Exhibit 10.1

 

 

UNITED INDUSTRIAL CORPORATION

 

3.75% CONVERTIBLE SENIOR NOTES DUE 2024

 

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INDENTURE

 

DATED AS OF SEPTEMBER 15, 2004

 

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U.S. BANK NATIONAL ASSOCIATION

 

AS TRUSTEE

 

 

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TABLE OF CONTENTS

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

 

 

 

Section 1.1.

Definitions.

 

 

 

 

Section 1.2.

Other Definitions

 

 

 

 

Section 1.3.

Trust Indenture Act Provisions

 

 

 

 

Section 1.4.

Rules of Construction

 

 

 

 

ARTICLE 2

THE SECURITIES

 

 

 

 

Section 2.1.

Form and Dating

 

 

 

 

Section 2.2.

Execution and Authentication

 

 

 

 

Section 2.3.

Registrar, Paying Agent and Conversion Agent

 

 

 

 

Section 2.4.

Paying Agent to Hold Money in Trust

 

 

 

 

Section 2.5.

Securityholder Lists

 

 

 

 

Section 2.6.

Transfer and Exchange

 

 

 

 

Section 2.7.

Replacement Securities

 

 

 

 

Section 2.8.

Outstanding Securities

 

 

 

 

Section 2.9.

Treasury Securities

 

 

 

 

Section 2.10.

Temporary Securities

 

 

 

 

Section 2.11.

Cancellation

 

 

 

 

Section 2.12.

Legend; Additional Transfer and Exchange Requirements

 

 

 

 

Section 2.13.

CUSIP Numbers

 

 

 

 

Section 2.14.

Senior Unsecured Obligations

 

 

 

 

Section 2.15.

Calculations Regarding the Securities

 

 

 

 

Section 2.16.

Conversion Arrangement on Call for Redemption

 

 

 

 

ARTICLE 3

REDEMPTION, PURCHASES AND REPURCHASES

 

 

 

 

Section 3.1.

Optional Redemption

 

 

 

 

Section 3.2.

Purchase of Securities at the Option of Holders on Specific Dates

 

 

 

 

Section 3.3.

Repurchase of Securities at Option of the Holder Upon Repurchase Event

 

 

 

 

Section 3.4.

Company Purchases of Securities

 

 

 

 

Section 3.5.

Repayment to the Company

 

 

 

 

ARTICLE 4

CONVERSION

 

 

 

 

Section 4.1.

Conversion Privilege

 

 

 

 

Section 4.2.

Right to Receive Repurchase Event Make-Whole Premium

 

 

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Section 4.3.

Conversion Procedures

 

 

 

 

Section 4.4.

Adjustment of Conversion Rate

 

 

 

 

Section 4.5.

No Adjustment

 

 

 

 

Section 4.6.

Notice of Adjustment

 

 

 

 

Section 4.7.

Consolidation or Merger of the Company.

 

 

 

 

Section 4.8.

Company to Reserve Stock; Registration; Listing

 

 

 

 

Section 4.9.

Taxes on Conversion

 

 

 

 

Section 4.10.

Conversion after Record Date

 

 

 

 

Section 4.11.

Company Determination Final

 

 

 

 

Section 4.12.

Responsibility of Trustee for Conversion Provisions

 

 

 

 

Section 4.13.

Automatic Conversion by the Company.

 

 

 

 

Section 4.14.

Notification to Trustee.

 

 

 

 

Section 4.15.

Unconditional Right of Holders to Convert

 

 

 

 

Section 4.16.

Repayment to the Company

 

 

 

 

ARTICLE 5

SUBSIDIARY GUARANTEE

 

 

 

 

Section 5.1.

Guarantee.

 

 

 

 

Section 5.2.

Limitation on Guarantor Liability.

 

 

 

 

Section 5.3.

Execution and Delivery of Subsidiary Guarantee.

 

 

 

 

ARTICLE 6

COVENANTS

 

 

 

 

Section 6.1.

Payment of Securities

 

 

 

 

Section 6.2.

SEC Reports

 

 

 

 

Section 6.3.

Compliance Certificates

 

 

 

 

Section 6.4.

Further Instruments and Acts

 

 

 

 

Section 6.5.

Maintenance of Corporate Existence

 

 

 

 

Section 6.6.

Rule144A Information Requirement

 

 

 

 

Section 6.7.

Stay, Extension and Usury Laws

 

 

 

 

Section 6.8.

Payment of Special Interest

 

 

 

 

Section 6.9.

Payment of Contingent Interest

 

 

 

 

ARTICLE 7

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

 

 

 

Section 7.1.

Company and Guarantor May Consolidate, Etc, Only On Certain Terms

 

 

 

 

Section 7.2.

Successor Substituted

 

 

 

 

ARTICLE 8

DEFAULT AND REMEDIES

 

 

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Section 8.1.

Events of Default

 

 

 

 

Section 8.2.

Acceleration

 

 

 

 

Section 8.3.

Other Remedies

 

 

 

 

Section 8.4.

Waiver of Defaults and Events of Default

 

 

 

 

Section 8.5.

Waiver of Compliance

 

 

 

 

Section 8.6.

Control by Majority

 

 

 

 

Section 8.7.

Limitations on Suits

 

 

 

 

Section 8.8.

Rights of Holders to Receive Payment and to Convert

 

 

 

 

Section 8.9.

Collection Suit by Trustee

 

 

 

 

Section 8.10.

Trustee May File Proofs of Claim

 

 

 

 

Section 8.11.

Priorities

 

 

 

 

Section 8.12.

Undertaking for Costs

 

 

 

 

ARTICLE 9

TRUSTEE

 

 

 

 

Section 9.1.

Duties of Trustee

 

 

 

 

Section 9.2.

Rights of Trustee

 

 

 

 

Section 9.3.

Individual Rights of Trustee

 

 

 

 

Section 9.4.

Trustee’s Disclaimer

 

 

 

 

Section 9.5.

Notice of Default or Events of Default

 

 

 

 

Section 9.6.

Reports by Trustee to Holders

 

 

 

 

Section 9.7.

Compensation and Indemnity

 

 

 

 

Section 9.8.

Replacement of Trustee

 

 

 

 

Section 9.9.

Successor Trustee by Merger, Etc

 

 

 

 

Section 9.10.

Eligibility; Disqualification

 

 

 

 

Section 9.11.

Preferential Collection of Claims Against Company

 

 

 

 

ARTICLE 10

SATISFACTION AND DISCHARGE OF INDENTURE

 

 

 

 

Section 10.1.

Satisfaction and Discharge of Indenture

 

 

 

 

Section 10.2.

Application of Trust Money

 

 

 

 

Section 10.3.

Repayment to Company

 

 

 

 

Section 10.4.

Reinstatement

 

 

 

 

ARTICLE 11

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

 

 

 

Section 11.1.

Without Consent of Holders

 

 

 

 

Section 11.2.

With Consent of Holders

 

 

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Section 11.3.

Compliance with Trust Indenture Act

 

 

 

 

Section 11.4.

Revocation and Effect of Consents

 

 

 

 

Section 11.5.

Notation on or Exchange of Securities

 

 

 

 

Section 11.6.

Trustee to Sign Amendments, Etc

 

 

 

 

Section 11.7.

Effect of Supplemental Indentures

 

 

 

 

ARTICLE 12

TAX TREATMENT

 

 

 

 

Section 12.1.

Tax Treatment

 

 

 

 

Section 12.2.

Comparable Yield and Projected Payment Schedule.

 

 

 

 

ARTICLE 13

MISCELLANEOUS

 

 

 

 

Section 13.1.

Trust Indenture Act Controls

 

 

 

 

Section 13.2.

Notices

 

 

 

 

Section 13.3.

Communications by Holders with Other Holders

 

 

 

 

Section 13.4.

Certificate and Opinion as to Conditions Precedent

 

 

 

 

Section 13.5.

Record Date for Vote or Consent of Securityholders

 

 

 

 

Section 13.6.

Rules by Trustee, Paying Agent, Registrar and Conversion Agent

 

 

 

 

Section 13.7.

Legal Holidays

 

 

 

 

Section 13.8.

Governing Law

 

 

 

 

Section 13.9.

No Adverse Interpretation of Other Agreements

 

 

 

 

Section 13.10.

No Recourse Against Others

 

 

 

 

Section 13.11.

Successors

 

 

 

 

Section 13.12.

Multiple Counterparts

 

 

 

 

Section 13.13.

Separability

 

 

 

 

Section 13.14.

Table of Contents, Headings, Etc.

 

 

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CROSS-REFERENCE TABLE*

 

TIA SECTION

 

INDENTURE
SECTION

Section 310(a)(1)

 

9.10

(a)(2)

 

9.10

(a)(3)

 

N.A.

(a)(4)

 

N.A.

(a)(5)

 

9.10

(b)

 

9.8; 9.10; 13.2

(c)

 

N.A.

Section 311(a)

 

9.11

(b)

 

9.11

(c)

 

N.A.

Section 312(a)

 

2.5

(b)

 

13.3

(c)

 

13.2

Section 313(a)

 

9.6

(b)(1)

 

N.A.

(b)(2)

 

9.6

(c)

 

9.6; 13.2

(d)

 

9.6

Section 314(a)

 

6.2; 6.4; 13.2

(b)

 

N.A.

(c)(1)

 

13.4(a)

(c)(2)

 

13.4(a)

(c)(3)

 

N.A.

(d)

 

N.A.

(e)

 

13.4(b)

(f)

 

N.A.

Section 315(a)

 

9.1(b)

(b)

 

9.5; 13.2

(c)

 

9.1(a)

(d)

 

9.1(c)

(e)

 

8.12

Section 316(a) (last sentence)

 

2.9

(a)(1)(A)

 

8.6

(a)(1)(B)

 

8.4

(a)(2)

 

N.A.

(b)

 

8.8

(c)

 

13.5

Section 317(a)(1)

 

8.9

(a)(2)

 

8.10

(b)

 

2.4

 

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

 

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THIS INDENTURE dated as of September 15, 2004 is among United Industrial
Corporation, a Delaware Corporation (the “Company”), AAI Corporation, a Maryland
corporation (the “Guarantor”), and U.S. Bank National Association, a national
banking association organized and existing under the laws of the United States,
as Trustee (the “Trustee”).

 

In consideration of the premises herein and the purchase of the Securities by
the Holders thereof, the parties agree as follows for their mutual benefit and
for the equal and ratable benefit of the registered Holders of the Company’s
3.75% Convertible Senior Securities due 2024.

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.                                Definitions.

 

“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.

 

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

 

“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, in each case to the extent applicable to such transfer or
exchange.

 

“Bid Solicitation Agent” means, initially, the Trustee.

 

“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 each day that is not a Legal Holiday.

 

“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” 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 hereto as Exhibit A and that does not include the information or the
schedule called for by footnotes 1, 3 and 4 thereof.

 

“Change of Control” means the occurrence of any of the following events:

 

(i)                                     any “person” or “group,” within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities

 

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within the meaning of Rule 13d-5(b)(1) under the Exchange Act, becomes the
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of 50% or more of the total voting power of all classes of the
Company’s Voting Stock entitled to vote generally in the election of directors;

 

(ii)                                  the sale, transfer, lease, conveyance or
other disposition, in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company to any “person” or
“group” (as such terms are defined above);

 

(iii)                               any consolidation or merger of the Company
with or into another Person (or vice versa) except pursuant to a transaction in
which the persons that “beneficially owned,” directly or indirectly, the shares
of the Company’s Voting Stock immediately prior to such transaction
“beneficially own” immediately after such transaction, directly or indirectly,
shares of the continuing or surviving corporation’s Voting Stock representing at
least a majority of the total voting power of all outstanding classes of Voting
Stock of the continuing or surviving corporation in substantially the same
proportion as such ownership prior to the transaction;

 

(iv)                              the following persons cease for any reason to
constitute a majority of the board of directors of the Company;

 

(A)  individuals who on the first issue date of the Securities constituted the
Board of Directors; and

 

(B)  any new directors whose election to the Board of Directors or whose
nomination for election by the Company’s shareholders was approved by at least a
majority of the directors of the Company then still in office who were either
directors on such first issue date of the Securities or whose election or
nomination for election was previously so approved;

 

(v)                                 the Company distributes to all or
substantially all holders of shares of its Common Stock its assets, cash, debt
securities or certain rights to purchase its securities, which distribution has
a per share value exceeding 10% of the closing price of the Common Stock on the
day preceding the declaration date for such distribution; or

 

(vi)                              the Company is liquidated or dissolved or
holders of the Common Stock approve any plan or proposal for the liquidation or
dissolution of the Company.

 

A “Change of Control” shall not be deemed to have occurred if in the case of a
merger or consolidation, all of the consideration (other than Cash payments for
fractional shares or pursuant to statutory appraisal rights) in the merger or
consolidation constituting the Change in Control consists of common stock and
any associated rights traded on a US national securities exchange or quoted on
The Nasdaq National Market (or which will be so traded or quoted when issued or
exchanged in connection with such change in control), and, as a result of such
transaction or transactions, the securities become convertible solely into such
common stock and associated rights.

 

“Common Stock” means the common stock of the Company, par value $1.00 per share,
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 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,

 

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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 Company.

 

“Contingent Interest Period” has the meaning set forth in the Securities.

 

“Contingent Interest” has the meaning set forth in the paragraph 1 of the
Security.

 

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

 

“Conversion Rate” means initially 25.4863 shares per $1,000 principal amount of
Securities, subject to adjustment as set forth herein.

 

“Conversion Value” means, on any Trading Day, the amount equal to the product of
the Sale Price at such time multiplied by the then current Conversion Rate.

 

“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
office at the date of the execution of this Indenture is located at 60
Livingston Avenue, St. Paul, Minnesota 55107-2292, Attention:  Frank Leslie, or
at any other time at such other address as the Trustee may designate from time
to time by notice to the Company.

 

“Current Market Price” means, per share of Common Stock, on any day means the
average of the daily Sale Price for the five consecutive Trading Days selected
by the Company commencing not more than 30 Trading Days before, and ending not
later than, the earlier of the day in question (including upon the occurrence of
a Repurchase Event) and the day before the “ex-dividend trading date” with
respect to the issuance or distribution requiring such computation.

 

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

 

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

 

“Ex-dividend trading date” means, with respect to any issuance or distribution,
the first date on which the Common Stock trades regular way on the exchange or
in the market in which the security trades without the right to receive such
issuance or distribution.

 

“Final Maturity Date” means September 15, 2024.

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect as of the date of this Indenture, including those set forth
in (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 Financial Accounting Standards Board, (3) such other
statements

 

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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 permanent Global Security that is in substantially the
form attached hereto as Exhibit A and that includes the information and
schedule called for by footnotes 1, 3 and 4 thereof and which is deposited with
the Depositary or its custodian and registered in the name of the Depositary or
its nominee.

 

“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 Guarantor.

 

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

 

“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person (i) for borrowed money (including obligations of such Person in
respect of overdrafts, foreign exchange contracts, currency exchange agreements,
interest rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or (ii) 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 the assets of such
Person or to only a portion thereof) (other than any accounts payable or other
accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services), (b) all
reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees or bankers’
acceptances, (c) all obligations and liabilities (contingent or otherwise) of
such Person (i) in respect of leases of such Person required, in conformity with
GAAP, to be accounted for as capitalized lease obligations on the balance sheet
of such Person (as determined by the Company), or (ii) under any lease or
related document (including a purchase agreement, conditional sale or other
title retention agreement) in connection with the lease of real property or
improvement thereon (or any personal property included as part of any such
lease) which provides that such Person is contractually obligated to purchase or
cause a third party to purchase the leased property or pay an agreed upon
residual value of the leased property to the lessor (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with GAAP), (d) all obligations (contingent or otherwise) of such
Person with respect to any interest rate or other swap, cap, floor or collar
agreement, hedge agreement, forward contract, or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties, agreements to be jointly
liable or similar agreements by such Person in respect of, and obligations or
liabilities of such Person to purchase or otherwise acquire or otherwise assure
a creditor against loss in respect of, indebtedness, obligations or liabilities
of another Person of the kind described in clauses (a) through (d), and (f) any
and all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (e).

 

“Indenture” means this Indenture as amended or supplemented from time to time
pursuant to the terms of this Indenture.

 

“Initial Purchasers” means UBS Securities LLC and Bear, Stearns & Co. Inc.

 

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“Issuance Date” means the date on which the Securities are first authenticated
and issued.

 

“Measurement Period” means the last 30 consecutive Trading Days in a calendar
quarter, beginning with the quarter ending March 31, 2005.

 

“Officer” means the Chairman or any Co-Chairman of the Board, any Vice Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer, the Controller, the Secretary or any Assistant
Controller or Assistant Secretary of the Company.

 

“Officers’ Certificate” means a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company and by 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 Trustee.

 

“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 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.

 

“Purchase Market Price” means, with respect to any Purchase Date, the average of
the Sale Prices for the 15 consecutive Trading Days ending on the third Trading
Day prior to the Purchase Date, appropriately adjusted to take into account the
occurrence, during the period commencing on the first Trading Day of such 15
Trading Day period and ending on the Purchase Date of any event requiring an
adjustment of the Conversion Rate as set forth under Section 4.4; provided that
in no event shall the Purchase Market Price be less than $1.00.

 

“Redemption Date” when used with respect to any Security to be redeemed, means
the date fixed for such redemption pursuant to this Indenture.

 

“Redemption Price” when used with respect to any Security to be redeemed, means
the price fixed for such redemption pursuant to this Indenture, as set forth in
the form of Security annexed as Exhibit A hereto.

 

“Registration Rights Agreement” means the Registration Rights Agreement dated,
as of September 15, 2004, among the Company, the Guarantor and the Initial
Purchasers.

 

“Repurchase Event” means the occurrence of either a “Change in Control” or a
“Termination of Trading.”

 

“Repurchase Market Price” means, with respect to any Repurchase Date, the
average of the closing sale prices of Common Stock for the 20 consecutive
Trading Days ending on the third Trading Day prior to the Repurchase Date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first Trading Day of such 20 Trading Day period and ending on
the Repurchase Date of any event requiring an adjustment of the Conversion Rate
as set forth under Section 4.4; provided that in no event shall the Repurchase
Market Price be less than $1.00.

 

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

 

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

 

“Sale Price” means the price of a share of Common Stock on the relevant date,
determined (a) on the basis of the closing per share sale price (or if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and average ask
prices) on such date on the principal national securities exchange on which the
Common Stock is listed; or (b) if the Common Stock is not listed on a national
securities exchange, as reported by the National Association of Securities
Dealers Automated Quotation System; or (c) if not so quoted, as reported by
National Quotation Bureau, Incorporated or similar organization.  In the absence
of such a quotation or report, the Sale Price shall be such price as the Board
of Directors shall reasonably determine on the basis of such quotations as most
accurately reflecting the price that a fully informed buyer, acting on his own
accord, would pay to a fully informed seller, acting on his own accord in an
arms-length transaction, for a share of such Common Stock.

 

“SEC” means the United States Securities and Exchange Commission.

 

“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.

 

“Securities” means the 3.75% Convertible Senior Notes due 2024 or any of them
(each, a “Security”), as amended or supplemented from time to time, that are
issued under this Indenture.

 

“Significant Subsidiary” means, in respect of any Person, a Subsidiary of such
Person that would constitute a “significant subsidiary” as such term is defined
under Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act;
provided, that in no event shall Electric Transit, Inc., an Ohio corporation, be
deemed a “Significant Subsidiary” for purposes of this Indenture.

 

“Special Interest” has the meaning specified in paragraph 3 of the Security.

 

“Subsidiary” means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers, general partners or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii)
one or more Subsidiaries of such Person.

 

“Termination of Trading” means the occurrence after the date hereof, of the
following event:  the Common Stock (or other common stock into which the
Securities are then convertible) is not listed for trading on a United States
national securities exchange, quoted on the Nasdaq National Market, or approved
for trading on an established automated over-the-counter trading market in the
United States.

 

“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 as
provided in Section 11.3, and except to the extent any amendment to the Trust
Indenture Act expressly provides for application of the Trust Indenture Act as
in effect on another date.

