day after the date on which “ex-distribution trading” commences for such dividend
or distribution on The New York Stock Exchange or such other national or regional exchange
or market on which the Common Stock is then listed or quoted,

such adjustment to become effective immediately prior to the opening of business on the date
“ex-distribution trading” commenced on The New York Stock Exchange or such other national or
regional exchange or market on which the Common Stock is then listed or quoted.



     Rights or warrants distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company’s Capital Stock (either
initially or under certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of
Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of
Common Stock, shall be deemed not to have been distributed for purposes of this Section 4.03 (and
no adjustment to the Conversion Rate under this Section 4.03 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made
under this Section 4.03(c). If any such right or warrant, including any such existing rights or
warrants distributed prior to the date of this First Supplemental Indenture, are subject to events,
upon the occurrence of which such rights or warrants become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the date of the occurrence of any and
each such event shall be deemed to be the date of distribution with respect to such rights or
warrants (and a termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or any Trigger Event or


28




 






other event (of the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an adjustment to the Conversion
Rate under this Section 4.03 was made, (1) in the case of any such rights or warrants that shall
all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate
shall be readjusted upon such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights
or warrants that shall have expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been issued.


     For purposes of this Section 4.03(c), Section 4.03(a), and Section 4.03(b), any dividend or
distribution to which this Section 4.03(c) is applicable that also includes shares of Common Stock,
or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 4.03(b)
applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets or shares of capital stock other than such shares of Common Stock or rights or
warrants to which Section 4.03(a) or Section 4.03(b) applies (and any Conversion Rate adjustment
required by this Section 4.03(c) with respect to such dividend or distribution shall then be made)
immediately followed by (2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (and any further Conversion Rate adjustment required by Section 4.03(a) and
Section 4.03(b) with respect to such dividend or distribution shall then be made), except any
shares of Common Stock included in such dividend or distribution shall not be deemed outstanding
within the meaning of Section 4.03(a).


     (d) In case the Company shall, by dividend or otherwise, distribute exclusively cash to all
holders of its Common Stock during any fiscal quarter then the Conversion Rate shall be adjusted by
multiplying the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such
dividend or distribution by a fraction,



     (i) the numerator of which shall be the Current Market Price on the Ex-Dividend Date;
and



     (ii) the denominator of which shall be the Current Market Price on the Ex-Dividend
Date minus the amount of cash so distributed applicable to one share of Common Stock,

such adjustment to be effective immediately prior to the opening of business on the Ex-Dividend
Date; provided that if the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current

29




 





Market Price on the Ex-Dividend Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Noteholder shall have the right to receive upon conversion of a Note (or any
portion thereof) the amount of cash such holder would have received had such holder owned a number
of shares of Common Stock equal to the Conversion Rate on the date immediately preceding the
Ex-Dividend Date. If such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.



     For the avoidance of doubt, for purposes of this Section 4.03(d), in the event of any
reclassification of the Common Stock, as a result of which the Notes become convertible into more
than one class of Common Stock, if an adjustment to the Conversion Rate is required pursuant to
this Section 4.03(d), references in this Section to one share of Common Stock or to the Current
Market Price or Closing Sale Price of one share of Common Stock shall be deemed to refer to a unit
or to the price of a unit consisting of the number of shares of each class of Common Stock into
which the Notes are then convertible equal to the numbers of shares of such class issued in respect
of one share of Common Stock in such reclassification. The above provisions of this paragraph shall
similarly apply to successive reclassifications.


     (e) In case a tender or exchange offer made by the Company or any Subsidiary for all or any
portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders of cash and any other consideration
per share of Common Stock having a Fair Market Value (as determined by the Board of Directors, and
described in a resolution of the Board of Directors) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be
amended) exceeds the last reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased so that the same shall equal
the rate determined by multiplying the Conversion Rate in effect on the Trading Day immediately
following such Expiration Time by a fraction,



     (i) the numerator of which shall be the sum of (x) the Fair Market Value (determined
as aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted up to any such maximum, being referred to as the “Purchased
Shares”) and (y) the product of the number of shares of Common Stock outstanding, after
giving effect to the purchase or exchange of shares of Common Stock pursuant to such
tender offer or exchange offer, at the Expiration Time and the last reported sale price of
a share of Common Stock on the Trading Day next succeeding the Expiration Time, and



30







 





     (ii) the denominator of which shall be the number of shares of Common Stock
outstanding (including any Purchased Shares) at the Expiration Time multiplied by the last
reported sale price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day
following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or exchange offer had not
been made.



     (f) In addition to those required by clauses (a), (b), (c), (d) or (e) of this Section 4.03,
to the extent permitted by law and subject to applicable rules of the New York Stock Exchange, the
Company from time to time may increase the Conversion Rate by any amount for any period of at least
20 days; to the extent permitted by applicable law and subject to applicable rules of The New York
Stock Exchange, the Company from time to time may also increase the Conversion Rate by any amount
the Board of Directors deems advisable including such increases that would avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event treated as such
for income tax purposes or would otherwise be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to the holder of each Note at his last address appearing
on the Security Register provided for in Section 305 of the Indenture a notice of the increase at
least fifteen days prior to the date the increased Conversion Rate takes effect, and such notice
shall state the increased Conversion Rate and the period during which it will be in effect.


     (g) All calculations and other determinations under this Article 4 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a
share, as the case may be. No adjustment shall be made for the Company’s issuance of Common Stock
or convertible or exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities, other than as provided in this Section 4.03.


     (h) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of
which it has knowledge is still in effect.


31




 



Promptly after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which
each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion
Rate to the holder of each Note at his last address appearing on the Security Register provided for
in Section 305 of the Indenture within twenty (20) days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any such adjustment.



     (i) In any case in which this Section 4.03 provides that an adjustment shall become effective
immediately preceding (1) an Ex-Dividend Date for an event, (2) the Ex-Dividend Date with respect
to a dividend or distribution pursuant to Section 4.03(a), (3) the Ex-Dividend Date with respect to
a distribution of rights or warrants pursuant to Section 4.03(b), or (4) the Expiration Time, as
the case may be, for any tender or exchange offer pursuant to Section 4.03(e), (each an “Adjustment
Determination Date”), the Company may elect to defer until the occurrence of the applicable
Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Note converted after
such Adjustment Determination Date and before the occurrence of such Adjustment Event, the
additional shares of Common Stock or other securities issuable upon such conversion by reason of
the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash
in lieu of any fraction pursuant to Section 4.03. For purposes of this Section 4.03(i)(i), the term
“Adjustment Event” shall mean:



     (i) in any case referred to in clause (1) hereof, the occurrence of such event,



     (ii) in any case referred to in clause (2) hereof, the date any such dividend or
distribution is paid or made,



     (iii) in any case referred to in clause (3) hereof, the date of expiration of such
rights or warrants, and



     (iv) in any case referred to in clause (4) hereof, the date a sale or exchange of
Common Stock pursuant to such tender or exchange offer is consummated and becomes
irrevocable.


     (j) For purposes of this Section 4.03, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.


32




 




     (k) Notwithstanding any provision in the Indenture or this First Supplemental Indenture, the
Company shall not be required to make any adjustments to the Conversion Rate for any of the
transactions or events described in this Section 4.03 if the Company makes provision for the
Noteholders to participate in any such transaction or event without conversion of any Notes on a
basis and with notice that the Board of Directors determines to be fair and appropriate.


     Section 4.04. Shares to Be Fully Paid. The Company shall provide, free from preemptive rights,
out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common
Stock to provide for conversion of the Notes from time to time as such Notes are presented for
conversion.


