Exhibit 10.8

ABITIBIBOWATER INC., as Issuer, and

BOWATER INCORPORATED, as Guarantor

8% CONVERTIBLE SENIOR NOTES DUE 2013

 

 

INDENTURE

DATED AS OF APRIL 1, 2008

 

 

THE BANK OF NEW YORK TRUST COMPANY, N.A.

AS TRUSTEE

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TABLE OF CONTENTS

 

         

Page

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

   1

Section 1.01

  

Definitions

   1

Section 1.02

  

Other Definitions

   8

Section 1.03

  

Trust Indenture Act Provisions

   9

Section 1.04

  

Rules of Construction

   9

ARTICLE 2 THE SECURITIES

   10

Section 2.01

  

Form and Dating

   10

Section 2.02

  

Execution and Authentication

   12

Section 2.03

  

Registrar, Paying Agent and Conversion Agent

   12

Section 2.04

  

Paying Agent to Hold Money in Trust

   13

Section 2.05

  

Lists of Holders of Securities

   13

Section 2.06

  

Transfer and Exchange

   14

Section 2.07

  

Replacement Securities

   15

Section 2.08

  

Outstanding Securities

   15

Section 2.09

  

Treasury Securities

   16

Section 2.10

  

Temporary Securities

   16

Section 2.11

  

Cancellation

   16

Section 2.12

  

Legend; Additional Transfer and Exchange Requirements

   16

Section 2.13

  

CUSIP Numbers

   20

ARTICLE 3 PURCHASE

   21

Section 3.01

  

Repurchase of Securities at Option of the Holder upon a Fundamental Change

   21

Section 3.02

  

Effect of Fundamental Change Repurchase Notice

   23

Section 3.03

  

Deposit of Fundamental Change Repurchase Price

   24

Section 3.04

  

Repayment to the Company

   24

Section 3.05

  

Securities Purchased in Part

   25

Section 3.06

  

Compliance with Securities Laws upon Purchase of Securities

   25

Section 3.07

  

Purchase of Securities in Open Market

   25

ARTICLE 4 CONVERSION

   25

Section 4.01

  

Conversion Privilege and Conversion Rate

   25

Section 4.02

  

Conversion Procedure

   26

Section 4.03

  

Fractional Shares

   27

Section 4.04

  

Taxes on Conversion

   28

Section 4.05

  

Company to Provide Stock

   28

Section 4.06

  

Adjustment of Conversion Rate

   28

Section 4.07

  

No Adjustment

   35

Section 4.08

  

Notice of Adjustment

   35

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Page

Section 4.09

  

Notice of Certain Transactions

   36

Section 4.10

  

Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale

   36

Section 4.11

  

Trustee’s Disclaimer

   37

Section 4.12

  

Voluntary Increase

   37

ARTICLE 5 GUARANTEE

   37

Section 5.01

  

Guarantee

   37

Section 5.02

  

Continuing Guarantee; No Right of Set-Off; Independent Obligation

   37

Section 5.03

  

Guarantee Absolute

   38

Section 5.04

  

Right to Demand Full Performance

   40

Section 5.05

  

Waivers

   41

Section 5.06

  

The Guarantor Remain Obligated in Event the Company Is No Longer Obligated to
Discharge Indenture Obligations

   41

Section 5.07

  

Limitation on Guarantor Liability

   42

Section 5.08

  

Guarantee is in Addition to Other Security

   42

Section 5.09

  

No Bar to Further Actions

   42

Section 5.10

  

Failure to Exercise Rights Shall Not Operate as a Waiver; No Suspension of
Remedies

   42

Section 5.11

  

Trustee’s Duties; Notice to Trustee

   43

Section 5.12

  

Successors and Assigns

   43

Section 5.13

  

Release of Guarantee

   43

Section 5.14

  

Execution of Guarantee

   43

ARTICLE 6 COVENANTS

   44

Section 6.01

  

Payment of Securities

   44

Section 6.02

  

SEC and Other Reports

   45

Section 6.03

  

Compliance Certificates

   45

Section 6.04

  

Further Instruments and Acts

   46

Section 6.05

  

Maintenance of Corporate Existence

   46

Section 6.06

  

Rule 144A Information Requirement

   46

Section 6.07

  

Stay, Extension and Usury Laws

   46

Section 6.08

  

Payment of Additional Interest

   46

Section 6.09

  

Maintenance of Office or Agency

   47

Section 6.10

  

Voting Rights

   47

ARTICLE 7 CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR LEASE

   47

Section 7.01

  

Company May Consolidate, etc., only on Certain Terms

   47

Section 7.02

  

Successor Substituted

   48

 

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Page

ARTICLE 8 DEFAULT AND REMEDIES

   48

Section 8.01

  

Events of Default

   48

Section 8.02

  

Acceleration

   50

Section 8.03

  

Other Remedies

   51

Section 8.04

  

Waiver of Defaults and Events of Default

   51

Section 8.05

  

Control by Majority

   51

Section 8.06

  

Limitations on Suits

   52

Section 8.07

  

Rights of Holders to Receive Payment and to Convert

   52

Section 8.08

  

Collection Suit by Trustee

   52

Section 8.09

  

Trustee may File Proofs of Claim

   52

Section 8.10

  

Priorities

   53

Section 8.11

  

Undertaking for Costs

   53

ARTICLE 9 TRUSTEE

   54

Section 9.01

  

Obligations of Trustee

   54

Section 9.02

  

Rights of Trustee

   55

Section 9.03

  

Individual Rights of Trustee

   56

Section 9.04

  

Trustee’s Disclaimer

   56

Section 9.05

  

Notice of Default or Events of Default

   56

Section 9.06

  

Reports by Trustee to Holders

   57

Section 9.07

  

Compensation and Indemnity

   57

Section 9.08

  

Replacement of Trustee

   58

Section 9.09

  

Successor Trustee by Merger, etc.

   59

Section 9.10

  

Eligibility; Disqualification

   59

Section 9.11

  

Preferential Collection of Claims against Company

   59

ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE

   59

Section 10.01

  

Satisfaction and Discharge of Indenture

   59

Section 10.02

  

Application of Trust Money

   60

Section 10.03

  

Repayment to Company

   60

Section 10.04

  

Reinstatement

   61

ARTICLE 11 AMENDMENTS; SUPPLEMENTS AND WAIVERS

   61

Section 11.01

  

Without Consent of Holders

   61

Section 11.02

  

With Consent of Holders

   62

Section 11.03

  

Compliance with Trust Indenture Act

   63

Section 11.04

  

Revocation and Effect of Consents

   63

Section 11.05

  

Notation on or Exchange of Securities

   63

Section 11.06

  

Trustee to Sign Amendments, etc.

   63

Section 11.07

  

Effect of Supplemental Indentures

   63

 

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Page

ARTICLE 12 MISCELLANEOUS

   64

Section 12.01

  

Trust Indenture Act Controls

   64

Section 12.02

  

Notices

   64

Section 12.03

  

Communications by Holders with other Holders

   65

Section 12.04

  

Certificate and Opinion as to Conditions Precedent

   65

Section 12.05

  

Record Date for Vote or Consent of Holders of Securities

   66

Section 12.06

  

Rules by Trustee, Paying Agent, Registrar and Conversion Agent

   66

Section 12.07

  

Legal Holidays

   66

Section 12.08

  

Governing Law

   67

Section 12.09

  

No Adverse Interpretation of other Agreements

   67

Section 12.10

  

No Recourse against Others

   67

Section 12.11

  

No Security Interest Created

   67

Section 12.12

  

Successors

   67

Section 12.13

  

Multiple Counterparts

   67

Section 12.14

  

Separability

   67

Section 12.15

  

Table of Contents, Headings, etc.

   67

Section 12.16

  

Waiver of Jury Trial.

   67

Section 12.17

  

Force Majeure.

   67

EXHIBIT A

   Form of Security    A-1

EXHIBIT B

   Form of Notation of Guarantee    B-1

 

iv

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CROSS REFERENCE TABLE*

 

TIA Section

   Indenture Section  

Section 310

   12.01  

310(a)(1)

   9.10  

      (a)(2)

   9.10  

      (a)(3)

   N.A. **

      (a)(4)

   N.A.  

      (a)(5)

   9.10  

      (b)

   9.10  

      (c)

   N.A.  

Section 311

   12.01  

311(a)

   9.11  

      (b)

   9.11  

      (c)

   N.A.  

Section 312

   12.01  

312(a)

   N.A.  

      (b)

   12.03  

      (c)

   12.03  

Section 313

   12.01  

313(a)

   9.06 (a)

      (b)(1)

   N.A.  

      (b)(2)

   9.06 (a)

      (c)

   9.06 (a)

      (d)

   9.06 (a)

Section 314

   12.01  

314(a)

   6.02 (a)

      (b)

   N.A.  

      (c)(1)

   12.04  

      (c)(2)

   12.04  

      (c)(3)

   N.A.  

      (d)

   N.A.  

      (e)

   12.04  

      (f)

   N.A.  

Section 315

   12.01  

 

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

** N.A. means Not Applicable.

 

v

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TIA Section

   Indenture Section  

315(a)

   9.01 (b)

      (b)

   9.05  

      (c)

   9.01 (a)

      (d)(1)

   9.01 (d)

      (d)(2)

   9.01 (d)

      (d)(3)

   9.01 (d)

      (e)

   8.11  

Section 316

   12.01  

316(a)

   2.09  

316(a)(1)(A)

   8.05  

316(a)(1)(B)

   8.04  

316(a)(2)

   N.A.  

      (b)

   8.07  

      (c)

   12.05  

Section 317

   12.01  

317(a)(1)

   8.08  

317(a)(2)

   8.09  

317(b)

   2.04  

Section 318(a)

   12.01  

318(c)

   12.01  

 

vi

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THIS INDENTURE dated as of April 1, 2008 is among AbitibiBowater Inc., a
corporation duly organized under the laws of the State of Delaware (the
“Company”), Bowater Incorporated, a corporation duly organized under the laws of
the State of Delaware, as guarantor (the “Guarantor”), and The Bank of New York
Trust Company, N.A., a national banking association, as Trustee (the “Trustee”).

In consideration of the purchase of the Securities (as defined herein) by the
Holders thereof, the parties agree as follows for the benefit of one another and
for the equal and ratable benefit of the Holders of the Company’s 8% Convertible
Senior Notes Due April 15, 2013.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions.

“Additional Interest” has the meaning specified in the Registration Rights
Agreement. All references herein to interest accrued or payable as of any date
shall include any Additional Interest accrued or payable as of such date as
provided in the Registration Rights Agreement.

“Affiliate” means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
“control” when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.
Notwithstanding the foregoing, it is agreed that, for purposes of this Indenture
(other than Section 2.12(a)), each of Purchaser and its Affiliates shall be
deemed not to be an Affiliate of the Company.

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

“Antitrust Laws” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, the Competition Act (Canada), and any other foreign antitrust laws
or requirements.

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

“Beneficial Ownership” means the definition such term is given in accordance
with Rule 13d-3 promulgated by the SEC under the Exchange Act.

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

“Business Day” means any weekday that is not a day on which banking institutions
in the City of New York are authorized or obligated to close.

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

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

“Certificated Security” means a Security that is in substantially the form
attached as Exhibit A but that does not include the legend or the schedule
called for by footnote 1 thereof.

“Change of Control” means the occurrence of any of the following after the date
hereof: (i) the acquisition by any Person (other than Purchaser or its
Affiliates) of Beneficial Ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of shares of
the Company’s Capital Stock entitling that Person to exercise 50% or more of the
total voting power of all shares of the Company’s Capital Stock entitled to vote
generally in elections of directors, other than any acquisition by the Company,
any of its subsidiaries or any of its employee benefit plans; or (ii) the
consolidation or merger of the Company with or into any other Person, any merger
of another Person into the Company, or any conveyance, transfer, sale, lease or
other disposition of all or substantially all of the Company’s properties and
assets to another Person other than to one or more of the Company’s wholly-owned
subsidiaries, provided that this clause (ii) shall not apply to (A) any
transaction (x) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Company’s Capital Stock
and (y) pursuant to which holders of the Company’s Capital Stock immediately
prior to the transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of the Capital
Stock entitled to vote generally in elections of directors of the continuing or
surviving Person immediately after the transaction; or (B) any merger solely for
the purpose of changing the Company’s jurisdiction of incorporation and
resulting in a reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of common stock of the surviving entity; or
(iii) if, during any consecutive two-year period, individuals who at the
beginning of that two-year period constituted the Company’s Board of Directors,
together with any new directors whose election to the Company’s Board of
Directors, or whose nomination for election by the Company’s stockholders, was
approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority of the Company’s Board of Directors then in office.

“Closing Price” means on any Trading Day, the reported last sale price per share
(or if no last sale price is reported, the average of the bid and ask prices per
share or, if more than one in either case, the average of the average bid and
the average ask prices per share) on such date reported by the New York Stock
Exchange or, if the Common Stock (or the applicable security) is not quoted on
the New York Stock Exchange, as reported by the principal national securities
exchange on which the Common Stock (or such other security) is listed, or if no
such prices are available, the Closing Price per share shall be the fair value
of a share of Common Stock (or such other security) as reasonably determined by
the Board of Directors (which determination shall be conclusive and shall be
evidenced by an Officers’ Certificate delivered to the Trustee).

 

2

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“Common Stock” means the common stock of the Company, par value $1.00, as it
exists on the date of this Indenture and any shares of any class or classes of
Capital Stock of the Company resulting from any reclassification or
reclassifications thereof, or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving corporation, the common stock, common
equity interests, ordinary shares or depositary shares or other certificates
representing common equity interests of such surviving corporation or its direct
or indirect parent corporation, and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however, that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable on conversion of Securities shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

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

“Conversion Price” per share of Common Stock as of any day means the result
obtained by dividing (i) $1,000 by (ii) the then applicable Conversion Rate,
rounded to the nearest cent.

“Conversion Rate” means the rate at which shares of Common Stock shall be
delivered upon conversion, which rate shall be initially 100 shares of Common
Stock for each $1,000 principal amount of Securities, as adjusted from time to
time pursuant to the provisions of this Indenture.

“Corporate Trust Office” means the office of the Trustee at which at any
particular time the trust created by this Indenture shall be administered, which
initially will be the office of The Bank of New York Trust Company, N.A.,
located at 10161 Centurion Parkway, Jacksonville, Florida 32256, Attention:
Christie Leppert.

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

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

“Final Maturity Date” means April 15, 2013.

“Fundamental Change” means the occurrence of a Change of Control or a
Termination of Trading following the original issuance of the Securities.

“Fundamental Change Effective Date” means the date on which any Fundamental
Change becomes effective.

 

3

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“Fundamental Change Repurchase Price” of any Security, means 110% of the
principal amount of the Security to be purchased plus accrued and unpaid
interest, if any, and Additional Interest, if any, to, but excluding, the
Fundamental Change Repurchase Date.

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

“Global Security” means a Security in global form that is in substantially the
form attached as Exhibit A and that includes the legend and schedule called for
in footnote 1 thereof and which is deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.

“Guarantee” means the guarantee by the Guarantor of the Company’s Indenture
Obligations.

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

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

“Indebtedness” means, with respect to any Person, without duplication, the
principal or face amount of:

(1) all of such Person’s indebtedness, obligations and other liabilities
(contingent or otherwise) for borrowed money (including obligations in respect
of overdrafts and any loans or advances from banks, whether or not evidenced by
notes or similar instruments) or evidenced by credit or loan agreements, bonds,
debentures, notes or similar instruments (whether or not the recourse of the
lender is to the whole of such Person’s assets or to only a portion thereof)
(other than any trade accounts payable or other accrued current expense incurred
in the ordinary course of business in connection with the obtaining of materials
or services);

(2) all of such Person’s reimbursement obligations and other liabilities
(contingent or otherwise) with respect to letters of credit, bank guarantees or
bankers’ acceptances (other than endorsements of checks in the ordinary course
of business);

(3) all of such Person’s obligations and liabilities (contingent or otherwise)

 

4

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(A) in respect of leases required, in conformity with GAAP, to be accounted for
as capitalized lease obligations on such Person’s balance sheet,

(B) in respect of any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP;

(4) all of such Person’s obligations (contingent or otherwise) with respect to
an interest rate, currency or other swap, cap, floor or collar agreement, hedge
agreement, forward contract, or other similar instrument or foreign currency
hedge, exchange, purchase or similar instrument or agreement; provided, that
Indebtedness shall not include obligations (contingent or otherwise) with
respect to an interest rate, currency or other swap, cap, floor or collar
agreement, hedge agreement, forward contract, or other similar instrument or
foreign currency hedge, exchange, purchase or similar instrument or agreement
entered into in the ordinary course of business and not for speculative
purposes;

(5) all of such Person’s direct or indirect guarantees, agreements to be jointly
liable or similar agreements in respect of, and obligations or liabilities
(contingent or otherwise) to purchase or otherwise acquire or otherwise assure a
creditor against loss in respect of, Indebtedness of another person of the kind
described in clauses (1) through (4);

(6) any indebtedness or other obligations described in clauses (1) through
(5) secured by any mortgage, pledge, lien or other encumbrance existing on
property which is owned or held by such Person (other than a pledge of equity
interests of a joint venture or similar entity where recourse against such
Person is limited to such equity interests), regardless of whether the
indebtedness or other obligation secured thereby shall be assumed by such
Person; and

(7) 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 (1) through (6).

“Indenture” means this Indenture as amended or supplemented from time to time
pursuant to the terms of this Indenture, including the provisions of the TIA
that are automatically deemed to be a part of this Indenture by operation of the
TIA.