 

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“Trading Day” means, with respect to any security, each day, other than
Saturday, Sunday or any other day on which securities are not generally traded
on the principal exchange or market in which such security is traded.

 

“Trading Price” means, as of any date of determination, the average of the
secondary market bid quotations per $1,000 principal amount of Securities
obtained by the Bid Solicitation Agent (which shall initially be the Trustee)
for $5,000,000 principal amount of Securities at approximately 4:00 p.m., New
York City time, on such date of determination from three nationally recognized
securities dealers (none of which shall be an Affiliate of the Company) selected
by the Company, which may include any of the Initial Purchasers, provided, that
if at least three such bids cannot be reasonably obtained by the Bid
Solicitation Agent, but two bids are obtained, then the average of the two bids
shall be used, and if only one such bid can be reasonably obtained by the Bid
Solicitation Agent, this one bid will be used; provided, however, if (a) the Bid
Solicitation Agent, through the exercise of reasonable efforts, is unable to
obtain at least one bid for $5,000,000 principal amount of Securities from an
independent nationally recognized securities dealer, or (b) in the reasonable
good faith judgment of the Board of Directors, the bid quotations are not
indicative of the secondary market value of the Securities as of such date of
determination, then the Trading Price of a Security for such date of
determination shall equal 98% of the product of (1) the Conversion Rate in
effect as of such date of determination and (2) the Sale Price of a share of
Common Stock on the day of determination.

 

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

 

“Trust Officer” means, with respect to the Trustee, any officer assigned to the
Corporate Trust Office, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject.

 

“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.”

 

“Voting Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof.

 

Section 1.2.                                Other Definitions.

 

Term

 

Defined in Section

“accounting event”

 

3.3(b)(4)

“Agent Members”

 

2.1(b)

“Aggregate Amount”

 

4.4(e)

“Automatic Conversion”

 

4.13(a)

“Automatic Conversion Date”

 

4.13(a)

“Automatic Conversion Notice”

 

4.13(b)

“Bankruptcy Law”

 

8.1

“Cash Settlement Averaging Period”

 

4.3(b)

“Cash Settlement Notice Period

 

4.3(b)

“Company Order”

 

2.2

 

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Term

 

Defined in Section

“Conversion Agent”

 

2.3

“Conversion Date”

 

4.3(a)

“Conversion Notice”

 

4.3(a)

“Conversion Obligation”

 

4.3(b)

“Conversion Retraction Period”

 

4.3(b)

“Conversion Settlement Distribution”

 

4.3(b)

“Conversion Shares”

 

4.4(b)

“Custodian”

 

8.1

“Depositary”

 

2.1(a)

“Determination Date”

 

4.4(h)

“Distribution Date”

 

4.4(c)

“Dividend Increase”

 

4.4(d)

“Dividend Threshold Amount”

 

4.4(d)

“DTC”

 

2.1(a)

“Election Amount”

 

4.3(d)

“Election Date”

 

4.3(d)

“Event of Default”

 

8.1

“Expiration Date”

 

4.4(e)

“Expiration Time”

 

4.4(e)

“Final Notice Date”

 

4.3(b)

“Fixed Cash Portion”

 

4.3(b)(3)

“indenture securities”

 

1.3

“indenture securityholder”

 

1.3

“intenture to be qualified”

 

1.3

“indenture trustee”

 

1.3

“institutional trustee”

 

1.3

“Legal Holiday”

 

13.7

“Legend”

 

2.12(a)

“Make-Whole Premium Table”

 

3.3(b)(2)

“Non-Electing Share”

 

4.7(c)

“Notice of Default”

 

8.1

“obligor”

 

1.3

“Optional Redemption”

 

3.1

“Paying Agent”

 

2.3

“Primary Registrar”

 

2.3

“Purchase Agreement”

 

2.1

“Purchase Date”

 

3.2(a)(1)

“Purchase Notice”

 

3.2(a)(2)

“Purchase Offer”

 

3.2(a)(2)

“Purchase Price”

 

3.2(a)(1)

“Purchased Shares”

 

4.4(e)

“QIB”

 

2.1(a)

“Redemption Price”

 

3.1

“Registrar”

 

2.3

“Regular Record Date”

 

3.1(d)

“Repurchase Date”

 

3.3(a)

“Repurchase Event Company Notice”

 

3.3(c)

“Repurchase Event Make -Whole Premium”

 

3.3(b)(2)

“Repurchase Event Repurchase Notice”

 

3.3(c)

“Repurchase Price”

 

3.3(a)

 

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Term

 

Defined in Section

“Rights”

 

4.4(c)

“Security Measurement Period”

 

4.1(a)(2)

“Stock Price”

 

3.3(b)(2)

“successor corporation”

 

7.1(a)

“Third Party Aggregate Amount”

 

4.4(f)

“Third Party Expiration Date”

 

4.4(f)

“Third Party Expiration Time”

 

4.4(f)

“Third Party Purchased Shares”

 

4.4(f)

“Underlying Shares”

 

4.4(b)

 

 

 

 

Section 1.3.           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.  The 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 Securityholder;

 

“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 1.4.                                Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

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

 

(d)         provisions apply to successive events and transactions;

 

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

 

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

 

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

 

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(h)         “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 2.1.                                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 rule 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 September 9, 2004 (the “Purchase
Agreement”), between the Company and the Initial Purchasers, 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 to qualified institutional
buyers as defined in Rule 144A (collectively, “QIBs” or individually, each a
“QIB”) in reliance on Rule 144A under 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”) (such depositary, or any
successor thereto, being hereinafter referred to as the “Depositary”), and
registered in the name of its nominee, Cede & Co., duly executed by the Company
and authenticated by the Trustee as hereinafter provided.  The aggregate
principal amount of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the 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 and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, redemptions,
purchases or conversions of such Securities.  Any 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 (A) prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or (B)
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.

 

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(c)                                  Book Entry Provisions.  The Company shall
execute and the Trustee shall, in accordance with this Section 2.1(c),
authenticate and deliver initially one or more Global Securities that (i) shall
be registered in the name of the Depositary, (ii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary’s instructions and (iii)
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.”

 

Section 2.2.                                Execution and Authentication.

 

An Officer shall sign the Securities for the Company by manual or facsimile
signature attested by the manual or facsimile signature of the Secretary or an
Assistant Secretary of the Company.  Typographic and other minor errors or
defects in any such facsimile signature shall not affect the validity or
enforceability of any Security which has been authenticated and delivered by the
Trustee.

 

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.

 

A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security.  The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.

 

The Trustee shall authenticate and make available for delivery Securities for
original issue in the aggregate principal amount of up to $120,000,000 upon
receipt of a written order or orders of the Company signed by an Officer of the
Company (a “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.  The aggregate principal amount of
Securities outstanding at any time may not exceed $120,000,000 except as
provided in Section 2.7.

 

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

 

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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.

 

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.

 

Section 2.3.                                Registrar, Paying Agent and
Conversion Agent.

 

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 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 enter into an appropriate agency agreement with any Agent not
a party to this Indenture.  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 6.1 and Article 10).

 

The Company hereby initially designates the Trustee as Paying Agent, Registrar,
Custodian, Bid Solicitation Agent and Conversion Agent, and each of the
Corporate Trust Office of the Trustee and the office or agency of the Trustee
(which shall initially be 100 Wall Street, Suite 1600, New York, NY 10005,
Attention:  Frank Leslie), shall be one such office or agency of the Company for
each of the aforesaid purposes.

 

Section 2.4.                                Paying Agent to Hold Money in Trust.

 

Prior to 10:00 a.m., New York City time, on each due date of the principal of or
interest, if any, on any Securities, the Company shall deposit with a Paying
Agent a sum sufficient to pay such principal or interest, if any, so becoming
due.  The Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest, if any, on the Securities, and shall notify the Trustee of any
default by the Company (or any other obligor on the Securities) in making any
such payment.  If the Company or an Affiliate of the Company acts as Paying
Agent, it shall, before 10:00 a.m., New York City time, on each due date of the
principal of or 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.

 

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Section 2.5.                                Securityholder Lists.

 

The Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Securityholders. 
If the Trustee is not the Primary Registrar, the Company shall furnish to the
Trustee on or before each semiannual 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
Securityholders.

 

Section 2.6.                                Transfer and Exchange.

 

(a)          Subject to compliance with any applicable additional requirements
contained in Section 2.12, when a Security is presented to 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
B, and in form satisfactory to the Registrar 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 2.3, 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, and provided, that this sentence shall not apply to
any exchange pursuant to Section 2.10, 2.12(a), 3.1(f), 3.2(e), 3.3(h) and 11.5.

 

Neither the Company, any Registrar nor the Trustee shall be required to exchange
or register a transfer of (i) any Securities for a period of 15 days next
preceding any mailing of a notice of Securities to be redeemed, (ii) any
Securities or portions thereof selected or called for redemption (except, in the
case of redemption of a Security in part, the portion thereof not to be
redeemed) or (iii) any Securities or portions thereof in respect of which a
Repurchase Event Company 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).  All Securities issued upon any transfer
or exchange of Securities shall be valid obligations of the Company, evidencing
the same debt and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.

 

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

 

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

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between 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 2.7.                                Replacement Securities.

 

If any mutilated Security is surrendered to the Company, a Registrar or the
Trustee, or 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 may 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.

 

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

 

Upon the issuance of any new Securities under this Section 2.7, the Company may
require the payment of a sum sufficient to cover any tax 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.

 

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

 

The provisions of this Section 2.7 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 2.8.                                Outstanding Securities.

 

Securities outstanding at any time are all Securities authenticated by the
Trustee, except for those canceled by it, those converted pursuant to Article 4,
those delivered to it for cancellation or surrendered for transfer or exchange
and those described in this Section 2.8 as not outstanding.

 

If a Security is replaced pursuant to Section 2.7, it ceases to be outstanding
unless the Company receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.

 

If a Paying Agent (other than the Company or an Affiliate of the Company) holds
on a Redemption Date, a Repurchase Date, a Repurchase Event Purchase Date or the
Final Maturity Date money sufficient to pay the principal of (including premium,
if any) and accrued interest on Securities (or portions thereof) payable on that
date, then on and after such Redemption Date, Repurchase Date, Repurchase Event
Purchase Date or the final Maturity Date, as the case may be, such Securities
(or portions thereof, as the case may be) shall cease to be outstanding and
interest on them shall cease to accrue; provided, that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefore satisfactory to the Trustee has been made.

 

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Subject to the restrictions contained in Section 2.9, a Security does not cease
to be outstanding because the Company or an Affiliate of the Company holds the
Security.

 

Section 2.9.                                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 Trust Officer of the Trustee 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,
redemption, payment or conversion.  The Trustee and no one else shall cancel, in
accordance with its standard procedures, all Securities surrendered for
transfer, exchange, redemption, payment, conversion or cancellation and shall
deliver the canceled Securities to the Company.  All Securities which are
redeemed, purchased or otherwise acquired by the Company or any of its
Subsidiaries prior to the Final Maturity Date 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.  Without limitation to the
foregoing, any Securities acquired by any investment bank or other purchasers
pursuant to Section 2.16 shall be surrendered for conversion and thereafter
cancelled, and may not be reoffered, sold or otherwise transferred.

 

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 hereto 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 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

 

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Security pursuant to a registration statement that is effective at the time of
such sale.  Upon (i) provision of such satisfactory evidence if requested, or
(ii) 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 the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend other than a
Restricted Global Security.  Whenever any Transfer Restricted Security other
than a Restricted Global Security is presented or surrendered for registration
of transfer or for 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 B, 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(k) 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, an opinion of
counsel reasonably acceptable to the Company, addressed to the Company and in
form acceptable to the Company, 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 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
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.

 

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

 

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

 

(1)          Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in part for a
Security registered in the name of any Person other than the Depositary or one
or more nominees thereof, provided, that a Global Security may be exchanged for
Securities registered in the names of any person designated by the

 

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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, or (B) an Event of Default has occurred and is continuing with respect
to the Securities.  Any Global Security exchanged pursuant to clause (A) above
shall be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (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,
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.

 

(2)          Securities issued in exchange for a Global Security or any portion
thereof shall be issued in definitive, fully-registered book entry 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.

 

(3)          Subject to the provisions of clause (5) below, 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.

 

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

 

(5)          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.

 

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 redemption or purchase as a convenience to Holders; provided, that
any such notice may state that no representation is made as to the

 

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correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption or purchase and that reliance may be placed only
on the other identification numbers printed on the Securities, and any such
redemption or 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.

 

Section 2.14.                         Senior Unsecured Obligations.

 

The Securities are senior unsecured obligations of the Company and rank equally
in right of payment with all existing and future unsecured and unsubordinated
indebtedness of the Company senior to existing and future subordinated
indebtedness of the Company.

 

Section 2.15.                         Calculations Regarding the Securities.

 

The Company and its agents shall be responsible for making all calculations as
contemplated under this Indenture and the Securities.  Such calculations
include, but are not limited to, the determination of the Trading Price of the
Securities, the current Sale Price of the Common Stock and any amounts of
interest and any make-whole payments or premiums that are payable on the
Securities.  The Company and its agents shall make such calculations in good
faith, and absent manifest error, such calculations shall be final and binding
upon all Holders of the Securities.  The Company shall provide a copy of these
calculations to the Trustee, and, absent manifest error, the Trustee shall be
entitled to rely on the accuracy of such calculations without conducting an
independent verification as to the accuracy thereof.

 

Section 2.16.                         Conversion Arrangement on Call for
Redemption.

 

In connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment banks or other purchasers to purchase such
Securities by paying to a Paying Agent (other than the Company or any of its
Affiliates) in trust for the Holders, on or before 10:00 a.m.  New York City
time on the Redemption Date, an amount that, together with any amounts deposited
with such Paying Agent by the Company for the redemption of such Securities, is
not less than the Redemption Price, together with interest (including Contingent
Interest, if any and Special Interest, if any), accrued to, but not including,
the Redemption Date, of such Securities.  Notwithstanding anything to the
contrary contained in this Article 2, the obligation of the Company to pay the
Redemption Price of such Securities, including all accrued and unpaid interest,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers; provided, however, that nothing in this Section 2.16
shall relieve the Company of its obligation to pay the Redemption Price, plus
accrued and unpaid interest (including Contingent Interest, if any and Special
Interest, if any), to but excluding the relevant Redemption Date, on Securities
called for redemption.  If such an agreement with one or more investment banks
or other purchasers is entered into, any Securities called for redemption and
not surrendered for conversion by the Holders thereof prior to the relevant
Redemption Date may, at the option of the Company upon written notice to the
Trustee, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all as of
10:00 a.m.  New York City time on the Redemption Date, subject to payment of the
above amount as aforesaid.  The Paying Agent shall hold and pay to the Holders
whose Securities are selected for redemption any such amount paid to it for
purchase in the same manner as it would money deposited with it by the Company
for the redemption of Securities.  Without the Paying Agent’s prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Paying Agent from,
and hold it harmless against, any loss, liability or expense arising out of or
in

 

18

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connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.

 

ARTICLE 3

 

REDEMPTION, PURCHASES AND REPURCHASES

 

Section 3.1.                                Optional Redemption.

 

The Securities may be redeemed at the election of the Company (the “Optional
Redemption”), as a whole or from time to time in part, at any time on or after
September 15, 2009, at a redemption price equal to 100% of the principal amount
of those Securities plus accrued and unpaid interest (including Contingent
Interest, if any, and Special Interest, if any) to, but not including, such
Redemption Date (the “Redemption Price”); provided, that if the Redemption Date
falls after an interest payment record date and on or before an interest payment
date, then the interest (including Contingent Interest, if any, and Special
Interest, if any) will be payable to the Holders in whose name the Securities
are registered at the close of business on the interest payment record date and
the Redemption Price shall not include such interest payment.

 

(a)          Notice to Trustee.

 

If the Company elects to redeem Securities pursuant to Section 3.1, it shall
notify the Trustee at least 45 days prior to the Redemption Date, as fixed by
the Company, (unless a shorter notice shall be satisfactory to the Trustee) of
the Redemption Date and the principal amount of Securities to be redeemed.  If
fewer than all of the Securities are to be redeemed, the record date relating to
such redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.

 

(b)         Selection of Securities to be Redeemed.

 

If less than all of the Securities are to be redeemed, unless the procedures of
the Depositary provide otherwise, the Trustee shall, at least 30 days but not
more than 60 days prior to the Redemption Date, select the Securities to be
redeemed.  The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption, by lot, or in its discretion, on a pro
rata basis, or in accordance with any other method the Trustee considers fair
and appropriate.  Securities in denominations of $1,000 may only be redeemed in
whole.  The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000.  Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
partial redemption.

 

If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the unconverted portion of such Security shall be deemed to be the
portion selected for redemption.  Securities which have been converted during a
selection of Securities to be redeemed shall be treated by the Trustee as
outstanding for the purpose of such selection.

 

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(c)          Notice of Redemption.

 

At least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail or cause to be mailed a notice of redemption to each Holder of
Securities to be redeemed at such Holder’s address as it appears on the Primary
Registrar’s books.

 

The notice shall identify the Securities (including CUSIP numbers) to be
redeemed and shall state:

 

(1)                                  the Redemption Date;

 

(2)                                  the Redemption Price;

 

(3)                                  the then current Conversion Price;

 

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

 

(5)                                  that Securities called for redemption must
be presented and surrendered to a Paying Agent to collect the Redemption Price;

 

(6)                                  that Holders who wish to convert Securities
must surrender such Securities for conversion no later than the close of
business on the Business Day immediately preceding the Redemption Date and must
satisfy the other requirements set forth in paragraph 11 of the Securities;

 

(7)                                  that, unless the Company defaults in making
the payment of the Redemption Price, interest on Securities called for
redemption shall cease accruing on and after the Redemption Date and the only
remaining right of the Holder shall be to receive payment of the Redemption
Price plus accrued interest, if any upon presentation and surrender to a Paying
Agent of the Securities; and

 

(8)                                  if any Security is being redeemed in part,
the portion of the principal amount of such Security to be redeemed and that,
after the Redemption Date, upon presentation and surrender of such Security, a
new Security or Securities in aggregate principal amount equal to the unredeemed
portion thereof will be issued.

 

If any of the Securities to be redeemed is in the form of a Global Security,
then the Company shall modify such notice to the extent necessary to accord with
the procedures of the Depositary applicable to redemptions.  At the Company’s
written request, which request shall (i) be irrevocable once given and (ii) set
forth all relevant information required by clauses (1) through (8) of the
preceding paragraph, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense.

 

(d)         Effect of Notice of Redemption.

 

Once notice of redemption is mailed, Securities called for redemption become due
and payable on the Redemption Date and at the Redemption Price stated in the
notice, together with accrued and unpaid interest (including Contingent
Interest, if any, and Special Interest, if any) except for Securities that are
converted in accordance with the provisions of Article 4.  Upon presentation and
surrender to a Paying Agent, Securities called for redemption shall be paid at
the Redemption Price, plus accrued and unpaid interest (including Contingent
Interest, if any, and Special Interest, if any) up to but not including the
Redemption Date; provided, that if the Redemption Date falls after an interest
payment record date and on or before an interest payment date, then the interest
(including Contingent Interest, if any, and Special

 

20

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 Interest, if any) will be payable to the Holders in whose name the Securities
are registered at the close of business on the interest payment record date
(each, a “Regular Record Date”).

 

(e)          Deposit of Redemption Price.

 

Prior to 10:00 a.m. New York City time, on the Redemption Date, the Company
shall deposit with a Paying Agent (or, if the Company acts as Paying Agent,
shall segregate and hold in trust) an amount of money (in immediately available
funds if deposited on such Redemption Date) sufficient to pay the Redemption
Price of and accrued and unpaid interest (including Contingent Interest, if any,
and Special Interest, if any) on all Securities to be redeemed on that date,
other than Securities or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation or have
been converted.  The Paying Agent shall as promptly as practicable return to the
Company any money not required for that purpose because of the conversion of
Securities pursuant to Article 4 or, if such money is then held by the Company
in trust and is not required for such purpose, it shall be discharged from the
trust.