     Section 4.05. Effect of Reclassification, Consolidation, Merger or Sale. If any of the
following events occur, namely (i) any reclassification or change of the outstanding shares of
Common Stock (other than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a split, subdivision or combination), (ii) any consolidation,
merger or combination of the Company with another Person, or (iii) any sale, lease, transfer or
conveyance of all or substantially all of the properties and assets of the Company and its
Subsidiaries substantially as an entirety to any other Person, in each case as a result of which
the Common Stock would be converted into, or exchanged for, stock, other securities or other
property or assets (including cash or any combination thereof)(any such event a “Merger Event”),
then:


     (a) the Company or the successor or purchasing corporation, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the 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) permitted under Section 6.01(a) providing for the conversion and
settlement of the Notes as set forth in this First Supplemental Indenture. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Article. If, in the case of any Merger Event, the Reference
Property includes shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such reclassification, change,
consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also
be executed by such other corporation and shall contain such additional provisions to protect the
interests of the holders of the Notes as the Board of Directors shall reasonably consider necessary
by reason of the foregoing, including, to the extent required by the Board of Directors, the
provisions providing for the repurchase rights set forth in Article 5 herein.


     In the event the Company shall execute a supplemental indenture pursuant to this Section 4.05,
the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the
reasons therefore, the kind or amount of shares of stock or other securities or property (including
cash) that will constitute


33




 






the Reference Property after any such Merger Event, any adjustment to be made with respect
thereto and that all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Noteholders.


     (b) Notwithstanding the provisions of Section 4.02(a), and subject to the provisions of
Section 4.01, at the effective time of such Merger Event, (i) the right to convert each $1,000
principal amount of Notes will be changed to a right to convert such Note into the kind and amount
of shares of stock, other securities or other property or assets (including cash or any combination
thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate
immediately prior to such transaction would have owned or been entitled to receive (the “Reference
Property”) and (ii) the related Conversion Obligation shall be settled as set forth under clause
(c) below. For purposes of determining the constitution of Reference Property, the kind and amount
of consideration that a holder of Common Stock would have been entitled to in the case of
recapitalizations, reclassifications, consolidations, mergers, sales or transfers of assets or
other transactions that cause the Common Stock to be converted into the right to receive more than
a single type of consideration (determined based in part upon any form of stockholder election)
will be deemed to be (i) the weighted average of the kinds and amounts of consideration received by
the holders of Common Stock that affirmatively make such an election or (ii) if no holders of the
Common Stock affirmatively make such an election, the kinds and amounts of consideration actually
received by such holders. The Company shall not become a party to any such transaction unless its
terms are consistent with the preceding. None of the foregoing provisions shall affect the right of
a holder of Notes to convert its Notes into cash and shares of Common Stock, as set forth in
Section 4.01 and Section 4.02 prior to the effective date of any such Merger Event.


     (c) If the Notes shall be deemed to be convertible into Reference Property as set forth above,
the related Conversion Obligation, with respect to each $1,000 principal amount of Notes tendered
for conversion after the effective date of any such Merger Event, shall be settled in cash and
units of Reference Property in accordance with Section 4.02 as follows:



     (i) The Daily Conversion Value for each day of the Conversion Period shall be based
on the per unit value of the Reference Property on such day (including, subject to
4.01(d), any Additional Shares added to such Reference Property) as set forth in Section
4.02(a). Such per unit value shall be (A) for any shares of common stock that are included
in the Reference Property, as set forth in the definition of “Common Stock” as if such
shares were “Common Stock” using the procedures set forth in the definition of “Closing
Sale Price” in Section 1.02; (B) for any other property (other than cash) included in the
Reference Property, as determined in good faith by the Board of Directors or by a New York
Stock Exchange member firm selected by the Board of Directors and (C) for any cash, the
face amount of such cash.


34




 





     (ii) The Company shall pay in cash the Principal Return as set forth in Section
4.02(a), and an amount of Reference Property (the “Net Reference Property Amount”)
determined in accordance with this clause (ii). The Net Reference Property Amount for each
$1,000 principal amount of Notes shall be the sum of, for each of the 20 VWAP Trading Days
in the Conversion Period for such Notes, an amount of units of Reference Property equal to
(1) any excess of (a) the Daily Conversion Value on such Trading Day (determined in the
same manner as set forth in Section 4.05(c)(i) above) over (b) $50, divided by (2) the per
unit value of such Reference Property on such Trading Day.


     (d) Notwithstanding clause (c) above, if the Notes are tendered for conversion prior to the
effective date of any such Merger Event pursuant to Section 4.01(d) above, and the Company shall be
obligated to deliver any increase to the Daily Conversion Value in additional Net Shares following
the effective date of such Merger Event, such additional Net Shares shall be delivered in the kind
and amount of Reference Property as a holder of such additional Net Shares would have received in
such Merger Event.


     (e) The Company shall cause notice of the execution of a supplemental indenture pursuant to
this Section 4.05 to be mailed to each Noteholder, at his address appearing on the Security
Register, within twenty (20) days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.


     (f) The above provisions of this Section shall similarly apply to successive Merger Events.


     Section 4.06. Certain Covenants.


     (a) The Company shall not take any action which would cause an adjustment reducing the
Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Notes. The Company covenants that all shares of Common Stock issued upon
conversion of Notes will be fully paid and non-assessable by the Company and free from all taxes,
liens and changes with respect to the issue thereof.


     (b) The Company covenants that, if any shares of Common Stock to be provided for the purpose
of conversion of Notes hereunder require registration with or approval of any governmental
authority under any federal or state law before such shares may be validly issued upon conversion,
the Company will in good faith and as expeditiously as possible, to the extent then permitted by
the rules and interpretations of the Commission (or any successor thereto), endeavor to secure such
registration or approval, as the case may be.


     (c) The Company further covenants that if at any time the Common Stock shall be listed on any
national securities exchange or automated quotation


35




 






system the Company will, if permitted and required by the rules of such exchange or automated
quotation system, list and keep listed, so long as the Common Stock shall be so listed on such
exchange or automated quotation system, all shares of Common Stock issuable upon conversion of the
Notes.


     Section 4.07. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not
at any time be under any duty or responsibility to any Noteholder to determine the Conversion Rate
or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be employed, in making the
same. The Trustee and any other Conversion Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of any Note; and the
Trustee and any other Conversion Agent make no representations with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or to comply with any
of the duties, responsibilities or covenants of the Company contained in this Article. Without
limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be
under any responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 4.05 relating either to the kind or amount
of shares of stock or securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 4.05 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 4.07, may accept as
conclusive evidence of the correctness of any such provisions, and shall be protected in relying
upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect thereto.


     Section 4.08. Notice to Noteholders Prior to Certain Actions. In case:



     (a) the Company shall declare a dividend (or any other distribution) on its Common
Stock that would require an adjustment in the Conversion Rate pursuant to Section 4.03; or



     (b) the Company shall authorize the granting to all of the holders of its Common
Stock of rights or warrants to subscribe for or purchase any share of any class or any
other rights or warrants; or



     (c) of any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, or a change in par value, or
from par value to no par value, or from no par value to par value), or of any
consolidation or
merger to which the


36




 






Company is a party and for which approval of any shareholders of
the Company is required, or of the sale or transfer of all or substantially all of the
assets of the Company; or



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

the Company shall cause to be filed with the Trustee and to be mailed to each Noteholder at his
address appearing on the Security Register, provided for in Section 305 of the Indenture of this
Indenture, as promptly as possible but in any event at least twenty days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, 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, transfer, dissolution, liquidation or
winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.