“Indenture Obligations” means the obligations of the Company and any other
obligor under this Indenture or under the Securities, including the Guarantor,
to pay principal of and interest when due and payable, and all other amounts due
or to become due under or in connection with this Indenture and the Securities
and the performance of all other obligations to the Trustee and the Holders
under this Indenture and the Securities, according to the respective terms
hereof and thereof.

“Interest Payment Date” means October 15 and April 15 of each year, commencing
October 15, 2008.

 

5

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

“Market Disruption Event” means the occurrence or existence for more than
one-half hour period in the aggregate on any scheduled Trading Day for the
Common Stock of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the New York Stock Exchange or
otherwise) in the Common Stock or in any options, contracts or future contracts
relating to the Common Stock, and such suspension or limitation occurs or exists
at any time before 1:00 p.m., New York City time, on such day.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Vice President, the Chief Financial Officer, the
Controller, the Secretary, or any Assistant Controller or any Assistant
Secretary of the Company or the Guarantor, as applicable.

“Officers’ Certificate” means a certificate signed on behalf of the Company or
the Guarantor, as the case may be, by two Officers; provided, however, that for
purposes of Sections 4.11 and 6.03, “Officers’ Certificate” means a certificate
signed by (a) the principal executive officer, principal financial officer or
principal accounting officer of the Company and (b) one other Officer.

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

“Payment-in-Kind Interest” or “PIK Interest” means interest paid with respect to
the Securities in the form of increasing the outstanding principal amount of the
Securities or by issuing Payment-in-Kind Securities.

“Payment-in-Kind Securities” or “PIK Securities” shall have the meaning ascribed
to it in the Securities.

“Person” or “person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any syndicate or group that would be deemed to be a “person” under
Section 13(d)(3) of the Exchange Act or any other entity.

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

“Purchaser” means Fairfax Financial Holdings Limited.

“Qualified Institutional Buyer” shall have the meaning assigned to it in Rule
144A.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of April 1, 2008, among the Company and the Purchaser, as amended from time
to time in accordance with its terms.

“Regular Record Date” means, with respect to each Interest Payment Date, the
April 1 or October 1, as the case may be, next preceding such Interest Payment
Date.

 

6

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“Responsible Officer” means, when used with respect to the Trustee, any officer
within the corporate trust services department of the Trustee with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such person’s knowledge of and familiarity with
the particular subject.

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

“Restricted Security” means a Security required to bear the restricted legend
set forth in the form of Security annexed as Exhibit A.

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

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

“SEC” means the Securities and Exchange Commission.

“Securities” means the up to $350,000,000 aggregate principal amount of 8%
Convertible Senior Notes due 2013 and the PIK Securities, if any, or any of them
(each a “Security”), as amended or supplemented from time to time, that are
issued under this Indenture.

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

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

“Stock Price” means the price paid, or deemed to be paid, per share of the
Common Stock in connection with a Fundamental Change as determined pursuant to
Section 4.01(e).

“Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees of the corporation, association or other business entity is
at the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).

“Termination of Trading” means the termination (but not the temporary
suspension) of trading of the Common Stock, which will be deemed to have
occurred if the Common Stock or other common stock into which the Securities are
convertible is not listed for trading on a United States national securities
exchange.

 

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

“Trading Day” means any day on which (i) there is no Market Disruption Event and
(ii) the New York Stock Exchange or, if the Common Stock is not quoted on the
New York Stock Exchange, the principal national securities exchange on which the
Common Stock is listed is open for trading or, if the Common Stock is not so
listed, admitted for trading or quoted, any Business Day. A Trading Day only
includes those days that have a scheduled closing time of 4:00 p.m. (New York
City time) or the then standard closing time for regular trading on the relevant
exchange or trading system.

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

“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.”

Section 1.02 Other Definitions.

 

Term

   Defined in Section

“Agent Members”

   2.01

“Bankruptcy Law”

   8.01

“Business Combination”

   4.10

“Company Order”

   2.02

“Conversion Agent”

   2.03

“Conversion Date”

   4.02

“Current Market Price”

   4.06

“DTC”

   2.01

“Depositary”

   2.01

“Determination Date”

   4.06

“Distributed Securities”

   4.06

“Event of Default”

   8.01

“Expiration Date”

   4.06

“Expiration Time”

   4.06

“Fundamental Change Company Notice”

   3.01

“Fundamental Change Repurchase Date”

   3.01

“Fundamental Change Repurchase Notice”

   3.01

“Legal Holiday”

   12.07

“Legend”

   2.12

“Notice of Default”

   8.01

“Paying Agent”

   2.03

 

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Term

   Defined in Section

“Primary Registrar”

   2.03

“Purchase Agreement”

   2.01

“Purchased Shares”

   4.06

“record date”

   4.06

“Receiver”

   8.01

“Registrar”

   2.03

“Resale Restriction Termination Date”

   2.12

“Rights”

   4.06

“Rights Plan”

   4.06

“Spinoff Securities”

   4.06

“Spinoff Valuation Period”

   4.06

“tender offer”

   4.06

“Triggering Distribution”

   4.06

Section 1.03 Trust Indenture Act Provisions.

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

“indenture securities” means the Securities;

“indenture security holder” means a Holder of a Security;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the indenture securities means the Company or any other obligor on
the Securities.

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

Section 1.04 Rules of Construction.

(a) Unless the context otherwise requires:

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

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

 

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

(4) provisions apply to successive events and transactions;

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

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

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

(8) all “Article”, “Exhibit” and “Section” references are to Articles, Exhibits
and Sections, respectively, of or to this Indenture unless otherwise specified
herein, and the terms “herein,” “hereof” and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

ARTICLE 2

THE SECURITIES

Section 2.01 Form and Dating. The Securities and the Trustee’s certificate of
authentication shall be substantially in the respective forms set forth in
Exhibit A, which Exhibit is incorporated in and made part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange or automated quotation system rule or regulation or usage. The Company
shall provide any such notations, legends or endorsements to the Trustee in
writing. Each Security shall be dated the date of its authentication. The
Securities are being offered and sold by the Company pursuant to a Purchase
Agreement dated March 24, 2008 (the “Purchase Agreement”) between the Company
and the Purchaser, in transactions exempt from, or not subject to, the
registration requirements of the Securities Act.

(a) Restricted Global Securities. All of the Securities are initially being
offered and sold in reliance on exemptions from the registration requirements of
the Securities Act and shall be issued initially in the form of one or more
Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust
Company (“DTC”, and such depositary, or any successor thereto, being hereinafter
referred to as the “Depositary”), and registered in the name of its nominee,
Cede & Co. (or any successor thereto), for the accounts of participants in the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Subject to Section 2.02 hereof, the aggregate principal
amount of the Restricted Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Securities Custodian as
hereinafter provided, subject in each case to compliance with the Applicable
Procedures.

(b) Global Securities in General. Each Global Security shall represent such of
the outstanding Securities as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Securities from time
to time endorsed thereon (giving effect to any Payment-in-Kind Interest made
thereon by increasing the aggregate

 

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principal amount of such relevant Global Security) and that the aggregate amount
of outstanding Securities represented thereby may from time to time be reduced
or increased, as appropriate, to reflect replacements, exchanges, purchases,
conversions of such Securities or payment of Payment-in-Kind Interest. Any
adjustment of the aggregate principal amount of a Global Security to reflect the
amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Trustee in accordance with instructions
given by the Holder thereof as required by Section 2.12 and shall be made on the
records of the Trustee and the Depositary.

Members of, or participants in, the Depositary (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or under the Global Security, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall (1) prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
(2) impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.

(c) Book Entry Provisions. The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(c), authenticate and deliver initially one or
more Global Securities that (1) shall be registered in the name of the
Depositary or its nominee, (2) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instructions and (3) shall bear
legends substantially to the following effect:

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

 

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Section 2.02 Execution and Authentication.

(a) The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to $350,000,000, plus any amount in
respect of Payment-in-Kind Interest thereon.

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

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

(d) A Security shall not be valid until an authorized signatory of the Trustee
by manual or facsimile signature signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

(e) The Trustee shall authenticate and make available for delivery Securities
for original issue in the aggregate principal amount of $350,000,000 upon
receipt of a written order or orders of the Company signed by an Officer of the
Company (a “Company Order”). In addition, at any time, from time to time, the
Trustee shall upon receipt of a Company Order authenticate and deliver any
Payment-in-Kind Securities (or increase the principal amount of any Security) as
a result of Payment-in-Kind Interest in an aggregate principal amount specified
in such Company Order. The Company Order shall specify the amount of Securities
to be authenticated, shall provide that all such Securities will be represented
by a Restricted Global Security and the date on which each original issue of
Securities is to be authenticated.

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

(g) The Securities shall be issuable only in registered form without coupons and
only in denominations of $1,000 principal amount and any integral multiple
thereof and, if PIK Interest is paid, in denominations of $1.00 or integral
multiples of $1.00 (in each case in aggregate principal amount).

Section 2.03 Registrar, Paying Agent and Conversion Agent.

(a) The Company shall maintain one or more offices or agencies where Securities
may be presented for registration of transfer or for exchange (each, a
“Registrar”), one

 

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or more offices or agencies where Securities may be presented for payment (each,
a “Paying Agent”), one or more offices or agencies where Securities may be
presented for conversion (each, a “Conversion Agent”) and one or more offices or
agencies where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will at all times
maintain a Paying Agent, Conversion Agent, Registrar and an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served in the Borough of Manhattan, The City of New
York. One of the Registrars (the “Primary Registrar”) shall keep a register of
the Securities and of their transfer and exchange. The Company shall provide
written notice to the Trustee of any Registrar, Securities Agent, Conversion
Agent or Paying Agent that is not also the Trustee.

(b) The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, provided that the Agent may be an Affiliate of
the Trustee. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent, or agent for service of
notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such. The Company or any
Affiliate of the Company may act as Paying Agent (except for the purposes of
Section 6.01 and Article 10).

(c) The Company hereby initially designates the Trustee as Paying Agent,
Registrar, Securities Custodian and Conversion Agent, and initially designates
the Corporate Trust Office of the Trustee as an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture shall be served.

Section 2.04 Paying Agent to Hold Money in Trust. Prior to 12:00 p.m. (noon),
New York City time, on each due date of the payment of principal of, interest or
Additional Interest on, any Securities, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal , interest or Additional
Interest so becoming due. Subject to Section 9.02, a Paying Agent shall hold in
trust for the benefit of Holders of Securities or the Trustee all money held by
the Paying Agent for the payment of principal of, interest or Additional
Interest on, the Securities, and shall notify the Trustee of any failure by the
Company (or any other obligor on the Securities) to make any such payment. If
the Company or an Affiliate of the Company acts as Paying Agent, it shall,
before 12:00 p.m. (noon), New York City time, on each due date of the principal
of, interest or Additional Interest on, any Securities, segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee, and the Trustee may at any
time during the continuance of any Default, upon written request to a Paying
Agent, require such Paying Agent to pay forthwith to the Trustee all sums so
held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than
the Company) shall have no further liability for the money.

Section 2.05 Lists of Holders of Securities. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of Securities. If the Trustee is not the
Primary Registrar, the Company shall furnish to the Trustee on or before each
Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders of Securities.

 

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Section 2.06 Transfer and Exchange.

(a) Subject to compliance with any applicable additional requirements contained
in Section 2.12, when a Security is presented to a Registrar with a request to
register a transfer thereof or to exchange such Security for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested; provided, however, that
every Security presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by an assignment form and, if applicable,
a transfer certificate each in the form included in Exhibit A, and completed in
a manner satisfactory to the Registrar and duly executed by the Holder thereof
or its attorney duly authorized in writing. To permit registration of transfers
and exchanges, upon surrender of any Security for registration of transfer or
exchange at an office or agency maintained pursuant to Section 2.03, the Company
shall execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar’s request. Any exchange or transfer shall be
without charge, except that the Company or the Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto; provided that this sentence shall not apply to any
exchange pursuant to Section 2.10, 2.12(a), 3.05, 4.02(e) or 11.05.

(b) Neither the Company, any Registrar nor the Trustee shall be required to
exchange or register a transfer of any Securities or portions thereof in respect
of which a Fundamental Change Repurchase Notice has been delivered and not
withdrawn by the Holder thereof (except, in the case of the purchase of a
Security in part, the portion thereof not to be purchased).

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

(d) Any Registrar appointed pursuant to Section 2.03 shall provide to the
Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Securities upon transfer or exchange of
Securities.

(e) Each Holder of a Security agrees to indemnify and hold harmless 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.

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

 

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Section 2.07 Replacement Securities.

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

(b) If any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or is about to be purchased by the Company
pursuant to Article 3, or converted pursuant to Article 4, the Company in its
discretion may, instead of issuing a new Security, pay, purchase or convert such
Security, as the case may be.

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

(d) Every new Security or Guarantee issued pursuant to this Section 2.07 in lieu
of any mutilated, destroyed, lost or stolen Security or Guarantee shall
constitute an original additional contractual obligation of the Company and the
Guarantor, whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.

(e) The provisions of this Section 2.07 are (to the extent lawful) exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.

Section 2.08 Outstanding Securities.

(a) Securities outstanding at any time are all Securities authenticated by the
Trustee, except for those canceled by it, those purchased pursuant to Article 3,
those converted pursuant to Article 4, those delivered to the Trustee for
cancellation or surrendered for transfer or exchange and those described in this
Section 2.08 as not outstanding.

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

(c) If a Paying Agent (other than the Company or an Affiliate of the Company)
holds in respect of the outstanding Securities on a Fundamental Change
Repurchase Date or the Final Maturity Date money sufficient to pay the principal
of (including premium, if

 

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any) and accrued interest on Securities (or portions thereof) payable on that
date, then on and after such Fundamental Change Repurchase Date or Final
Maturity Date, as the case may be, such Securities (or portions thereof, as the
case may be) shall cease to be outstanding and cash interest on them shall cease
to accrue.

(d) Subject to the restrictions contained in Section 2.09, a Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.

Section 2.09 Treasury Securities. In determining whether the Holders of the
required principal amount of Securities have concurred in any notice, direction,
waiver or consent, Securities owned by the Company or any other obligor on the
Securities or by any Affiliate of the Company or of such other obligor shall be
disregarded, except that, for purposes of determining whether the Trustee shall
be protected in relying on any such notice, direction, waiver or consent, only
Securities which a Responsible Officer of the Trustee with responsibility for
this Indenture actually knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to the Securities and that the pledgee is not the Company or
any other obligor on the Securities or any Affiliate of the Company or of such
other obligor.

Section 2.10 Temporary Securities. Until definitive Securities are ready for
delivery, the Company may prepare and execute, and, upon receipt of a Company
Order, the Trustee shall authenticate and deliver, temporary Securities.
Temporary Securities shall be substantially in the form of definitive securities
but may have variations that the Company with the consent of the Trustee
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate and deliver definitive
Securities in exchange for temporary Securities.

Section 2.11 Cancellation. The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar, the Paying Agent and the Conversion
Agent shall forward to the Trustee or its agent any Securities surrendered to
them for transfer, exchange, purchase, payment or conversion. The Trustee and no
one else shall cancel, in accordance with its standard procedures, all
Securities surrendered for transfer, exchange, purchase, payment, conversion or
cancellation and shall dispose of the cancelled Securities in accordance with
its customary procedures or deliver the canceled Securities to the Company upon
its request therefor. All Securities which are purchased or otherwise acquired
by the Company or any of its Subsidiaries prior to the Final Maturity Date
pursuant to Article 3 shall be delivered to the Trustee for cancellation, and
the Company may not hold or resell such Securities or issue any new Securities
to replace any such Securities or any Securities that any Holder has converted
pursuant to Article 4.

Section 2.12 Legend; Additional Transfer and Exchange Requirements.

(a) If Securities are issued upon the transfer, exchange or replacement of
Securities subject to restrictions on transfer and bearing the legends set forth
on the forms of Securities attached as Exhibit A (collectively, the “Legend”),
or if a request is made to remove the Legend on a Security, the Securities so
issued shall bear the Legend, or the Legend shall not

 

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be removed, as the case may be, unless there is delivered to the Company and the
Registrar such satisfactory evidence, which shall include an Opinion of Counsel
if requested by the Company or such Registrar, as may be reasonably required by
the Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act; provided that no such evidence need be supplied in connection
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale. Upon (1) provision of such satisfactory
evidence if requested, or (2) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend. If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Legend shall be
reinstated.

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

(c) Subject to Section 2.12(b) and in compliance with Section 2.12(d), every
Security shall be subject to the restrictions on transfer provided in the
Legend. Whenever any Restricted Security other than a Restricted Global Security
is presented or surrendered for registration of transfer or in exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in
Exhibit A, dated the date of such surrender and signed by the Holder of such
Security, as to compliance with such restrictions on transfer. The Registrar
shall not be required to accept for such registration of transfer or exchange
any Security not so accompanied by a properly completed certificate.

(d) The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144 under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by, if requested by the Company or the
Registrar, an Opinion of Counsel reasonably acceptable to the Company and the
Registrar and addressed to the Company and the Registrar, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new

 

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Security, of like tenor and aggregate principal amount, which shall not bear the
restrictive Legend. The Company shall inform the Trustee of the effective date
of any registration statement registering the offer and sale of the Securities
under the Securities Act. The Trustee shall not be liable for any action taken
or omitted to be taken by it in good faith in accordance with the aforementioned
Opinion of Counsel or registration statement.

As used in Sections 2.12(c) and (d), the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any Security.