 

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

 

(f)            Securities Redeemed in Part.

 

Upon presentation and surrender of a Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.

 

(g)         Compliance with Securities Laws.

 

When complying with the provisions of Section 3.1 hereof (provided, that such
offer or purchase constitutes an “issuer tender offer” for purposes of Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act at the time of such offer or purchase), and subject to
any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)                                  otherwise comply with all federal and state
securities laws so as to permit the rights and obligations under Section 3.1 to
be exercised in the time and in the manner specified therein.

 

To the extent that the provisions of any securities laws or regulations conflict
with the provisions of Section 3.1, the Company’s compliance with such laws and
regulations shall not in and of itself cause a breach of its obligations under
Section 3.1.

 

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Section 3.2.                                Purchase of Securities at the Option
of Holders on Specific Dates.

 

(a)          Optional Put.

 

(1)          Securities shall be purchased by the Company, at the option of the
Holder thereof, on September 15, 2009, September 15, 2014 and September 15, 2019
(each, a “Purchase Date”), at a purchase price equal to 100% of the principal
amount of those Securities plus accrued and unpaid interest (including
Contingent Interest, if any, and Special Interest, if any) to, but not
including, such Purchase Date (the “Purchase Price”), subject to satisfaction by
or on behalf of the Holder of the requirements set forth in Section 3.2.

 

The Purchase Price may be paid in Cash, shares of Common Stock, or a combination
thereof.  If the Company elects to pay the Purchase Price, in whole or in part,
in shares of Common Stock, the number of shares of Common Stock to be delivered
by the Company will be equal to the portion of the Purchase Price to be paid in
shares of Common Stock divided by 95% of the Purchase Market Price of such
shares Common Stock.  If the Company elects to pay the Purchase Price in whole
or in part in shares of Common Stock, the Company shall pay Cash in lieu of
fractional shares.

 

The Company shall not be entitled to pay any portion of the Purchase Price in
shares of Common Stock pursuant to Section 3.2 unless all of the following
conditions are satisfied:

 

(i)                                     the shares of Common Stock to be
delivered as payment, in whole or in part, of the Purchase Price shall be either
(1) registered under the Securities Act for initial issuance, unless such
registration is not necessary to permit the Holders who receive such shares and
who are not Affiliates of the Company to publicly resell such shares or (2)
registered for resale pursuant to a shelf registration statement, that has
become effective under the Securities Act and that is reasonably expected to
remain effective and available for use until at least the 30th day after the
Purchase Date, unless the shares may be publicly sold without restriction
pursuant to Rule 144(k) under the Securities Act;

 

(ii)                                  the shares of Common Stock to be delivered
as payment, in whole or in part, of the Purchase Price shall be duly qualified
or registered under applicable state securities laws or shall be qualified for
an available exemption from such qualification and registration; and

 

(iii)                               the shares of Common Stock to be delivered
as payment, in whole or in part, of the Purchase Price shall be approved for
listing on The Nasdaq National Market or a U.S. national securities exchange.

 

All shares of Common Stock issued as payment, in whole or in part, of the
Purchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute “Registrable Securities” (as defined in the
Registration Rights Agreement), unless either (i) such shares were registered
under the Securities Act for initial issuance and are able to be publicly resold
by the recipients of such shares without further registration under the
Securities Act or (ii) such registration was and is not necessary to permit the
Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder prior to the
close of business on the Business Day immediately preceding the Purchase Date,
the Company shall pay the Purchase Price entirely in Cash.

 

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(2)          No later than 20 Business Days prior to each Repurchase Date, the
Company shall mail a written notice of the purchase right under Section 3.2(a)
(a “Purchase Offer”) by first class mail to the Trustee and to each Holder (and
to beneficial owners as required by applicable law).  The notice shall include a
form of notice to be completed by the Holder and returned to the Company in the
event that the Holder elects such right to so repurchase (the “Purchase Notice”)
and shall briefly state, as applicable:

 

(i)                                     the amount of Purchase Price;

 

(ii)                                  whether the Company shall pay the Purchase
Price in Cash, shares of Common Stock, or a combination thereof, specifying the
percentage or amount of each;

 

(iii)                               if the Company elects to pay the Purchase
Price, in whole or in part, in shares of Common Stock, the method of calculating
the Purchase Market Price;

 

(iv)                              that the Securities with respect to which the
Holder has delivered a Purchase Notice may be converted in accordance with the
terms of this Indenture, only if such Holder withdraws such Purchase Notice in
accordance with Section 3.2(c); and

 

(v)                                 the procedures the Holder must follow in
order to exercise its rights under this Section 3.2(a).

 

At the Company’s request, the Trustee shall give the Purchase Offer in the
Company’s name and at the Company’s expense; provided, however, that the Company
makes such request at least three Business Days (unless a shorter period shall
be satisfactory to the Trustee) prior to the date by which such Purchase Offer
must be given to the Holder in accordance with Section 3.2(a)(2); provided,
further, that the text of the notice of the Purchase Offer shall be prepared by
the Company.

 

(3)          A Holder may exercise its rights under Section 3.2(a) upon delivery
of a properly completed Purchase Notice to the Paying Agent at any time during
the period beginning at 9:00 a.m., New York City time, on the date that is 20
Business Days immediately preceding the relevant Purchase Date until 5:00 p.m.,
New York City time, on the Business Day immediately preceding such Purchase
Date, stating:

 

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

 

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

 

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

 

(iv)                              if the Company has elected to pay the Purchase
Price in shares of Common Stock but the Purchase Price is ultimately to be paid
to the Holder entirely in Cash because any of the conditions to payment in
shares of Common Stock are not satisfied in accordance with Section 3.2(a),
whether such Holder elects:

 

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(A) to withdraw the Purchase Notice in accordance with Section 3.2(c); or

 

(B) to receive Cash in respect of the entire Purchase Price subject to the
Purchase Notice.

 

If a Holder fails to indicate its choice with respect to Section 3.2(a)(3)(iv),
such Holder shall be deemed to have elected to receive Cash in respect of the
entire Purchase Price subject to the Purchase Notice.

 

The delivery of such Security to the Paying Agent with, or at any time after
delivery of, the Purchase Notice (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Purchase Price therefor; provided, however, that such Purchase
Price shall be so paid pursuant to this Section 3.2(a) only if the Security so
delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice.

 

The Company shall purchase from the Holder thereof, pursuant to this
Section 3.2(a), a portion of a Security, so long as the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of a Security.

 

Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.2(a) shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Security.

 

Notwithstanding anything contained herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by Section 3.2(a)(2) shall
have the right to withdraw such Purchase Notice at any applicable time prior to
5:00 p.m., New York City time, on the Business Day immediately preceding the
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.2(c).

 

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

 

(b)                                 Effect of Purchase Notice.

 

Upon receipt by the Paying Agent of the Purchase Notice specified in
Section 3.2(a)(3), the Holder of the Security in respect of which such Purchase
Notice was given shall (unless such Purchase Notice is withdrawn as specified in
the following paragraph) thereafter be entitled to receive solely the Purchase
Price with respect to such Security.  Such Purchase Price shall be paid to such
Holder, subject to receipts of Cash, shares of Common Stock or a combination
thereof, as applicable, by the Paying Agent, promptly following the later of (a)
the Purchase Date with respect to such Security (provided the conditions in
Section 3.2(a)(3) have been satisfied) and (b) the time of delivery of such
Security to the Paying Agent by the Holder thereof in the manner required by
Section 3.2(a)(3).  Securities in respect of which a Purchase Notice has been
given by the Holder thereof may not be converted pursuant to Article 4 on or
after the date of the delivery of such Purchase Notice unless such Purchase
Notice has first been validly withdrawn as specified in the following paragraph.

 

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(c)          Withdrawal of Purchase Notice.

 

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

 

(1)                                  the name of the Holder;

 

(2)                                  a statement that the Holder is withdrawing
its election to require the Company to purchase its Securities;

 

(3)                                  the certificate number, if any, of the
Security in respect of which such notice of withdrawal is being submitted;

 

(4)                                  the principal amount of the Security with
respect to which such notice of withdrawal is being submitted, which must be an
integral multiple of $1,000;

 

(5)                                  the principal amount, if any, of such
Security which remains subject to the original Purchase Notice and which has
been or will be delivered for repurchase by the Company, which must be an
integral multiple of $1,000; and

 

(6)                                  if the Security is not then issued in
certificated form, the Purchase Notice must comply with the Applicable
Procedures of the Depositary in effect at that time.

 

(d)         Deposit of Purchase Price.

 

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

 

If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m.,
New York City time, on the Business Day immediately following the applicable
Purchase Date, Cash, and, if the Company determines to pay all or any portion of
the Purchase Price in shares of Common Stock, such shares of Common Stock,
sufficient to pay the Purchase Price of any Securities for which a Purchase
Notice has been tendered and not withdrawn pursuant to Section 3.2(c), then,
immediately after such Repurchase Date, such Securities will cease to be
outstanding and interest (including, Contingent Interest, if any, and Special
Interest, if any) on such Securities will cease to accrue, whether or not such
Securities are delivered to the Paying Agent, and the rights of the Holders in
respect thereof shall terminate (other than the right to receive the Purchase
Price upon delivery of such Securities).

 

(e)          Securities Purchased in Part.

 

Any Certificated Security which is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount

 

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equal to, and in exchange for, the portion of the principal amount of the
Security so surrendered which is not repurchased.

 

(f)            Covenant to Comply With Securities Laws Upon Purchase of
Securities.

 

When complying with the provisions of Section 3.2 hereof (provided, that such
offer or purchase constitutes an “issuer tender offer” for purposes of Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act at the time of such offer or purchase), and subject to
any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)          otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under Section 3.2 to be exercised in the
time and in the manner specified therein.

 

To the extent that the provisions of any securities laws or regulations conflict
with the provisions of Section 3.2, the Company’s compliance with such laws and
regulations shall not in and of itself cause a breach of its obligations under
Section 3.2.

 

(g)         Company’s Right to Elect Method of Payment of Purchase Price.

 

Notwithstanding anything to the contrary in the Indenture, at any time prior to
the Final Maturity Date, the Company may irrevocably elect, in its sole
discretion without the consent of the Holders of the Securities, by written
notice to the Trustee and the Holders of the Securities, to satisfy its
obligation to pay the Purchase Price in accordance with Section 3.2 solely in
Cash.

 

Section 3.3.                                Repurchase of Securities at Option
of the Holder Upon Repurchase Event.

 

(a)          Repurchase Event Put.

 

If a Repurchase Event occurs, each Holder will have the right to require the
Company to repurchase all of its Securities not previously called for
redemption, or any portion of such Securities, at a purchase price equal to 100%
of the principal amount of all such Securities, plus accrued and unpaid interest
(including Contingent Interest, if any and Special Interest, if any) on such
Securities to, but not including, the Repurchase Event Repurchase Date (the
“Repurchase Price”), subject to satisfaction by or on behalf of any Holder of
the requirements set forth in Section 3.3.  The date the Company shall
repurchase the Securities pursuant to this Section 3.3(a) (the “Repurchase
Date”) shall be within 30 Business Days of the date of the mailing of the
Repurchase Event Company Notice under Section 3.3(c).

 

The Repurchase Price may be paid in Cash, shares of Common Stock, or a
combination thereof.  If the Company elects to pay the Repurchase Price, in
whole or in part, in shares of Common Stock, the number of shares of Common
Stock to be delivered by the Company will be equal to the portion of the
Repurchase Price to be paid in shares of Common Stock divided by 95% of the
Repurchase Market Price of such shares of Common Stock.  If the Company elects
to pay the Repurchase Price in whole or in part in shares of Common Stock, the
Company shall pay Cash in lieu of fractional shares.

 

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The Company shall not be entitled to pay any portion of the Repurchase Price in
shares of Common Stock pursuant to this Section 3.3(a) unless all of the
following conditions are satisfied:

 

(1)          the shares of Common Stock to be delivered as payment, in whole or
in part, of the Repurchase Price shall be either (i) registered under the
Securities Act for initial issuance, unless such registration is not necessary
to permit the Holders who receive such shares and who are not Affiliates of the
Company to publicly resell such shares or (ii) registered for resale pursuant to
a shelf registration statement, that has become effective under the Securities
Act and that is reasonably expected to remain effective and available for use
until at least the 30th day after the Repurchase Date, unless the shares may be
publicly sold without restriction pursuant to Rule 144(k) under the Securities
Act;

 

(2)          the shares of Common Stock to be delivered as payment, in whole or
in part, of the Repurchase Price shall be duly qualified or registered under
applicable state securities laws or shall be qualified for an available
exemption from such qualification and registration; and

 

(3)          the shares of Common Stock to be delivered as payment, in whole or
in part, of the Repurchase Price shall be approved for listing on The Nasdaq
National Market or a U.S. national securities exchange.

 

All shares of Common Stock issued as payment, in whole or in part, of the
Repurchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute “Registrable Securities” (as defined in the
Registration Rights Agreement), unless either (i) such shares were registered
under the Securities Act for initial issuance and are able to be publicly resold
by the recipients of such shares without further registration under the
Securities Act or (ii) such registration was and is not necessary to permit the
Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder prior to the
close of business on the Business Day immediately preceding the Repurchase Date,
the Company shall pay the Repurchase Price entirely in Cash.

 

(b)         Repurchase Event Make-Whole Premium.

 

(1)          General.  If a Repurchase Event (except solely pursuant to clause
(iv) of the definition of Change of Control) occurs prior to September 15, 2009,
the Company shall pay, in addition to the Repurchase Price, a Repurchase Event
Make-Whole Premium to Holders of Securities who elect to require the Company to
repurchase such Securities in connection with a Repurchase Event pursuant to
Section 3.3(a).  If the Holder surrenders the Securities for conversion in
accordance with Section 4.1(a)(3) in connection with a Repurchase Event, in lieu
of requiring the Company to repurchase such Securities in accordance with
Section 3.3(a), such Holder will receive (i) Cash and, if applicable, shares of
Common Stock in respect of such conversion obligation in accordance with
Section 4.1(a)(3), plus (ii) the applicable Repurchase Event Make-Whole Premium.

 

The Repurchase Event Make-Whole Premium may be paid in Cash, shares of Common
Stock, or a combination thereof.  If the Company elects to pay the Repurchase
Event Make-Whole Premium, in whole or in part, in shares of Common Stock, the
number of shares of Common Stock to be delivered by the Company will be equal to
the portion of the Repurchase Event Make-Whole Premium to be paid in shares of
Common Stock divided by 95% of the Repurchase Market Price of such shares Common
Stock.  If the Company elects to pay the Repurchase Event Make-Whole Premium in
whole or in part in shares of Common Stock, the Company shall pay Cash in lieu
of any fractional shares.

 

27

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(2)          Repurchase Event Make-Whole Premium Amount.  The Repurchase Event
Make-Whole Premium shall equal an amount derived by multiplying each $1,000
principal amount of Securities by a specified percentage (the “Repurchase Event
Make-Whole Premium”) which shall be determined by reference to the table in
Schedule A hereto (the “Make-Whole Premium Table”) and is based on the date on
which the Repurchase Event becomes effective (the “effective date”) and the
price (the “Stock Price”) paid per share of the Company’s Common Stock in the
transaction constituting the Repurchase Event.  If a Holder of Common Stock
receives only Cash in the Repurchase Event, the Stock Price shall be the Cash
amount paid per share of Common Stock.  Otherwise, the Stock Price shall equal
the average of the Sale Prices of Common Stock on the five Trading Days up to,
but not including, the Effective Date of the Repurchase Event.

 

The stock prices set forth in the first column of the Make-Whole Premium Table
shall be adjusted in accordance with Section 4.4 as of any date on which the
Conversion Rate is adjusted and shall equal the Stock Prices applicable
immediately prior to such adjustment, multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to the adjustment giving rise to
the Stock Price adjustment and the denominator of which is the Conversion Rate
as so adjusted.

 

If the Stock Price is between two Stock Price amounts in the Make-Whole Premium
Table or the repurchase date is between two dates on the Make-Whole Premium
Table, the Repurchase Event Make-Whole Premium shall be determined by
straight-line interpolation between the make-whole premium amounts set forth for
the higher and lower Stock Price amounts and the two dates, as applicable, based
on a 365-day year.

 

If the Stock Price is equal to or in excess of $120.00 per share of Common Stock
(subject to adjustment for any event requiring an adjustment of the Conversion
Rate as set forth under Section 4.4), no Repurchase Event Make-Whole Premium
will be paid.

 

If the Stock Price is less than or equal to $28.64 per share of Common Stock
(subject to adjustment for any event requiring an adjustment of the Conversion
Rate as set forth under Section 4.4), no Repurchase Event Make-Whole Premium
will be paid.

 

(3)          Payment Conditions.  The Company’s right to pay the Repurchase
Event Make-Whole Premium for the Securities, in whole or in part, in shares of
Common Stock is subject to:

 

(i)                                     the company providing timely written
notice, pursuant to Section 3.3(c), of the Company’s election to pay all or part
of the Repurchase Event Make-Whole Premium in shares of Common Stock;

 

(ii)                                  the Common Stock being listed on a U.S.
national securities exchange or quoted on the Nasdaq National Market or other
similar automated quotation system; and

 

(iii)                               information necessary to calculate the
Current Market Price of Common Stock being published in a daily newspaper of
national circulation or being otherwise readily publicly available.

 

All shares of Common Stock issued as payment, in whole or in part, of the
Repurchase Event Make-Whole Premium shall be deemed, for purposes of the
Registration Rights Agreement, to constitute “Registrable Securities” (as
defined in the Registration Rights Agreement), unless either (i) such shares
were registered under the Securities Act for initial issuance and are able to be
publicly resold by the recipients of such shares without further registration
under the Securities Act or (ii) such registration

 

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was and is not necessary to permit the Holders who receive such shares to
publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder prior to the
close of business on the Business Day immediately preceding the Repurchase Date,
the Company shall pay the Repurchase Event Make-Whole Premium, if any, for such
Holder’s Securities entirely in Cash.

 

(4)          Accounting Events.  From and after the occurrence of an “accounting
event,” the Company shall have the option, in its sole discretion, to elect, by
providing notice to the Trustee and the Holders of the Securities, to pay any
Repurchase Event Make-Whole Premium payable in the future solely in Cash.  An
“accounting event” means that the Emerging Issues Task Force of the Financial
Accounting Standards Board or its successor has issued an amendment to, change
in or clarification of rules as a result of which the Company is required, under
then current generally accepted accounting principles to include the number of
shares of Common Stock which may be issuable as a Repurchase Event Make-Whole
Premium in determining the number of our shares outstanding for purposes of
calculating diluted earnings per share.

 

(c)          Notice of Repurchase Event.  No later than 15 days after the
occurrence of a Repurchase Event, the Company shall mail a written notice of
Repurchase Event (the “Repurchase Event Company Notice”) by first class mail to
the Trustee and to each Holder (and to beneficial owners as required by
applicable law).  The Company shall publish the notice in The New York Times,
the Wall Street Journal, or another newspaper of national circulation.  The
Company must repurchase the Securities submitted for repurchase by a Holder in
accordance with the terms and conditions of Section 3.3 no later than 30
Business Days following the mailing of the Repurchase Event Repurchase Notice. 
The Repurchase Event Company Notice shall include a form of notice to be
completed by the Holder in the event the Holder elects such right to repurchase
pursuant to Section 3.3 (the “Repurchase Event Repurchase Notice”) and shall
briefly state, as applicable:

 

(1)          the events causing a Repurchase Event;

 

(2)          the date of such Repurchase Event;

 

(3)          the Repurchase Date;

 

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

 

(5)          the amount of the Repurchase Price;

 

(6)          the amount of the Repurchase Event Make-Whole Premium, if any;

 

(7)          whether the Company will pay the Repurchase Price or the Repurchase
Event Make-Whole Premium, if any, in Cash, shares of Common Stock or a
combination thereof, specifying the percentage or amount of each;

 

(8)          if the Company elects to pay the Repurchase Price or the Repurchase
Event Make-Whole Premium, if any, in whole or in part in shares of Common Stock,
the method of calculating the Repurchase Market Price of Common Stock;

 

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

 

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(10)                            the procedures for withdrawing a Repurchase
Event Repurchase Notice;

 

(11)                            the Conversion Rate applicable on the Repurchase
Event Company Notice Date and any adjustments to the Conversion Rate that will
result from the Repurchase Event;

 

(12)                            that the Securities with respect to which the
Holder has delivered a Repurchase Event Repurchase Notice may be converted in
accordance with the terms of this Indenture, only if such Holder withdraws such
Repurchase Event Repurchase Notice in accordance with Section 3.3(f); and

 

(13)                            the procedures the Holder must follow in order
to exercise its rights under this Section 3.3.