     Section 4.09. Shareholder Rights Plans. Each share of Common Stock issued upon conversion of
Notes pursuant to this Article 4 shall be entitled to receive the appropriate number of rights, if
any, and the certificates representing the Common Stock issued upon such conversion shall bear such
legends, if any, in each case as may be provided by the terms of any shareholder rights plan
adopted by the Company, as the same may be amended from time to time. If at the time of conversion,
however, the rights have separated from the shares of Common Stock in accordance with the
provisions of the applicable shareholder rights agreement so that the holders of the Notes would
not be entitled to receive any rights in respect of Common Stock issuable upon conversion of the
Notes, the Conversion Rate will be adjusted as provided in Section 4.03(c).


ARTICLE 5

Repurchase of Notes at Option of Noteholders



     Section 5.01. Repurchase at Option of Noteholders Upon a Fundamental Change.


     (a) If there shall occur a Fundamental Change at any time prior to maturity of the Notes, then
each Noteholder shall have the right, at such holder’s option, to require the Company to repurchase
all of such holder’s Notes for cash, or any portion thereof that is a multiple of $1,000 principal
amount, on the date


37




 



(the “Fundamental Change Repurchase Date”) specified by the Company that is not less than
twenty (20) Business Days and not more than thirty five (35) Business Days after the date of the
Fundamental Change Repurchase Notice (as defined below) at a repurchase price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest, if any, thereon to, but
excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”). If
such Fundamental Change Repurchase Date falls after a record date for the payment of interest and
on or prior to the corresponding Interest Payment Date, the Company shall instead pay the principal
amount to the Noteholders, and pay the full amount of accrued and unpaid interest, if any, payable
on such Interest Payment Date to the holder of record of the Notes on the close of business on the
corresponding record date. Repurchases of Notes under this Section 5.01 shall be made, at the
option of the holder thereof, upon:




     (i) delivery to the Trustee (or other Paying Agent appointed by the Company) by a
holder of a duly completed notice (the “Fundamental Change Repurchase Notice”) in the form
set forth on the reverse of the Note prior to the close of business on the Fundamental
Change Repurchase Date; and



     (ii) delivery or book-entry transfer of the Notes to the Trustee (or other Paying
Agent appointed by the Company) at any time after delivery of the Fundamental Change
Repurchase Notice (together with all necessary endorsements) at the Corporate Trust Office
of the Trustee (or other Paying Agent appointed by the Company) in the Borough of
Manhattan, such delivery being a condition to receipt by the holder of the Fundamental
Change Repurchase Price therefor; provided that such Fundamental Change Repurchase Price
shall be so paid pursuant to this Section 5.01 only if the Note so delivered to the
Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to
the description thereof in the related Fundamental Change Repurchase Notice.


     Any purchase by the Company contemplated pursuant to the provisions of this Section 5.01 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 the book-entry transfer or
delivery of the Note.


     Notwithstanding anything herein to the contrary, any holder delivering to the Trustee (or
other Paying Agent appointed by the Company) the Fundamental Change Repurchase Notice contemplated
by this Section 5.01 shall have the right to withdraw such Fundamental Change Repurchase Notice at
any time prior to the close of business on the Business Day prior to the Fundamental Change
Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or other Paying Agent
appointed by the Company) in accordance with Section 5.02 below.


38




 




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


     (b) On or before the fifteenth day after the occurrence of a Fundamental Change, the Company
shall mail to all holders of record of the Notes a notice (the “Fundamental Change Notice”) of the
occurrence of such Fundamental Change and of the repurchase right at the option of the holders
arising as a result thereof. Such mailing shall be by first class mail. The Company shall also
deliver a copy of the Fundamental Change Notice to the Trustee and cause a copy of such Fundamental
Change Notice, or a summary of the information contained therein, to be published once in a
newspaper of general circulation in The City of New York. Concurrently with the mailing of any
Fundamental Change Notice, the Company shall issue a press release announcing such Fundamental
Change referred to in the Fundamental Change Notice, the form and content of which press release
shall be determined by the Company in its sole discretion. The failure to issue any such press
release or any defect therein shall not affect the validity of the Fundamental Change Notice or any
proceedings for the repurchase of any Note that any Noteholder may elect to have the Company
repurchase as provided in this Section 5.01.


     Each Fundamental Change Notice shall specify the circumstances constituting the Fundamental
Change, the Fundamental Change Repurchase Date and the Fundamental Change Repurchase Price, that
the holder must exercise the repurchase right on or prior to the close of business on the
Fundamental Change Repurchase Date (the “Fundamental Change Expiration Time”), that the holder
shall have the right to withdraw any Notes surrendered prior to the Fundamental Change Expiration
Time, a description of the procedure which a Noteholder must follow to exercise such repurchase
right and to withdraw any surrendered Notes, the place or places where the holder is to surrender
such holder’s Notes and the CUSIP number or numbers of the Notes (if then generally in use) and
include a form of Fundamental Change Repurchase Notice.


     No failure of the Company to give the foregoing notices and no defect therein shall limit the
Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 5.01.


     (c) Notwithstanding the foregoing, no Notes may be repurchased by the Company at the option of
the holders upon a Fundamental Change if the principal amount of the Notes has been accelerated,
and such acceleration has not been rescinded, on or prior to the Fundamental Change Repurchase
Date.


     Section 5.02. Withdrawal of Fundamental Change Repurchase Notice.


     (a) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the Corporate Trust Office of the Trustee (or other Paying Agent appointed
by the Company) in accordance


39




 






with the Fundamental Change Repurchase Notice at any time prior to the close of business on
the Business Day prior to the close of business on the Fundamental Change Repurchase Date,
specifying:



     (i) the name of the holder,



     (ii) a statement that the holder is withdrawing its election to require us to
purchase its Notes,



     (iii) the principal amount of the withdrawn Notes which must be an integral multiple
of $1,000,



     (iv) if certificated Notes have been issued, the certificate number of the withdrawn
Notes, and



     (v) the principal amount, if any, that remains subject to the Fundamental Change
Repurchase Notice which must be an integral multiple of $1,000;

provided, however, that if the Notes are not in certificated form, the notice must comply with
appropriate Depository Procedures.



     Section 5.03. Deposit of Fundamental Change Repurchase Price.


     (a) On or prior to the Fundamental Change Repurchase Date, the Company will deposit with the
Trustee (or other Paying Agent appointed by the Company or if the Company is acting as its own
Paying Agent, set aside, segregate and hold in trust as provided in Section 1003 of the Indenture)
an amount of money sufficient to repurchase on the Fundamental Change Repurchase Date all of the
Notes to be repurchased on such date at the appropriate Fundamental Change Repurchase Price;
provided that if such payment is to be made on the Fundamental Change Repurchase Date it must be
received by the Trustee or Paying Agent, as the case may be, by 11:00 a.m. New York City time, on
such date. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed
by the Company), payment for Notes surrendered for repurchase (and not withdrawn) prior to the
Fundamental Change Expiration Time will be made promptly after the later of (x) the Fundamental
Change Repurchase Date with respect to such Note (provided the holder has satisfied the conditions
in Section 5.01) and (y) the time of delivery of such Note to the Trustee (or other Paying Agent
appointed by the Company) by the holder thereof in the manner required by Section 5.01) by mailing
checks for the amount payable to the holders of such Notes entitled thereto as they shall appear in
the Security Register, provided, however, that payments to the Depository shall be made by wire
transfer of immediately available funds to the account of the Depository or its nominee. The
Trustee shall, promptly after such payment and upon written demand by the Company, return to the
Company any funds in excess of the Fundamental Change Repurchase Price.


40




 




     (b) If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to
repurchase on the Fundamental Change Repurchase Date all the Notes or portions thereof that are to
be purchased as of the Fundamental Change Repurchase Date, then on and after the Business Day
following the Fundamental Change Repurchase Date (i) such Notes will cease to be outstanding, (ii)
interest will cease to accrue on such Notes, and (iii) all other rights of the holders of such
Notes will terminate, whether or not book-entry transfer of the Notes has been made or the Notes
have been delivered to the Trustee or Paying Agent, other than the right to receive the Fundamental
Change Repurchase Price upon delivery of the Notes.