(e) The provisions below shall apply only to Global Securities:

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

(2) Notwithstanding any other provisions of this Indenture or the Securities, a
Global Security shall not be exchanged in whole or in part for a Security
registered, and no transfer of a Global Security in whole or in part shall be
registered in the name of any Person other than the Depositary or one or more
nominees thereof; provided that a Global Security may be exchanged for
securities registered in the names of any person designated by the Depositary in
the event that (A) the Depositary has notified the Company that it is unwilling
or unable to continue as Depositary for such Global Security or such Depositary
has ceased to be a “clearing agency” registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90 days after
receiving such notice or becoming aware that the Depositary has ceased to be a
“clearing agency,” or (B) an Event of Default has occurred and is continuing
with respect to the Securities. Any Global Security exchanged pursuant to
subclause (A) above shall be so exchanged in whole and not in part, and any
Global Security exchanged pursuant to subclause (B) above may be exchanged in
whole or from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion thereof shall be a
Global Security; provided further that any such Security so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.

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

 

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(4) Subject to clause (6) of this Section 2.12(e), the registered Holder may
grant proxies and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Securities.

(5) In the event of the occurrence of any of the events specified in clause (2)
of this Section 2.12(e), the Company will promptly make available to the Trustee
a reasonable supply of Certificated Securities in definitive, fully registered
form, without interest coupons.

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

(7) At such time as all interests in a Global Security have been converted,
cancelled or exchanged for Securities in certificated form, such Global Security
shall, upon receipt thereof, be cancelled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Securities Custodian, subject to Section 2.11 of this Indenture. At any time
prior to such cancellation, if any interest in a Global Security is converted,
canceled or exchanged for Securities in certificated form, the principal amount
of such Global Security shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Securities Custodian, be
appropriately reduced, and an endorsement shall be made on such Global Security,
by the Trustee or the Securities Custodian, at the direction of the Trustee, to
reflect such reduction.

(f) Until the expiration of the holding period applicable to sales thereof under
Rule 144 under the Securities Act (or any successor provision thereto), any
stock certificate representing Common Stock issued upon conversion of any
Security shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or transferred in compliance with Rule 144 under
the Securities Act (or any successor provision thereto), or such Common Stock
has been issued upon conversion of Securities that have been transferred
pursuant to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act (or any
successor provision thereto), or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:

 

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“THE SECURITIES REPRESENTED HEREBY (THE “SECURITIES”) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) NOR REGISTERED OR
QUALIFIED UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THE SECURITIES MAY
ONLY BE SOLD (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (C) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT TO THE COMPANY’S AND THE
TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THESE RESTRICTIONS SHALL APPLY
UNTIL SUCH SECURITIES MAY BE RESOLD WITHOUT RESTRICTION PURSUANT TO RULE 144
UNDER THE ACT.

UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY IN CANADA BEFORE AUGUST 2, 2008.

Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this section. The Trustee may reasonably rely on an Opinion of Counsel in order
to determine whether the legend is required upon transfer.

Section 2.13 CUSIP Numbers. The Company in issuing the Securities may use one or
more “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall
use “CUSIP” numbers in notices of purchase as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such purchase shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the “CUSIP” numbers.

 

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ARTICLE 3

PURCHASE

Section 3.01 Repurchase of Securities at Option of the Holder upon a Fundamental
Change.

(a) If a Fundamental Change occurs prior to the Final Maturity Date, each Holder
of a Security shall have the right, at the option of the Holder, to require the
Company to repurchase for cash all or any portion of the Securities of such
Holder equal to $1,000 principal amount (or an integral multiple thereof), or if
Payment-in-Kind Interest is paid, a minimum of $1.00 or an integral multiple of
$1.00, at the Fundamental Change Repurchase Price, on the date that is not less
than 30 days nor more than 45 days after the date of the Fundamental Change
Company Notice pursuant to subsection 3.01(b) (the “Fundamental Change
Repurchase Date”).

(b) As promptly as practicable following the date on which the Company publicly
announces such transaction, but in no event less than 20 days prior to the
anticipated effective date of a Fundamental Change, the Company shall mail a
written notice of the Fundamental Change and of the resulting repurchase right
to the Trustee, Paying Agent and to each Holder (and to beneficial owners as
required by applicable law) (the “Fundamental Change Company Notice”). The
Fundamental Change Company Notice shall include the form of a Fundamental Change
Repurchase Notice to be completed by the Holder and shall state:

(1) the events causing such Fundamental Change;

(2) the date (or expected date) of such Fundamental Change;

(3) the last date by which the Fundamental Change Repurchase Notice must be
delivered to elect the repurchase option pursuant to this Section 3.01;

(4) the Fundamental Change Repurchase Date;

(5) the Fundamental Change Repurchase Price;

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

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

(8) the then effective Conversion Rate and any adjustments to the Conversion
Rate resulting from such Fundamental Change;

(9) the procedures that the Holder must follow to exercise conversion rights
under Article 4 and that Securities as to which a Fundamental Change Repurchase
Notice has been given may be converted into Common Stock pursuant to Article 4
of this Indenture only to the extent that the Fundamental Change Repurchase
Notice has been withdrawn in accordance with the terms of this Indenture;

 

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(10) the procedures that the Holder must follow to exercise rights under this
Section 3.01;

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

(12) that, unless the Company fails to pay such Fundamental Change Repurchase
Price, Securities covered by any Fundamental Change Repurchase Notice will cease
to be outstanding and interest and Additional Interest, if any, will cease to
accrue on and after the Fundamental Change Repurchase Date; and

(13) the CUSIP number of the Securities.

At the Company’s request, the Trustee shall give such Fundamental Change Company
Notice in the Company’s name and at the Company’s expense; provided, that, in
all cases, the text of such Fundamental Change Company Notice shall be prepared
by the Company. If any of the Securities is in the form of a Global Security,
then the Company shall modify such notice to the extent necessary to accord with
the Applicable Procedures relating to the purchase of Global Securities.

(c) A Holder may exercise its rights specified in Section 3.01(a) upon delivery
of a written notice (which shall be in substantially the form attached as
Exhibit A under the heading “Fundamental Change Repurchase Notice” and which may
be delivered by letter, overnight courier, hand delivery, facsimile transmission
or in any other written form and, in the case of Global Securities, may be
delivered electronically or by other means in accordance with the Depositary’s
Applicable Procedures) of the exercise of such rights (a “Fundamental Change
Repurchase Notice”) to the Company or any Paying Agent at any time prior to the
close of business on the Business Day next preceding the Fundamental Change
Repurchase Date, subject to extension to comply with applicable law.

(1) The Fundamental Change Repurchase Notice shall state: (A) the certificate
number (if such Security is held other than in global form) of the Security
which the Holder will deliver to be purchased (or, if the Security is held in
global form, any other items required to comply with the Applicable Procedures),
(B) the portion of the principal amount of the Security which the Holder will
deliver to be purchased, in integral multiples of $1,000 or of $1.00, as
applicable, and (C) that such Security shall be purchased as of the Fundamental
Change Repurchase Date pursuant to the terms and conditions specified in the
Securities and in this Indenture.

(2) The delivery of a Security for which a Fundamental Change Repurchase Notice
has been timely delivered to any Paying Agent and not validly withdrawn prior
to, on or after the Fundamental Change Repurchase Date (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Fundamental Change Repurchase Price
therefor.

(3) The Company shall only be obliged to purchase, pursuant to this
Section 3.01, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000, or if Payment-in-Kind Interest is
paid, $1.00 or an integral multiple of $1.00 (provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security).

 

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(4) Notwithstanding anything herein to the contrary, any Holder delivering to a
Paying Agent the Fundamental Change Repurchase Notice contemplated by this
Section 3.01(c) shall have the right to withdraw such Fundamental Change
Repurchase Notice in whole or in a portion thereof that is a principal amount of
$1,000 or in an integral multiple thereof, or if Payment-in-Kind Interest is
paid, a principal amount of $1.00 or an integral multiple thereof, 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
Paying Agent in accordance with Section 3.02.

(5) A Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice or written withdrawal thereof.

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

Section 3.02 Effect of Fundamental Change Repurchase Notice.

(a) Upon receipt by any Paying Agent of a properly completed Fundamental Change
Repurchase Notice from a Holder, the Holder of the Security in respect of which
such Fundamental Change Repurchase Notice was given shall (unless such
Fundamental Change Repurchase Notice is withdrawn as specified in
Section 3.02(b)) thereafter be entitled to receive the Fundamental Change
Repurchase Price with respect to such Security, subject to the occurrence of the
Fundamental Change Effective Date and an absence of an Event of Default, or a
continuation thereof (other than a Default in the payment of the Fundamental
Change Repurchase Price). Such Fundamental Change Repurchase Price shall be paid
to such Holder promptly following the later of (1) the Fundamental Change
Repurchase Date (provided that the conditions in Section 3.01 have been
satisfied) and (2) the time of delivery of such Security to a Paying Agent by
the Holder thereof in the manner required by Section 3.01(c). Securities in
respect of which a Fundamental Change Repurchase Notice has been given by the
Holder thereof may not be converted into shares of Common Stock pursuant to
Article 4 on or after the date of the delivery of such Fundamental Change
Repurchase Notice unless such Fundamental Change Repurchase Notice has first
been validly withdrawn in accordance with Section 3.02(b) with respect to the
Securities to be converted.

(b) A Fundamental Change Repurchase Notice may be withdrawn by means of a
written notice (which may be delivered by mail, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Applicable Procedures) of withdrawal delivered by the Holder
to a Paying Agent at any time prior to the close of business on the Business Day
immediately prior to the Fundamental Change Repurchase Date, specifying (1) the
principal amount of the Security or portion thereof (which must be a principal
amount of $1,000 or an integral multiple of $1,000 in excess thereof, provided,
however, that if Payment-in-Kind

 

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Interest is paid, the principal amount may equal $1.00 or an integral multiple
of $1.00) with respect to which such notice of withdrawal is being submitted,
(2) if certificated Securities have been issued, the certificate number of the
Security being withdrawn in whole or in withdrawable part (or if the Securities
are not certificated, such written notice must comply with the Applicable
Procedures) and (3) the portion of the principal amount of the Security that
will remain subject to the Fundamental Change Repurchase Notice, which portion
must be a principal amount of $1,000 or an integral multiple thereof, provided,
however, that if Payment-in-Kind Interest is paid, the principal amount may
equal a minimum of $1.00 or an integral multiple of $1.00.

Section 3.03 Deposit of Fundamental Change Repurchase Price.

(a) On or before 12:00 p.m. (noon) New York City time on the Business Day
following the applicable Fundamental Change Repurchase Date, the Company shall
deposit with the Trustee or with a Paying Agent (or if the Company or an
Affiliate of the Company is acting as the Paying Agent, shall segregate and hold
in trust as provided in Section 2.04) an amount of money (in immediately
available funds if deposited on or after such Fundamental Change Repurchase
Date), sufficient to pay the aggregate Fundamental Change Repurchase Price of
all the Securities or portions thereof that are to be purchased as of such
Fundamental Change Repurchase Date.

(b) If a Paying Agent or the Trustee holds, in accordance with the terms hereof,
money sufficient to pay the Fundamental Change Repurchase Price of any Security
for which a Fundamental Change Repurchase Notice has been tendered and not
withdrawn in accordance with this Indenture then, on the Business Day following
the applicable Fundamental Change Repurchase Date, such Security will cease to
be outstanding, whether or not the Security is delivered to the Paying Agent or
the Trustee, and interest and Additional Interest, if any, shall cease to
accrue, and the rights of the Holder in respect of the Security shall terminate
(other than the right to receive the Fundamental Change Repurchase Price as
aforesaid). The Company shall publicly announce the principal amount of
Securities repurchased on or as soon as practicable after the Fundamental Change
Repurchase Date.

(c) The Paying Agent will promptly return to the respective Holders thereof any
Securities with respect to which a Fundamental Change Repurchase Notice has been
withdrawn in compliance with this Indenture.

(d) If a Fundamental Change Repurchase Date falls after a Regular Record Date
and on or before the related Interest Payment Date, then interest on the
Securities payable on such Interest Payment Date will be payable to the Holders
in whose names the Securities are registered at the close of business on such
Regular Record Date.

Section 3.04 Repayment to the Company. To the extent that the aggregate amount
of cash deposited by the Company pursuant to Section 3.03 exceeds the aggregate
Fundamental Change Repurchase Price of the Securities or portions thereof that
the Company is obligated to purchase, then promptly after the Fundamental Change
Repurchase Date the Trustee or a Paying Agent, as the case may be, shall return
any such excess cash to the Company.

 

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Section 3.05 Securities Purchased in Part. Any Security that is to be purchased
only in part shall be surrendered at the office of a Paying Agent, and promptly
after the Fundamental Change Repurchase Date, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities, of such authorized denomination or
denominations as may be requested by such Holder (which must be equal to $1,000
principal amount or any integral thereof, provided, however, that if
Payment-in-Kind Interest is paid, the principal amount may equal a minimum of
$1.00 or an integral multiple of $1.00), in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.

Section 3.06 Compliance with Securities Laws upon Purchase of Securities. In
connection with any offer to purchase of Securities under Section 3.01, the
Company shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to
either such Rule), and any other tender offer rules, if applicable, under the
Exchange Act, (b) file the related Schedule TO (or any successor or similar
schedule, form or report) if required under the Exchange Act, and (c) otherwise
comply with all federal and state securities laws in connection with such offer
to purchase or purchase of Securities, all so as to permit the rights of the
Holders and obligations of the Company under Sections 3.01 through 3.04 to be
exercised in the time and in the manner specified therein. To the extent that
compliance with any such laws, rules and regulations would result in a conflict
with any of the terms hereof, this Indenture is hereby modified to the extent
required for the Company to comply with such laws, rules and regulations.

Section 3.07 Purchase of Securities in Open Market. The Company will surrender
any Security purchased by the Company pursuant to this Article 3 to the Trustee
for cancellation. Any securities surrendered to the Trustee for cancellation
will be canceled promptly in accordance with Section 2.11. The Company may
repurchase Securities in the open market, by tender at any price or by
negotiated transactions.

ARTICLE 4

CONVERSION

Section 4.01 Conversion Privilege and Conversion Rate.

(a) Subject to and upon compliance with the provisions of this Article 4, at the
option of the Holder thereof, any Security or portion thereof that is an
integral multiple of $1,000 principal amount (or if Payment-in-Kind interest is
paid, in an integral multiple of $1,000) may be converted into fully paid and
non-assessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock at any time prior to the close of business on the
Business Day immediately preceding the Final Maturity Date, unless purchased by
the Company at the Holder’s option, at the Conversion Rate in effect at such
time, determined as hereinafter provided.

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

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

 

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(d) The Conversion Rate shall be adjusted in certain instances as provided in
Section 4.01(e) and Section 4.06.

(e) By delivering the number of shares of Common Stock issuable on conversion to
the Trustee, or to the Conversion Agent, if the Conversion Agent is other than
the Trustee, the Company will be deemed to have satisfied its obligation to pay
the principal amount of the Securities so converted and its obligation to pay
accrued and unpaid interest, and Additional Interest if any, attributable to the
period from the most recent Interest Payment Date through the Conversion Date
(which amount will be deemed paid in full rather than cancelled, extinguished or
forfeited).

(f) Notwithstanding anything contained herein to the contrary, the Company shall
not be obligated to deliver shares of Common Stock in connection with any
conversion of Securities to the extent such delivery would, in the Company’s
reasonable judgment, after having received the advice of independent legal
counsel (who may be the Company’s regularly engaged independent legal counsel),
constitute a violation of any Antitrust Laws; provided, however, that this
Section 4.01(f) shall not limit the Company’s obligations under Section 7.5 of
the Purchase Agreement.

Section 4.02 Conversion Procedure.

(a) To convert a Security, a Holder must (1) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to a
Conversion Agent, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by a Registrar or a
Conversion Agent, and (4) pay all transfer or similar taxes, if required
pursuant to Section 4.04. The date on which the Holder satisfies all of those
requirements is the “Conversion Date.” Upon the conversion of a Security, the
Company will pay the cash and deliver the shares of Common Stock, to the Trustee
(or to the Conversion Agent, if the Conversion Agent is other than the Trustee),
as applicable, as promptly as practicable after the later of the Conversion Date
and the date that all calculations necessary to make such payment and delivery
have been made, but in no event later than five Business Days after the later of
those dates. Anything herein to the contrary notwithstanding, in the case of
Global Securities, conversion notices may be delivered and such Securities may
be surrendered for conversion in accordance with the Applicable Procedures as in
effect from time to time.

(b) The person in whose name the shares of Common Stock are issuable upon
conversion shall be deemed to be a holder of record of such Common Stock on the
Conversion Date; provided, however, that no surrender of a Security on any
Conversion 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 conversion as the record holder or holders of such
shares of Common Stock on such date, but such surrender shall be effective to
constitute the person or persons entitled to receive such shares of Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided further that such conversion shall be at the

 

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Conversion Rate in effect on the Conversion Date as if the stock transfer books
of the Company had not been closed. Upon conversion of a Security, such person
shall no longer be a Holder of such Security. Except as set forth in this
Indenture, no payment or adjustment will be made for dividends or distributions
declared or made on shares of Common Stock issued upon conversion of a Security
prior to the issuance of such shares.

(c) Holders of Securities surrendered for conversion (in whole or in part)
during the period from the close of business on any Regular Record Date to the
opening of business on the next succeeding Interest Payment Date will receive
the semi-annual interest payable on such Securities on the corresponding
Interest Payment Date notwithstanding the conversion. Upon surrender of any such
Securities for conversion during the period from the close of business on any
Regular Record Date to the opening of business on the next succeeding Interest
Payment Date, unless (1) such Securities have been surrendered for conversion
following the Regular Record Date immediately preceding the final interest
payment date (April 15, 2013), (2) the Company has specified a Fundamental
Change Repurchase Date that is after a Regular Record Date and on or prior to
the Business Day following the corresponding Interest Payment Date, or (3) to
the extent of overdue interest, if any, which exists at the time of the
Conversion with respect to such Security, such Securities shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such corresponding Interest Payment Date. Except as
otherwise provided in this Section 4.02(c), no payment or adjustment will be
made for accrued interest on a converted Security.