 

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

 

(d)         Repurchase Event Repurchase Notice.  A Holder may exercise its
rights specified in Section 3.3 upon delivery of a properly completed Repurchase
Event Repurchase Notice to the Paying Agent at any time from the opening of
business on the date of the Repurchase Event Company Notice until 5:00 p.m., New
York City time, on the Business Day immediately preceding the Repurchase Event
Repurchase Date, stating:

 

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

 

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

 

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

 

(4)          if the Company has elected to pay the Repurchase Price or the
Repurchase Event Make-Whole Premium, if any, in shares of Common Stock but the
Repurchase Price or the Repurchase Event Make-Whole Premium, if any, is
ultimately to be paid to the Holder entirely in Cash because any of the
conditions to payment in shares of Common Stock set forth in this Indenture is
not satisfied prior to the close of business on the Business Day immediately
preceding the Repurchase Event Repurchase Date, whether such Holder elects:

 

(i)                                     to withdraw the Repurchase Event
Repurchase Notice for all of the Securities subject to the Repurchase Event
Repurchase Notice; or

 

(ii)                                  to receive Cash in respect of the entire
Repurchase Price and the Repurchase Event Make-Whole Premium, if any subject to
the Repurchase Event Repurchase Notice.

 

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If such Holder fails to indicate their choice with respect to (i) or (ii) above,
such Holder will be deemed to have elected to receive Cash in respect of the
entire Repurchase Price and the Repurchase Event Make-Whole Premium, if any.

 

The delivery of such Security to the Paying Agent with, or at any time after
delivery of, the Repurchase Event Repurchase Notice (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Repurchase Price therefor; provided, however, that
such Repurchase Price shall be so paid pursuant to Section 3.3 only if the
Security so delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Repurchase Event Repurchase Notice.

 

The Company shall repurchase from the Holder thereof, pursuant to Section 3.3, a
portion of a Security, so long as the principal amount of such portion is $1,000
or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the repurchase of all of a Security also apply to the repurchase of such portion
of such Security.

 

Any repurchase by the Company contemplated pursuant to the provisions of this
Section 3.3 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Repurchase Date and
the time of delivery of the Security.

 

Notwithstanding anything contained herein to the contrary, any Holder delivering
to the Paying Agent the Repurchase Event Repurchase Notice contemplated by this
Section 3.3(d) shall have the right to withdraw such Repurchase Event Repurchase
Notice at any time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Repurchase Event Repurchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with
Section 3.3(f).

 

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

 

(e)          Effect of Repurchase Event Repurchase Notice.

 

Upon receipt by the Paying Agent of the Repurchase Event Repurchase Notice
specified in Section 3.3(d), the Holder of the Security in respect of which such
Repurchase Event Repurchase Notice was given shall (unless such Repurchase Event
Repurchase Notice is withdrawn as specified in the following paragraph)
thereafter be entitled to receive solely the Repurchase Price and the Repurchase
Event Make-Whole Premium, if any, with respect to such Security.  Such
Repurchase Price (including the Repurchase Event Make-Whole Premium) shall be
paid to such Holder, subject to receipt of Cash, shares of Common Stock or a
combination thereof, as applicable, by the Paying Agent, promptly following the
later of (a) the Repurchase Event Repurchase Date with respect to such Security
and (b) the time of delivery of such Security to the Paying Agent by the Holder
thereof.  Securities in respect of which a Repurchase Event Repurchase Notice
has been given by the Holder thereof may not be converted pursuant to Article 4
on or after the date of the delivery of such Repurchase Event Repurchase Notice
unless such Repurchase Event Repurchase Notice has first been validly withdrawn
as specified in Section 3.3(f).

 

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

 

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(1)          the name of the Holder;

 

(2)          a statement that the Holder is withdrawing its election to require
the Company to repurchase its Securities;

 

(3)          the certificate number, if any, of the Security in respect of which
such notice of withdrawal is being submitted;

 

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

 

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

 

(6)          if the Security is not then issued in certificated form, the
Repurchase Event Repurchase Notice must comply with the Applicable Procedures of
the Depositary in effect at that time.

 

(g)         Deposit of Repurchase Price.

 

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

 

If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m.,
New York City time, on the Business Day immediately following the applicable
Repurchase Date, Cash, and, if all or any portion of the Repurchase Price (or
the Repurchase Event Make-Whole Premium, if any) is to be paid in shares of
Common Stock, such shares of Common Stock, sufficient to pay the Repurchase
Price and the Repurchase Event Make-Whole Premium, if any, of any Securities for
which a Repurchase Event Repurchase Notice has been tendered and not withdrawn
pursuant to Section 3.3(f), then, immediately after such Repurchase Date, such
Securities will cease to be outstanding and interest on such Securities will
cease to accrue, whether or not such Securities are delivered to the Paying
Agent, and the rights of the Holders in respect thereof shall terminate (other
than the right to receive the Repurchase Price and the Repurchase Event
Make-Whole Premium, if any, upon delivery of such Securities).

 

(h)         Securities Repurchased in Part.

 

Any Certificated Security which is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

 

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(i)             Compliance With Securities Laws Upon Repurchase of Securities.

 

When complying with the provisions of Section 3.3 hereof (provided, that such
offer or purchase constitutes an “issuer tender offer” for purposes of Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act at the time of such offer or purchase), and subject to
any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)          otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under this Section 3.3 to be exercised in
the time and in the manner specified therein.

 

To the extent that the provisions of any securities laws or regulations conflict
with the provisions of Section 3.3, the Company’s compliance with such laws and
regulations shall not in and of itself cause a breach of its obligations under
Section 3.3.

 

(j)             Company’s Right to Elect Method of Payment of Repurchase Price.

 

Notwithstanding anything to the contrary in the Indenture, at any time prior to
the Final Maturity Date, the Company may irrevocably elect, in its sole
discretion without the consent of the Holders of the Securities, by written
notice to the Trustee and the Holders of the Securities, to satisfy its
obligation to pay the Repurchase Price in accordance with this Section 3.3
solely in Cash.

 

Section 3.4.                                Company Purchases of Securities.

 

The Company may from time to time, to the extent permitted by applicable law,
purchase any or a certain amount of the Securities in the market on which such
Securities trade, or by commencing a tender offer under the rules and
regulations promulgated under the Securities Act and the Exchange Act, or by
entering into a private agreement with a third party.  Upon the occurrence of
such an event, the Company may, at its option and to the extent permitted by
applicable law, reissue, resell or surrender to the Trustee for cancellation any
such Securities purchased.  Any such Securities surrendered to the Trustee for
cancellation shall be cancelled and shall not be reissued or resold.

 

Section 3.5.                                Repayment to the Company.

 

To the extent that the aggregate amount of Cash deposited by the Company
pursuant to this Article 3 exceeds the aggregate payment, thereon of the
Securities or portions thereof that the Company is obligated to purchase, then
the Trustee or a Paying Agent, as the case may be, shall promptly return any
such excess Cash to the Company.

 

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ARTICLE 4

 

CONVERSION

 

Section 4.1.           Conversion Privilege.

 

(a)          Subject to and upon compliance with the provisions of this
Article 4, a Holder of a Security shall have the right, at such Holder’s option,
to convert all or any portion (if the portion to be converted is $1,000 or an
integral multiple of $1,000) of such Security into shares of Common Stock at the
Conversion Price in effect on the date of conversion only as follows:

 

(1)          Conversion Based on Sale Price of Common Stock.  The Securities may
be surrendered for conversion during any calendar quarter (beginning with the
quarter ending March 31, 2005) if the Sale Price of the Common Stock for each of
20 or more consecutive Trading Days in the Measurement Period of the immediately
preceding calendar quarter exceeds 120% of the Conversion Price in effect on the
last Trading Day of the immediately proceeding calendar quarter (in the event
that the Conversion Price on such last Trading Day of the immediately preceding
calendar quarter is not the same as the Conversion Price in effect for each of
the Trading Days in such Measurement Period, the Board of Directors shall make
such adjustments as it, in its discretion, deems appropriate in determining
whether the foregoing condition has been met).

 

(2)          Conversion Based on Satisfaction of Trading Price Condition.  The
Securities may be surrendered for conversion during any five consecutive
Business Day period immediately following any five consecutive Trading Day
period (the “Security Measurement Period”) in which the average Trading Price
per $1,000 principal amount of Securities during such Security Measurement
Period was equal to or less than 98% of the average Conversion Value during such
Security Measurement Period; provided that a Holder may not surrender Securities
for conversion pursuant to this Section 4.1(a)(2) after September 15, 2019 if,
on any Trading Day during the applicable Security Measurement Period, the Sale
Price was between 100% and 120% of the Conversion Price in effect on that
Trading Day.

 

(3)          Conversion Based on Redemption.  The Securities may be surrendered
for conversion at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Redemption Date, if such Security has
been called for redemption pursuant to Article 3 hereof.

 

(4)          Conversion Upon Occurrence of Certain Corporate Transactions.  If
either:  (A) the Company is a party to any consolidation or merger of the
Company with or into another Person (or vice versa) pursuant to which all of the
outstanding shares of Common Stock are converted into Cash, securities or other
property; (B) any “person” or “group,” within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act, becomes the “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, directly or indirectly of 50% or more of the total voting power of
all classes of the Company’s Voting Stock entitled to vote generally in the
election of directors; (C) the Company sells, transfers, conveys or otherwise
disposes, in one or a series of related transactions, of all or substantially
all of its properties or assets to any “person” or “group” (as such terms are
defined above); or (D) the Company distributes to all or substantially all
holders of shares of its Common Stock, its assets, cash, debt securities or
certain rights to purchase its securities, which distribution has a per share
value

 

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exceeding 10% of the closing price of the Common Stock on the day preceding the
declaration date for such distribution or (E) except as described in clauses (A)
to (D) above, the Company takes any action, or becomes aware of any event, that
would require adjustment to the Conversion Rate pursuant to Section 4.4(c), (d),
(e) and (f), then (x) in the case of (A), (B) and (C) above, a Holder may
surrender Securities for conversion at any time from and after the date that is
15 Business Days before the date the Company announces as the anticipated
effective date of the transaction or event until the date that is 15 Business
Days after the actual effective date of the transaction or event, and (y) in the
case of (D) and (E) above, the Company shall mail to Holders written notice of
the distribution at least 20 days prior to the record, effective or expiration
date, as the case may be, of the distribution or transaction and once the
Company has given such notice, Holders may surrender their Securities for
conversion beginning on the date that the Company mails such notice (or, if
earlier, the date that the Company is required to mail such notice pursuant to
this Indenture) until the close of business on the Business Day immediately
preceding the “ex-dividend trading date” of the distribution or the Company’s
announcement that such distribution or transaction shall not take place.

 

(b)         Whenever any event described in Section 4.1(a) shall occur which
shall cause the Securities to become convertible into shares of Common Stock,
the Company shall (i) promptly deliver written notice of the convertibility of
the Securities to the Trustee and each Holder (provided that if such event would
also constitute a Repurchase Event, such notice shall comply with the provisions
set forth in Section 3.3(c)); and (ii) publicly announce that the Securities
have become convertible.  Such written notice and public announcement shall
include a description of such event, a description of the periods during which
the Securities shall be convertible and the procedures by which a Holder may
convert its Securities.  At the Company’s request, upon reasonable prior notice
agreed to by the Trustee, the Trustee shall, in the Company’s name and at the
Company’s expense, deliver to each Holder the written notice of the
convertibility of the Securities required by this Section 4.1(b); provided, that
the form and content of such notice shall be prepared by the Company.

 

(c)          The Company shall determine at the end of each applicable period
whether the Securities shall be convertible as a result of the occurrence of an
event specified in Section 4.1(a)(1) and, if the Securities shall be so
convertible, the Company shall promptly deliver to the Trustee written notice
thereof.  Upon receipt of reasonable evidence from any Holder that the Trading
Price per $1,000 principal amount of notes is equal to or less than 98% of the
Conversion Value, the Company shall instruct the Bid Solicitation Agent to
determine the Trading Price for each of the next five Trading Days after receipt
of such notice and on each subsequent Trading Day thereafter until the trading
price condition described in Section 4.1(a)(2) is no longer satisfied. 
Notwithstanding anything contained in this Indenture to the contrary, the Bid
Solicitation Agent shall have no obligation to determine the Trading Price
unless the Company so requests and the Company shall have no obligation to make
such request unless a Holder provides the Company with such reasonable evidence
that the trading price condition has been satisfied.

 

Section 4.2.           Right to Receive Repurchase Event Make-Whole Premium.

 

If any of the events set forth in Section 4.1(a)(4) occur prior to September 15,
2009, any Holder that surrenders its Securities within the timeframe set forth
in Section 4.1(a)(4) shall also be entitled to receive the Repurchase Event
Make-Whole Premium in accordance with the terms of Section 3.3(b).

 

Section 4.3.           Conversion Procedures.

 

(a)          General.

 

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The Company shall not issue any fraction of a share of Common Stock in
connection with any conversion of Securities, but instead shall make a Cash
payment (calculated to the nearest cent) equal to such fraction multiplied by
the Sale Price of the Common Stock on the last Trading Day prior to the date of
conversion.

 

Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Purchase Notice or Repurchase Event Purchase Notice exercising such
Holder’s option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn in accordance with
Sections 3.2(c) or 3.3(f) hereof, as the case may be, prior to the close of
business on the Business Day immediately preceding the applicable Purchase Date
or Repurchase Date, as the case may be, unless the Company defaults in the
payment of the Purchase Price or the Repurchase Price.

 

Before any Holder of a Security shall be entitled to convert such Security, such
Holder shall, in the case of Securities issued in global form, comply with the
Applicable Procedures of the Depositary in effect at that time, and in the case
of Certificated Securities, surrender such Securities, duly endorsed to the
Company or in blank, at the office of the Conversion Agent, and shall give
written notice to the Company at said office or place in the form of the
Conversion Notice attached to the Security (the “Conversion Notice”) that such
Holder elects to convert the same and shall state in writing therein the
principal amount of Security to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.

 

Before any such conversion, a Holder also shall pay all funds required, if any,
relating to interest on the Securities, as provided in Section 4.10, and all
taxes or duties, if any, as provided in Section 4.9.

 

If more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock or Cash which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Security (or specified portions thereof to the extent
permitted thereby) so surrendered.  Subject to the next succeeding sentence, the
Company will, in accordance with the provisions hereof, issue and deliver at
said office or place to such Holder of a Security, or to such Holder’s nominee
or nominees, certificates (other than in the case of Holders of Securities in
book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Common Stock to which such Holder shall be entitled as aforesaid,
together with Cash payable as a result of such conversion or in lieu of any
fraction of a share to which such Holder would otherwise be entitled.  The
Company shall not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or the security register are duly
closed for any purpose, but certificates for shares of Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register.

 

If shares of Common Stock to be issued upon conversion of a Transfer Restricted
Security are to be issued in the name of a Person other than the Holder of such
Transfer Restricted Security, such Holder must deliver to the Conversion Agent a
certification in substantially the form set forth in a Transfer Certificate
dated the date of surrender of such Transfer Restricted Security and signed by
such Holder, as to compliance with the restrictions on transfer applicable to
such Transfer Restricted Security.  The Company shall not be required to issue
Common Stock upon conversion of any such Transfer Restricted Security to a
Person other than the Holder if such Transfer Restricted Security is not so
accompanied by a properly completed certification, and the Registrar shall not
be required to register Common Stock upon conversion of any such Transfer
Restricted Security in the name of a Person other than the Holder if such
Transfer Restricted Security is not so accompanied by a properly completed
certification.

 

A Security shall be deemed to have been converted as of the close of business on
the date of the surrender of such Security for conversion as provided above
(such date, the “Conversion Date”), and the

 

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person or persons entitled to receive the Common Stock, if any, issuable upon
such conversion shall be treated for all purposes as the record Holder or
Holders of such Common Stock as of the close of business on such date.  Upon
conversion, all obligations under the Securities so converted will be deemed
satisfied, including with respect to any accrued and unpaid interest (including
Contingent Interest, if any, and Special Interest, if any).

 

In case any Certificated Security shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall, upon the written order of the
Company, authenticate and deliver to the Holder of the Security so surrendered,
without charge to such Holder (subject to the provisions of Section 4.8 hereof),
a new Security or Securities in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered
Certificated Securities.

 

(b)         Conversion on or Before the Final Notice Date.

 

If a Holder elects to convert all or any portion of a Security into shares of
Common Stock as set forth in Section 4.3 and the Company receives such Holder’s
Conversion Notice on or prior to the day that is 10 days prior to the Final
Maturity Date, or with respect to Securities called for redemption pursuant to
Article 3 hereof, the applicable Redemption Date (the “Final Notice Date”), the
Company may choose to satisfy all or any portion of the Securities surrendered
for Conversion (the “Conversion Obligation”) in Cash.  Upon such election, the
Company will notify such Holder through the Trustee of the dollar amount to be
satisfied in Cash (which must be expressed either as 100% of the Conversion
Obligation or as a fixed dollar amount) at any time on or before the date that
is two Business Days following the Conversion Agent’s receipt of the Notice of
Conversion (such period, the “Cash Settlement Notice Period”).  If the Company
elects to pay Cash for any portion of the shares of Common Stock otherwise
issuable to the Holder, the Holder may retract the Notice of Conversion at any
time during the two Business Day period beginning on the day after the final day
of the Cash Settlement Notice Period (the “Conversion Retraction Period”);
provided that no such retraction can be made (and a Conversion Notice shall be
irrevocable) (i) if the Company does not elect to deliver Cash in lieu of shares
of Common Stock (other than Cash in lieu of fractional shares) or (ii) as
provided in Section 4.1.  If the Company elects to satisfy all or a portion of
its Conversion Obligations in Cash and the Notice of Conversion has not been
retracted, then settlement (in Cash or a combination of Cash and shares of
Common Stock) will occur on the third Business Day following the 10 Trading Days
beginning on the Trading Day immediately following the final day of the
Conversion Retraction Period (the “Cash Settlement Averaging Period”).  If the
Company elects to satisfy the entire Conversion Obligation in shares of Common
Stock, then settlement will occur on the third Business Day following the
Conversion Date.  With respect to any Notice of Conversion received by the
Company prior to the Final Notice Date and not retracted pursuant to this
Section 4.3(b), the “Conversion Settlement Distribution” for any Security
subject to such Notice of Conversion shall consist of Cash, Common Stock or a
combination thereof, as selected by the Company as set forth below:

 

(1)          if the Company elects to satisfy the entire Conversion Obligation
in shares of Common Stock, the Conversion settlement Distribution shall be a
number of shares of Common Stock for each $1,000 principal amount of the
Securities to be converted equal to the Conversion Rate, plus Cash for any
fractional shares;

 

(2)          if the Company elects to satisfy the entire Conversion Obligation
in Cash, the Conversion Settlement Distribution shall be Cash for each $1,000
principal amount of the Securities in an amount equal to the product of:

 

(i)                                     the applicable Conversion Rate, and

 

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(ii)                                  the average of the Sale Price of the
Common Stock during the Cash Settlement Averaging Period; and

 

(3)          If we elect, for each $1,000 principal amount of the Securities, to
satisfy a fixed portion (other than 100%) of the Conversion Obligation in Cash
(the “Fixed Cash Portion’’), we will deliver to you such Fixed Cash Portion and
a number of shares of Common Stock equal to (A) the then current Conversion
Rate, minus (B) the Fixed Cash Portion divided by the average Sale Price during
the Cash Settlement Averaging Period; provided, however, that the number of
shares of Common Stock shall not be less than zero.