ARTICLE 6

Supplemental Indentures



     Section 6.01. Supplemental Indentures Without Consent of Noteholders. The Company, when
authorized by the resolutions of the Board of Directors, and the Trustee, at the Company’s expense,
may from time to time and at any time amend this First Supplemental Indenture or enter into an
indenture or indentures supplemental hereto for one or more of the following purposes:



(a) to make provision with respect to the conversion rights of the Noteholders
pursuant to the requirements of Section 4.05;



(b) providing for the assumption of our obligations to the Noteholders in the case of
a merger, consolidation, conveyance, sale, transfer or lease;



(c) to increase, from time to time, the Conversion Rate in the manner described in
this First Supplemental Indenture;



(d) to add or modify any provision of this First Supplemental Indenture (not expressly
addressed in this Section 6.01) which the Company and the Trustee may deem necessary or
desirable and which will not adversely affect the interests of holders of the Notes in any
material respect; or



(e) to cure any ambiguity or to correct or supplement any provision contained herein
or in any supplemental indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture; provided that such
modification or amendment does not, in the good faith opinion of the Company’s Board of
Directors, adversely affect the interests of the holders of Notes in any material respect;
provided further that any amendment made solely to conform the provisions of this First
Supplemental Indenture to the “Description of the Notes” section of the Preliminary
Prospectus Supplement, dated October 3, 2007, the Final Prospectus Supplement, dated
October 4, 2007 and the accompanying Prospectus, dated November 23, 2005, in each case
relating


41




 






to the initial offering of the Notes, will not be deemed to adversely affect the
interests of the holders of the Notes.


     Upon the written request of the Company, accompanied by a Board Resolution authorizing the
execution of such amendment or supplemental indenture, the Trustee is hereby authorized to join
with the Company in the execution of any such amendment or supplemental indenture, to make any
further appropriate agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any amendment or supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this First Supplemental Indenture or
otherwise.


     Any amendment or supplemental indenture authorized by the provisions of this Section 6.01 may
be executed by the Company and the Trustee without the consent of the holders of any of the Notes
at the time outstanding, notwithstanding any of the provisions of Section 6.02.


     Section 6.02. Amendments or Supplemental Indentures with Consent of Noteholders. With the
consent (evidenced as provided in Section 104 of the Indenture) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding (determined in
accordance with Section 104 of the Indenture), the Company, when authorized by the resolutions of
the Board of Directors, and the Trustee may from time to time and at any time amend this First
Supplemental Indenture or enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of this
First Supplemental Indenture or any supplemental indenture or of modifying in any manner the rights
of the Noteholders, provided, however, that no such amendment or supplemental indenture shall:


     (a) reduce the principal amount or any amount payable on repurchase or conversion of any Note;


     (b) impair the right to institute suit for the enforcement of any payment on or with respect
to, or the conversion of, any Note;


     (c) except as otherwise permitted or contemplated by provisions of the Indenture, impair or
adversely affect the conversion rights of holders of the Notes, including any change to the payment
of the Principal Return or delivery of the Net Shares;

in each case without the consent or affirmative vote of the holder of each outstanding Note
affected.



     Upon the written request of the Company, accompanied by a copy of the Board Resolutions
authorizing the execution of any such amendment or


42




 






supplemental indenture, and upon the filing with the Trustee of evidence of the consent of
Noteholders as aforesaid, the Trustee shall join with the Company in the execution of such
amendment or supplemental indenture unless such amendment or supplemental indenture affects the
Trustee’s own rights, duties or immunities under this First Supplemental Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to, enter into such
amendment or supplemental indenture.


     It shall not be necessary for the consent of the Noteholders under this Section 6.02 to
approve the particular form of any proposed amendment or supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.


     Section 6.03. Effect of Amendments or Supplemental Indentures. Any amendment or supplemental
indenture executed pursuant to the provisions of this Article 6 shall comply with the Trust
Indenture Act, as then in effect, provided that this Section 6.03 shall not require such amendment
or supplemental indenture or the Trustee to be qualified under the Trust Indenture Act prior to the
time such qualification is in fact required under the terms of the Trust Indenture Act or the First
Supplemental Indenture has been qualified under the Trust Indenture Act, nor shall it constitute
any admission or acknowledgment by any party to such amendment or supplemental indenture that any
such qualification is required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act or the First Supplemental Indenture has been qualified under the
Trust Indenture Act. Upon the execution of any amendment or supplemental indenture pursuant to the
provisions of this Article 6, this First Supplemental Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this First Supplemental Indenture of the Trustee, the
Company and the Noteholders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms and conditions of
any such amendment or supplemental indenture shall be and be deemed to be part of the terms and
conditions of this First Supplemental Indenture for any and all purposes.


     Section 6.04. Notation on Notes. Notes authenticated and delivered after the execution of any
amendment or supplemental indenture pursuant to the provisions of this Article 6 may bear a
notation in form approved by the Trustee as to any matter provided for in such amendment or
supplemental indenture. If the Company or the Trustee shall so determine, new Notes so modified as
to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this
First Supplemental Indenture contained in any such amendment or supplemental indenture may, at the
Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 611 of the Indenture) and
delivered in exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.


43




 




     Section 6.05. Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee. In
addition to the documents required by Section 102 of the Indenture, upon its request, the Trustee
shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements of this Article 6.


ARTICLE 7

Consolidation, Merger, Sale, Conveyance And Lease



     Section 7.01. Company May Consolidate, Etc. On Certain Terms. Subject to the provisions of
Section 4.05, the Company shall not, without the consent of holders of the Notes, consolidate with,
merge with or into or sell, lease or otherwise transfer in one transaction or a series of related
transactions the consolidated assets of the Company and its subsidiaries substantially as an
entirety to any Person, unless:


     (a) the Company is the surviving Person or the Person formed by such consolidation or into
which the Company is merged or the Person that acquires by conveyance or transfer, or that leases
the assets and properties of the Company substantially as an entirety shall be a corporation,
limited liability company, partnership or trust organized under the laws of the United States or
any of its political subdivisions;


     (b) such Person or surviving entity assumes all of the Company’s obligations under the
Indenture and the First Supplemental Indenture and the Notes in a supplemental indenture hereto,
executed and delivered to the Trustee by such Person;


     (c) if, as a result of such transactions, the Notes become convertible into common stock,
securities or other property issued by any Person (other than the Person assuming the obligations
under the Indenture and the First Supplemental Indenture pursuant to clause (b) above) pursuant to
Section 4.05, such Person shall fully and unconditionally guarantees all the obligations of the
Company or such successor under the Notes, the Indenture and the First Supplemental Indenture;


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


     (e) an Officers’ Certificate and an Opinion of Counsel, each stating that the transaction or
series of transactions comply with the provisions of the Indenture and First Supplemental
Indenture, have been delivered to the Trustee.


44




 




ARTICLE 8

Miscellaneous Provisions



     Section 8.01. Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.


     Section 8.02. No Security Interest Created. Nothing in this First Supplemental Indenture or in
the Notes, expressed or implied, shall be construed to constitute a security interest under the
Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction.


     Section 8.03. Table of Contents, Headings, Etc. The table of contents and the titles and
headings of the articles and sections of this First Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.


     Section 8.04. Scope of First Supplemental Indenture. Except as specifically supplemented and
amended by this First Supplemental Indenture, the terms and provisions of the Indenture shall
remain in full force and effect. The Indenture, as supplemented and amended by this First
Supplemental Indenture and all other indentures supplemental hereto, is in all respects ratified
and confirmed, and the Indenture, this First Supplemental Indenture and all indentures supplemental
thereto shall be read, taken and construed as one and the same instrument.