(d) Subject to Section 4.02(c), nothing in this Section shall affect the right
of a Holder in whose name any Security is registered at the close of business on
a Regular Record Date to receive the interest payable on such Security on the
related Interest Payment Date in accordance with the terms of this Indenture,
the Securities and the Registration Rights Agreement. If a Holder converts more
than one Security at the same time, the number of shares of Common Stock
issuable upon the conversion, if any, (and the amount of any cash in lieu of
fractional shares pursuant to Section 4.03) shall be based on the aggregate
principal amount of all Securities so converted.

(e) In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, without service charge, a new Security or
Securities of authorized denominations in an aggregate principal amount equal
to, and in exchange for, the unconverted portion of the principal amount of such
Security. A Security may be converted in part, but only if the principal amount
of such part is an integral multiple of $1,000 and the principal amount of such
Security to remain outstanding after such conversion is equal to $1,000 or any
integral multiple of $1,000 in excess thereof.

Section 4.03 Fractional Shares. The Company will not issue fractional shares of
Common Stock upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Securities (or specified portions thereof
to the extent permitted hereby) so surrendered. In lieu of any fractional share,
the Company will pay an amount in cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined (calculated to

 

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the nearest 1/100th of a share) by multiplying the average of the Closing Price
of the Common Stock on the Trading Day immediately preceding the Conversion Date
by such fractional share and rounding the product to the nearest whole cent.

Section 4.04 Taxes on Conversion. If a Holder converts a Security, the Holder
shall pay any transfer, stamp or similar taxes or duties related to the issue or
delivery of shares of Common Stock upon such conversion. The Holder shall also
pay any such tax with respect to cash received in lieu of fractional shares. In
addition, the Holder shall pay any such tax which is due because the Holder
requests the shares to be issued in a name other than the Holder’s name. The
Conversion Agent may refuse to deliver the certificate representing the Common
Stock being issued in a name other than the Holder’s name until the Conversion
Agent receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder’s name. Nothing herein
shall preclude any tax withholding required by law or regulation.

Section 4.05 Company to Provide Stock.

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

(b) All shares of Common Stock delivered upon conversion of the Securities shall
be newly issued shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive or similar rights and free of
any lien or adverse claim as the result of any action by the Company.

(c) The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities.

Section 4.06 Adjustment of Conversion Rate.

(a) The Conversion Rate shall be adjusted from time to time by the Company as
follows:

(1) If the Company shall pay a dividend or make a distribution on outstanding
Common Stock in shares of Common Stock, the Conversion Rate in effect
immediately prior to the record date for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased so
that the same shall equal the rate determined by the Company by multiplying the
Conversion Rate in effect immediately prior to such record date by a fraction of
which the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on such record date plus the total number
of shares of Common Stock constituting such dividend or other distribution and
of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date. Such adjustment shall
be made successively whenever any such dividend or distribution is made and
shall become effective immediately after such record date. For the purpose of
this clause (1), the number of shares of Common Stock at any time outstanding
shall

 

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not include shares held in the treasury of the Company. The Company will not pay
any dividend or make any distribution on Common Stock held in the treasury of
the Company. If any dividend or distribution of the type described in this
clause is declared but not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.

(2) If the Company shall subdivide its outstanding Common Stock into a greater
number of shares, or combine its outstanding Common Stock into a smaller number
of shares, the Conversion Rate in effect immediately prior to the day upon which
such subdivision or combination becomes effective shall be, in the case of a
subdivision of Common Stock, proportionately increased and, in the case of a
combination of Common Stock, proportionately reduced. Such adjustment shall be
made successively whenever any such subdivision or combination of the Common
Stock occurs and shall become effective immediately after the date upon which
such subdivision or combination becomes effective.

(3) If the Company shall issue certain rights or warrants to all or
substantially all holders of its outstanding Common Stock entitling them (for a
period expiring within 45 days after such issuance) to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share (or having a conversion price per share) less than the Current Market
Price per share of Common Stock (as determined in accordance with clause (9) of
this Section 4.06(a)) on the record date for the determination of shareholders
entitled to receive such rights or warrants, the Conversion Rate in effect
immediately prior thereto shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to such record date by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on such record date
plus the number of additional shares of Common Stock that such rights or
warrants entitle holders thereof to subscribe for or purchase (or into which
such convertible securities are convertible) and of which the denominator shall
be the number of shares of Common Stock outstanding at the close of business on
such record date plus the number of shares which the aggregate offering price of
the total number of shares of Common Stock so offered for subscription or
purchase (or the aggregate conversion price of the convertible securities so
offered for subscription or purchase, which shall be determined by multiplying
the number of shares of Common Stock issuable upon conversion of such
convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the
Current Market Price per share of Common Stock on such record date. Such
adjustment shall be made successively whenever any such rights or warrants (or
convertible securities) are issued, and shall become effective immediately after
such record date. To the extent that shares of Common Stock (or securities
convertible into 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 (or securities convertible into 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 the record date for the determination of shareholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the shareholders to subscribe for or purchase shares of Common
Stock at a price less than the Current Market Price per share of Common

 

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Stock and in determining the aggregate offering price of the total number of
shares of Common Stock so offered, there shall be taken into account any
consideration received by the Company for such rights or warrants and any amount
payable on exercise or conversion thereof, the value of such consideration, if
other than cash, to be determined by the Board of Directors.

(4) If the Company shall make a dividend or other distribution to all or
substantially all holders of its Common Stock of Capital Stock, other than
Common Stock, or evidences of indebtedness or other assets of the Company,
including securities (excluding (x) any issuance of rights or warrants for which
an adjustment was made pursuant to Section 4.06(a)(3), (y) dividends or
distributions in connection with a reclassification, consolidation, merger,
combination, sale or conveyance resulting in a change in the conversion
consideration pursuant to Section 4.10, or pursuant to any Rights Plan or
(z) any dividend or distribution paid exclusively in cash for which an
adjustment was made pursuant to Section 4.06(a)(6)) (the “Distributed
Securities”), then in each such case (unless the Company distributes such
Distributed Securities for distribution to the Holders of Securities on such
dividend or distribution date as if each Holder had converted such Security into
Common Stock immediately prior to the record date with respect to such
distribution) the Conversion Rate in effect immediately prior to the record date
fixed for the determination of shareholders entitled to receive such dividend or
distribution shall be adjusted so that the same shall equal the rate determined
by multiplying the Conversion Rate in effect immediately prior to such record
date by a fraction of which the numerator shall be the Current Market Price per
share of the Common Stock on such record date and of which the denominator shall
be Current Market Price per share on such record date less the fair market value
(as determined in good faith by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and which shall be
evidenced by an Officers’ Certificate delivered to the Trustee) on such record
date of the portion of the Distributed Securities so distributed applicable to
one share of Common Stock (determined on the basis of the number of shares of
Common Stock outstanding at the close of business on such record date). Such
adjustment shall be made successively whenever any such distribution is made and
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such distribution. In the event that 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 fair market value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price per share of the Common Stock on such
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Security shall have the right to receive upon
conversion the amount of Distributed Securities so distributed that such Holder
would have received had such Holder converted each Security on such record date.
If the Board of Directors determines the fair market value of any distribution
for purposes of this Section 4.06(a)(4) by reference to the actual or when
issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price of the Common Stock.

Notwithstanding the foregoing, if the securities distributed by the Company to
all holders of its Common Stock consist of Capital Stock of, or similar equity
interests in, a Subsidiary or

 

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other business unit of the Company (the “Spinoff Securities”), the Conversion
Rate shall be adjusted, unless the Company makes an equivalent distribution to
the Holders of the Securities, so that the same shall be equal to the rate
determined by multiplying the Conversion Rate in effect on the record date fixed
for the determination of shareholders entitled to receive such distribution by a
fraction, the numerator of which shall be the sum of (A) the average Closing
Price of one share of Common Stock over the ten consecutive Trading Day period
(the “Spinoff Valuation Period”) commencing on and including the fifth Trading
Day after the date on which ex-dividend trading commences for such distribution
on the New York Stock Exchange or such other U.S. national or regional exchange
or market on which the Common Stock is then listed or quoted and (B) the average
of the Closing Prices over the Spinoff Valuation Period of the Spinoff
Securities multiplied by the number of Spinoff Securities distributed in respect
of one share of Common Stock and the denominator of which shall be the average
Closing Price of one share of Common Stock over the Spinoff Valuation Period,
such adjustment to become effective immediately prior to the opening of business
on the fifteenth Trading Day after the date on which ex-dividend trading
commences; provided, however, that the Company may in lieu of the foregoing
adjustment elect to make adequate provision so that each Holder of Securities
shall have the right to receive upon conversion thereof the amount of such
Spinoff Securities that such Holder of Securities would have received if such
Securities had been converted on the record date with respect to such
distribution.

(5) With respect to any rights or warrants (the “Rights”) that may be issued or
distributed pursuant to any rights plan that the Company implements after the
date of this Indenture (a “Rights Plan”), to the extent that such Rights Plan is
in effect upon such conversion, the Holders of Securities will receive, with
respect to the shares of Common Stock issued upon conversion, the Rights
described therein (whether or not the Rights have separated from the Common
Stock at the time of conversion), subject to the limitations set forth in and in
accordance with any such Rights Plan; provided that, if, at the time of
conversion, however, the Rights have separated from the shares of Common Stock
in accordance with the provisions of the Rights Plan so that Holders would not
be entitled to receive any rights in respect of the shares of Common Stock
issuable upon conversion of the Securities as a result of the timing of the
Conversion Date, the Conversion Rate will be adjusted as if the Company
distributed to all holders of Common Stock Distributed Securities constituting
such rights as provided in the first paragraph of clause (4) of this
Section 4.06(a), subject to appropriate readjustment in the event of the
expiration, termination, repurchase or redemption of the Rights. Any
distribution of rights or warrants pursuant to a Rights Plan complying with the
requirements set forth in the immediately preceding sentence of this paragraph
shall not constitute a distribution of rights or warrants pursuant to this
Section 4.06(a). Other than as specified in this clause (5) of this
Section 4.06(a), there will not be any adjustment to the Conversion Rate as the
result of the issuance of any Rights, the distribution of separate certificates
representing such Rights, the exercise or redemption of such Rights in
accordance with any Rights Plan or the termination or invalidation of any
Rights.

(6) If the Company shall, by dividend or otherwise, at any time distribute (a
“Triggering Distribution”) to all holders of its Common Stock a payment
consisting exclusively of cash (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary) the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying such

 

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Conversion Rate in effect immediately prior to the close of business on the
record date for such Triggering Distribution (a “Determination Date”) by a
fraction of which the numerator shall be such Current Market Price per share of
the Common Stock on the Determination Date and the denominator of which shall be
the Current Market Price per share of the Common Stock on the Determination Date
less the amount of such cash dividend or distribution applicable to one share of
Common Stock (determined on the basis of the number of shares of Common Stock
outstanding at the close of business on the Determination Date), such increase
to become effective immediately prior to the opening of business on the day
following the date on which the Triggering Distribution is paid. If the amount
of cash dividend or distribution applicable to one share of Common Stock is
equal to or greater than the Current Market Price per share of the Common Stock
on the Determination Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of a Security shall have the right
to receive upon conversion the amount of cash so distributed that such Holder
would have received had such Holder converted each Security on such
Determination Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such divided or distribution had not been
declared.

(7) If any tender offer made by the Company or any of its Subsidiaries for all
or any portion of Common Stock shall expire, then, if the tender offer shall
require the payment to shareholders of consideration per share of Common Stock
having a fair market value (determined as provided below) that exceeds the
Closing Price per share of Common Stock on the Trading Day next succeeding the
last date (the “Expiration Date”) tenders could have been made pursuant to such
tender offer (as it may be amended) (the last time at which such tenders could
have been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”), 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 close of business on the Expiration Date by a fraction
of which the numerator shall be the sum of (A) the fair market value of the
aggregate consideration (the fair market value as determined in good faith by
the Board of Directors, whose determination shall be conclusive evidence of such
fair market value and which shall be evidenced by an Officers’ Certificate
delivered to the Trustee) payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the “Purchased Shares”)
and (B) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares and excluding any shares held in the treasury of the
Company) at the Expiration Time and the Closing Price per share of Common Stock
on the Trading Day next succeeding the Expiration Date and the denominator of
which shall be the product of the number of shares of Common Stock outstanding
(including Purchased Shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the Closing Price per share of the
Common Stock on the Trading Day next succeeding the Expiration Date, such
increase to become effective immediately prior to the opening of business on the
day following the Expiration Date. In the event that the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any or all such purchases
or any or all such purchases are rescinded, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would have been in effect based upon
the number of shares actually purchased, if any. If the application of this
clause (7) of Section 4.06(a) to any tender offer would result in a decrease in
the Conversion Rate, no adjustment shall be made for such tender offer under
this clause (7).

 

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(8) For purposes of this Section 4.06, the term “tender offer” shall mean and
include both tender offers and exchange offers, all references to “purchases” of
shares in tender offers (and all similar references) shall mean and include both
the purchase of shares in tender offers and the acquisition of shares pursuant
to exchange offers, and all references to “tendered shares” (and all similar
references) shall mean and include shares tendered in both tender offers and
exchange offers.

(9) For purposes of any computation under this Section 4.06, “Current Market
Price” shall mean the average of the daily Closing Prices per share of Common
Stock for each of the ten consecutive Trading Days immediately prior to the date
in question; provided, however, that if

(A) the “ex” date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Rate pursuant to Section 4.06(a) (1), (2), (3), (4), (5),
(6) or (7) occurs during such ten consecutive Trading Days, the Closing Price
for each Trading Day prior to the “ex” date for such other event shall be
adjusted by dividing such Closing Price by the same fraction by which the
Conversion Rate is so required to be adjusted as a result of such other event;

(B) the “ex” date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Rate
pursuant to Section 4.06(a) (1), (2), (3), (4), (5), (6) or (7) occurs on or
after the “ex” date for the issuance or distribution requiring such computation
and prior to the day in question, the Closing Price for each Trading Day on and
after the “ex” date for such other event shall be adjusted by dividing such
Closing Price by the reciprocal of the fraction by which the Conversion Rate is
so required to be adjusted as a result of such other event; and

(C) the “ex” date for the issuance or distribution requiring such computation is
prior to the day in question, after taking into account any adjustment required
pursuant to the immediately preceding clause (A) or (B) of this
Section 4.06(a)(9), the Closing Price for each Trading Day on or after such “ex”
date shall be adjusted by adding thereto the amount of any cash and the fair
market value (as determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for purposes of
Section 4.06(a)(4) or (7), whose determination shall be conclusive and set forth
in a Board Resolution) of the evidences of indebtedness, shares of capital stock
or assets being distributed applicable to one share of Common Stock as of the
close of business on the day before such “ex” date.

For purposes of any computation under Section 4.06(a)(7), if the “ex” date for
any event (other than the tender offer that is the subject of the adjustment
pursuant to Section 4.06(a)(7)) that requires an adjustment to the Conversion
Rate pursuant to Section 4.06(a)(1), (2), (3), (4), (5) or (6) occurs on the
date of the Expiration Time for the tender or exchange offer requiring such
computation or on the Trading Day next following the Expiration Time, the
Closing Price for each Trading Day on and after the “ex” date for such other
event shall be adjusted by

 

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dividing such Closing Price by the reciprocal of the fraction by which the
Conversion Rate is so required to be adjusted as a result of such other event.
For purposes of this Section 4.06(a)(9) the term “ex” date, when used:

(A) with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution;

(B) with respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and

(C) with respect to any tender or exchange offer, means the first date on which
the Common Stock trades regular way on such exchange or in such market after the
Expiration Time of such offer.

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Rate are called for pursuant to this Section 4.06, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 4.06 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors and evidenced by
an Officers’ Certificate delivered to the Trustee.

(b) In any case in which this Section 4.06 shall require that an adjustment be
made following a record date, a Determination Date or Expiration Date, as the
case may be, established for the purposes specified in this Section 4.06, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in
Section 4.08) issuing to the Holder of any Security converted after such record
date, Determination Date or Expiration Date the shares of Common Stock and other
Capital Stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other Capital Stock of the Company (or other cash,
property or securities, as applicable) issuable upon such conversion only on the
basis of the Conversion Rate prior to adjustment; and, in lieu of any cash,
property or securities the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such cash, property or
securities. If any distribution in respect of which an adjustment to the
Conversion Rate is required to be made as of the record date, Determination Date
or Expiration Date therefore is not thereafter made or paid by the Company for
any reason, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed or such record
date, Determination Date or Expiration Date had not occurred.

(c) For purposes of this Section 4.06, “record date” shall mean, with respect to
any dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged or
converted into any combination of cash, securities or other property, the date
fixed for determination of shareholders entitled to receive such cash, security
or other property (whether or not such date is fixed by the Board of Directors
or by statute, contract or otherwise).

 

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(d) If one or more event occurs requiring an adjustment be made to the
Conversion Rate for a particular period, adjustments to the Conversion Rate
shall be determined by the Company’s Board of Directors to reflect the combined
impact of such Conversion Rate adjustment events, as set out in this
Section 4.06, during such period.

Section 4.07 No Adjustment.

(a) No adjustment in the Conversion Rate shall be required if Holders may
participate in the transactions set forth in Section 4.06 above (to the same
extent as if the Securities had been converted into Common Stock immediately
prior to such transactions) without converting the Securities held by such
Holders.

(b) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Rate as last adjusted; provided, however, that any adjustments which
would be required to be made but for this Section 4.07(b) shall be carried
forward and taken into account in any subsequent adjustment. The Company shall
adjust for any carry forward amount upon conversion regardless of the 1%
threshold. All calculations under this Article 4 shall be made to the nearest
cent or to the nearest one-ten thousandth of a share, as the case may be, with
one half cent and 0.00005 of a share, respectively, being rounded upward.