 

(c)          Conversion After the Final Notice Date.  If a Holder elects to
convert all or any portion of a Security into shares of Common Stock as set
forth in this Section 4.3 and the Company receives such Holder’s Notice of
Conversion after the Final Notice Date, the Company will not notify such Holder
of its election to satisfy all or a portion of the Conversion Obligation in
Cash.  If the Company elects to satisfy all or any portion of the Conversion
Obligation in Cash, the Company shall send, on or after the Final Notice Date, a
single notice to the Trustee of the dollar amount to be satisfied in Cash (which
shall be expressed as either 100% of the Conversion Obligation or as a fixed
dollar amount).  Settlement amounts shall be computed and settlement dates shall
be determined for any Securities with respect to which a Holder’s Notice of
Conversion is received by the Company after the Final Notice Date in accordance
with the procedures set forth in Section 4.3(b); provided that the “Cash
Settlement Averaging Period” shall be the 10 Trading Day Period beginning on the
Trading Day after receipt of such Holder’s Conversion Notice and settlement (in
Cash and/or Common Stock) shall occur on the third business day following the
final day of such Cash Settlement Averaging Period.

 

(d)         Company Right to Irrevocably Elect Payment.  Notwithstanding
anything to the contrary in the Indenture, at any time prior to the Final
Maturity Date, the Company may irrevocably elect, in its sole discretion without
the consent of the Holders of the Securities, by written notice to the Trustee
and the Holders of the Securities, to satisfy a portion of the Conversion
Obligation for all Securities for conversion after the date of such election
(the “Election Date”) by paying in Cash up to 100% of the principal amount of
the Securities so converted.  After making such an election, the Company shall
satisfy the remainder of the Conversion Obligation in Common Stock, to the
extent the Conversion Obligation exceeds the principal amount or the portion of
the principal amount of the Securities the Company elects to pay in Cash.  In
the event that the Company receives a Notice of Conversion after the Election
Date:  the Notice of Conversion will not be retractable; the Cash Settlement
Averaging Period shall be the 10 Trading Day period beginning on the day after
the Company’s receipt of the Conversion Notice; and the Conversion Settlement
Distribution for each $1,000 principal amount of the Securities shall consist of
(i) such Cash amount (“Election Amount”) equal to the applicable Conversion Rate
multiplied by the average Closing Price of Common Stock during the Cash
Settlement Averaging Period (provided, however, that the Election Amount will
not be more than 100% of the principal amount of a Security) and (ii) a number
of shares of Common Stock equal to (A) the then current Conversion Rate, minus
(B) the Fixed Cash Portion divided by the average Sale Price during the Cash
Settlement Averaging Period; provided, however, that the number of shares of
Common Stock shall not be less than zero.

 

Section 4.4.           Adjustment of Conversion Rate.

 

The Conversion Rate shall be subject to adjustment from time to time as follows:

 

(a)          In case the Company shall (1) pay a dividend in shares of Common
Stock to all holders of Common Stock, (2) make a distribution in shares of
Common Stock to all holders of Common Stock, (3) subdivide the outstanding
shares of Common Stock into a greater number of shares of Common Stock or (4)
combine the outstanding shares of Common Stock into a smaller number of shares
of Common

 

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Stock, the Conversion Rate in effect immediately prior to such action shall be
adjusted so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which such Holder would have owned immediately following such action had such
Securities been converted immediately prior thereto.  Any adjustment made
pursuant to this Section 4.4(a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.

 

(b)         In case the Company shall issue rights or warrants to all or
substantially all holders of Common Stock, entitling them, for a period expiring
not more than sixty (60) days immediately following the record date for the
determination of holders of Common Stock entitled to receive such rights or
warrants, to subscribe for or purchase shares of Common Stock (or securities
convertible into or exchangeable or exercisable for Common Stock), at a price
per share (or having a conversion, exchange or exercise price per share) that is
less than the Current Market Price (as determined pursuant to Section 4.4(h)) of
Common Stock on the record date for the determination of holders of Common Stock
entitled to receive such rights or warrants, the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to such
record date by a fraction of which (i) the numerator shall be the sum of (A) the
number of shares of Common Stock outstanding at the close of business on such
record date and (B) the aggregate number of shares (the “Underlying Shares”) of
Common Stock underlying all such issued rights or warrants (whether by exercise,
conversion, exchange or otherwise), and (ii) the denominator shall be the sum of
(A) the number of shares of Common Stock outstanding at the close of business on
such record date and (B) the number of shares of Common Stock which the
aggregate exercise, conversion, exchange or other price at which the Underlying
Shares may be subscribed for or purchased pursuant to such rights or warrants
would purchase at such Current Market Price.  Such increase shall become
effective immediately prior to the opening of business on the day following such
record date.  In no event shall the Conversion Rate be decreased pursuant to
this Section 4.4(b).

 

(c)          In case the Company shall dividend or distribute to all or
substantially all holders of Common Stock shares of Capital Stock of the Company
(other than Common Stock), evidence of Indebtedness or other assets (other than
dividends or distributions requiring an adjustment to the Conversion Rate in
accordance with Sections 4.4(d), 4.4(e) or 4.4(f), or shall dividend or
distribute to all or substantially all holders of Common Stock rights or
warrants to subscribe for or purchase securities (other than those referred to
in Section 4.4(b)), then in each such case the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
close of business on the record date for the determination of shareholders
entitled to such dividend or distribution by a fraction of which (i) the
numerator shall be the Current Market Price (as determined pursuant to
Section 4.4(h)) on such record date and (ii) the denominator shall be amount
equal to (A) such Current Market Price less (B) the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board Resolution), on such
record date, of the portion of the shares of Common Stock, evidences of
Indebtedness, assets, rights and warrants to be divided or distributed
applicable to one share of Common Stock, such increase to become effective
immediately prior to the opening of business on the day following such record
date; provided, however, that if such denominator is equal to or less than zero,
then in lieu of the foregoing adjustment to the Conversion Rate, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion of its Securities, in addition to the shares of Common Stock issuable
(and Cash, if any, payable) upon such conversion, an amount of shares of Capital
Stock, evidences of Indebtedness, assets, rights and/or warrants that such
Holder would have received had such Holder converted all of its Securities on
such record date.  Notwithstanding the foregoing, in the event that the Company
shall distribute rights or warrants (other than those referred to in
Section 4.4(b)) (collectively, “Rights”) pro rata to holders of Common Stock,
the Company may, in lieu of making any adjustment pursuant to this
Section 4.4(c), make proper provision so that each Holder of a Security who
converts such Security (or

 

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any portion thereof) on or after the record date for such distribution and prior
to the expiration or redemption of the Rights shall be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable (and Cash,
if any, payable ) upon such conversion ( the “Conversion Shares”), a number of
Rights to be determined as follows:  (i) if such conversion occurs on or prior
to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the “Distribution Date”), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of shares of Conversion Shares would be entitled at the time of such
conversion in accordance with the terms and provisions of and applicable to the
Rights; and (ii) if such conversion occurs after the Distribution Date, the same
number of Rights to which a holder of the number of shares of Common Stock into
which the principal amount of the Security so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and applicable
to the Rights.  Any distribution of rights or warrants pursuant to a
shareholders’ rights plan complying with the requirements set forth in the
preceding sentence of this paragraph shall not constitute a distribution of
rights or warrants pursuant to this Section 4.4(c).  In no event shall the
Conversion Rate be decreased pursuant to this Section 4.4(c).

 

(d)         In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock Cash, excluding any Cash dividend on its Common
Stock to the extent that the aggregate Cash dividend on its Common Stock in any
quarterly period does not exceed $.10 per share (appropriately adjusted from
time to time for any stock dividends on or subdivisions or combinations of
Common Stock) (the “Dividend Threshold Amount”), the Conversion Rate shall be
adjusted by multiplying (i) the Conversion Rate by (ii) a fraction (A) the
numerator of which shall be the Current Market Price on the Record Date of such
distribution and (B) the denominator of which shall be the same Current Market
Price as used in the numerator minus the amount per share of such Dividend
Increase (as defined below) or distribution.  If an adjustment is required to be
made under this Section 4.4(d) as a result of a Cash dividend in any quarterly
period that exceeds the Dividend Threshold Amount, the adjustment shall be based
upon the amount by which the distribution exceeds the Dividend Threshold Amount
(the “Dividend Increase”). If an adjustment is otherwise required to be made
under this Section 4.4(d), the adjustment shall be based upon the full amount of
the distribution.

 

(e)          In case the Company or Subsidiary shall distribute cash or other
consideration in respect of a tender offer or exchange offer made by the Company
or any Subsidiary for all or any portion of the Common Stock where the sum of
the aggregate amount of such cash distributed and the aggregate fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive and set forth in a Board Resolution), as
of the Expiration Date (as defined below), of such other consideration
distributed (such sum, the “Aggregate Amount”) expressed as an amount per share
of Common Stock validly tendered or exchanged, and not withdrawn, pursuant to
such tender offer or exchange offer as of the Expiration Time (as defined below)
(such tendered or exchanged shares of Common Stock, the “Purchased Shares”)
exceeds the Current Market Price (as determined pursuant to Section 4.4(h)) on
the last date (such last date, the “Expiration Date”) on which tenders or
exchanges could have been made pursuant to such tender offer or exchange offer
(as the same may be amended through the Expiration Date), then the Conversion
Rate shall be increased by multiplying the Conversion Rate in effect immediately
prior to the close of business on the Expiration Date by a fraction (i) whose
numerator is equal to the sum of (A) the Aggregate Amount and (B) the product of
(1) the Current Market Price (as determined pursuant to Section 4.4(h)) on the
Expiration Date and (2) an amount equal to (a) the number of shares of Common
Stock outstanding as of the last time (the “Expiration Time”) at which tenders
or exchanges could have been made pursuant to such tender offer or exchange
offer (including all Purchased Shares) less (b) the Purchased Shares and (ii)
whose denominator is equal to the product of (A) the number of shares of Common
Stock outstanding as of the Expiration Time (including all Purchased Shares) and
(B) the Current Market Price on the Expiration Date.

 

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An increase, if any, to the Conversion Rate pursuant to this Section 4.4(e)
shall become effective immediately prior to the opening of business on the
Business Day following the Expiration Date.  In the event that the Company or a
Subsidiary is obligated to purchase shares of Common Stock pursuant to any such
tender offer or exchange offer, but the Company or such Subsidiary is
permanently prevented by applicable law from effecting any such purchases, or
all such purchases are rescinded, then the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if such tender
offer or exchange offer had not been made.  If the application of this
Section 4.4(e) to any tender offer or exchange offer would result in a decrease
in the Conversion Rate, no adjustment shall be made for such tender offer or
exchange offer under this Section 4.4(e).

 

(f)            If (i) a person other than the Company or any Subsidiary shall
distribute cash or other consideration in respect of a tender or exchange offer
made by such person for all or any portion of the Common Stock; (ii) as of the
last date (the “Third Party Expiration Date”) on which tenders or exchanges
could have been made pursuant to such tender offer or exchange offer (as the
same may be amended through such date), the Board of Directors does not
recommend rejection of such tender offer or exchange offer; (iii) such person
(including such person’s “affiliates,” within the meaning of Rule 144(a)(1)
under the Securities Act, and including any “syndicate” or “group,” within the
meaning of Section 13(d)(3) of the Exchange Act, that includes such person)
would, assuming that all shares sought for tender or exchange pursuant to such
tender or exchange offer are validly tendered or exchanged pursuant to such
tender or exchange offer, “beneficially own” (within the meaning of Rule 13d-3
under the Exchange Act) at least 10% of the total shares of Common Stock
outstanding immediately after the Third Party Expiration Time (as defined
below); and (iv) the sum of the aggregate amount of such cash and the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive and described in a Board
Resolution), as of the Third Party Expiration Date, of such other consideration
(such sum, the “Third Party Aggregate Amount”), expressed as an amount per share
of Common Stock validly tendered or exchanged, and not withdrawn, pursuant to
such tender offer or exchange offer as of the last time (the “Third Party
Expiration Time”) at which tenders or exchanges could have been make pursuant to
such tender offer or exchange offer (such tendered or exchanged shares of Common
Stock, the “Third Party Purchased Shares”), exceeds the Current Market Price (as
determined pursuant to Section 4.4(h)) on the Expiration Date, then the
Conversion Rate shall be adjusted by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Third Party Expiration Date by
a fraction (A) whose numerator is equal to the sum of (1) the Third Party
Aggregate Amount and (2) the product of (a) the Current Market Price (as
determined pursuant to Section 4.4(h)) on the Third Party Expiration Date and
(b) an amount equal to (i) the number of shares of Common Stock outstanding as
of the Third Party Expiration Time (including all Third Party Purchased Shares)
less (ii) the Third Party Purchased Shares and (B) whose denominator is equal to
the product of (1) the number of shares of Common Stock outstanding as of the
Third Party Expiration Time (including all Third Party Purchased Shares) and (2)
the Current Market Price (as determined pursuant to Section 4.4(h)) on the Third
Party Expiration Date.

 

An adjustment, if any, to the Conversion Rate pursuant to this Section 4.4(f)
shall become effective immediately prior to the opening of business on the
Business Day following the Third Party Expiration Date.  In the event that such
tender offer or exchange offer is permanently prevented by applicable law from
being effected, or all purchases pursuant to such tender offer or exchange offer
are rescinded, then the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such tender offer or exchange
offer had not been made.  If the application of this Section 4.4(f) to any
tender offer or exchange offer would result in a decrease in the Conversion
Rate, no adjustment shall be made for such tender offer or exchange offer under
this Section 4.4(f).

 

(g)         In addition to the foregoing adjustments in Subsections (a), (b),
(c), (d), (e) and (f) above, the Company, from time to time and to the extent
permitted by law, may increase the Conversion Rate by any

 

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amount for a period of at least 20 days or such longer period as may be required
by law, if the Board of Directors has made a determination, which determination
shall be conclusive, that such increase would be in the best interests of the
Company.  Such Conversion Rate increase shall be irrevocable during such
period.  The Company shall give notice to the trustee and cause notice of such
increase to be mailed to each Holder of Securities at such Holder’s address as
the same appears on the registry books of the Registrar, at least 15 days prior
to the date on which such increase commences.

 

(h)         For the purposes of any computation under Subsections (a), (b), (c)
or (d) above of Section 4.4, the Current Market Price on the date fixed for
determination of the shareholders entitled to receive the issuance or
distribution requiring such computation (the “Determination Date”) shall be
determined during the period immediately preceding the Determination Date, and,
for the purpose of any computation under Sections 4.4(e) or 4.4(f), the Current
Market Price on the Expiration Date or Third Party Expiration Date, as the case
may be, for the tender offer or exchange offer requiring such computation shall
be determined during the period immediately preceding the Expiration Date or
Third Party Expiration Date, as the case may be.

 

Section 4.5.           No Adjustment.

 

No adjustment in the Conversion Rate shall be required if such adjustment would
reduce the Conversion Price below $1.00 or until cumulative adjustments would
result in a change of at least 1% or more of the Conversion Price as last
adjusted (or, if never adjusted, the initial Conversion Price); provided,
however, that any adjustments which by reason of this Section 4.5 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.  All calculations under this Article 4 shall be made to
the nearest cent or to the nearest one-millionth of a share, as the case may be.

 

If any rights, options or warrants issued by the Company and requiring an
adjustment to the Conversion Rate in accordance with Section 4.4 are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Rate will not be adjusted as provided in Section 4.4 until the
earliest of such triggering events occurs.  Upon the expiration or termination
of any rights, options or warrants issued by the Company (which rights, options
or warrants require an adjustment to the Conversion Rate in accordance with
Section 4.4) without the exercise of such rights, options or warrants, the
Conversion Rate then in effect at the time of such expiration or termination
shall be adjusted to the Conversion Rate that would then be in effect had such
rights, options or warrants never been issued.

 

If any dividend or distribution is declared and the Conversion Rate is adjusted
pursuant to Section 4.4 on account of such dividend or distribution, but such
dividend or distribution is thereafter not paid or made, the Conversion Rate
shall again be adjusted to the Conversion Rate which would then be in effect had
such dividend or distribution not been declared.

 

No adjustment to the Conversion Rate need be made for a transaction referred to
in this Article 4 if Holders are to participate in the transaction without
conversion on a basis and with notice that the Board of Directors determines in
good faith to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction (which determination
shall be described in a Board Resolution).

 

Section 4.6.           Notice of Adjustment.

 

(a)          Whenever an adjustment in the Conversion Rate with respect to the
Securities is required:

 

(1)          the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion

 

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Rate determined as provided herein and setting forth in reasonable detail such
facts as shall be necessary to show the reason for and the manner of computing
such adjustment; and

 

(2)          a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be given by the
Company or, at the Company’s request, by the Trustee in the name and at the
expense of the Company, to each Holder.  Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.

 

(b)         If the Company takes any action, or becomes aware of an event, that
would require an adjustment to the Conversion Rate as described in
Section 4.4(b), (c), (d), (e) and (f), the Company shall mail to Holders a
written notice of such action or event at least 20 days prior to the record,
effective or expiration date, as the case may be, of the transaction.

 

Section 4.7.           Consolidation or Merger of the Company.

 

If any of the following events occurs, namely:

 

(a)          any reclassification or change of the outstanding Common Stock into
another class of Capital Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination);

 

(b)         any merger, consolidation, statutory share exchange or combination
of the Company with another corporation as a result of which all of the holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including Cash or any combination thereof) with respect to or in
exchange for all of their Common Stock; or

 

(c)          any sale or conveyance of all or substantially all the properties
and assets of the Company to any other person as a result of which all of the
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including Cash or any combination thereof) with respect to
or in exchange for all of their Common Stock;

 

the Company or the successor or purchasing person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
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
Holder’s right to convert a Security into Common Stock shall be changed to a
right to convert a Security into the kind and amount of shares of stock and
other securities or property or assets (including Cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
Cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided, that if the kind or amount of
securities, Cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised (“Non-Electing Share”), then for the purposes of this Section 4.7, the
kind and amount of securities, Cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares).  Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 4.  If, in the case
of any such

 

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reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and assets of a corporation other than the successor or
purchasing corporation, as the case may be, in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing.

 

The Company shall cause notice of the execution of such supplemental indenture
to be mailed to each Holder, at the address of such Holder as it appears on the
register of the Securities maintained by the Registrar, within 20 days after
execution thereof.  Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.

 

The above provisions of this Section 4.7 shall similarly apply to successive
reclassifications, changes, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.

 

If this Section 4.7 applies to any event or occurrence, Section 4.3 shall not
apply.

 

Section 4.8.           Company to Reserve Stock; Registration; Listing.

 

(a)          The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock for the purpose of effecting the conversion of the Securities, such number
of its duly authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all Securities then outstanding into such
Common Stock at any time (assuming that, at the time of the computation of such
number of shares or securities, all such Securities would be held by a single
Holder).  The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and free from all liens and charges and, except as provided in
Section 4.9, taxes with respect to the issue thereof.

 

(b)         If any shares of Common Stock which would be issuable upon
conversion of Securities hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon such
conversion, the Company will use its commercially reasonable efforts to cause
such shares or securities to be duly registered or approved, as the case may
be.  The Company further covenants that so long as the Common Stock shall be
listed on the New York Stock Exchange, the Company will use its commercially
reasonable efforts, if permitted by the rules of the New York Stock Exchange, to
have and keep approved for listing on the New York Stock Exchange (subject to
notice of official issuance) all Common Stock issuable upon conversion of the
Securities, and the Company will use its commercially reasonable efforts to list
the shares of Common Stock required to be delivered upon conversion of the
Securities prior to such delivery upon any other national securities exchange or
automated quotation system upon which the outstanding Common Stock is listed or
quoted at the time of such delivery.

 

Section 4.9.           Taxes on Conversion.