     Section 8.05. Execution in Counterparts. This First Supplemental Indenture may be executed in
any number of counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.


[Signature Page Follows]




45







 




     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
executed as of the date first above written.




    
 
    
 
    
 
    
 
    
 


    
 
    
MOLINA HEALTHCARE, INC.

 
    
 

    
 
    
By:  
    
 
    
 

    
 
    
 
    
Name:  
    
 
    
 

    
 
    
 
    
Title:  
    
 
    
 


    
 





    
 
    
 
    
 
    
 
    
 


    
 
    
U.S. BANK NATIONAL

     ASSOCIATION, as Trustee

 
    
 

    
 
    
By:  
    
 
    
 

    
 
    
 
    
Name:  
    
 
    
 

    
 
    
 
    
Title:  
    
 
    
 




 




 







EXHIBIT A



[FORM OF FACE OF NOTE]


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



A-1




 







MOLINA HEALTHCARE, INC.

3.75% Convertible Senior Notes due 2014






    
 
    
 
    
 
    
 
    
 




    
No. 1
    
 
    
$
    
175,000,000
    
 






CUSIP No.
60855R AA8



     Molina Healthcare, Inc., a corporation duly organized and validly existing under the laws of
the State of Delaware (herein called the “Company,” which term includes any successor corporation
under the Indenture, as supplemented by the First Supplemental Indenture, referred to on the
reverse hereof), for value received hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of One Hundred Fifty Million Dollars (which amount may from time to time be
increased or decreased to such other principal amounts by adjustments made on the records of the
Trustee as set forth in Schedule B hereto, as Custodian of the Depository, in accordance with the
rules and procedures of the Depository) on October 1, 2014.


     The
Notes bear interest at the rate of 3.75% per year from the date of original issuance of the
Notes, or from the most recent date to which interest had been paid or provided for to, but
excluding, the next scheduled Interest Payment Date. Interest is payable semi-annually in arrears
on each April 1 and October 1, commencing April 1, 2008, to holders of record at the close of
business on the preceding March 15 and September 15, respectively.


     Payment of the principal of and interest accrued on this Note shall be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New
York, or, at the option of the holder of this Note, at the Corporate Trust Office, in such lawful
money of the United States of America as at the time of payment shall be legal tender for the
payment of public and private debts; provided, however, interest may be paid by check mailed to
such holder’s address as it appears in the Security Register; provided further, however, that, with
respect to any Noteholder with an aggregate principal amount equal to or in excess of $2,000,000,
at the request of such holder in writing to the Company, interest on such holder’s Notes shall be
paid by wire transfer in immediately available funds in accordance with the written wire transfer
instruction supplied by such holder from time to time to the Trustee and Paying Agent (if different
from the Trustee) at least two days prior to the applicable record date; provided that any payment
to the Depository or its nominee shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instruction supplied by the Depository or its nominee from time
to time to the Trustee and Paying Agent (if different from Trustee) at least two days prior to the
applicable record date.


A-2




 




     Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the holder of this Note the right to convert this
Note into cash and Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture, as supplemented by the First
Supplemental Indenture. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.


     This Note shall be deemed to be a contract made under the laws of the State of New York, and
for all purposes shall be construed in accordance with and governed by the laws of said State
(without regard to the conflicts of laws provisions thereof).


     This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by the Trustee or a duly authorized
authenticating agent under the Indenture.


[Remainder of page intentionally left blank]



A-3




 







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




    
 
    
 
    
 
    
 
    
 


    
 
    
MOLINA HEALTHCARE, INC.

 
    
 

    
 
    
By:  
    
 
    
 

    
 
    
 
    
Name:  
    
 
    
 

    
 
    
 
    
Title:  
    
 
    
 


    
 


    
 
    
 
    
 

    
 
    
By:  
    
 
    
 

    
 
    
 
    
Name:  
    
 
    
 

    
 
    
 
    
Title:  
    
 
    
 


    
 



TRUSTEE’S CERTIFICATE OF AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture, as supplemented by the First Supplemental

Indenture.





    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
 

    
By:  
    
 
    
 
    
 

    
 
    
Authorized Officer 
    
 
    
 

    
 
    
 
    
 
    
 




A-4




 







[FORM OF REVERSE OF NOTE]



MOLINA HEALTHCARE, INC.

3.75% Convertible Senior Notes due 2014




     This
Note is one of a duly authorized issue of Notes of the Company,
designated as its 3.75%
Convertible Senior Notes due 2014 (herein called the “Notes”), limited to the aggregate principal
amount of $175,000,000 all issued or to be issued under and pursuant to an Indenture dated as of
October 11, 2007 (herein called the “Indenture”), as supplemented by the First Supplemental
Indenture, dated as of October 11, 2007 (herein called the “First Supplemental Indenture”), and as
further amended and supplemented from time to time, between the Company and U.S. Bank National
Association (herein called the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the
Notes. Additional Notes may be issued in an unlimited aggregate principal amount, subject to
certain conditions specified in the Indenture and the First Supplemental Indenture.


     In case an Event of Default, as defined in the Indenture and the First Supplemental Indenture,
shall have occurred and be continuing, the principal of, and accrued and unpaid interest on all
Notes may be declared, and upon said declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the Indenture and the First Supplemental
Indenture.


     Subject to the terms and conditions of the Indenture and the First Supplemental Indenture, the
Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price
and the principal amount on the maturity date, as the case may be, to the holder who surrenders a
Note to a Paying Agent to collect such payments in respect of the Note. The Company will pay cash
amounts in money of the United States that at the time of payment is legal tender for payment of
public and private debts.


     The Indenture and the First Supplemental Indenture contain provisions permitting the Company
and the Trustee in certain circumstances, without the consent of the holders of the Notes, and in
other circumstances, with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as in the Indenture and the First
Supplemental Indenture provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or the First
Supplemental Indenture or of any other supplemental indenture or modifying in any manner the rights
of the holders of the Notes;


A-5




 






provided, however, that no such supplemental indenture shall make any of the changes set forth in Section 902 of the Indenture or any of the changes set forth in Section
6.02 of the First Supplemental Indenture, without the consent of the holders of all Notes then
outstanding. It is also provided in the Indenture and the First Supplemental Indenture that, prior
to any declaration accelerating the maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default under the Indenture and the First Supplemental
Indenture and its consequences except as provided in the Indenture and the First Supplemental
Indenture. Any such consent or waiver by the holder of this Note (unless revoked as provided in
the Indenture and the First Supplemental Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Note and any Notes which may be issued in
exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon
this Note or such other Notes.


     No reference herein to the Indenture or the First Supplemental Indenture and no provision of
this Note or of the Indenture or the First Supplemental Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the principal of, and
accrued and unpaid interest on this Note at the place, at the respective times, at the rate and in
the lawful money herein prescribed.


     The Notes are issuable in registered form without coupons in denominations of $1,000 principal
amount and integral multiples thereof. At the office or agency of the Company referred to on the
face hereof, and in the manner and subject to the limitations provided in the Indenture, without
payment of any service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or exchange of Notes,
Notes may be exchanged for a like aggregate principal amount of Notes of other authorized
denominations.


     Upon the occurrence of a “Fundamental Change,” the holder has the right, at such holder’s
option, to require the Company to repurchase all of such holder’s Notes or any portion thereof (in
principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Purchase Date
at a price equal to 100% of the principal amount of the Notes such holder elects to require the
Company to repurchase, together with accrued and unpaid interest, to but excluding the date fixed
for repurchase. The Company or, at the written request of the Company, the Trustee shall mail to
all holders of record of the Notes a notice of the occurrence of a Fundamental Change and of the
repurchase right arising as a result thereof on or before the fifteenth day after the occurrence of
such Fundamental Change.