(c) No adjustment in the Conversion Rate shall be required for issuances of
Common Stock pursuant to a Company plan for reinvestment of dividends or
interest or for a change in the par value, or a change to no par value, of the
Common Stock. Except as expressly provided in Section 4.06, no adjustment in the
Conversion Rate shall be required for issuances of Common Stock or any
securities convertible into, exercisable into or exchangeable for Common Stock,
including the issuance of Common Stock or options to purchase shares of Common
Stock pursuant to any present or future employee, director or consultant benefit
plan or program of or assumed by the Company, upon the issuance of Common Stock
pursuant to any option, warrant or right, or exercise of any exchangeable or
convertible security outstanding as of the Issue Date, and repurchases by the
Company of Common Stock not expressly discussed in this Article 4.

(d) To the extent that the Securities become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash.

Section 4.08 Notice of Adjustment. Whenever the Conversion Rate or conversion
privilege is required to be adjusted pursuant to this Indenture, the Company
shall promptly mail to Holders a notice of the adjustment and file with the
Trustee an Officers’ Certificate briefly stating the facts requiring the
adjustment and the manner of computing it. Failure to mail such notice or any
defect therein shall not affect the validity of any such adjustment. Unless and
until the Trustee shall receive an Officers’ Certificate setting forth an
adjustment of the Conversion Rate, the Trustee may assume without inquiry that
the Conversion Rate has not been adjusted and that the last Conversion Rate of
which it has knowledge remains in effect.

 

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Section 4.09 Notice of Certain Transactions. In the event that there is a
dissolution or liquidation of the Company, the Company shall mail to Holders and
file with the Trustee a notice stating the proposed effective date. The Company
shall mail such notice at least 10 days before such proposed effective date.
Failure to mail such notice or any defect therein shall not affect the validity
of any transaction referred to in this Section 4.09.

Section 4.10 Effect of Recapitalization, Reclassification, Consolidation, Merger
or Sale. If any of following events occur (each, a “Business Combination”):

(1) any recapitalization, reclassification or change of the Common Stock, other
than changes resulting from a subdivision or a combination,

(2) a consolidation, merger or combination involving the Company,

(3) a sale, conveyance or lease to another corporation of all or substantially
all of the property and assets of the Company, other than one or more of the
Company’s subsidiaries, or

(4) any statutory share exchange,

in each case as a result of which holders of Common Stock are entitled to
receive stock, other securities, other property or assets (including cash or any
combination thereof) with respect to or in exchange for Common Stock, the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the Holders
of the Securities then outstanding will be entitled thereafter to convert such
Securities into the kind and amount of shares of stock, other securities or
other property or assets (including cash or any combination thereof) which they
would have owned or been entitled to receive upon such Business Combination had
such Securities been converted into Common Stock immediately prior to such
Business Combination. In the event holders of Common Stock have the opportunity
to elect the form of consideration to be received in such Business Combination,
the Securities will be convertible into the weighted average of the kind and
amount of consideration received by the holders of the Common Stock that
affirmatively make such an election. The Company may not become a party to any
such transaction unless its terms are consistent with this Section 4.10. 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 4. If, in the case of any such Business Combination, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
Business Combination, then such supplemental indenture shall also be executed by
such other corporation and shall contain such additional provisions to protect
the interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set forth
in Article 3 hereof. Notwithstanding anything contained in this Section, and for
the avoidance of doubt, this Section shall not affect the right of a Holder to
convert its Securities into shares of Common Stock prior to the effective date
of the Business Combination.

 

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Section 4.11 Trustee’s Disclaimer.

(a) The Trustee shall have no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of that fact or the correctness of any
such adjustment, and shall be protected in relying upon, an Officers Certificate
and/or an Opinion of Counsel, including the Officers’ Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 4.08. The Trustee makes no representation as to the validity or value of
any securities or assets issued upon conversion of Securities, and the Trustee
shall not be responsible for the Company’s failure to comply with any provisions
of this Article 4.

(b) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.10, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers’
Certificate and Opinion of Counsel, with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 12.04.

Section 4.12 Voluntary Increase. The Company from time to time may increase the
Conversion Rate, to the extent permitted by law, by any amount for any period of
time if the period is at least 20 days, its Board of Directors has made a
determination that this increase would be in the Company’s best interests, and
the Company provides 15 days prior written notice to any increase in the
Conversion Rate to the Trustee and Holders. The Company may also make such an
increase to the Conversion Rate as the Board of Directors determines would avoid
or diminish U.S. federal income tax to holders of shares of Common Stock in
connection with a dividend or distribution of stock (or rights to acquire stock)
or from any event treated as such for U.S. federal income tax purposes.

ARTICLE 5

GUARANTEE

Section 5.01 Guarantee.

The Guarantor, in accordance with this Article 5, hereby absolutely, fully,
unconditionally and irrevocably guarantees to the Trustee and the Holders, as if
the Guarantor were the principal debtor, the punctual payment and performance
when due of all Indenture Obligations (which for purposes of this Guarantee
shall also be deemed to include all commissions, fees, charges, costs and other
expenses (including reasonable legal fees and disbursements of one counsel)
arising out of or incurred by the Trustee or the Holders in connection with the
enforcement of this Guarantee).

Section 5.02 Continuing Guarantee; No Right of Set-Off; Independent Obligation.

(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to any ultimate balance due or remaining unpaid to the Trustee or the
Holders in respect of the Indenture Obligations; and this Guarantee shall not be
considered as wholly or partially satisfied by the payment or liquidation at any
time or from time to time of any sum of money for the time being due or
remaining unpaid to the Trustee or

 

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the Holders. Without limiting the generality of the foregoing, the Guarantor’s
liability shall extend to all amounts which constitute part of the Indenture
Obligations and would be owed by the Company under this Indenture and the
Securities but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.

(b) The Guarantor hereby guarantees that the Indenture Obligations will be paid
to the Trustee without set-off or counterclaim or other reduction whatsoever
(whether for taxes, withholding or otherwise) in lawful currency of the United
States of America.

(c) The Guarantor guarantees that the Indenture Obligations shall be paid
strictly in accordance with their terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Holders of the Securities.

(d) The Guarantor’s liability to pay or perform or cause the performance of the
Indenture Obligations under this Guarantee shall arise forthwith after demand
for payment or performance by the Trustee has been given to the Guarantor in the
manner prescribed in Section 12.02 hereof.

(e) Except as provided herein, the provisions of this Article 5 cover all
agreements between the parties hereto relative to this Guarantee and none of the
parties shall be bound by any representation, warranty or promise made by any
Person relative thereto which is not embodied herein; and it is specifically
acknowledged and agreed that this Guarantee has been delivered by the Guarantor
free of any conditions whatsoever and that no representations, warranties or
promises have been made to the Guarantor affecting its liabilities hereunder,
and that the Trustee shall not be bound by any representations, warranties or
promises now or at any time hereafter made by the Company to the Guarantor.

(f) This Guarantee is a guarantee of payment, performance and compliance and not
of collectibility and is in no way conditioned or contingent upon any attempt to
collect from or enforce performance or compliance by the Company or upon any
event or condition whatsoever.

(g) The obligations of the Guarantor set forth herein constitute the full
recourse obligations of the Guarantor enforceable against it to the full extent
of all its assets and properties.

Section 5.03 Guarantee Absolute.

The obligations of the Guarantor hereunder are independent of the obligations of
the Company under the Securities and this Indenture and a separate action or
actions may be brought and prosecuted against the Guarantor whether or not an
action or proceeding is brought against the Company and whether or not the
Company is joined in any such action or proceeding. The liability of the
Guarantor hereunder is irrevocable, absolute and unconditional and (to the
extent permitted by law) the liability and obligations of the Guarantor
hereunder shall not be released, discharged, mitigated, waived, impaired or
affected in whole or in part by:

1. any defect or lack of validity or enforceability in respect of any
indebtedness or other obligation of the Company or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any of
the foregoing;

 

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2. any grants of time, renewals, extensions, indulgences, releases, discharges
or modifications which the Trustee or the Holders may extend to, or make with,
the Company, the Guarantor or any other Person, or any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any increase or
decrease in the Indenture Obligations;

3. the taking of security from the Company, the Guarantor or any other Person,
and the release, discharge or alteration of, or other dealing with, such
security;

4. the occurrence of any change in the laws, rules, regulations or ordinances of
any jurisdiction by any present or future action of any governmental authority
or court amending, varying, reducing or otherwise affecting, or purporting to
amend, vary, reduce or otherwise affect, any of the Indenture Obligations and
the obligations of the Guarantor hereunder;

5. the abstention from taking security from the Company, the Guarantor or any
other Person or from perfecting, continuing to keep perfected or taking
advantage of any security;

6. any other dealings with the Company, the Guarantor or any other Person, or
with any security;

7. Trustee’s or the Holders’ acceptance of compositions from the Company or the
Guarantor;

8. the application by the Holders or the Trustee of all monies at any time and
from time to time received from the Company, the Guarantor or any other Person
on account of any indebtedness and liabilities owing by the Company or any
Guarantor to the Trustee or the Holders, in such manner as the Trustee or the
Holders deems best and the changing of such application in whole or in part and
at any time or from time to time;

9. the release or discharge of the Company or the Guarantor of the Securities or
of any Person liable directly as surety or otherwise by operation of law or
otherwise for the Securities, other than an express release in writing given by
the Trustee, on behalf of the Holders, of the liability and obligations of the
Guarantor hereunder;

10. any change in the name, business, capital structure or governing instrument
of the Company or the Guarantor or any refinancing or restructuring of any of
the Indenture Obligations;

11. the sale of the Company’s or the Guarantor’s business or any part thereof;

 

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12. subject to Section 5.13, any merger or consolidation, arrangement or
reorganization of the Company, the Guarantor, any Person resulting from the
merger or consolidation of the Company or the Guarantor with any other Person or
any other successor to such Person or merged or consolidated Person or any other
change in the corporate existence, structure or ownership of the Company or the
Guarantor or any change in the corporate relationship between the Company and
the Guarantor, or any termination of such relationship;

13. the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership, arrangement, readjustment, assignment for the benefit of creditors
or distribution of the assets of the Company or its assets or any resulting
discharge of any obligations of the Company (whether voluntary or involuntary)
or of the Guarantor (whether voluntary or involuntary) or the loss of corporate
existence;

14. subject to Section 5.13, any arrangement or plan of reorganization affecting
the Company or the Guarantor;

15. any failure, omission or delay on the part of the Company to conform or
comply with any term of this Indenture;

16. any limitation on the liability or obligations of the Company or any other
Person under this Indenture, or any discharge, termination, cancellation,
distribution, irregularity, invalidity or unenforceability in whole or in part
of this Indenture;

17. any other circumstance (including any statute of limitations) that might
otherwise constitute a defense available to, or discharge of, the Company or the
Guarantor; or

18. any modification, compromise, settlement or release by the Trustee, or by
operation of law or otherwise, of the Indenture Obligations or the liability of
the Company or any other obligor under the Securities, in whole or in part, and
any refusal of payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the Indenture Obligations,
whether or not with notice to, or further assent by, or any reservation of
rights against, the Guarantor.

Section 5.04 Right to Demand Full Performance.

In the event of any demand for payment or performance by the Trustee from the
Guarantor hereunder, the Trustee or the Holders shall have the right to demand
its full claim and to receive all dividends or other payments in respect thereof
until the Indenture Obligations have been paid in full, and the Guarantor shall
continue liable hereunder for any balance which may be owing to the Trustee or
the Holders by the Company under this Indenture and the Securities. The
retention by the Trustee or the Holders of any security, prior to the
realization by the Trustee or the Holders of its rights to such security upon
foreclosure thereon, shall not, as between the Trustee and the Guarantor, be
considered as a purchase of such security, or as payment, satisfaction or
reduction of the Indenture Obligations due to the Trustee or the Holders by the
Company or any part thereof. The Guarantor, promptly after demand, will
reimburse the Trustee and the Holders for all costs and expenses of collecting
such amount under, or enforcing this Guarantee, including, without limitation,
the reasonable fees and expenses of one counsel.

 

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Section 5.05 Waivers.

(a) The Guarantor hereby expressly waives (to the extent permitted by law)
notice of the acceptance of this Guarantee and notice of the existence, renewal,
extension or the non-performance, non-payment, or non-observance on the part of
the Company of any of the terms, covenants, conditions and provisions of this
Indenture or the Securities or any other notice whatsoever to or upon the
Company or the Guarantor with respect to the Indenture Obligations, whether by
statute, rule of law or otherwise. The Guarantor hereby acknowledges
communication to it of the terms of this Indenture and the Securities and all of
the provisions therein contained and consents to and approves the same. The
Guarantor hereby expressly waives (to the extent permitted by law) diligence,
presentment, protest and demand for payment with respect to (i) any notice of
sale, transfer or other disposition of any right, title to or interest in the
Securities by the Holders or in this Indenture, (ii) any release of the
Guarantor from its obligations hereunder resulting from any loss by it of its
rights of subrogation hereunder and (iii) any other circumstances whatsoever
that might otherwise constitute a legal or equitable discharge, release or
defense of a guarantor or surety or that might otherwise limit recourse against
such Guarantor.

(b) Without prejudice to any of the rights or recourses which the Trustee or the
Holders may have against the Company, the Guarantor hereby expressly waives (to
the extent permitted by law) any right to require the Trustee or the Holders to:

(1) enforce, assert, exercise, initiate or exhaust any rights, remedies or
recourse against the Company or any other Person under this Indenture or
otherwise;

(2) value, realize upon, or dispose of any security of the Company or any other
Person held by the Trustee or the Holders;

(3) initiate or exhaust any other remedy which the Trustee or the Holders may
have in law or equity; or

(4) mitigate the damages resulting from any default under this Indenture;

before requiring or becoming entitled to demand payment under this Guarantee.

Section 5.06 The Guarantor Remain Obligated in Event the Company Is No Longer
Obligated to Discharge Indenture Obligations.

It is the express intention of the Trustee and the Guarantor that if for any
reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article 5 shall
nevertheless be binding upon the Guarantor, as principal debtor, until such time
as all such Indenture Obligations have been paid in full to the Trustee and all
Indenture Obligations owing to the Trustee or the Holders by the Company have
been discharged.

 

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Section 5.07 Limitation on Guarantor Liability.

The Guarantor is a Subsidiary of the Company and, by its acceptance hereof, each
Holder hereby confirms that it is the intention of all such parties that the
Guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the Holders
and the Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee shall be limited to the maximum amount which,
after giving effect to all other contingent and fixed liabilities of the
Guarantor, will result in the obligations of such Guarantor under its Guarantee
not constituting such fraudulent transfer or conveyance.

Section 5.08 Guarantee is in Addition to Other Security.

This Guarantee shall be in addition to and not in substitution for any other
guarantees which the Trustee may now or hereafter hold in respect of the
Indenture Obligations owing to the Trustee or the Holders by the Company and
(except as may be required by law) the Trustee shall be under no obligation to
marshal in favor of the Guarantor any other guarantees or any moneys or other
assets which the Trustee may be entitled to receive or upon which the Trustee or
the Holders may have a claim.

Section 5.09 No Bar to Further Actions.

Except as provided by law, no action or proceeding brought or instituted under
this Article 5 and this Guarantee and no recovery or judgment in pursuance
thereof shall be a bar or defense to any further action or proceeding which may
be brought under this Article 5 and this Guarantee by reason of any further
default or defaults under this Article 5 and this Guarantee or in the payment of
any of the Indenture Obligations owing by the Company.

Section 5.10 Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies.

(a) No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
5 and this Guarantee shall operate as a waiver thereof, nor shall any single or
partial exercise of any rights, power, privilege or remedy preclude any other or
further exercise thereof, or the exercise of any other rights, powers,
privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.

(b) Nothing contained in this Article 5 shall limit the right of the Trustee or
the Holders to take any action to accelerate the maturity of the Securities
pursuant to Article 8 or to pursue any rights or remedies hereunder or under
applicable law.

 

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Section 5.11 Trustee’s Duties; Notice to Trustee.

(a) Any provision in this Article 5 or elsewhere in this Indenture allowing the
Trustee to request any information or to take any action authorized by, or on
behalf of the Guarantor, shall be permissive and shall not be obligatory on the
Trustee except as the Holders may direct in accordance with the provisions of
this Indenture or where the failure of the Trustee to request any such
information or to take any such action arises from the Trustee’s negligence, bad
faith or willful misconduct.

(b) The Trustee shall not be required to inquire into the existence, powers or
capacities of the Company, the Guarantor or the officers, directors or agents
acting or purporting to act on their respective behalf.

Section 5.12 Successors and Assigns.

All terms, agreements and conditions of this Article 5 shall extend to and be
binding upon the Guarantor and its successors and permitted assigns and shall
inure to the benefit of and may be enforced by the Trustee and its successors
and assigns; provided, however, that the Guarantor may not assign any of its
rights or obligations hereunder other than in accordance with Article 7 hereof.

Section 5.13 Release of Guarantee.

Concurrently with the payment in full of all of the Indenture Obligations, the
Guarantor shall be released from and relieved of its obligations under this
Article 5. Upon the delivery by the Company to the Trustee of an Officers’
Certificate and an Opinion of Counsel to the effect that the transaction giving
rise to the release of this Guarantee was made by the Company in accordance with
the provisions of this Indenture and the Securities, the Trustee shall execute
any documents reasonably required in order to evidence the release of the
Guarantor from its obligations under this Guarantee. If any of the Indenture
Obligations are revived and reinstated after the termination of this Guarantee,
then all of the obligations of the Guarantor under this Guarantee shall be
revived and reinstated as if this Guarantee had not been terminated until such
time as the Indenture Obligations are paid in full, and the Guarantor shall
enter into an amendment to this Guarantee, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.