 

The issue of stock certificates on conversion of Securities shall be made
without charge to the converting Holder for any documentary, stamp or similar
issue or transfer taxes in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto.  The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or the portion, if

 

44

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any, of the Securities which are not so converted in a name other than that in
which the Securities so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of such tax or has established to the satisfaction of the
Company that such tax has been paid.

 

The Company agrees, and each Holder is deemed to agree, that delivery to such
Holder of the full number of shares of Common Stock into which each Security is
convertible, together with any Cash payment of such Holder’s fractional shares,
will be treated as a contingent payment (in an amount equal to the sum of the
then fair market value of such Common Stock and such Cash payment (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be conclusive and described in a Board Resolution), if any) on the
Securities for purposes of the Contingent Payment Debt Regulations governing
contingent payment debt obligations.

 

Nothing contained herein shall preclude any income tax withholding required by
law or regulation upon conversion of the Securities, and at the Company’s
request, Holders shall be responsible for satisfying any such withholding.

 

Section 4.10.        Conversion after Record Date.

 

Except as provided in this Section 4.10, a converting Holder of Securities shall
not be entitled to receive any accrued and unpaid interest (including Contingent
Interest, if any) on any such Securities being converted.  By delivery to the
Holder of the number of shares of Common Stock or other consideration issuable
or payable upon conversion in accordance with this Article 4, any accrued and
unpaid interest (including Contingent Interest, if any and Special Interest, if
any), on such Securities will be deemed to have been paid in full.  If any
Securities are surrendered for conversion subsequent to the Record Date
preceding an Interest Payment Date but prior to such Interest Payment Date, the
Holder of such Securities at the close of business on such Record Date shall
receive the interest payable on such Security on such Interest Payment Date
notwithstanding the conversion thereof.  Securities surrendered for conversion
during the period from the close of business on any Record Date preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
shall (except in the case of Securities which have been called for redemption on
a Redemption Date within such period) be accompanied by payment from converting
Holders, for the account of the Company, in New York Clearing House funds, or
other funds of an amount equal to the interest payable on such Interest Payment
Date (excluding any overdue interest, if applicable) on the Securities being
surrendered for conversion; provided, however, if the Company elects to redeem
Securities on a date that is after the Regular Record Date but prior to the
corresponding Interest Payment Date, and such Holder elects to convert those
Securities, the Holder will not be required to pay the Company, at the time that
Holder surrenders those Securities for conversion, the amount of interest such
Holder will have received on the Interest Payment Date.

 

Except as provided in this Section 4.10, no adjustments in respect of payments
of interest, including Contingent Interest, if any, and Special Interest, if
any, on Securities surrendered for conversion or any dividends or distributions
or interest on the Common Stock issued upon conversion shall be made upon the
conversion of any Securities.

 

Section 4.11.        Company Determination Final.

 

Any determination that the Company or the Board of Directors must make pursuant
to this Article 4 shall be conclusive if made in good faith and in accordance
with the provisions of this Article, absent manifest error, and set forth in a
Board Resolution.

 

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Section 4.12.        Responsibility of Trustee for Conversion Provisions.

 

The Trustee has no duty to determine when an adjustment under this Article 4
should be made, how it should be made or what it should be.  Unless and until a
Trust Officer of the Trustee receives a certificate delivered pursuant to
Section 4.6 setting forth an adjustment of the Conversion Rate, the Trustee may
assume without inquiry that no such adjustment has been made and that the last
Conversion Rate of which the Trustee has knowledge remains in effect.  The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities.  The Trustee shall not be
responsible for any failure of the Company to comply with this Article 4.  Each
Conversion Agent other than the Company shall have the same protection under
this Section 4.12 as the Trustee.

 

The rights, privileges, protections, immunities and benefits given to the
Trustee under this Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Conversion Agent acting
hereunder.

 

Section 4.13.        Automatic Conversion by the Company.

 

(a)          The Company may elect to automatically convert the Securities (an
“Automatic Conversion”) at any time prior to maturity if the Closing Price of
the Company’s Common Stock has exceeded 150% of the Conversion Price for at
least 20 Trading Days during a 30-day Trading Day period, ending within five
Trading Days prior to the date of the Automatic Conversion Notice (as defined
below); provided, however, that, during the two-year period commencing on the
date of the last delivery of the Securities under this Indenture, the Company
may only automatically convert the Securities if, in accordance with the terms
of the Registration Rights Agreement, a registration statement registering the
resale of the Securities and Common Stock issuable upon conversion of the
Securities is declared effective under the Securities Act prior to the date of
the Automatic Conversion Notice and such registration statement remains
effective on the date selected for Automatic Conversion (the “Automatic
Conversion Date”).  In the event that the date on which the Securities will be
automatically converted occurs on or prior to September 15, 2009, the Company
will pay the Make-Whole Interest Payment on the Automatic Conversion Date.

 

The Make-Whole Interest Payment shall equal five full years of interest on the
Securities, less any interest actually paid or provided for on the Securities
prior to such Automatic Conversion.  The Company may, at its option, pay the
Make-Whole Interest Payment in Cash or in Common Stock.  In the event that the
Company elects to pay the Make-Whole Interest Payment in Common Stock, the
shares of Common Stock will be valued at 95% of the average Sale Price for each
of the five Trading Days immediately preceding the second Trading Day prior to
the Automatic Conversion Date.

 

(b)         Unless the Company shall have theretofore called for redemption all
of the outstanding Securities, the Company shall give to all Holders notice (the
“Automatic Conversion Notice”) of the Automatic Conversion not more than 30 days
but not less than 20 days prior to the Automatic Conversion Date.  The Company
shall also deliver a copy of such Automatic Conversion Notice to the Trustee. 
At the Company’s request, the Trustee shall give the Automatic Conversion Notice
in the Company’s name and at the Company’s expense; provided, however, that the
Company makes such request at least three Business Days (unless a shorter period
shall be satisfactory to the Trustee) prior to the date by which such Automatic
Conversion Notice must be given to the Holder in accordance with this
Section 4.13(b); provided, further, that the text of the Automatic Conversion
Notice shall be prepared by the Company.

 

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(c)          Each Automatic Conversion Notice shall state:

 

(1)          the Automatic Conversion Date,

 

(2)          whether the Make-Whole Interest Payment, if any, shall be paid by
the Company and, if so, if it shall be paid in Cash or by delivery of shares of
Common Stock,

 

(3)          the place or places where such Securities are to be surrendered for
conversion and accrued and unpaid Make-Whole Interest Payment, if any, and

 

(4)          the Conversion Price then in effect.

 

(d)         In the event of an Automatic Conversion, the Company shall issue and
deliver a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion of the Securities and the Make-Whole Interest
Payment, if any, due on such Securities along with any Cash in respect of any
fractional shares of Common Stock otherwise issuable upon conversion or in the
event that the Company elects to pay Make-Whole Interest Payment, if any, in
Common Stock instead of Cash, for payment to the holder as promptly after the
Automatic Conversion Date, as practicable in accordance with the provisions of
this Article 4, but in no event later than the close of business of the next
succeeding third Business Day following such Automatic Conversion Date.

 

(e)          All Securities subject to the Automatic Conversion shall be
delivered to the Trustee to be cancelled at the direction of the Trustee, which
shall dispose of the same as provided in Section 2.8 hereof.

 

(f)            If any of the foregoing provisions or other provisions of
Section 4.13 are consistent with applicable law at the time of such Automatic
Conversion, such law shall govern.

 

Section 4.14.        Notification to Trustee.

 

If the Company is obligated to pay any Make-Whole Interest Payment upon
Automatic Conversion pursuant to Section 4.13(a), it shall deliver to the
Trustee a certificate setting forth (i) the amount of interest actually paid or
provided for by the Company with respect to the affected Securities prior to the
Automatic Conversion Date, and (ii) if such Make-Whole Interest Payment upon
Automatic Conversion is payable in Common Stock, the number of shares of Common
Stock which is equal to the Make-Whole Interest Payment, valued at 95% of the
average of the Closing Price for each of the five Trading Days immediately
preceding the second Trading Day prior to the Automatic Conversion Date.  Unless
and until the Trustee shall receive such certificate, it shall not be charged
with knowledge of the facts required by this Section 4.14 to be set forth
therein.  In no event will the Trustee be required to inquire into or verify the
information required to be set forth in such certificate, other than the amount
of interest actually paid by the Trustee as paying agent with respect to the
affected Securities.  The Trustee need not inquire into or confirm any amount of
interest provided for by the Company, unless such amount has actually been
delivered to the Trustee as paying agent and is being held by the Trustee as
paying agent pending distribution to the affected holders.

 

Section 4.15.        Unconditional Right of Holders to Convert.

 

Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to convert
its Security in accordance with this Article 4 and to bring an action for the
enforcement of any such right to convert, and such rights shall not be impaired
or affected without the consent of such Holder.

 

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Section 4.16.        Repayment to the Company.

 

To the extent that the aggregate amount of Cash deposited by the Company
pursuant to this Article 4 exceeds the aggregate payment thereon of the
Securities or portions thereof that the Company is obligated to purchase, then
the Trustee or a Paying Agent, as the case may be, shall promptly return any
such excess Cash to the Company.

 

ARTICLE 5

 

SUBSIDIARY GUARANTEE

 

Section 5.1.           Guarantee.

 

Subject to this Article 5, the Guarantor hereby, unconditionally guarantees to
each Holder of a Security authenticated and delivered by the Trustee, to each
holder of shares of Common Stock issued upon conversion of a Security or issued
pursuant to Article 3 and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company hereunder or thereunder, that:  (a)
the principal of, premium, if any, and interest (including Contingent Interest,
if any, and Special Interest, if any) on the Securities will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and premium, if any, and interest or
additional interest, if any, on the Securities or such shares, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder or under the Registration Rights Agreement will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Securities, any
such shares 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 stated maturity, by acceleration or otherwise.  Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, Guarantor shall be obligated to pay the same immediately. 
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.  For purposes of this Article 5, “Holder” shall be deemed to include
any holder of shares of Common Stock issued upon conversion of a Security or
issued pursuant to Article 3.

 

Subject to this Article 5, Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.  Notwithstanding the foregoing, Guarantor shall, with respect to any
claim, action or proceeding against Guarantor relating to this Indenture, the
Securities or Guarantor’s Subsidiary Guarantee, be entitled to assert a defense
of prior payment or performance by Guarantor of the obligations that are the
subject of such claim, action or proceeding.  Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Subsidiary Guarantee shall not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
the Registration Rights Agreement.  Nothing in the foregoing sentence shall
affect the obligations contained in Section 8.7 of this Indenture.

 

If any Holder or the Trustee is required by any court or otherwise to return to
the Company, Guarantor or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or Guarantor, any amount paid
by the Company or Guarantor either to the Trustee or to such

 

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Holder, then each Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.

 

Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.  Guarantor further agrees
that, as between Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 8 hereof for the purposes of the Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article 8
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by Guarantor for the purpose of the Subsidiary Guarantee.

 

The Subsidiary Guarantee shall be a senior unsecured obligation of Guarantor and
ranks equally in right of payment with all existing and future unsecured and
unsubordinated indebtedness of Guarantor senior to existing and future
subordinated indebtedness of Guarantor.

 

Section 5.2.           Limitation on Guarantor Liability.

 

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

 

Section 5.3.           Execution and Delivery of Subsidiary Guarantee.

 

To evidence its Subsidiary Guarantee set forth in this Article 5, Guarantor
hereby agrees that a notation of such Subsidiary Guarantee substantially in the
form included in Exhibit C shall be endorsed by an Officer of Guarantor on each
security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of Guarantor by one of its Officers.

 

Notwithstanding the foregoing, Guarantor hereby agrees that any failure by
Guarantor to endorse on each Security a notation of such Subsidiary Guarantee
shall not affect Guarantor’s obligations under this Article 5 or the validity of
Guarantor’s Subsidiary Guarantee.

 

If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee
shall nevertheless be valid.

 

The delivery of any Security by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Guarantors.

 

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ARTICLE 6

 

COVENANTS

 

Section 6.1.           Payment of Securities.

 

The Company shall promptly make all payments in respect of the Securities on the
dates and in the manner provided in the Securities and this Indenture.  An
installment of principal or interest or Special Interest, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the
Company) holds by 10:00 a.m., New York City time, on that date money, deposited
by the Company or an Affiliate thereof, sufficient to pay the installment.  The
Company shall, (in immediately available funds) to the fullest extent permitted
by law, pay interest on overdue principal (including premium, if any) and
overdue installments of interest at the rate borne by the Securities per annum.

 

Payment of the principal of (and premium, if any) and any interest on the
Securities shall be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York (which shall
initially be U.S. Bank Trust National Association, an Affiliate of the Trustee,
as agent of the Trustee) or at the Corporate Trust Office of the Trustee 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
$5,000,000 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 Company at least 10 Business Days prior to the payment date.

 

Section 6.2.           SEC Reports.

 

The Company shall file 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, and shall make such reports and other information and documents available
on its website to the extent required by law.

 

The Company shall annually provide the Trustee with copies of the Company’s
most-recent annual report to stockholders, promptly after such annual report is
mailed to the Company’s holders of its Common Stock.  Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

 

Section 6.3.           Compliance Certificates.

 

The Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending December 31,
2004), 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 6.3, 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 6.4.           Further Instruments and Acts.

 

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

 

Section 6.5.           Maintenance of Corporate Existence.

 

Subject to Article 7, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.

 

Section 6.6.           Rule 144A Information Requirement.

 

Within the period prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), 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 Transfer 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 or
such Common Stock 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.  Upon the request of any
Holder or any beneficial holder of the Securities or such Common Stock, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.

 

Section 6.7.           Stay, Extension and Usury Laws.

 

The Company covenants (to the extent that it may lawfully do so) that it 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 from paying all or any portion of the
principal of, premium, if any, or interest (including Contingent Interest, if
any, and Special 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 (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it 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 6.8.           Payment of Special Interest.

 

If Special Interest is payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee a certificate to that
effect stating (i) the amount of such Special Interest that is payable (ii) the
reason why such Special Interest is payable and (iii) the date on which such
Special Interest is payable.  Unless and until a Trust Officer of the Trustee
receives such a certificate, the Trustee may assume without inquiry that no such
Special Interest is payable.  If the Company has paid Special Interest directly
to the Persons entitled to it, the Company shall deliver to the Trustee a
certificate setting forth the particulars of such payment.

 

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Section 6.9.           Payment of Contingent Interest.

 

If Contingent Interest is payable pursuant to the terms of paragraph 1 of the
Security, the Company shall furnish to the Trustee a certificate to that effect
stating (i) the amount of such Contingent Interest per $1,000 principal amount
of the Securities that is payable, (ii) the facts and calculations supporting
the determination of such amount and (iii) the date on which such interest is
payable and pay the Contingent Interest, required by that paragraph.  Unless and
until a Trust Officer receives the notice required by such paragraph, the
Trustee may assume without inquiry that no Contingent Interest is payable.

 

ARTICLE 7

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 7.1.           Company and Guarantor May Consolidate, Etc, Only On
Certain Terms.

 

The Company and/or Guarantor shall not consolidate with or merge into any other
Person (in a transaction in which the Company is not the surviving corporation)
or convey, transfer, lease or otherwise dispose of all or substantially all of
its properties and assets to any Person, whether in a single transaction or
series of related transactions, unless:

 

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

 

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

 

(c)          the Company shall have delivered to the Trustee an Officers’
Certificate and, if requested by the Trustee, an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer, sale, lease or
other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article 7
and that all conditions precedent herein provided for relating to such
transaction have been satisfied.

 

Section 7.2.           Successor Substituted.

 

Upon any consolidation of the Company or Guarantor with, or merger of the
Company or Guarantor into, any other Person or any conveyance, transfer or lease
of all or substantially all of the properties and assets of the Company or
Guarantor in accordance with Section 7.1, the successor Person formed by such
consolidation or into which the Company or 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 Guarantor under this
Indenture with the same effect as if such successor Person had been named as the
Company or Guarantor herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

 

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ARTICLE 8

 

DEFAULT AND REMEDIES

 

Section 8.1.           Events of Default.

 

An “Event of Default” shall occur if:

 

(a)          the Company defaults in the payment of the principal amount (or
premium, if any), with respect to the Securities, when the same become due and
payable, whether at maturity, upon redemption, on the Purchase Date or
Repurchase Date;

 

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

 

(c)          the Company fails to satisfy its conversion obligation with respect
to any portion of the principal amount of any Security following the exercise by
a Holder of the right to convert such Security into shares of Common Stock (or
Cash or a combination of shares of Common Stock and Cash, if the Company so
elects) pursuant to and in accordance with Article 4;

 

(d)         the Company defaults in its obligation to pay the Purchase Price or
the Repurchase Price, as applicable, with respect to any Security, or any
portion thereof, upon the exercise by a Holder of such Holder’s right to require
the Company to purchase or repurchase such Securities pursuant to and in
accordance with Section 3.2 or 3.3, as applicable;

 

(e)          the Company fails to provide a timely Purchase Notice as provided
in Section 3.2 of this Indenture or provide a timely Repurchase Event Company
Notice as provided under Section 3.3 of this Indenture.

 

(f)            the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in
clauses (a) through (e) above) and such failure continues for 30 days after
receipt by the Company of a Notice of Default (defined below);

 

(g)         the Company fails or any Subsidiary fails to make any payment at
maturity on any indebtedness for money borrowed, including any applicable grace
periods, in an amount in excess of $5.0 million in the aggregate for all such
indebtedness for money borrowed and such amount has not been paid or discharged
within 30 days after receipt by the Company of a Notice of Default;

 

(h)         a default by the Company or any Subsidiary that results in the
acceleration of maturity of any indebtedness for money borrowed of the Company
or any Subsidiary, at any one time, in an amount in excess of $5.0 million
unless the acceleration is cured, waived or rescinded within 30 days after
receipt by the Company of a Notice of Default;

 

(i)             the Subsidiary Guarantee of Guarantor shall be held in any
judicial proceedings 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
Guarantor’s behalf, shall deny or disaffirm its obligations under the Subsidiary
Guarantee;

 

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(j)             the Company or any Subsidiary fails to pay final judgments, the
uninsured portion of which aggregates in excess of $5.0 million, if such
judgments are not paid or otherwise discharged within 30 days;

 

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

 

(1)          commences a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

A default under clause (f) above is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding notify the Company and the Trustee, in
writing of the default, and the Company does not cure the default within 30 days
after receipt of such notice.  The notice given pursuant to this Section 8.1
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 8.1 is cured, it
ceases.

 

The Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer at the Corporate
Trust Office of the Trustee by the Company, a Paying Agent, any Holder or any
agent of any Holder.

 

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Section 8.2.           Acceleration.

 

If an Event of Default (other than an Event of Default specified in clause (k)
or (l) of Section 8.1 that relates solely to the Company and not a Significant
Subsidiary or group of Subsidiaries that in the aggregate would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee may, by notice to
the Company, 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 all unpaid principal to the date of acceleration on the Securities then
outstanding (if not then due and payable) to be due and payable upon any such
declaration, and the same shall become and be immediately due and payable.  If
an Event of Default specified in clause (k) or (l) of Section 8.1 occurs that
relates to the Company and not a Significant Subsidiary or group of Subsidiaries
that would constitute a Significant Subsidiary, all unpaid principal of the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.  The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind or annul such
acceleration and its consequences if (a) all existing Events of Default, other
than the nonpayment of the principal of the Securities which has 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, order or decree of a court of competent jurisdiction; and (d) all
payments due to the Trustee and any predecessor Trustee under Section 9.7 have
been made.  No such rescission shall affect any subsequent default or impair any
right consequent thereto.

 

Section 8.3.           Other Remedies.

 

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

 

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

 

Section 8.4.           Waiver of Defaults and Events of Default.

 

Subject to Sections 8.7 and 11.2, 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 a
default or Event of Default (i) in the payment of the principal of, premium, if
any, or interest (including Contingent Interest, if any, or Special Interest, if
any) on any Security, or the payment of the Redemption Price, the Repurchase
Price, or Repurchase Price, (ii) arising from the Company’s failure to comply
with the conversion procedures provided in Article 4 of this Indenture, or (iii)
in respect of any provision of this Indenture which, under Section 11.2, 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.