A-6




 




     Subject to the provisions of the Indenture and the First Supplemental Indenture, the holder
hereof has the right, at its option, on and after July 1, 2014, or earlier upon the occurrence of
certain conditions specified in the First Supplemental Indenture and prior to the close of business on the business day immediately
preceding the maturity date, to convert any Notes or portion thereof which is $1,000 or an integral
multiple thereof, into cash and, if applicable, shares of Common Stock, in each case at a
Conversion Rate specified in the First Supplemental Indenture, as adjusted from time to time as
provided in the First Supplemental Indenture, upon surrender of this Note, together with a
conversion notice as provided in the First Supplemental Indenture and this Note, to the Company at
the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, or at the option of such holder, the Corporate Trust Office, and, unless the
shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the
holder or by his duly authorized attorney. The initial Conversion Rate shall be [•] shares for
each $1,000 principal amount of Notes. No fractional shares of Common Stock will be issued upon
any conversion, but an adjustment in cash will be paid to the holder, as provided in the First
Supplemental Indenture, in respect of any fraction of a share which would otherwise be issuable
upon the surrender of any Note or Notes for conversion. No adjustment shall be made for dividends
or any shares issued upon conversion of such Note except as provided in the First Supplemental
Indenture.


     Upon due presentment for registration of transfer of this Note at the office or agency of the
Company in the Borough of Manhattan, The City of New York, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the limitations provided in the Indenture and the First Supplemental Indenture,
without charge except for any tax, assessments or other governmental charge imposed in connection
therewith.


     The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and
any Note registrar may deem and treat the registered holder hereof as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or
other writing hereon), for the purpose of receiving payment hereof, or on account hereof, for the
conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any Paying Agent nor any other Conversion Agent nor any Note registrar
shall be affected by any notice to the contrary. Notwithstanding the foregoing, the Indenture
provides that following an event which, after notice or passage of time or both, would become a
Default, owners of beneficial interests in a Global Note may directly enforce against the Company
such owners’ right to exchange such beneficial interest for Notes in


A-7




 






certificated form. All payments made to or upon the order of such registered holder shall, to the extent of the sum or
sums paid, satisfy and discharge liability for monies payable on this Note.


     No recourse for the payment of the principal of, or accrued and unpaid interest on this Note,
or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture, the First Supplemental Indenture
or any other indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, stockholder, employee,
agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor corporation, whether
by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.


     Terms used in this Note and defined in the Indenture or the First Supplemental Indenture are
used herein as therein defined.



A-8






 




ABBREVIATIONS


The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:






    
 
    
 
    
 
    
 
    
 




    
TEN COM — as tenants in common
    
 
    
UNIF GIFT MIN ACT


    
 
    
 
    
 
    
 
    
 


    
 

    
 
    
 
    
Custodian
    
 


    
 

    
 
    
 
(Cust)

    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
TEN ENT — as tenants by the entireties
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
 


    
 

    
 
    
 
(Minor)

    
 
    
 

 

    
JT TEN  — as joint tenants with right of
survivorship and not as tenants in common

    
 
    
Uniform Gifts to Minors Act                      (State)





Additional abbreviations may also be used

though not in the above list.




A-9




 







EXHIBIT B



[FORM OF CONVERSION NOTICE]



To: Molina Healthcare, Inc.



     The undersigned registered owner of this Note hereby irrevocably (subject to revocation as set
forth in the First Supplemental Indenture) exercises the option to convert this Note, or the
portion hereof (which is $1,000 principal amount or an integral multiple thereof) below designated,
into cash and shares of Common Stock, if any, in accordance with the terms of the First
Supplemental Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon such conversion, if any, together with any check in payment of the Principal
Return (as defined in the First Supplemental Indenture) and for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or any portion of this
Note not converted are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be
paid to the undersigned on account of interest accompanies this Note.


Dated:                                         





    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
 

    
 
    

 
    
 


    
 
    

 
    
 


    
 
    
Signature(s) 
    
 





    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
 

    

 
    
 
    
 


    
Signature Guarantee 
    
 
    
 

    
Signature(s) must be guaranteed
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares
of Common Stock are to be issued, or
Notes to be delivered, other than
to and in the name of the registered holder. 
    
 
    
 




B-1




 










    
 
    
 
    
 




    
Fill in for registration of shares if
to be issued, and Notes if to
be delivered, other than to and in the
name of the registered holder:
    
 
    
 


    
 
    
 
    
 


    
 
(Name)

    
 
    
 


    
 
    
 
    
 


    
 
(Street Address)

    
 
    
 


    
 
    
 
    
 


    
 
(City, State and Zip Code)

Please print name and address

    
 
    
 


    
 
    
 
    
 


    
 

    
 
    
Principal amount to be converted
 (if
less than all): $                    ,000


    
 
    
 
    
 


    
 

    
 
    
 


    
 

    
 
    
Social Security or Other

Taxpayer Identification Number






B-2




 





EXHIBIT C



[FORM OF OPTION TO ELECT REPAYMENT

UPON A FUNDAMENTAL CHANGE]



To: Molina Healthcare, Inc.


The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Molina
Healthcare, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the
Company and requests and instructs the Company to repay the entire principal amount of this Note,
or the portion thereof (which is $1,000 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the First Supplemental Indenture referred to in this
Note, together with accrued and unpaid interest, if any, to, but excluding, such date, to the
registered holder hereof.



Dated:                                         





    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
 

    
 
    

 
    
 


    
 
    

 
    
 


    
 
    
Signature(s) 
    
 


    
 
    
 
    
 

    
 
    

 
    
 

    
 
    
Social Security or Other Taxpayer 
    
 

    
 
    
Identification Number

Principal amount to be repaid (if less
than all):  $                    ,000

NOTICE:  The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change
whatever. 
    
 




C-1




 







SCHEDULE A



Applicable Price






    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 


    
Conversion Date
    
 
    
$34.51
    
 
    
 
    
$38.00
    
 
    
 
    
$41.50
    
 
    
 
    
$45.00
    
 
    
 
    
$48.50
    
 
    
 
    
$52.00
    
 
    
 
    
$55.50
    
 
    
 
    
$60.00
    
 
    
 
    
$70.00
    
 
    
 
    
$80.00
    
 
    
 
    
$100.00
    
 
    
 
    
$120.00
    
 





    
 


    
October 5, 2007
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
6.8816
    
 
    
 
    
 
    
5.9458
    
 
    
 
    
 
    
5.2060
    
 
    
 
    
 
    
4.6113
    
 
    
 
    
 
    
4.1259
    
 
    
 
    
 
    
3.7243
    
 
    
 
    
 
    
3.3017
    
 
    
 
    
 
    
2.6201
    
 
    
 
    
 
    
2.1594
    
 
    
 
    
 
    
1.5796
    
 
    
 
    
 
    
1.2285
    
 


    
October 1, 2008
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
6.6085
    
 
    
 
    
 
    
5.6459
    
 
    
 
    
 
    
4.8930
    
 
    
 
    
 
    
4.2944
    
 
    
 
    
 
    
3.8114
    
 
    
 
    
 
    
3.4162
    
 
    
 
    
 
    
3.0054
    
 
    
 
    
 
    
2.3559
    
 
    
 
    
 
    
1.9276
    
 
    
 
    
 
    
1.4017
    
 
    
 
    
 
    
1.0896
    
 


    
October 1, 2009
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
6.3145
    
 
    
 
    
 
    
5.3140
    
 
    
 
    
 
    
4.5413
    
 
    
 
    
 
    
3.9354
    
 
    
 
    
 
    
3.4533
    
 
    
 
    
 
    
3.0645
    
 
    
 
    
 
    
2.6669
    
 
    