Section 5.14 Execution of Guarantee.

(a) To evidence the Guarantee, the Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Exhibit B hereto, to be
endorsed on each Security authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of the Guarantor by one of its
Chairman of the Board, its President, its Chief Executive Officer, its
President, its Chief Operating Officer, any Executive Vice President or Vice
President, its Treasurer, its Assistant Treasurer, its Secretary or its
Assistant Secretary. The signature of any of these officers on the Securities
may be manual or facsimile.

 

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(b) If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which this Guarantee
is endorsed, such Guarantee shall be valid nevertheless.

ARTICLE 6

COVENANTS

Section 6.01 Payment of Securities.

(a) The Company shall promptly make all payments in respect of the Securities on
the dates and in the manner provided in the Securities and this Indenture. A
payment of principal or interest or Additional Interest, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the
Company) holds by 12:00 p.m. (noon), New York City time, on that date money,
deposited by or on behalf of the Company sufficient to make the payment. Subject
to Section 4.02, accrued and unpaid interest on any Security that is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security 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. Principal, Fundamental Change
Repurchase Price, interest and Additional Interest, if any, in each case if
payable, shall be considered paid on the applicable date due if on such date
(or, in the case of Fundamental Change Repurchase Price, on the Business Day
following the applicable Fundamental Change Repurchase Date) the Trustee or the
Paying Agent holds, in accordance with this Indenture, money sufficient to pay
all such amounts then due. The Company shall, to the fullest extent permitted by
law, pay interest in immediately available funds on overdue principal amount and
interest at the annual rate borne by the Securities compounded semiannually,
which interest shall accrue from the date such overdue amount was originally due
to the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand. Payment-in-Kind
Interest shall be considered paid on the date due if the Trustee is directed on
or prior to such date to issue Payment-in-Kind Securities or increase the
principal amount of the applicable Securities, in each case in an amount equal
to the amount of the applicable Payment-in-Kind Interest.

(b) Payment of the principal of and interest, if any, on the Securities shall be
made at the office or agency of the Company maintained for that purpose (which
shall initially be at the address set forth in Section 2.03(c)) in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Register;
provided further that a Holder with an aggregate principal amount in excess of
$2,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder if such Holder has provided wire transfer instructions
to the Trustee at least 10 Business Days prior to the payment date. Any wire
transfer instructions received by the Trustee will remain in effect until
revoked by the Holder. Notwithstanding the foregoing, so long as this Security
is registered in the name of a Depositary or its nominee, all payments hereon
shall be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

 

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Section 6.02 SEC and Other Reports.

The Company shall file in a timely fashion all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act (including its Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q), and within 15 days after it files them with the
SEC, the Company shall file copies of all such reports, information and other
documents with the Trustee; provided that any such reports, information and
documents filed with the SEC pursuant to its Electronic Data Gathering, Analysis
and Retrieval (or EDGAR) system shall be deemed to be filed with the Trustee. In
the event that the Company is no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall continue to provide
the Trustee, the Holders and, upon request, beneficial owners of Securities with
reports containing substantially the same information as would be required to be
filed with the SEC had the Company continued to have been subject to such
reporting requirements. In such event, such reports will be provided at the
times the Company would have been required to provide reports had it continued
to be subject to such reporting requirements. In addition, in such event the
Company will (i) hold a quarterly conference call to discuss the quarterly and
annual information contained in the reports no later than five business days
from the time the Company furnishes such information to the Trustee; (ii) no
fewer than three business days prior to the date of the conference call required
to be held in accordance with clause (i) above, issue a press release to the
appropriate wire services for broad dissemination in the United States and
Canada announcing the time and date of such conference call and directing the
beneficial owners of the Securities, prospective investors and securities
analysts to contact the investor relations office of the Company to obtain the
reports and information and how to access such conference call; and (iii) either
(x) maintain an unrestricted public website on which the reports and conference
call access details are posted; (y) maintain a non-public website to which
beneficial owners of the Securities, prospective investors and securities
analysts are given access and to which the reports and conference call access
details are posted or (z) distribute via e-mail such reports and conference call
details to beneficial owners of the Securities, prospective investors and
securities analysts who request to receive such distributions. The Company also
shall comply with the provisions of TIA Section 314(a).

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

Section 6.03 Compliance Certificates. The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Company (beginning with
the fiscal year ending December 31, 2008), an Officers’ Certificate as to the
signer’s knowledge of the Company’s compliance with all conditions and covenants
on its part contained in this Indenture and stating whether or not the signer
knows of any Default or Event of Default. If such signer knows of such a Default
or Event of Default, the Officers’ Certificate shall describe the Default or
Event of Default and the efforts to remedy the same. For the purposes of this
Section 6.03, compliance shall be determined without regard to any grace period
or requirement of notice provided pursuant to the terms of this Indenture.

 

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Section 6.04 Further Instruments and Acts. Upon request of the Trustee, the
Company and the Guarantor will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

Section 6.05 Maintenance of Corporate Existence. Subject to Article 7, each of
the Company and the Guarantor will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence.

Section 6.06 Rule 144A Information Requirement. So long as any Securities remain
outstanding, the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange Act, upon
the request of any Holder or beneficial holder of the Securities make available
to such Holder or beneficial holder of Securities or any Common Stock issued
upon conversion thereof which continue to be Restricted Securities in connection
with any sale thereof and any prospective purchaser of Securities or such Common
Stock designated by such Holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
further action as any Holder or beneficial holder of such Securities or such
Common Stock may reasonably request, all to the extent required from time to
time to enable such Holder or beneficial holder to sell its Securities or Common
Stock without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such Rule may be amended from time to time.
Whether a person is a beneficial holder shall be determined by the Company.

Section 6.07 Stay, Extension and Usury Laws. The Company and the Guarantor
covenant (to the extent that they may lawfully do so) that they shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company or the Guarantor from paying all or any portion
of the principal of or accrued but unpaid interest or Additional Interest, if
any, on the Securities as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture, and the Company and the Guarantor (to the extent it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law and
covenant that they will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

Section 6.08 Payment of Additional Interest. If Additional Interest is payable
by the Company pursuant to the Registration Rights Agreement, the Company shall
deliver to the Trustee an Officers’ Certificate to that effect stating (i) the
amount of such Additional Interest that is payable, (ii) the reason why such
Additional Interest is payable and (iii) the date on which such Additional
Interest is payable. Unless and until a Responsible Officer of the Trustee
receives such a certificate, the Trustee may assume without inquiry that no such
Additional Interest is payable. If the Company has paid Additional Interest
directly to the Persons entitled to such Additional Interest, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment. The Trustee may conclusively rely on the correctness of the Additional
Interest calculations provided by the Company without investigation.

 

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Section 6.09 Maintenance of Office or Agency. The Company will maintain an
office or agency of the Trustee, Registrar and Paying Agent where securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or purchase and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office shall initially be one such office or agency for all of
the aforesaid purposes. The Company shall give prompt written notice to the
Trustee of the location, and of any change in the location, of any such office
or agency (other than a change in the location of the office of the Trustee). If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 12.02.

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

Section 6.10 Voting Rights. Without the consent of the Holders of not less than
a majority in aggregate principal amount of the Securities then outstanding,
voting as a class, (i) the Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, incur, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”) any Indebtedness if after the incurrence of such
Indebtedness the Company’s total Indebtedness, on a consolidated basis, would
exceed $7,500, 000,000 and (ii) the Company will not pay any dividends on its
Common Stock (other than a dividend paid solely in shares of Common Stock).

ARTICLE 7

CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR LEASE

Section 7.01 Company May Consolidate, etc., only on Certain Terms. Neither the
Company nor the Guarantor may consolidate with or merge into any Person (unless
the Company or the Guarantor is the surviving corporation) or convey, transfer
or lease the property and assets, substantially as an entirety, of the Company
or the Guarantor to another Person, other than to one or more of the Company’s
wholly-owned subsidiaries, unless:

(1) the Person (if other than the Company or the Guarantor) formed by such
consolidation or into which the Company or the Guarantor is merged, or the
Person which acquires by conveyance, transfer or lease all or substantially all
of the properties and assets of the Company or the Guarantor, shall (i) be a
corporation, limited liability company, partnership, trust or other business
entity organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and (ii) such Person (if other
than the Company or the Guarantor) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the obligations of the Company or the Guarantor under the
Securities, the Guarantee and this Indenture, as applicable, and the performance
or observance of every covenant and provision of this Indenture, the Guarantee
and the Securities required on the part of the Company or the Guarantor, as
applicable, to be performed or observed and the conversion rights shall be
provided for in accordance with

 

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Article 4, by supplemental indenture satisfactory in form to the Trustee,
executed and delivered to the Trustee, by the Person (if other than the Company
or the Guarantor) formed by such consolidation or into which the Company or the
Guarantor shall have been merged or by the Person which shall have acquired the
Company’s or the Guarantor’s assets;

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

(3) if the Company or the Guarantor will not be the resulting or surviving
corporation, the Company shall have, at or prior to the effective date of such
consolidation, merger or transfer, delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with this Section 7.01 and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture complies with this Article, and that all conditions precedent herein
provided for relating to such transaction have been complied with.

Section 7.02 Successor Substituted. Upon any consolidation of the Company or the
Guarantor with, or merger of the Company or the Guarantor into, any other Person
or any conveyance, transfer or lease substantially as an entity, of the
properties and assets of the Company or the Guarantor and its Subsidiaries,
taken as a whole, in accordance with Section 7.01, the successor Person formed
by such consolidation or into which the Company or the Guarantor is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or the
Guarantor, as applicable, under this Indenture with the same effect as if such
successor Person had been named as the Company or the Guarantor herein, and
thereafter, except in the case of a lease, and except for obligations the
predecessor Person may have under a supplemental indenture, the predecessor
Person shall be relieved of all obligations and covenants under this Indenture,
the Guarantee and the Securities, as applicable.

ARTICLE 8

DEFAULT AND REMEDIES

Section 8.01 Events of Default.

(a) An “Event of Default” shall occur if:

(1) the Company shall fail to pay when due the Principal or any Fundamental
Change Repurchase Price of any Security when the same becomes due and payable;
or

(2) the Company shall fail to pay an installment of interest or Additional
Interest, if any, on any of the Securities, which failure continues for 30 days
after the date when due; or

(3) the Company shall fail to deliver when due all shares of Common Stock, if
any, deliverable upon conversion of the Securities, which failure continues for
5 days; or

 

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(4) the Company or the Guarantor shall fail to perform or observe (or obtain a
waiver with respect to) any other term, covenant or agreement contained in the
Securities, the Guarantee or this Indenture for a period of 60 days after
receipt by the Company of a Notice of Default specifying such failure; or

(5) the Company, the Guarantor or any of the Guarantor’s Subsidiaries shall fail
to pay any principal by the end of any applicable grace period or resulting in
acceleration of other Indebtedness of the Company, the Guarantor or any of the
Guarantor’s Subsidiaries for borrowed money where the aggregate principal amount
with respect to which the default or acceleration has occurred exceeds $50
million, provided that if any such default is cured, waived, rescinded or
annulled, then the Event of Default by reason thereof would be deemed not to
have occurred; or

(6) the Company, the Guarantor or any of the Guarantor’s Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:

(A) commences as a debtor a voluntary case or proceeding; or

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

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

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

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

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

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

(A) grants relief against the Company, the Guarantor or any of the Guarantor’s
Subsidiaries in an involuntary case or proceeding or adjudicates the Company,
the Guarantor or any of the Guarantor’s Subsidiaries insolvent or bankrupt; or

(B) appoints a Receiver of the Company, the Guarantor or any of the Guarantor’s
Subsidiaries or for all or substantially all of the property of the Company, the
Guarantor or any of the Guarantor’s Subsidiaries; or

(C) orders the winding up or liquidation of the Company, the Guarantor or any of
the Guarantor’s Subsidiaries;

 

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

(8) the Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect or the
Guarantor, or any person acting on behalf of the Guarantor, shall deny or
disaffirm in writing its obligations under the Guarantee.

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

(b) Notwithstanding Section 8.01(a), no Event of Default under clauses (4) or
(5) of Section 8.01(a) shall occur until the Trustee notifies the Company in
writing upon the written direction of the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding, or the Holders of at least
25% in aggregate principal amount of the Securities then outstanding notify the
Company and the Trustee in writing, of the Default (a “Notice of Default”), and
the Company does not cure the Default within the time specified in clause (4) or
(5) of Section 8.01(a), as applicable, after receipt of such notice. A notice
given pursuant to this Section 8.01 shall be given by registered or certified
mail, must specify the Default, demand that it be remedied and state that the
notice is a Notice of Default. When any Default under this Section 8.01 is
cured, it ceases.

(c) The Company will deliver to the Trustee, within five Business Days after
becoming aware of the occurrence of a Default or Event of Default, written
notice thereof.

The Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Responsible Officer with
responsibility for this Indenture at the Corporate Trust Office of the Trustee
by the Company, a Paying Agent, any Holder or any agent of any Holder or unless
a Responsible Officer with responsibility for this Indenture acquires actual
knowledge of such Event of Default in the course of performing other duties
pursuant to this Indenture.

Section 8.02 Acceleration. If an Event of Default (other than an Event of
Default specified in clause (6) or (7) of Section 8.01(a)) occurs and is
continuing with respect to the Company or the Guarantor, the Trustee may, by
notice to the Company, and shall upon the written direction of the Holders of at
least 25% in aggregate principal amount of the Securities then outstanding, or
the Holders of at least 25% in aggregate principal amount of the Securities then
outstanding may, by notice to the Company and the Trustee, declare the principal
amount and accrued and unpaid interest, if any, and accrued and unpaid
Additional Interest, if any, through the date of declaration on all the
Securities to be immediately due and payable. Upon such a declaration, such
principal amount and such accrued and unpaid interest, if any, and such accrued
and unpaid Additional Interest, if any, shall be due and payable immediately. If
an Event of Default specified in Section 8.01(a)(6) or (7) occurs in respect of
the Company or the Guarantor or any of the Guarantor’s Subsidiaries and is
continuing, the principal amount and accrued but unpaid interest, if any, and
accrued and unpaid Additional Interest, if any, on all the

 

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Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders of
Securities. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (a) all existing Events of Default, other than the
nonpayment of the principal of the Securities which have become due solely by
such declaration of acceleration, have been cured or waived; (b) to the extent
the payment of such interest is lawful, interest (calculated at the rate per
annum borne by the Securities) on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and (d) all payments
due to the Trustee and any predecessor Trustee under Section 9.07 have been
made. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.

Section 8.03 Other Remedies.

(a) If an Event of Default occurs and is continuing, the Trustee may, but shall
not be obligated to, pursue any available remedy by proceeding at law or in
equity to collect payment of the principal amount and accrued and unpaid
interest, if any, and accrued and unpaid Additional Interest, if any, on the
Securities or to enforce the performance of any provision of the Securities, the
Guarantee or this Indenture.

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

Section 8.04 Waiver of Defaults and Events of Default. Subject to Sections 8.02,
8.07 and 11.02, the Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may waive an existing
Default or Event of Default and its consequences, except an uncured Default or
Event of Default in the payment of the principal of, premium, if any, or any
accrued but unpaid interest on any Security, an uncured failure by the Company
to convert any Securities into Common Stock or any Default or Event of Default
in respect of any provision of this Indenture, the Guarantee or the Securities
which, under Section 11.02, cannot be modified or amended without the consent of
the Holder of each Security affected. When a Default or Event of Default is
waived, it is cured and ceases to exist.

Section 8.05 Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the time method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
the Trustee determines may be unduly prejudicial to the rights of another Holder
or the Trustee, or that may involve the Trustee in personal liability unless the
Trustee is offered security or indemnity satisfactory to it; provided, however,
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.

 

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Section 8.06 Limitations on Suits.

(a) A Holder may not pursue any remedy with respect to this Indenture, the
Guarantee or the Securities (except actions for payment of overdue principal,
premium, if any, or interest or for the conversion of the Securities pursuant to
Article 4) unless:

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

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

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

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

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

(b) No Holder of a Security shall have any right under any provision of this
Indenture, the Guarantee or the Securities to affect, disturb, or prejudice the
rights of another Holder of a Security or to obtain a preference or priority
over another Holder of a Security.

Section 8.07 Rights of Holders to Receive Payment and to Convert.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of the principal amount, Fundamental Change
Repurchase Price and interest, if any, or Additional Interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities and this Indenture, (whether upon repurchase
or otherwise), and to convert such Security in accordance with Article 4, and to
bring suit for the enforcement of any such payment on or after such respective
due dates or for the right to convert in accordance with Article 4, is, subject
to compliance with the provisions of Section 8.06, absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.

Section 8.08 Collection Suit by Trustee. If an Event of Default described in
clause (1) or (2) of Section 8.01(a) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or another obligor on the Securities for the whole amount owing with
respect to the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

Section 8.09 Trustee may File Proofs of Claim. The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in

 

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any judicial proceedings relative to the Company (or any other obligor on the
Securities or the Guarantee), its creditors or its property and shall be
entitled and empowered to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same, and any
Receiver in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.07, and to the extent that such payment
of the reasonable compensation, expenses, disbursements and advances in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other property which the Holders may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to, or, on behalf of any
Holder, to authorize, accept or adopt any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

Section 8.10 Priorities.