 

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Section 8.5.           Waiver of Compliance.

 

Except as otherwise provided in this Indenture, the Holders of a majority in
aggregate principal amount of the Securities then outstanding, by notice to the
Trustee, may waive compliance with any provision of this Indenture, or of the
Securities (as described in this Indenture).

 

Section 8.6.           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 indemnity,
reasonably satisfactory to it, against the costs, expenses and liabilities the
Trustee may incur to comply with such request or demand; provided, however, that
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

 

Section 8.7.           Limitations on Suits.

 

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

 

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

 

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

 

(c)          the Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to it against any loss, liability or expense; and

 

(d)         the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity and 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.

 

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

 

Section 8.8.           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 of and interest on the
Security, on or after the respective due dates expressed in the Security and
this Indenture, 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
dates or the right to convert, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.

 

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Section 8.9.           Collection Suit by Trustee.

 

If an Event of Default in the payment of principal or interest specified in
clause (a) or (b)of Section 8.1 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 of principal
and accrued interest remaining unpaid, together with, to the extent that payment
of such interest is lawful, interest on overdue principal and on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

Section 8.10.        Trustee May File Proofs of Claim.

 

The Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
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 Custodian 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 9.7, 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 8.11.        Priorities.

 

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

 

(a)          First, to the Trustee for amounts due under Section 9.7;

 

(b)         Second, to Holders for amounts due and unpaid on the Securities for
principal and interest (including Special Interest, if any), ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal and interest (including Special Interest, if any),
respectively; and

 

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

 

The Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 8.11.

 

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Section 8.12.        Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. 
This Section 8.12 does not apply to a suit made by the Trustee, a suit by a
Holder pursuant to Section 8.7, or a suit by Holders of more than 10% in
aggregate principal amount of the Securities then outstanding.

 

ARTICLE 9

 

TRUSTEE

 

Section 9.1.           Duties of Trustee.

 

(a)          If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in 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:

 

(1)          the Trustee need perform only those duties as are specifically set
forth in this Indenture and no others; and

 

(2)          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 to the requirements of this Indenture.

 

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

 

(1)          this paragraph does not limit the effect of subsection (b) of this
Section 9.1;

 

(2)          the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
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 a direction received by it
pursuant to Section 8.6.

 

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

 

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

 

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

 

Section 9.2.           Rights of Trustee.

 

Subject to Section 9.1:

 

(a)          The Trustee may rely conclusively on 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.

 

(b)         Before the Trustee acts or refrains from acting, it may require an
Officers’ Certificate or an Opinion of Counsel, which shall conform to
Section 13.4(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.

 

(c)          The Trustee may act through its agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

 

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

 

(e)          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.

 

(f)            The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request 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.

 

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

 

(h)         The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust 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.

 

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

 

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Section 9.3.           Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or 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 9.4.           Trustee’s Disclaimer.

 

The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company’s use
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 9.5.           Notice of Default or Events of Default.

 

If a default or an Event of Default occurs and is continuing and if the Trustee
has received notice thereof in accordance with this Indenture, the Trustee shall
mail to each Securityholder notice of the default or Event of Default within 30
days after it occurs.  However, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of Securityholders, except in the case of
a default or an Event of Default in payment of the principal of or interest on
any Security.

 

Section 9.6.           Reports by Trustee to Holders.

 

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

 

A copy of each report at the time of its mailing to Securityholders shall be
mailed to the Company and 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 9.7.           Compensation and Indemnity.

 

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.

 

The Company shall indemnify the Trustee or any predecessor Trustee (which for
purposes of this Section 9.7 shall include its officers, directors, employees
and agents) for, and hold it harmless against, any and all loss, liability or
expense including taxes (other than taxes based upon, measured by or determined
by the income of the Trustee), (including reasonable legal fees and expenses)
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
itself against any

 

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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 without its written consent, which shall
not be unreasonably withheld.

 

The Company need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it resulting from its gross negligence
or bad faith.

 

To secure the Company’s payment obligations in this Section 9.7, 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, except such money or
property held in trust to pay the principal of and interest on the Securities. 
The obligations of the Company under this Section 9.7 shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of
the Trustee.

 

When the Trustee incurs expenses or renders services after an Event of Default
specified in clause (k) or (l) of Section 8.1 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 9.8.           Replacement of Trustee.

 

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 may, with the Company’s written consent,
appoint a successor Trustee.  The Company may remove the Trustee if:

 

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

 

(b)         the Trustee is adjudged a bankrupt or an insolvent;

 

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

 

(d)         the Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the 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.

 

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 for the appointment of a successor Trustee at
the expense of the Company.

 

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.

 

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

 

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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.

 

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

 

Notwithstanding replacement of the Trustee pursuant to this Section 9.8, the
Company’s obligations under Section 9.7 shall continue for the benefit of the
retiring Trustee.

 

Section 9.9.           Successor Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust assets (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 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.  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 10.1.        Satisfaction and Discharge of Indenture.

 

This Indenture shall cease to be of further 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

 

(a)          either

 

(1)          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 2.7 and (ii) Securities for whose
payment money has theretofore been deposited in trust and thereafter repaid to
the Company as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or

 

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

 

(i)                                     have become due and payable, or

 

(ii)                                  will become due and payable at the Final
Maturity Date, Purchase Date or Repurchase Date, or

 

(iii)                               are to be called for redemption under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company,

 

and the Company, in the case of clause (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably 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 Cash and/or shares of Common Stock (as permitted under the
Indenture) in an amount sufficient to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for cancellation,
for principal and interest (including Special Interest, if any) to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Final Maturity Date, Redemption Date, Repurchase Date or Repurchase Event
Repurchase Date, as the case may be; provided, however, that there shall not
exist, on the date of such deposit, a Default or Event of Default; provided,
further, that such deposit shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or to which the Company is bound;

 

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

 

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

 

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 9.7 shall survive and,
if money shall have been deposited with the Trustee pursuant to subclause (2) of
clause (a) of this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7,
2.12, 3.2, 3.3, Article 4 and this Article 10, shall survive until the
Securities have been paid in full.

 

Section 10.2.        Application of Trust Money.

 

Subject to the provisions of Section 10.3, the Trustee or a Paying Agent shall
hold in trust, for the benefit of the Holders, all money deposited with it
pursuant to Section 10.1 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 10.3.        Repayment to Company.

 

The Trustee and each Paying Agent shall promptly pay to the Company upon request
any excess money (i) deposited with them pursuant to Section 10.1 and (ii) held
by them at any time.

 

The Trustee and each Paying Agent shall 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

 

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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, either publish in a newspaper of general circulation in the City of New
York, or 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, and the Trustee and each Paying Agent shall be relieved of all liability
with respect to such money.

 

Section 10.4.        Reinstatement.

 

If the Trustee or any Paying Agent is unable to apply any money in accordance
with Section 10.2 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 10.1 until such time as the Trustee or
such Paying Agent is permitted to apply all such money in accordance with
Section 10.2; 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 11.1.                         Without Consent of Holders.

 

The Company, with the Trustee’s consent, may amend or supplement this Indenture
or the Securities without notice to or consent of any Securityholder to:

 

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

 

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

 

(c)          provide for the assumption of the Company’s obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer, sale, lease or other disposition of all or substantially all of the
Company’s property or assets pursuant to Article 7;

 

(d)         adjust the right to convert the Securities upon any of the events
set forth in Section 4.4;

 

(e)          increase the Conversion Rate or make other adjustments to the
Conversion Rate, in accordance with this Indenture;

 

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

 

(g)         secure the Securities;

 

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

 

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(i)             make any changes or modifications to this Indenture necessary in
connection with the registration of the Securities under the Securities Act as
contemplated in the Registration Rights Agreement;

 

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

 

Section 11.2.        With Consent of Holders.

 

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.  The Holders of
at least a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities without notice to any
Securityholder.  However, notwithstanding the foregoing but subject to
Section 11.4, without the written consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 8.4, may
not:

 

(a)          change the stated maturity of the principal of, any premium due on
or interest on (including Contingent Interest) or Special Interest on, any
Security;

 

(b)         reduce the principal amount of, Redemption Price, Repurchase Price,
Repurchase Price or any premium or interest on (including Contingent Interest)
or Special Interest on, any Security;

 

(c)          alter the manner of calculation or rate of accrual of interest
(including Contingent Interest), Special Interest, Redemption Price, Repurchase
Price, Repurchase Price on any Security;

 

(d)         change the place or currency of payment of principal of, or any
premium or interest on (including Contingent Interest and Special Interest), any
Security;

 

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

 

(f)            adversely affect the right of Holders to convert Securities other
than as provided in or under Article 4 of this Indenture;

 

(g)         adversely affect the right of Holders to require the Company to
purchase or repurchase the Securities as provided in Article 3 of this
Indenture;

 

(h)         reduce the percentage of the aggregate principal amount of the
outstanding Securities whose Holders must consent to a modification or amendment
of this Indenture or the Securities;

 

(i)             reduce the percentage of the aggregate principal amount of the
outstanding Securities necessary for the waiver of compliance with any provision
of this Indenture or of the Securities or the waiver of any default or Event of
Default; and

 

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(j)             modify any of the provisions of this Section 11.2 or
Section 8.4, except to increase any such percentage or to provide that certain
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Security affected thereby.

 

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

 

After an amendment, supplement or waiver under this Section 11.2 becomes
effective, the Company shall 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.

 

To the extent that the Company or any of the Subsidiaries hold any Securities,
such Securities shall be disregarded for purposes of voting in connection with
any notice, waiver, consent or direction requiring the vote or concurrence of
Securityholders.

 

Section 11.3.        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 11.4.        Revocation and Effect of Consents.

 

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.

 

After an amendment, supplement or waiver becomes effective, it shall bind every
Holder, unless it makes a change described in any of clauses (a) through (j) of
Section 11.2.  In that case the amendment, supplement or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security.

 

Section 11.5.        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 11.6.        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 entitled

 

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to receive and, subject to Section 9.1, shall be fully protected in relying
upon, an Opinion of Counsel stating that such amendment or supplemental
indenture is authorized or permitted by this Indenture.  The Company may not
sign an amendment or supplement indenture until the Board of Directors approves
it.

 

Section 11.7.        Effect of Supplemental Indentures.

 

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

 

ARTICLE 12

 

TAX TREATMENT

 

Section 12.1.        Tax Treatment.

 

(a)          The parties hereto hereby agree, and each Holder and any beneficial
holder of a Security by its purchase of a Security hereby agrees (in the absence
of administrative pronouncement or judicial ruling to the contrary):

 

(1)          to treat the Securities as indebtedness of the Company for all
United States federal income tax purposes;

 

(2)          to treat the Securities as debt instruments that are subject to
Treasury Regulation section 1.1275-4(b); and

 

(3)          to treat the delivery of Common Stock or Cash (including Cash
delivered in lieu of a fractional share) to a Holder of a Security upon
conversion of such Security, or upon a purchase of such Security by the Company
at the option of the Holder of a Security where the Company makes a payment in
Cash (including Cash paid in lieu of a fractional share), as a contingent
payment (in an amount equal to the sum of the fair market value of such Common
Stock and any Cash received (as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive and described
in a Board Resolution)) under Treasury Regulation section 1.1275-4(b).

 

Section 12.2.        Comparable Yield and Projected Payment Schedule.

 

(a)          Solely for purposes of applying Treasury Regulation
section 1.1275-4 to the Securities:

 

(1)          for United States federal income tax purposes, the Company shall
accrue interest with respect to outstanding Securities as original issue
discount according to the “noncontingent bond method,” as set forth in Treasury
Regulation section 1.1275-4(b), using a comparable yield of 7.38%, compounded
semiannually, and the projected payment schedule as determined by the Company;

 

(2)          the Company shall file with the Trustee promptly following the end
of each calendar year (A) a written notice specifying the amount of original
issue discount for United States federal income tax purposes accrued on
outstanding Securities as of the end of such year and (B) such other specific
information relating to such original issue discount that the Company determines
to be relevant under the Internal Revenue Code of 1986, as amended from time to

 

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time, including the amount of any adjustment made under the noncontingent bond
method to account for the amount of any difference between the amount of an
actual payment and the amount of a projected payment; and

 

(3)                                  the Company acknowledges and agrees, and
each Holder and any beneficial holder of a Security, by its purchase of a
Security shall be deemed to acknowledge and agree, that (A) the projected
payment schedule is determined on the basis of an assumption of linear growth of
stock price, (B) the comparable yield and the projected payment schedule are not
determined for any purpose other than for the purpose of applying Treasury
Regulation section 1.1275-4(b)(4) to the Security, (C) the comparable yield and
the projected payment schedule do not constitute a projection or representation
regarding the actual amounts payable on the Securities, and (D) the Company’s
application of Treasury Regulation section 1.1275-4(b), including the Company’s
determination of the comparable yield and the projected payment schedule shall
be binding on each Holder and any beneficial holder of a Security.

 

(b)                                 Holders that wish to obtain the projected
payment schedule may do so by contacting the Company (to the attention of the
Treasurer) as set forth in Section 13.2 below.

 

ARTICLE 13

 

MISCELLANEOUS

 

Section 13.1.        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 13.2.        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 or the Guarantor, to:

 

United Industrial Corporation

124 Industry Lane

Hunt Valley, Maryland 21030

Attention:  General Counsel

Facsimile No.:  (410) 628-6705

 

with a copy (for informational purposes only) to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention:  Julie M. Allen

Telecopy No.: (212) 969-2900

 

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if to the Trustee, to:

 

U.S. Bank National Association

60 Livingston Avenue

St. Paul, Minnesota 55107-2292

Attention:  Corporate Trust Services

Internal mail EP-MN-WS3C

(United Industrial Corporation - 3.75% Convertible

Senior Notes due 2024)

Facsimile No.:  (651) 495-8097

 

Such notices or communications shall be effective when received.

 

The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Holder 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.

 

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

 

Section 13.3.        Communications by Holders with Other Holders.

 

Holders may communicate pursuant to TIA Section 312(b) with other Holders 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 13.4.        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

 

(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;

 

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(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 13.5.        Record Date for Vote or Consent of Securityholders.

 

The Company (or, in the event deposits have been made pursuant to Section 10.1,
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 11.4, 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 13.6.        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 13.7.        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 and the state in which the
Corporate Trust Office is located are not required to be open.  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.

 

Section 13.8.        Governing Law.

 

This Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.

 

Section 13.9.        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 13.10.      No Recourse Against Others.

 

All liability described in paragraph 23 of the Securities of any director,
officer, employee or shareholder, as such, of the Company is waived and
released.

 

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Section 13.11.      Successors.

 

All agreements of the Company in this Indenture and the Securities shall bind
its successor.  All agreements of the Trustee in this Indenture shall bind its
successor.

 

Section 13.12.      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 13.13.      Separability.

 

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

 

Section 13.14.      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.

 

[SIGNATURE PAGE FOLLOWS]

 

71

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

 

 

United Industrial Corporation,
a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ James H. Perry

 

 

Name: James H. Perry

 

 

Title: Vice President, CFO & Treasurer

 

 

 

 

U.S. Bank National Association, as Trustee

 

 

 

 

 

 

 

By:

/s/ Frank Leslie

 

 

Name: Frank Leslie

 

 

Title:

 

 

 

 

AAI Corporation, a Maryland corporation,
as Guarantor

 

 

 

 

 

 

 

By:

/s/ James H. Perry

 

Name: James H. Perry

 

Title:  Vice President, CFO & Treasurer

 

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

Schedule A

 

MAKE-WHOLE PREMIUM

 

(% of the principal amount)

 

 

 

effective date

 

Stock Price

 

September 15,
2004

 

September 15,
2005

 

September 15,
2006

 

September 15,
2007

 

September 15,
2008

 

September 15,
2009

 

$

28.64

 

0.0

%

0.0

%

0.0

%

0.0

%

0.0

%

0.0

%

$

35.00

 

9.8

%

7.9

%

6.1

%

4.2

%

2.0

%

0.0

%

$

40.00

 

17.4

%

15.3

%

13.1

%

10.6

%

7.3

%

0.0

%

$

45.00

 

15.1

%

12.8

%

10.5

%

7.7

%

4.1

%

0.0

%

$

50.00

 

13.3

%

11.1

%

8.7

%

5.9

%

2.5

%

0.0

%

$

55.00

 

12.0

%

9.8

%

7.4

%

4.8

%

1.8

%

0.0

%

$

60.00

 

11.0

%

8.8

%

6.6

%

4.2

%

1.5

%

0.0

%

$

65.00

 

10.2

%

8.2

%

6.0

%

3.7

%

1.4

%

0.0

%

$

70.00

 

9.6

%

7.6

%

5.6

%

3.5

%

1.3

%

0.0

%

$

75.00

 

9.1

%

7.2

%

5.3

%

3.3

%

1.3

%

0.0

%

$

80.00

 

8.7

%

6.9

%

5.0

%

3.2

%

1.2

%

0.0

%

$

85.00

 

8.3

%

6.6

%

4.9

%

3.1

%

1.2

%

0.0

%

$

90.00

 

8.0

%

6.4

%

4.7

%

3.0

%

1.2

%

0.0

%

$

95.00

 

7.7

%

6.1

%

4.6

%

2.9

%

1.2

%

0.0

%

$

100.00

 

7.5

%

6.0

%

4.4

%

2.9

%

1.2

%

0.0

%

$

105.00

 

7.2

%

5.8

%

4.3

%

2.8

%

1.1

%

0.0

%

$

110.00

 

7.0

%

5.6

%

4.2

%

2.7

%

1.1

%

0.0

%

$

115.00

 

6.8

%

5.5

%

4.1

%

2.7

%

1.1

%

0.0

%

$

120.00

 

6.6

%

5.3

%

4.0

%

2.6

%

1.1

%

0.0

%

 

1

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

 

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 (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND THIS SECURITY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT
OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.(2)

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN

 

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

(1)                                  These paragraphs should be included only if
the Security is a Global Security.

(2)                                  These paragraphs to be included only if the
Security is a Transfer Restricted Security.

 

A-1

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

 

ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

 

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.

 

THIS SECURITY IS SUBJECT TO REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT
INSTRUMENTS.  UNDER SUCH REGULATIONS, THE COMPARABLE YIELD OF THIS SECURITY IS
7.38%.  THE ISSUER AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN
THE SECURITIES EACH HOLDER OF SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THE SECURITIES AS
INDEBTEDNESS THAT IS SUBJECT TO TREAS.  REG. SEC. 1.1275-4 (THE “CONTINGENT
PAYMENT REGULATIONS”) AND, FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS,
TO TREAT THE FAIR MARKET VALUE OF ANY STOCK BENEFICIALLY RECEIVED BY A
BENEFICIAL HOLDER UPON ANY CONVERSION OF THE SECURITIES AS A CONTINGENT PAYMENT
AND (2) TO BE BOUND BY THE ISSUER’S DETERMINATION OF THE “COMPARABLE YIELD” AND
“PROJECTED PAYMENT SCHEDULE,” WITHIN THE MEANING OF THE CONTINGENT PAYMENT
REGULATIONS, WITH RESPECT TO THE SECURITIES.  THE ISSUER AGREES TO PROVIDE
PROMPTLY TO HOLDER OF SECURITIES, UPON WRITTEN REQUEST, THE ISSUE DATE, YIELD TO
MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE.  ANY SUCH WRITTEN
REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS:  UNITED
INDUSTRIAL CORPORATION, 124 INDUSTRY LANE, HUNT VALLEY, MARYLAND 21030, ATT: 
GENERAL COUNSEL.

 

A-2

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

 

UNITED INDUSTRIAL CORPORATION

 

CUSIP No.:  91067AA4

 

3.75% CONVERTIBLE SENIOR SECURITIES DUE 2024

 

United Industrial Corporation, a Delaware corporation (the “Company,” which term
shall include any successor corporation under the Indenture referred to on the
reverse hereof), promises to pay to Cede & Co., or registered assigns, the
principal sum of One Hundred Twenty Million Dollars ($120,000,000) on
September 15, 2024, or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Securities on the other side of this Security to
reflect exchanges, redemptions, purchases, repurchases and conversions.