 
    
 
    
2.0548
    
 
    
 
    
 
    
1.6645
    
 
    
 
    
 
    
1.2013
    
 
    
 
    
 
    
0.9335
    
 


    
October 1, 2010
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
5.9936
    
 
    
 
    
 
    
4.9394
    
 
    
 
    
 
    
4.1377
    
 
    
 
    
 
    
3.5197
    
 
    
 
    
 
    
3.0371
    
 
    
 
    
 
    
2.6555
    
 
    
 
    
 
    
2.2738
    
 
    
 
    
 
    
1.7081
    
 
    
 
    
 
    
1.3646
    
 
    
 
    
 
    
0.9759
    
 
    
 
    
 
    
0.7590
    
 


    
October 1, 2011
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
5.6428
    
 
    
 
    
 
    
4.5090
    
 
    
 
    
 
    
3.6631
    
 
    
 
    
 
    
3.0259
    
 
    
 
    
 
    
2.5411
    
 
    
 
    
 
    
2.1683
    
 
    
 
    
 
    
1.8078
    
 
    
 
    
 
    
1.3038
    
 
    
 
    
 
    
1.0205
    
 
    
 
    
 
    
0.7228
    
 
    
 
    
 
    
0.5640
    
 


    
October 1, 2012
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
5.2646
    
 
    
 
    
 
    
4.0048
    
 
    
 
    
 
    
3.0879
    
 
    
 
    
 
    
2.4199
    
 
    
 
    
 
    
1.9320
    
 
    
 
    
 
    
1.5739
    
 
    
 
    
 
    
1.2470
    
 
    
 
    
 
    
0.8353
    
 
    
 
    
 
    
0.6348
    
 
    
 
    
 
    
0.4486
    
 
    
 
    
 
    
0.3536
    
 


    
October 1, 2013
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
5.0091
    
 
    
 
    
 
    
3.3773
    
 
    
 
    
 
    
2.3207
    
 
    
 
    
 
    
1.5955
    
 
    
 
    
 
    
1.1084
    
 
    
 
    
 
    
0.7869
    
 
    
 
    
 
    
0.5322
    
 
    
 
    
 
    
0.2887
    
 
    
 
    
 
    
0.2103
    
 
    
 
    
 
    
0.1537
    
 
    
 
    
 
    
0.1233
    
 


    
October 1, 2014
    
 
    
 
    
7.6704
    
 
    
 
    
 
    
5.0091
    
 
    
 
    
 
    
2.7897
    
 
    
 
    
 
    
0.9155
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 
    
 
    
 
    
0.0000
    
 


    
 







 




 







SCHEDULE B



MOLINA HEALTHCARE, INC.

3.75% Convertible Senior Notes due 2014



No.                     






    
 
    
 
    
 
    
 
    
 
    
 
    
 


    
 
    
 
    
 
    
 
    
Notation Explaining
    
 
    
Authorized Signature


    
 
    
 
    
 
    
 
    
Principal Amount
    
 
    
of Trustee or


    
Date
    
 
    
Principal Amount
    
 
    
Recorded
    
 
    
Custodian





    
 
    
 
    
 
    
 
    
 
    
 
    
 







 












 




Exhibit 5.1



[Letterhead of Holme Roberts & Owen LLP]



October 5, 2007



Molina Healthcare, Inc.

One Golden Shore Drive

Long Beach, CA 90802


Re: 3.75% Convertible Senior Notes due 2014


Ladies and Gentlemen:



     We have acted as counsel to Molina Healthcare, Inc., a Delaware corporation (the
“Company”), in connection with (i) the preparation and filing of the Company’s final
prospectus supplement, dated October 4, 2007 (the “Final Prospectus”), as transmitted to
the Securities and Exchange Commission (the “SEC”) for filing on October 4, 2007, (a)
related to the Company’s Registration Statement on Form S-3 (as amended, the “Registration
Statement”) filed with the SEC under the Securities Act of 1933, as amended (the
“Act”), on April 4, 2005 (File No. 333-123783), as amended on May 6, 2005 and November 23,
2005, and (b) supplementing the prospectus contained in Amendment No. 2 to the Registration
Statement filed on November 23, 2005 (the “Preliminary Prospectus,” and, together with the
Final Prospectus, collectively the “Prospectus”); and (ii) the offering and sale by the
Company pursuant to the Prospectus of $175,000,000 in 3.75% Convertible Senior Notes due 2014
(the “Convertible Notes”) of the Company that are to be convertible into shares of common
stock, par value $.001 per share, of the Company (the “Common Stock”). This opinion is
being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act. We did not represent the Company in connection with or participate in the
preparation or filing of the Registration Statement (other than the Final Prospectus), but we did
review the Registration Statement in connection with our participation in the preparation of the
Final Prospectus and the preparation of this opinion.


     In connection with the Company’s preparation and filing of the Final Prospectus, we have
examined originals or copies of all documents, corporate records or other writings that we consider
relevant for the purposes of this opinion. In such examination, we have assumed the genuineness of
all signatures on all original documents, the legal competency of each individual executing any
such documents, the authenticity of all documents submitted to us as originals, and the conformity
to original documents of all documents submitted to us as photocopies or electronic copies of
originals. In making our examination of documents executed by parties other than the Company, we
have further assumed that (i) all parties to the documents (except to the extent opined to herein)
are validly existing and in good standing under the laws of all jurisdictions where they are
conducting their businesses or are otherwise required to be so


 




 



qualified, and have full power and authority and all necessary consents and approvals to
execute, deliver and perform under such documents, (ii) all such documents have been duly
authorized by all necessary corporate or other action on the part of the parties thereto (except to
the extent opined to herein), have been duly executed by such parties and have been duly delivered
by such parties and (iii) all such documents constitute the legal, valid and binding obligation of
each party thereto enforceable against such party in accordance with its terms. In rendering the
opinions set forth below, we have relied as to factual matters upon certificates, statements and
representations of the Company, its officers and representatives and public officials and other
sources believed by us to be responsible. We have not independently established the facts so relied
upon. As to matters of fact not directly within our actual knowledge, we have relied upon
certificates and other documents from public officials in certain jurisdictions.



     In connection with this opinion, we have examined the following documents:


     1. The Certificate of Incorporation of the Company, as amended to date, certified as of a
recent date by an officer of the Company;


     2. The Bylaws of the Company, as amended to date, certified as of a recent date by an officer
of the Company;


     3. The form of Indenture (the “Base Indenture”), between the Company and U.S. Bank National
Association, as Trustee (the “Trustee”), and the form of First Supplemental Indenture (the
“First Supplemental Indenture”), between the Company and the Trustee (the Base Indenture,
as amended and supplemented by the First Supplemental Indenture, is referred to herein as the
“Indenture”), incorporated by reference as exhibits to the Registration Statement, and the
form of the Convertible Notes, which is an exhibit to the First Supplemental Indenture;


     4. The Prospectus;


     5. The Underwriting Agreement, dated October 4, 2007 (the “Underwriting Agreement”),
between the Company and Citigroup Global Markets Inc. and UBS Securities LLC, for themselves and
the other underwriters named therein (collectively, the “Underwriters”);


     6. Resolutions adopted by the Board of Directors of the Company and the Pricing Committee of
the Board of Directors of the Company approving the terms of the Convertible Notes, certified as of
a recent date by an officer of the Company (the “Board Resolutions”);


     7. Such other records of the corporate proceedings of the Company that we considered necessary
or appropriate for the purpose of rendering this opinion;


     8. Such other certificates and assurances from public officials, officers and representatives
of the Company that we considered necessary or appropriate for the purpose of rendering this
opinion; and


     9. Such other documents that we considered necessary or appropriate for the purpose of
rendering this opinion.


     On the basis of the foregoing examination, our reliance thereon, and subject to the
assumptions, limitations and qualifications set forth herein, we are of the opinion that (subject
to compliance with the pertinent provisions of the Act and the Trust Indenture Act of 1939, as
amended, and to compliance with such securities or “blue sky” laws of any jurisdiction as may be
applicable, as to which we express no opinion):


2




 




     1. When the Convertible Notes in the form contained in the Indenture shall have been
completed, executed, authenticated and delivered in accordance with the provisions of the
Indenture, the Board Resolutions and the Underwriting Agreement, against payment of the
consideration therefor pursuant to the Underwriting Agreement, and in a manner contemplated in the
Registration Statement, including the Prospectus, the Convertible Notes will be duly authorized by
the Company and will be valid and binding obligations of the Company.