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

(1) First, to the Trustee for amounts due under Section 9.07;

(2) Second, to Holders for amounts due and unpaid on the Securities for the
principal amount, interest, and Additional Interest, as applicable, ratably,
without preference or priority of any kind, according to such respective amounts
due and payable on the Holders’ Securities; and

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

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

Section 8.11 Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses (whether incurred before trial, at
trial, on appeal or in any bankruptcy or arbitration or other administrative
proceeding), against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 8.11 does not apply to a suit made by the Trustee, a suit by a Holder
pursuant to Section 8.07, or a suit by Holders of more than 10% in aggregate
principal amount of the Securities then outstanding. This Section 8.11 shall be
in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby expressly
excluded from this Indenture, as permitted by the TIA.

 

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ARTICLE 9

TRUSTEE

Section 9.01 Obligations of Trustee.

(a) If an Event of Default of which a Responsible Officer of the Trustee shall
have actual knowledge has occurred and is continuing, the Trustee may (and shall
upon the written direction of the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding and being furnished with indemnity
acceptable to it) exercise such of the rights and powers vested in it by this
Indenture. If an Event of Default of which a Responsible Officer of the Trustee
shall have actual knowledge has occurred and is continuing, the Trustee shall
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

(b) Except during the continuance of an Event of Default of which a Responsible
Officer of the Trustee shall have actual knowledge, the Trustee need perform
only those duties as are specifically set forth in this Indenture and no others.

This Section 9.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

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

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

(1) this paragraph does not limit the effect of Section 9.01(b);

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

(3) the Trustee shall not be liable with respect to any action it takes or omits
to take in good faith in accordance with this Indenture or a direction received
by it pursuant to Section 8.05.

This Section 9.01(d) shall be in lieu of Sections 315(d)(1), 315(d)(2) and
315(d)(3) of the TIA and such Sections are hereby expressly excluded from this
Indenture as permitted by the TIA.

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

(f) Every provision of this Indenture that in any way relates to the Trustee is
subject to subsections (a), (b), (c), (d) and (e) of this Section 9.01.

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

Section 9.02 Rights of Trustee.

(a) Subject to Section 9.01:

(1) The Trustee may rely conclusively and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.

(2) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to Section 12.04(b).
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers’ Certificate or Opinion of Counsel.

(3) The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents, attorneys or
custodians, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney or custodian appointed by the
Trustee with due care.

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

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

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

(7) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other

 

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paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company, and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.

(8) The Trustee shall not be deemed to have notice or knowledge of any Default
or Event of Default, or Fundamental Change unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which
is in fact such a Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Securities and this Indenture. In the
absence of receipt of such notice or actual knowledge, the Trustee may
conclusively assume that there is no Default, Event of Default, or Fundamental
Change.

(9) 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, including, without limitation as Paying Agent, Registrar and
Conversion Agent, and to each agent, custodian and other Person employed to act
hereunder.

(10) In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

Section 9.03 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Securities and may otherwise
deal with the Company or an Affiliate of the Company with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 9.10 and 9.11.

Section 9.04 Trustee’s Disclaimer. The Trustee makes no representation as to the
validity or adequacy of this Indenture, the Guarantee or the Securities. It
shall not be accountable for the Company’s use of the proceeds from the
Securities and it shall not be responsible for any statement in the Securities
other than its certificate of authentication.

Section 9.05 Notice of Default or Events of Default. If a Default or an Event of
Default occurs and is continuing and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Holder of a Security notice of all
uncured Defaults or Events of Default known to it within 90 days after it occurs
or, if later, within 15 days after it becomes known to the Trustee. However, the
Trustee may withhold the notice if and for so long as a committee of its
Responsible Officers in good faith determines that withholding notice is in the
interests of Holders of Securities, except in the case of a Default or an Event
of Default in payment of the principal of, or premium, if any, or interest on
any Security when due or in the payment of any purchase obligation, or the
Company’s failure to convert Securities when obligated to convert them. This
Section 9.05 is in lieu of section 315(b) of the TIA and such provision is
expressly excluded from this Indenture as permitted by the TIA.

 

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Section 9.06 Reports by Trustee to Holders.

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

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

Section 9.07 Compensation and Indemnity.

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

(b) The Company shall indemnify and hold harmless the Trustee or any predecessor
Trustee (which for purposes of this Section 9.07 shall include its officers,
directors, employees and agents) for, and hold it harmless against, any and all
loss, liability, claim, damage or expense including taxes (other than franchise
taxes and taxes based upon, measured by or determined by the income of the
Trustee), incurred by it in connection with the acceptance or administration of
its duties under this Indenture or any action or failure to act as authorized or
within the discretion or rights or powers conferred upon the Trustee hereunder
including the reasonable costs and expenses of the Trustee and its counsel in
defending (including reasonable legal fees and expenses whether incurred before
trial, at trial, on appeal or in any bankruptcy or arbitration or other
administrative proceeding) itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company need not pay for any
settlement effected without its prior written consent, which shall not be
unreasonably withheld.

(c) The Company need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it determined to have been caused by
its gross negligence, willful misconduct or bad faith.

 

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(d) To secure the Company’s payment obligations in this Section 9.07, the
Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee. The
obligations of the Company under this Section 9.07 shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of
the Trustee.

(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (6) or (7) of Section 8.01(a) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this Section shall
survive the termination of this Indenture.

Section 9.08 Replacement of Trustee.

(a) The Trustee may resign by so notifying the Company. The Holders of a
majority in aggregate principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and the Company and may, with the
Company’s written consent, appoint a successor Trustee. The Company may remove
the Trustee at any time, so long as no Default or Event of Default has occurred
and is continuing, and appoint a Successor Trustee in accordance with this
Section 9.08.

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

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

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

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

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

 

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(g) Notwithstanding replacement of the Trustee pursuant to this Section 9.08,
the Company’s obligations under Section 9.07 shall continue for the benefit of
the retiring Trustee.

Section 9.09 Successor Trustee by Merger, etc. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all of its corporate
trust business (including the administration of this Indenture) to, another
corporation, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee; provided such transferee
corporation shall qualify and be eligible under Section 9.10. Such successor
Trustee shall promptly mail notice of its succession to the Company, the
Guarantee and each Holder.

Section 9.10 Eligibility; Disqualification. The Trustee shall always satisfy the
requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. If at any time the Trustee shall cease to satisfy any such
requirements, it shall resign immediately in the manner and with the effect
specified in this Article 9. The Trustee shall be subject to the provisions of
TIA Section 310(b). Nothing herein shall prevent the Trustee from filing with
the SEC the application referred to in the penultimate paragraph of TIA
Section 310(b).

Section 9.11 Preferential Collection of Claims against Company. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 10

SATISFACTION AND DISCHARGE OF INDENTURE

Section 10.01 Satisfaction and Discharge of Indenture.

(a) This Indenture shall cease to be of further force and effect (except as to
any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for and except as further provided below),
and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when either:

(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 and (ii) Securities for whose
payment money has theretofore been deposited in trust and thereafter repaid to
the Company as provided in Section 10.03) have been delivered to the Trustee for
cancellation; or

(B) all such Securities not theretofore delivered to the Trustee for
cancellation,

(i) have become due and payable, or

 

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(ii) will become due and payable at the Final Maturity Date within one year;
provided in the case of clause (B), that

(1) the Company has deposited with the Trustee or a Paying Agent (other than the
Company or any of its Affiliates) as trust funds in trust for the purpose of and
in an amount sufficient to pay and discharge all indebtedness related to such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Final Maturity 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 relating
to the satisfaction and discharge of this Indenture have been complied with.

(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company with respect to the conversion privilege and the
Conversion Rate of the Securities pursuant to Article 4, the obligations of the
Company to the Trustee under Section 9.07 and, if money shall have been
deposited with the Trustee pursuant to clause (2) of Section 10.01(a), the
provisions of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 6.01 and 12.05,
Article 4, and this Article 10, shall survive until the Securities have been
paid in full.

Section 10.02 Application of Trust Money. Subject to the provisions of
Section 10.03, the Trustee or a Paying Agent shall hold in trust, for the
benefit of the Holders, all money deposited with it pursuant to Section 10.01
and shall apply the deposited money in accordance with this Indenture and the
Securities to the payment of the principal of and interest on the Securities.

Section 10.03 Repayment to Company.

(a) The Trustee and each Paying Agent shall promptly pay to the Company upon
request any excess money (1) deposited with them pursuant to Section 10.01 and
(2) held by them at any time.

(b) The Trustee and each Paying Agent shall, subject to applicable abandonment
property laws, pay to the Company upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years after a
right to such money has matured; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment, may at the expense
of the Company cause to be mailed to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein, which
shall be at least 30 days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.

 

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Section 10.04 Reinstatement. If the Trustee or any Paying Agent is unable to
apply any money in accordance with Section 10.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company’s obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to
Section 10.01 until such time as the Trustee or such Paying Agent is permitted
to apply all such money in accordance with Section 10.02; provided, however,
that if the Company has made any payment of the principal of or interest on any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive any such
payment from the money held by the Trustee or such Paying Agent.

ARTICLE 11

AMENDMENTS; SUPPLEMENTS AND WAIVERS

Section 11.01 Without Consent of Holders.

(a) The Company and the Trustee may amend or supplement this Indenture, the
Guarantee or the Securities without notice to or consent of any Holder of a
Security for the purpose of:

(1) evidencing a successor to the Company or the Guarantor and the assumption by
that successor of the Company’s or the Guarantor’s obligations under this
Indenture, the Guarantee and the Securities;

(2) adding to the Company’s or the Guarantor’s covenants for the benefit of the
Holders or surrendering any right or power conferred upon the Company or the
Guarantor;

(3) securing the Company’s or the Guarantor’s obligations in respect of the
Securities;

(4) adding a Guarantor;

(5) evidencing and providing for the acceptance of the appointment of a
successor trustee in accordance with Article 9;

(6) complying with the requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA, as contemplated by this
Indenture or otherwise;

(7) curing any ambiguity, omission, inconsistency or correcting or supplementing
any defective provision contained in this Indenture; or

(8) making any other changes to the Indenture that does not adversely affect the
interests of the Holders in any material respect.

 

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Section 11.02 With Consent of Holders.

(a) The Company and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding. However, subject
to Section 11.04, without the written consent of each Holder affected, an
amendment, supplement or waiver may not:

(1) alter the manner of calculation or rate of accrual of interest on any
Security or change the time of payment of any installment of interest on, or any
Additional Interest with respect to, any Security;

(2) make any of the Securities payable in money or securities other than that
stated in the Securities;

(3) change the stated maturity of any Security;

(4) reduce the principal amount or Fundamental Change Repurchase Price (as
applicable) with respect to any of the Securities, or any Additional Interest,
or the amount payable upon purchase pursuant to Article 3, with respect to any
Security;

(5) make any change that adversely affects the rights of Holders to require the
Company to purchase Securities at the option of Holders;

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

(7) change the currency of payment of principal of, or interest on, the
Securities;

(8) except as otherwise permitted or contemplated by Section 4.11, adversely
affect the conversion rights of the Securities;

(9) release the Guarantor from any of its obligations under the Guarantee,
except in accordance with the Indenture; or

(10) change the percentage in aggregate principal amount of Securities
outstanding necessary to modify or amend this Indenture or to waive any past
Default.

(b) Without limiting the provisions of Section 11.02(a) hereof, the Holders of a
majority in principal amount of the Securities then outstanding may, on behalf
of all the Holders of all Securities, (i) waive compliance by the Company or the
Guarantor with the restrictive provisions of this Indenture, and (ii) waive any
past Default or Event of Default under this Indenture and its consequences,
except an uncured failure to pay when due the principal amount, accrued and
unpaid interest, accrued and unpaid Additional Interest or Fundamental Change
Repurchase Price, or in the obligation to deliver Common Stock, if any and as
applicable, or in respect of any provision which under this Indenture cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected.

 

62

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(c) After an amendment, supplement or waiver under this Section 11.02 becomes
effective, the Company shall promptly mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.

Section 11.03 Compliance with Trust Indenture Act. Every amendment to or
supplement of this Indenture or the Securities shall comply with the TIA as in
effect at the date of such amendment or supplement.

Section 11.04 Revocation and Effect of Consents.

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

(b) After an amendment, supplement or waiver becomes effective, it shall bind
every Holder of a Security.

Section 11.05 Notation on or Exchange of Securities. If an amendment, supplement
or waiver changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.

Section 11.06 Trustee to Sign Amendments, etc. The Trustee shall sign any
amendment or supplemental indenture authorized pursuant to this Article 11 if
the amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
in its sole discretion, but need not sign it. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be provided with
and, subject to Section 9.01, shall be fully protected in relying upon, an
Opinion of Counsel and an Officers’ Certificate stating that such amendment or
supplemental indenture is authorized or permitted by this Indenture. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it.

Section 11.07 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article 11, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

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ARTICLE 12

MISCELLANEOUS

Section 12.01 Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the TIA through operation of Section 318(c) thereof, such
imposed duties shall control.

Section 12.02 Notices. Any demand, authorization notice, request, consent or
communication shall be given in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by delivery in person or mail by first-class
mail, postage prepaid, or by guaranteed overnight courier) to the following
facsimile numbers:

If to the Company, to:

AbitibiBowater Inc.

1155 Metcalfe Street

Suite 800

Montreal, Quebec H3B 5H2

Attention: Jacques Vachon, Chief Legal Officer

Fax: 514-394-3644

with a copy to:

Troutman Sanders LLP

600 Peachtree Street, N.E.

Suite 5200

Atlanta, Georgia 30308

Attention: Cal Smith

Fax: 404-885-3900

if to the Guarantor, to

Bowater Incorporated

55 East Camperdown Way

P.O. Box 1028

Greenville, South Carolina 29602

Attention: William Harvey

Fax: 864-282-9219

with a copy to:

Troutman Sanders LLP

600 Peachtree Street, N.E.

Suite 5200

Atlanta, Georgia 30308

Attention: Cal Smith

Fax: 404-885-3900

 

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if to the Trustee, to:

The Bank of New York Trust Company, N.A.

10161 Centurion Parkway

Jacksonville, Florida 32256

Attention: Christie Leppert

Fax: 904-645-1921

Such notices or communications shall be effective when received.

The Company, the Guarantor or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Notice to or from the Trustee shall not be via electronic mail. Notices to the
Trustee via facsimile shall promptly be followed by the original written notice.

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

The Trustee agrees to accept and act upon facsimile transmission of written
instructions and/or directions pursuant to this Indenture given by the Company,
provided, however that: (i) the Company, subsequent to such facsimile
transmission of written instructions and/or directions, shall provide the
originally executed instructions and/or directions to the Trustee in a timely
manner and (ii) such originally executed instructions and/or directions shall be
signed by an “Officer” of the Company

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

If the Company mails any notice to a Holder of a Security, it shall mail a copy
to the Trustee and each Registrar, Paying Agent and Conversion Agent.

Section 12.03 Communications by Holders with other Holders. Holders of
Securities may communicate pursuant to TIA Section 312(b) with other Holders of
Securities with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).

Section 12.04 Certificate and Opinion as to Conditions Precedent.

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

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

 

65

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

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

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

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

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

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

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

Section 12.05 Record Date for Vote or Consent of Holders of Securities. The
Company (or, in the event deposits have been made pursuant to Section 10.01, the
Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than 30
days prior to the date of the commencement of solicitation of such action.
Notwithstanding the provisions of Section 11.04, if a record date is fixed,
those persons who were Holders of Securities at the close of business on such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date.

Section 12.06 Rules by Trustee, Paying Agent, Registrar and Conversion Agent.
The Trustee may make reasonable rules (not inconsistent with the terms of this
Indenture) for action by or at a meeting of Holders. Any Registrar, Paying Agent
or Conversion Agent may make reasonable rules for its functions.

Section 12.07 Legal Holidays. A “Legal Holiday” is a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are authorized or obligated to close. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a Regular Record
Date is a Legal Holiday, the record date shall not be affected.

 

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Section 12.08 Governing Law. This Indenture, the Guarantee and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York (including Sections 5-1401 and 5-1402 of the New York General
Obligations Law but excluding all other choice of law and conflict of law
rules).

Section 12.09 No Adverse Interpretation of other Agreements. This Indenture may
not be used to interpret another indenture, loan or debt agreement of the
Company or a Subsidiary of the Company. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

Section 12.10 No Recourse against Others. All liability described in
paragraph 15 of the Securities of any director, officer, employee or
shareholder, as such, of the Company or the Guarantor hereby is waived and
released by each of the Holders.

Section 12.11 No Security Interest Created. Nothing in this Indenture, the
Guarantee or in the Securities, express or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, now in effect or hereafter enacted and made effective, in any
jurisdiction.

Section 12.12 Successors. All agreements of the Company in this Indenture and
the Securities shall bind its successor. All agreements of the Guarantor in this
Indenture, the Guarantee and the Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.

Section 12.13 Multiple Counterparts. The parties may sign multiple counterparts
of this Indenture. Each signed counterpart shall be deemed an original, but all
of them together represent the same agreement.

Section 12.14 Separability. If any provisions in this Indenture, the Guarantee
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

Section 12.15 Table of Contents, Headings, etc. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.

Section 12.16 Waiver of Jury Trial. EACH OF THE COMPANY, THE GUARANTOR AND THE
TRUSTEE 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 INDENTURE, THE GUARANTEE, THE SECURITIES OR THE TRANSACTION
CONTEMPLATED HEREBY.

 

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Section 12.17 Force Majeure. In no event shall the Trustee be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Trustee shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.

[SIGNATURE PAGE FOLLOWS]

 

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

 

ABITIBIBOWATER INC. By:  

/s/ William G. Harvey

Name:   William G. Harvey Title:   Senior Vice President and Chief Financial
Officer BOWATER INCORPORATED By:  

/s/ William G. Harvey

Name:   William G. Harvey Title:   Vice President and Treasurer THE BANK OF NEW
YORK TRUST COMPANY, N.A. By:  

/s/ Geraldine Creswell

Name:   Geraldine Creswell Title:   Assistant Treasurer

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

EXHIBIT A

[FORM OF FACE OF SECURITY]

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

THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY (“THE SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”) NOR REGISTERED OR QUALIFIED UNDER THE SECURITIES OR
BLUE SKY LAWS OF ANY STATE. THE SECURITIES MAY ONLY BE SOLD (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO

 

1 This paragraph should be included only if the Security is a Global Security.

 

A-1

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EACH OF THEM. THESE RESTRICTIONS SHALL APPLY UNTIL SUCH SECURITIES MAY BE RESOLD
WITHOUT RESTRICTION PURSUANT TO RULE 144 UNDER THE ACT.2

UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE IN CANADA AUGUST 2, 2008.3

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH
THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.4

ABITIBIBOWATER INC.

8% Convertible Senior Notes due 2013

 

No. [            ]

    CUSIP: 003687AA8

AbitibiBowater Inc., a Delaware corporation, promises to pay to Cede & Co. or
registered assigns the principal amount of [    ] dollars ($[    ]) on April 15,
2013.

This Security shall bear interest as specified on the other side of this
Security. This Security is convertible as specified on the other side of this
Security.

This Security is entitled to the benefits of the Guarantee by the Guarantor of
the punctual payment when due and performance of the Indenture Obligations made
in favor of the Trustee for the benefit of the Holders. Reference is made to
Article 5 of the Indenture for a statement of the respective rights, limitations
of rights, duties and obligations under the Guarantee of the Guarantor.

Additional provisions of this Security are set forth on the other side of this
Security.

Dated:

SIGNATURE PAGE FOLLOWS

 

2 This paragraph is to be included only if the Security is a Restricted
Security.

3 This paragraph is to be included only if the Security is a Restricted
Security.

4 This paragraph is to be included only if the Security is a Restricted
Security.

 

A-2

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

 

            ABITIBIBOWATER INC.       By:  

 

      Name:         Title:   Dated:         Trustee’s Certificate of
Authentication:       This is one of the Securities referred to in the
within-mentioned Indenture.       The Bank of New York Trust Company, N.A., as
Trustee       By:  

 

        Authorized Signatory      

 

A-3

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[FORM OF REVERSE SIDE OF SECURITY]

ABITIBIBOWATER INC.

8% CONVERTIBLE SENIOR NOTES DUE 2013

 

  1. INTEREST

AbitibiBowater Inc., a Delaware corporation (the “Company”, which term shall
include any successor corporation under the Indenture hereinafter referred to),
promises to pay interest on the principal amount of this Security at the rates
set forth below. Interest on the Securities shall be payable entirely in cash
(“Cash Interest”); provided that if the Board of Directors of the Company
determines in good faith that the Company will not have sufficient cash
resources on hand to pay Cash Interest on the Securities at the time of the
relevant Interest Payment Date (as defined below), the Company may pay interest
on the Securities entirely by increasing the principal amount of this Security
or issuing new Securities (“Payment-in-Kind Interest” or “PIK Interest”) as set
forth below. Cash Interest will accrue at a rate of 8% per annum.
Payment-in-Kind Interest will accrue at a rate of 10% per annum. If the Company
elects to pay Payment-in-Kind Interest, the Company shall (i) increase the
principal amount of this Security in an aggregate principal amount equal to the
amount of Payment-in-Kind Interest for the applicable interest period (rounded
to the nearest whole dollar) or (ii) issue new Securities (“Payment-in-Kind
Securities” or “PIK Securities”) in an aggregate principal amount equal to the
amount of Payment-in-Kind Interest for the applicable interest period (rounded
up to the nearest whole dollar) to the Holder of this Security on the relevant
record date. This Security will bear interest on the increased principal amount
thereof from and after the applicable Interest Payment Date on which a payment
of Payment-in-Kind Interest is made. Interest shall accrue on Payment-in-Kind
Securities issued from and including the date such Securities are issued. All
Securities issued under the Indenture, including any Payment-in-Kind Securities,
shall be issued on the same terms, shall constitute part of the same series and
shall vote together as one series on all matters with respect to the Securities.
The Company shall elect the form of interest payment with respect to each
interest period by delivering a notice to the Trustee at least ten Business Days
prior to the applicable Interest Payment Date; provided, however, that in
respect of the first full interest period during which the initial purchasers of
the Securities own less than 90% of the Securities, and in respect of all
subsequent interest periods, such notice must be delivered to the Trustee at
least ten Business Days prior to the beginning of such interest period. The
Trustee shall promptly deliver a corresponding notice to the Holders of this
Security. In the absence of such an election or proper notification of such
election to the Trustee, interest will be payable according to the election for
the previous interest period. The Company will make any payments of PIK Interest
in respect of the Securities represented by Global Securities by increasing the
principal amount of such Global Securities. The Company will make any payments
of PIK Interest in respect of Securities represented by Certificated Securities
by issuing PIK Securities in the form of Certificated Securities and delivering
them to Holders.

The Company will pay interest semi-annually in arrears on October 15 and
April 15 of each year (each, an “Interest Payment Date”), beginning on
October 15, 2008. Each payment of interest will include interest accrued for the
period commencing on and including the immediately preceding Interest Payment
Date, provided that the first interest payment on October 15, 2008, will include
interest from April 1, 2008 through the day before the relevant

 

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Interest Payment Date (or purchase date, as the case may be). Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months. Any
payment required to be made on a day that is not a Business Day shall be made on
the next succeeding Business Day. Any reference herein to interest accrued or
payable as of any date shall include any Additional Interest accrued or payable
on such date as provided in the Registration Rights Agreement.

No sinking fund is provided for the Securities.

 

  2. METHOD OF PAYMENT

The Company shall pay interest on this Security (except defaulted interest) to
the person who is the Holder of this Security at the close of business on
April 1 or October 1, as the case may be, (each, a “Regular Record Date”) next
preceding the related Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect payment of principal. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company may pay
principal and interest in respect of any Certificated Security by check or wire
payable in such money; provided, however, that a Holder with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder if such Holder has
provided wire transfer instructions to the Trustee at least 10 Business Days
prior to the Payment Date. The Company may mail an interest check to the
Holder’s registered address. Notwithstanding the foregoing, so long as this
Security is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.

Any wire transfer instructions received by the Trustee will remain in effect
until revoked by the Holder.

 

  3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT

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

 

  4. INDENTURE, LIMITATIONS

This Security is one of a duly authorized issue of Securities of the Company
designated as its 8% Convertible Senior Notes Due 2013 (the “Securities”),
issued under an Indenture dated as of April 1, 2008 (together with any
supplemental indentures thereto, the “Indenture”), between the Company, the
Guarantor and the Trustee. The terms of this Security include those stated in
the Indenture and those required by or made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended, as in effect on the date of the
Indenture. This Security is subject to all such terms, and the Holder of this
security is referred to the Indenture and said Act for a statement of them.
Capitalized terms not defined herein have the meaning ascribed to such terms in
the Indenture.

 

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The Securities are unsecured, senior obligations of the Company limited to
$350,000,000 aggregate principal amount plus any amount in respect of PIK
Interest thereon.

 

  5. PURCHASE OF SECURITIES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

If a Fundamental Change occurs prior to the Final Maturity Date, at the option
of the Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase for cash, subject to certain
exceptions described in the Indenture all or any part specified by the Holder
(so long as the principal amount of such part is $1,000 or an integral multiple
of $1,000, or if Payment-in-Kind Interest is paid, a minimum of $1.00 or an
integral multiple of $1.00) of the Securities held by such Holder on a date
specified by the Company that is not less than 30 nor more than 45 days after
the date of the Fundamental Change Company Notice, at a purchase price equal to
110% of the principal amount thereof together with accrued and unpaid interest,
if any, and accrued and unpaid Additional Interest, if any, to, but excluding,
the Fundamental Change Repurchase Date. The Holder shall have the right to
withdraw any Fundamental Change Repurchase Notice (in whole or in a portion
thereof that is $1,000 or an integral multiple of $1,000, or if Payment-in-Kind
Interest is paid, $1.00 and an integral multiple of $1.00) at any time prior to
the close of business on the Business Day next preceding the Fundamental Change
Repurchase Date by delivering a written notice of withdrawal to the Paying Agent
in accordance with the terms of the Indenture.

 

  6. CONVERSION

Subject to and upon compliance with the provisions of the Indenture, a Holder
may surrender for conversion any Security that is $1,000 principal amount or
integral multiples thereof.

 

  7. RESERVED

 

  8. DENOMINATIONS, TRANSFER, EXCHANGE

The Securities are in registered form, without coupons, in denominations of
$1,000 principal amount and integral multiples of $1,000 principal amount, or if
Payment-in-Kind Interest is paid, a minimum of $1.00 or an integral multiple of
$1.00 (in each case in aggregate principal amount). A Holder may register the
transfer of or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes or other governmental
charges that may be imposed in relation thereto by law or permitted by the
Indenture.

 

  9. PERSONS DEEMED OWNERS

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

 

  10. UNCLAIMED MONEY

If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and any Paying Agent will pay the money back to the Company
at its written request,

 

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subject to applicable unclaimed property law and the provisions of the
Indenture. After that, Holders entitled to money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.

 

  11. AMENDMENT, SUPPLEMENT AND WAIVER

Subject to certain exceptions, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding, and an existing Default or
Event of Default and its consequence or compliance with any provision of the
Indenture or the Securities may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding. Without the consent of or notice to any Holder, the
Company, the Guarantor and the Trustee may amend or supplement the Indenture or
the Securities as provided in the Indenture.

 

  12. SUCCESSOR ENTITY

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

 

  13. DEFAULTS AND REMEDIES

Under the Indenture, an Event of Default shall occur if:

(1) the Company shall fail to pay when due the Principal or any Fundamental
Change Repurchase Price of any Security when the same becomes due and payable;
or

(2) the Company shall fail to pay an installment of interest or Additional
Interest, if any, on any of the Securities, which failure continues for 30 days
after the date when due; or

(3) the Company shall fail to deliver when due all shares of Common Stock, if
any, deliverable upon conversion of the Securities, which failure continues for
5 days; or

(4) the Company or the Guarantor shall fail to perform or observe (or obtain a
waiver with respect to) any other term, covenant or agreement contained in the
Securities, the Guarantee or the Indenture for a period of 60 days after receipt
by the Company or the Guarantor of a Notice of Default specifying such failure;
or

(5) the Company, the Guarantor or any of the Guarantor’s Subsidiaries shall fail
to pay any principal by the end of any applicable grace period or resulting in
acceleration of other Indebtedness of the Company, the Guarantor or any of the
Guarantor’s Subsidiaries for borrowed money where the aggregate principal amount
with respect to which the default or acceleration has occurred exceeds $50
million, provided that if any such default is cured, waived, rescinded or
annulled, then the Event of Default by reason thereof would be deemed not to
have occurred; or

 

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(6) the Company, the Guarantor or any of the Guarantor’s Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:

(A) commences as a debtor a voluntary case or proceeding; or

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

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

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

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

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

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

(A) grants relief against the Company, the Guarantor or any of the Guarantor’s
Subsidiaries in an involuntary case or proceeding or adjudicates the Company,
the Guarantor or any of the Guarantor’s Subsidiaries insolvent or bankrupt; or

(B) appoints a Receiver of the Company, the Guarantor or any of the Guarantor’s
Subsidiaries or for all or substantially all of the property of the Company, the
Guarantor or any of the Guarantor’s Subsidiaries; or

(C) orders the winding up or liquidation of the Company, the Guarantor or any of
the Guarantor’s Subsidiaries;

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

(8) the Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect or the
Guarantor, or any person acting on behalf of the Guarantor, shall deny or
disaffirm in writing its obligations under the Guarantee.

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

 

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Notwithstanding the above, no Event of Default under clauses (4) or (5) above
shall occur until the Trustee notifies the Company in writing upon the written
direction of the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee in writing, of the Default (a “Notice of Default”), and the Company does
not cure the Default within the time specified in clause (4) or (5), as
applicable, after receipt of such notice.

If an Event of Default (other than an Event of Default specified in clause (6)
or (7) above) occurs and is continuing with respect to the Company or the
Guarantor the Trustee may, by notice to the Company and shall upon the written
direction of the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding may, by notice to the
Company and the Trustee, declare the principal amount and accrued and unpaid
interest, if any, and accrued and unpaid Additional Interest, if any, through
the date of declaration on all the Securities to be immediately due and payable.
Upon such a declaration, such principal amount and such accrued and unpaid
interest, if any, and such accrued and unpaid Additional Interest, if any, shall
be due and payable immediately. If an Event of Default specified in clauses (6)
or (7) occurs in respect of the Company, the Guarantor or any of the Guarantor’s
Subsidiaries and is continuing, the principal amount and accrued but unpaid
interest, if any, and accrued and unpaid Additional Interest, if any, on all the
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders of
Securities. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (a) all existing Events of Default, other than the
nonpayment of the principal of the Securities which have become due solely by
such declaration of acceleration, have been cured or waived; (b) to the extent
the payment of such interest is lawful, interest (calculated at the rate per
annum borne by the Securities) on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and (d) all payments
due to the Trustee and any predecessor Trustee under the Indenture have been
made. No such rescission shall affect any subsequent Default or impair any right
consequent thereto. Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in aggregate principal amount of
the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of principal or interest) if and so long as
it determines that withholding notice is in their interests. The Company is
required to file periodic certificates with the Trustee as to the Company’s
compliance with the Indenture and knowledge or status of any Default.

 

  14. TRUSTEE DEALINGS WITH THE COMPANY

The Bank of New York Trust Company, N.A., the initial Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from and perform services for the Company or an Affiliate of the
Company, and may otherwise deal with the Company or an Affiliate of the Company,
as if it were not the Trustee.

 

A-9

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  15. NO RECOURSE AGAINST OTHERS

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

 

  16. AUTHENTICATION

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

 

  17. ABBREVIATIONS AND DEFINITIONS

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

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

 

  18. GUARANTEES

This Security will be entitled to the benefits of the Guarantee made for the
benefit of the Holders. Reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantor, the Trustee and the Holders.

 

  19. INDENTURE TO CONTROL; GOVERNING LAW

In the case of any conflict between the provisions of this Security or the
Guarantee and the Indenture, the provisions of the Indenture shall control. This
Security, the Guarantee and the Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York (including Sections 5-1401
and 5-1402 of the New York General Obligations Law but excluding all other
choice of law and conflict of law rules).

The Company will furnish to any Holder, upon written request and without charge,
a copy of the Indenture. Requests may be made to: AbitibiBowater Inc., 1155
Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2, Attention: Chief Legal
Officer.

 

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ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

 

 

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

 

 

 

 

 

 

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

and irrevocably appoint

 

 

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

 

      Your Signature Date:  

 

   

 

      (Sign exactly as your name appears on the other side of this Security)
*Signature guaranteed by:     By:  

 

   

 

*

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

 

A-11

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CONVERSION NOTICE

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

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

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

 

 

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

 

 

 

 

 

 

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

 

      Your Signature Date:  

 

   

 

      (Sign exactly as your name appears on the other side of this Security)
*Signature guaranteed by:     By:  

 

   

 

*

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

 

A-12

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FUNDAMENTAL CHANGE REPURCHASE NOTICE

To: AbitibiBowater Inc.

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

 

Dated:  

 

   

 

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

 

      Signature Guaranty Principal amount to be redeemed     (in an integral
multiple of $1,000, if less than all):    

 

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

 

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SCHEDULE OF EXCHANGES OF SECURITIES(1)

The following exchanges, purchases or conversions of a part of this Global
Security have been made:

 

Principal Amount of this

Global Security

Following Such Decrease

Date of Exchange (or

Increase)

   Authorized Signatory of
Securities Custodian    Amount of Decrease in
Principal Amount of this
Global Security    Amount of Increase in
Principal Amount of this
Global Security                           

 

1

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

 

A-13

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF

TRANSFER OF RESTRICTED SECURITIES

Re: 8% Convertible Senior Notes Due 2013 (the “Securities”) of AbitibiBowater
Inc.

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

 

¨    book-entry or

  ¨    definitive form by   (the “Transferor”).

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

In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Securities as provided in Section 2.12 of the
Indenture dated as of April 1, 2008 between AbitibiBowater Inc., Bowater
Incorporated, as guarantor, and The Bank of New York Trust Company, N.A., as
trustee (the “Indenture”), and the transfer of such Security is being made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”) (check applicable box) or the transfer
or exchange, as the case may be, of such Security does not require registration
under the Securities Act because (check applicable box):

 

¨ Such Security is being transferred pursuant to an effective registration
statement under the Securities Act.

 

¨ Such Security is being acquired for the Transferor’s own account, without
transfer.

 

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

 

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

 

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

 

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

 

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

 

Date:  

 

   

 

      (Insert Name of Transferor)

 

A-15

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Exhibit B

FORM OF NOTATION OF GUARANTEE

The Guarantor (which term includes any successor Person under the Indenture) has
unconditionally guaranteed, to the extent set forth in the Indenture (a) the due
and punctual payment of the principal of, interest on the 8% Senior Convertible
Notes due 2013 (the “Securities”) whether at the Final Maturity Date, by
acceleration or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Securities, and Additional Interest, if any, on
a senior basis, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Securities or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at the Final Maturity Date, by acceleration
or otherwise. The obligations of the Guarantor to the Holders of Securities and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article 5 of the Indenture, including the circumstances under which
such obligations may be released, and reference is hereby made to the Indenture
for the precise terms of the Guarantee. Each Holder of a Security, by accepting
the same, agrees to and shall be bound by such provisions. This Guarantee may be
released in accordance with the Indenture without any further act by any Holder.

Capitalized terms used but not defined herein have the meanings given to them in
the Indenture.

[ Date ]

 

BOWATER INCORPORATED By:  

 

Name:   Title:  

 

B-1