     2. Following the valid issuance of the Convertible Notes, the shares of Common Stock to be
issued by the Company upon conversion of the Convertible Notes in accordance with the terms of the
Convertible Notes and the Indenture, will, when issued upon such conversion in accordance with the
terms of the Convertible Notes and the Indenture, be validly issued, fully paid and non-assessable.


     For purposes of this letter, we have assumed that, at the time of issuance, sale and delivery
of the Convertible Notes: (a) no stop order shall have been issued by the SEC relating to the
Registration Statement, (b) the authorization thereof by the Company’s board of directors shall not
have been modified or rescinded, (c) no change in law affecting the validity, legally binding
character or enforceability of the authorization of the of the issuance and sale of the Convertible
Notes by the Company’s board of directors shall have occurred, (d)  the Base Indenture
and the First Supplemental Indenture (including, without limitation, the form of the Convertible
Notes to be issued thereunder) shall not have been modified except to reflect the pricing terms
set forth in the Prospectus, (e) the Convertible Notes shall have been issued in accordance with
the Indenture; (f) upon the issuance of the Convertible Notes, the amount of Convertible Notes
outstanding does not exceed the amount authorized by the Company’s board of directors, and (g) the
Company’s certificate of incorporation shall not have been modified or amended in any respect that
would affect the opinions expressed herein and will be in full force and effect.


     The opinions expressed herein are limited to the laws of the State of New York (as such
opinions relate to the Convertible Notes only) and the General Corporation Law of the State of
Delaware (including the statutory provisions and all applicable provisions of the Delaware
Constitution and reported judicial decisions interpreting these laws) (the “DGCL”) and the
federal laws of the United States of America.


     This opinion, as it relates to the enforceability of obligations of the Company, is subject to
the qualification that the enforceability of the agreement, instrument or other obligation referred
to herein is subject to and may be limited by (i) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to or affecting the enforcement of creditors’ rights generally; (ii)
general principles of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law) and the discretion of the court before which any proceeding therefor may be brought
(such principles of equity are of general application, and in applying such principles, a court
might include a covenant of good faith and fair dealing and apply concepts of reasonableness and
materiality); and (iii) public policy or similar considerations that may limit enforceability of
indemnification provisions and provisions seeking to limit a party’s liability.


     We express no opinion as to the validity, legally binding effect or enforceability of any
provision in any agreement or instrument that (i) requires or relates to payment of any interest at
a rate or in an amount which a court would determine in the circumstances under applicable law
to be commercially unreasonable or a penalty or a forfeiture or (ii) relates to governing law
and submission by the parties to the jurisdiction of one or more particular courts.


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     This opinion may be filed as part of the Company’s Current Report on Form 8-K to be filed for
the purpose of including this opinion as part of the Registration Statement. Consent is also given
to the reference to this firm under the caption “Legal Matters” in the Final Prospectus. In giving
these consents, we do not admit we are included in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the SEC promulgated thereunder.


     The opinions expressed herein are rendered as of the date hereof. We do not undertake to
advise you of matters that may come to our attention subsequent to the date hereof and that may
affect the opinions expressed herein, including without limitation, future changes in applicable
law. This letter is our opinion as to certain legal conclusions as specifically set forth herein
and is not and should not be deemed to be a representation or opinion as to any factual matters.
The opinions expressed herein may not be quoted in whole or in part or otherwise used or referred
to in connection with any other transactions.




    
 
    
 
    
 
    
 
    
 


    
 
    
Very truly yours,




/s/ HOLME ROBERTS & OWEN LLP

HOLME ROBERTS & OWEN LLP

 
    
 

    
 
    
 
    
 

    
 
    
 
    
 

    
 
    
 
    
 


    
 




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Exhibit 99.1











Contact:

Juan José Orellana

Investor Relations

Molina Healthcare, Inc.

562-435-3666, ext. 111143



MOLINA
HEALTHCARE ANNOUNCES UPSIZING TO $175 MILLION AND PRICING OF CONVERTIBLE SENIOR NOTES


Long
Beach, California (October 5, 2007) — Molina Healthcare, Inc. (NYSE: MOH) today announced the
increase in the aggregate principal amount of 3.75% Convertible
Senior Notes due 2014 from $150,000,000 to $175,000,000 and pricing
of the Notes. The
Company has also granted the underwriters an over-allotment option to
purchase up to $25.0 million
of additional Notes on the same terms and conditions.


Under certain circumstances, the Notes will be convertible at an initial conversion rate of
21.3067 shares of the Company’s common stock per $1,000 principal amount of Notes, subject to adjustment.
This conversion rate is equivalent to an initial conversion price of
approximately $46.93 per
share. This represents an approximately 36% premium to the last reported sale price of the
Company’s common stock on the New York Stock Exchange on
October 4, 2007. The conversion rate
will be subject to adjustment upon the occurrence of specified events. Upon conversion, holders
will receive cash, and if applicable, shares of common stock of the Company.


The Company intends to use the proceeds from the offering to repay indebtedness under its credit
facility, to fund its pending acquisition of Mercy CarePlus in Missouri, continue to pursue its
acquisition and expansion strategy and for general corporate purposes including working capital.
The closing of the sale of the Notes is expected to occur on October 11, 2007, and is subject to
the satisfaction of customary closing conditions.


The Notes will be issued pursuant to an effective registration statement filed with the U.S.
Securities and Exchange Commission. Citi and UBS Investment Bank are acting as joint book-running
managers in connection with the offering. Copies of the prospectus relating to the offering may be
obtained from Citi, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220, (718)
765-6732 and from UBS Investment Bank, Prospectus Department, 299 Park Avenue, NY, NY 10171.


This press release does not constitute an offer to sell or solicitation of an offer to buy these
securities, nor shall there be any sale of these securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.



About Molina Healthcare


Molina Healthcare, Inc. is a multi-state managed care organization that arranges for the delivery
of healthcare services to persons eligible for Medicaid and other government-sponsored programs for
low-income families and individuals. Molina Healthcare, Inc. currently operates health plans in
California, Michigan, New Mexico, Ohio, Texas, Utah, and Washington.


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press
release may contain “forward-looking statements” regarding, but not limited to, the proposed
offering of the Convertible Senior Notes. All of our forward-looking statements are based on
current expectations and assumptions that are subject to numerous known and unknown risks,
uncertainties, and other factors that could cause actual results to differ materially. Such factors
include, without limitation, risks related to the closing of the
Company’s pending acquisition of Mercy CarePlus in Missouri and risks related to the closing of the sale of the Notes. Information concerning additional risk factors that could
cause actual results to differ materially is contained in the
Company’s offering prospectus, its Form 10-K annual report,
its Form 10-Q quarterly reports, and the Company’s other reports and filings with the Securities and
Exchange Commission and available for viewing on its website at www.sec.gov. All forward-looking
statements in this release represent our judgment as of the date of issuance of this release. We
disclaim any obligation to update any forward-looking statement to conform the statement to actual
results or changes in our expectations.



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