 

Interest Payment Dates:  March 15 and September 15, commencing March 15, 2005

 

Record Dates:  March 1 and September 1

 

This Security is convertible as specified on the other side of this Security. 
Additional provisions of this Security are set forth on the other side of this
Security.

 

SIGNATURE PAGE FOLLOWS

 

A-3

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

 

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

 

 

UNITED INDUSTRIAL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Attest:

 

 

 

Name:

 

Title:

 

Dated:

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities referred to

in the within-mentioned Indenture.

 

U.S. Bank National Association,

as Trustee

 

 

 

 

Authorized Signatory

 

A-4

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

 

[FORM OF REVERSE SIDE OF SECURITY]

 

UNITED INDUSTRIAL CORPORATION

 

3.75% CONVERTIBLE SENIOR SECURITIES DUE 2024

 

1.                                       Interest

 

United Industrial Corporation, 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
rate of 3.75% per annum.  The Company shall pay interest semiannually on
March 15 and September 15 of each year (each, an “Interest Payment Date”),
commencing on March 15, 2005.  Interest on the Securities shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from September 15, 2004, to, but excluding, the next Interest Payment
Date, or the Final Maturity Date, as the case may be; provided, however, that if
there is not an existing default in the payment of interest and if this Security
is authenticated between a Record Date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date.  Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

 

In addition, the Company shall pay contingent interest (“Contingent Interest”)
to the Holders during any six-month period (a “Contingent Interest Period”) from
March 15 to September 14 and from September 15 to March 14, commencing with the
six-month period beginning September 15, 2009, if the average Trading Price of a
Security for the five Trading Day period ending on the third Trading Day
immediately preceding the first day of the relevant Contingent Interest Period
equals $1,200 (120% of the principal amount of a Security) or more.

 

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

 

The amount of Contingent Interest payable per $1,000 principal amount of
Securities in respect of any Contingent Interest Period shall equal 0.23% of the
average Trading Price of such Security for the five Trading Day period ending on
and including the third Trading Day immediately preceding the first day of the
relevant six-month period.  Contingent Interest, if any, will accrue and be
payable to Holders in the same manner as regular Cash interest.  Regular Cash
interest will continue to accrue at the rate of 3.75% per year on the principal
amount of the Securities whether or not Contingent Interest is paid.

 

If this Security is redeemed pursuant to Section 7 of this Security or the
Holder elects to require the Company to repurchase this Security pursuant to
Section 9 of this Security, on a date that is after the Regular Record Date and
prior to the corresponding Interest Payment Date, interest (including Contingent
Interest, if any, and Special Interest, if any) accrued and unpaid hereon to,
but not including, the applicable Redemption Date, Repurchase Date or Repurchase
Event Repurchase Date will be paid to the same Holder to whom the Company pays
the principal of such Security regardless of whether such Holder was the
registered Holder on the Regular Record Date immediately preceding the
applicable Redemption Date, Repurchase Date or Repurchase Event Repurchase Date.

 

Interest (including Contingent Interest, if any, and Special Interest, if any)
on Securities converted after the close of business on a Regular Record Date but
prior to the opening of business on the

 

A-5

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

 

corresponding Interest Payment Date will be paid to the Holder of the Securities
on March 1 or September 1 (whether or not a Business Day), as the case may be,
next preceding the corresponding Interest Payment Date (a “Regular Record Date”)
but, upon conversion, the Holder must pay the Company the interest (including
Contingent Interest, if any, and Special Interest, if any) which has accrued and
will be paid on such Interest Payment Date.  No such payment need be made with
respect to Securities which will be converted after a Regular Record Date and
prior to the corresponding Interest Payment Date after being called for
redemption by the Company.

 

Any reference herein to interest accrued or payable as of any date shall include
Contingent Interest and any Special Interest accrued or payable on such date as
provided in Section 3 hereof.

 

2.                                       Maturity

 

The Securities will mature on September 15, 2024.

 

3.                                       Registration Rights Agreement

 

The holder of this Security is entitled to the benefits of a Registration Rights
Agreement, dated as of September 15, 2004, among the Company and the Initial
Purchasers (the “Registration Rights Agreement”).  Pursuant to the Registration
Rights Agreement the Company has agreed for the benefit of the Holders of the
Securities, that (i) it will, at its cost, within 90 days after the closing of
the sale of the Securities (the “Closing”), file a shelf registration statement
(the “Shelf Registration Statement”) with the Securities and Exchange Commission
(the “Commission”) with respect to resales of the Securities and the Common
Stock issuable upon conversion thereof, (ii) it will use its reasonable best
efforts to cause such Shelf Registration Statement to be declared effective
within 210 days after the Closing, and (iii) it will use its reasonable best
efforts to keep such Shelf Registration Statement continuously effective under
the Securities Act of 1933, as amended (the “Securities Act”), subject to
certain exceptions specified in the Registration Rights Agreement, until the
earliest of (A) the date on which there are no outstanding Registrable
Securities (as defined in the Registration Rights Agreement), (B) the first date
on which such Registrable Securities covered by the Shelf Registration Statement
have been sold pursuant thereto, (C) the date on which all Registrable
Securities held by non-affiliates are eligible to be sold pursuant to Rule
144(k) under the Securities Act, and (D) the second anniversary of the date of
the Closing.  As set forth in the Registration Rights Agreement, the Company
will be permitted to suspend use of the prospectus that is part of the Shelf
Registration Statement during certain periods of time and in certain
circumstances relating to pending corporate developments and public filings with
the SEC and similar events.  If (a) the Company fails to file the Shelf
Registration Statement required by the Registration Rights Agreement on or
before the date specified above for such filing, (b) such Shelf Registration
Statement is not declared effective by the Commission on or prior to the date
specified above for such effectiveness, (c) the Company fails, with respect to a
Holder that supplies it with the questionnaire described in the Registration
Rights Agreement, after the effective date of the Shelf Registration Statement,
to supplement or amend the Shelf Registration Statement, or filed a new
registration statement, in accordance with the terms of the Registration Rights
Agreement, so that such Holder may be added as a selling securityholder, (d) the
Shelf Registration Statement is declared effective but thereafter ceases to be
effective or useable in connection with resales of Transfer Restricted
Securities (as defined in the Registration Rights Agreement) during the periods
specified in the Registration Rights Agreement or (e) the Company fails to name
as a selling securityholder, either in the Shelf Registration Statement or any
amendment thereto, at the time it becomes effective under the Securities Act, or
in any prospectus relating to the Shelf Registration Statement, at the time the
Company files the prospectus or, if later, the time the related Shelf
Registration Statement or amendment becomes effective under the Securities Act,
any Holder that is entitled to be so named as a selling securityholder (each
such event referred to in clauses (a) through (e) above a “Registration
Default”), then the Company will pay Special Interest to each Holder of

 

A-6

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

 

Transfer Restricted Securities, with respect to the first 90-day period
immediately following the occurrence of such Registration Default in an amount
equal to an increase in the annual interest rate on the Securities of 0.25%
(“Special Interest”) and with respect to any period thereafter an amount equal
to an annual interest rate of 0.50%.  If a Holder of Securities converts some or
all of its Securities into Common Stock during a period when a Registration
Default exists with respect to the Common Stock, or if a Registration Default
occurs following such conversion, then such Holder will not be entitled to
receive additional interest on such Common Stock.  All accrued Special Interest
shall be paid by the Company on each Interest Payment Date for which Special
Interest is owed to the holders of Global Securities by wire transfer of
immediately available funds or by federal funds check and to holders of
certificated Securities registered as such as of the preceding Record Date by
mailing checks to their registered addresses.  If the Company redeems a
Security, purchases a Security pursuant to a Purchase Notice or a Repurchase
Event Company Notice, and the Redemption Date, Purchase Date or Repurchase Date,
as the case may be, is after the close of business on the preceding Record Date
and before the related Interest Payment Date, the Company will then pay the
Special Interest to the Holder that submitted the Security triggering such
Redemption Date, Repurchase Date or Repurchase Date.  Following the cure of all
Registration Defaults, the application of Special Interest will cease.

 

4.                                       Method of Payment

 

Except as provided in the Indenture (as defined below), the Company will pay
interest (including Contingent Interest, if any, and Special Interest, if any)
on the Securities to the persons who are Holders of record of Securities at the
close of business on the Regular Record Date set forth on the face of this
Security next preceding the applicable interest payment date.  Holders must
surrender Securities to a Paying Agent to collect the principal amount,
Redemption Price, Purchase Price or Repurchase Price of the Securities, plus, if
applicable, accrued and unpaid interest (including Contingent Interest and
Special Interest), if any, or any Make-Whole Interest Payment or Repurchase
Event Make-Whole Premium, if applicable, payable as herein provided upon
Automatic Conversion, Redemption, Repurchase at Holder’s Option or Repurchase
Upon Repurchase Event, as the case may be.  The Company will pay, in money of
the United States that at the time of payment is legal tender for payment of
public and private debts, all amounts due in Cash with respect to the
Securities, which amounts shall be paid (A) in the case this Security is in
global form, by wire transfer of immediately available funds to the account
specified by the Holder hereof and (B) in the case this Security is held in
other than global form, by wire transfer of immediately available funds to the
account specified by the Holder hereof or, if no such account is specified, by
mailing a check to such Holder’s address shown in the register of the
Registrar.  Any payments to be made in shares of Common Stock shall be made in
accordance with the terms of the Indenture.

 

5.                                       Paying Agent, Registrar, Bid
Solicitation Agent and Conversion Agent

 

Initially, U.S. Bank National Association (the “Trustee,” which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar, Bid Solicitation Agent and Conversion Agent. 
The Company may change any Paying Agent, Registrar, Bid Solicitation Agent 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.

 

6.                                       Indenture, Limitations

 

This Security is one of a duly authorized issue of Securities of the Company
designated as its 3.75% Convertible Senior Securities due 2024 (the
“Securities”), issued under an Indenture dated as of September 15, 2004
(together with any supplemental indentures thereto, the “Indenture”), between
the Company, the Subsidiary Guarantor and the Trustee.  The terms of this
Security include those stated in

 

A-7

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

 

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.  The
Securities are senior unsecured obligations of the Company limited to
$100,000,000 aggregate principal amount (or $120,000,000 if the option to
purchase additional Securities is exercised in full by the Initial Purchasers). 
The Indenture does not limit other debt of the Company, secured or unsecured.

 

7.                                       Optional Redemption

 

The Securities are subject to redemption, at any time on or after September 15,
2009, as a whole or from time to time in part, at the election of the Company. 
The Redemption Price, payable in Cash, is 100% of the principal amount together
with accrued and unpaid interest (including Contingent Interest, if any and
Special Interest, if any), up to but not including the Redemption Date;
provided, that if the Redemption Date falls after a Regular Record Date and on
or before an Interest Payment Date, then the interest (including Contingent
Interest, if any and Special Interest, if any), will be payable to the Holders
in whose names the Securities are registered at the close of business on the
relevant Regular Record Date and the Redemption Price shall not include such
interest payment.

 

No sinking fund is provided for the Securities.

 

8.                                       Notice of Redemption

 

Notice of redemption will be mailed by first-class mail at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at its registered address.  Securities in denominations larger than
$1,000 may be redeemed in part, but only in whole multiples of $1,000.  On and
after the Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price plus accrued interest (including
Contingent Interest, if any and Special Interest, if any), accrued to, but
excluding, the Redemption Date, interest (including Contingent Interest, if any
and Special Interest, if any), shall cease to accrue on Securities or portions
of them called for redemption.

 

9.                                       Purchase of Securities at Option of
Holder

 

Subject to the terms and conditions of the Indenture, Securities shall be
purchased by the Company, at the option of the Holder thereof, on September 15,
2009, September 15, 2014 and September 15, 2019 (each, a “Purchase Date”), in
integral multiples of $1,000 at a purchase price equal to 100% of the principal
amount of those Securities plus accrued and unpaid interest (including
Contingent Interest, if any and Special Interest, if any), to, but not
including, such Purchase Date (the “Purchase Price”), payable in Cash, shares of
Common Stock or a combination thereof (upon the Company’s satisfaction of
certain conditions) at the Company’s election.

 

The Purchase Price may be paid in Cash, shares of Common Stock, or a combination
thereof.  If the Company elects to pay the Purchase Price, in whole or in part,
in shares of Common Stock, the number of shares of Common Stock to be delivered
by the Company will be equal to the portion of the Purchase Price to be paid in
shares of Common Stock divided by 95% of the Purchase Market Price of such
shares Common Stock.  If the Company elects to pay the Purchase Price in whole
or in part in shares of Common Stock, the Company shall pay Cash in lieu of
fractional shares.

 

The Company shall not be entitled to pay any portion of the Purchase Price in
shares of Common Stock pursuant to the Indenture unless all of the following
conditions are satisfied:

 

A-8

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

 

(i)                                     the shares of Common Stock to be
delivered as payment, in whole or in part, of the Purchase Price shall be either
(1) registered under the Securities Act for initial issuance, unless such
registration is not necessary to permit the Holders who receive such shares and
who are not Affiliates of the Company to publicly resell such shares or (2)
registered for resale pursuant to a shelf registration statement, that has
become effective under the Securities Act and that is reasonably expected to
remain effective and available for use until at least the 30th day after the
Redemption Date, unless the shares may be publicly sold without restriction
pursuant to Rule 144(k) under the Securities Act;

 

(ii)                                  the shares of Common Stock to be delivered
as payment, in whole or in part, of the Purchase Price shall be duly qualified
or registered under applicable state securities laws or shall be qualified for
an available exemption from such qualification and registration;

 

(iii)                               the shares of Common Stock to be delivered
as payment, in whole or in part, of the Purchase Price shall be approved for
listing on The Nasdaq National Market or a U.S. national securities exchange;
and

 

All shares of Common Stock issued as payment, in whole or in part, of the
Purchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute Registrable Securities, unless either (i) such shares
were registered under the Securities Act for initial issuance and are able to be
publicly resold by the recipients of such shares without further registration
under the Securities Act or (ii) such registration was and is not necessary to
permit the Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder prior to the
close of business on the Business Day immediately preceding the Purchase Date,
the Company shall pay the Purchase Price entirely in Cash.

 

To exercise such right, a Holder shall deliver to the Paying Agent a Purchase
Notice containing the information set forth in the Indenture, at any time from
9:00 a.m., New York City time, on the date that is 20 Business Days immediately
preceding such Purchase Date until, 5:00 p.m., New York City time, on the
Business Day immediately preceding such Purchase Date, and shall deliver the
Securities to the Paying Agent as set forth in the Indenture.

 

Holders have the right to withdraw any Purchase Notice by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of
the Indenture. The Paying Agent shall promptly notify the Company of the receipt
by it of any Purchase Notice or written notice of withdrawal thereof.

 

If Cash, and, if the Company determines to pay all or any portion of the
Purchase Price in shares of Common Stock, such shares of Common stock sufficient
to pay the Purchase Price of all Securities or portions thereof to be purchased
with respect to a Purchase Date, have been deposited with the Paying Agent, at
10:00 a.m., New York City time, on the Business Day immediately following the
Purchase Date, then, immediately after the Purchase Date, such Securities will
cease to be outstanding and interest (including Contingent Interest, if any and
Special Interest, if any), on such Securities will cease to accrue, whether or
not such Securities are delivered to the Paying Agent, and the Holder thereof
shall have no other rights as such other than the right to receive the Purchase
Price upon surrender of such Security.

 

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10.                                 Purchase of Securities Upon a Repurchase
Event

 

If a Repurchase Event occurs, each Holder will have the right to require the
Company to repurchase all of its Securities not previously called for
redemption, or any portion of such Securities, in integral multiples of $1,000
at a purchase price equal to 100% of the principal amount of all such
Securities, plus accrued and unpaid interest, (including Contingent Interest and
Special Interest, if any), on such Securities to, but not including, the
Repurchase Event Repurchase Date (the “Repurchase Price”), subject to
satisfaction by or on behalf of any Holder of the requirements set forth in the
Indenture.  The date the Company shall repurchase the Securities (the
“Repurchase Event Repurchase Date”) must be within 30 Business Days of the date
of the mailing of the Repurchase Event Company Notice under the Indenture.

 

The Repurchase Price may be paid in Cash, shares of Common Stock, or a
combination thereof.  If the Company elects to pay the Repurchase Price, in
whole or in part, in shares of Common Stock, the number of shares of Common
Stock to be delivered by the Company will be equal to the portion of the
Repurchase Price to be paid in shares of Common Stock divided by 95% of the
Purchase Market Price of such shares of Common Stock.  If the Company elects to
pay the Repurchase Price in whole or in part in shares of Common Stock, the
Company shall pay Cash in lieu of fractional shares.

 

The Company shall not be entitled to pay any portion of the Repurchase Price in
shares of Common Stock under the Indenture unless all of the following
conditions are satisfied:

 

(i)                                     the shares of Common Stock to be
delivered as payment, in whole or in part, of the Repurchase Price shall be
either (1) registered under the Securities Act for initial issuance, unless such
registration is not necessary to permit the Holders who receive such shares and
who are not Affiliates of the Company to publicly resell such shares or (2)
registered for resale pursuant to a shelf registration statement, that has
become effective under the Securities Act and that is reasonably expected to
remain effective and available for use until at least the 30th day after the
Repurchase Event Repurchase Date, unless the shares may be publicly sold without
restriction pursuant to Rule 144(k) under the Securities Act;

 

(ii)                                  the shares of Common Stock to be delivered
as payment, in whole or in part, of the Repurchase Price shall be duly qualified
or registered under applicable state securities laws or shall be qualified for
an available exemption from such qualification and registration; and

 

(iii)                               the shares of Common Stock to be delivered
as payment, in whole or in part, of the Repurchase Price shall be approved for
listing on The Nasdaq National Market or a U.S. national securities exchange.

 

All shares of Common Stock issued as payment, in whole or in part, of the
Repurchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute Registrable Securities, unless either (i) such shares
were registered under the Securities Act for initial issuance and are able to be
publicly resold by the recipients of such shares without further registration
under the Securities Act or (ii) such registration was and is not necessary to
permit the Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder prior to the
close of business on the Business Day immediately preceding the Repurchase Date,
the Company shall pay the Repurchase Price entirely in Cash.

 

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A “Repurchase Event” shall be deemed to have occurred upon the occurrence of
either a “Change in Control” or a “Termination of Trading.”

 

A “Change of Control” shall be deemed to have occurred if any of the following
occurs after the date hereof:

 

(i)                                     any “person” or “group,” within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing, including any group acting for the purpose
of acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, becomes the “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of 50% or
more of the total voting power of all classes of the Company’s Voting Stock
entitled to vote generally in the election of directors;

 

(ii)                                  the sale, transfer, lease, conveyance or
other disposition, in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company to any “person” or
“group” (as such terms are defined above);

 

(iii)                               any consolidation or merger of the Company
with or into another Person (or vice versa) except pursuant to a transaction in
which the persons that “beneficially owned,” directly or indirectly, the shares
of the Company’s Voting Stock immediately prior to such transaction
“beneficially own” immediately after such transaction, directly or indirectly,
shares of the continuing or surviving corporation’s Voting Stock representing at
least a majority of the total voting power of all outstanding classes of Voting
Stock of the continuing or surviving corporation in substantially the same
proportion as such ownership prior to the transaction;

 

(iv)                              the following persons cease for any reason to
constitute a majority of the board of directors of the Company;

 

(A)                              individuals who on the first issue date of the
Securities constituted the Board of Directors; and

 

(B)                                any new directors whose election to the Board
of Directors or whose nomination for election by the Company’s shareholders was
approved by at least a majority of the directors of the Company then still in
office who were either directors on such first issue date of the Securities or
whose election or nomination for election was previously so approved;

 

(v)                                 the Company distributes to all or
substantially all holders of shares of its Common Stock its assets, cash, debt
securities or certain rights to purchase its securities, which distribution has
a per share value exceeding 10% of the closing price of the Common Stock on the
day preceding the declaration date for such distribution; or

 

(vi)                              the Company is liquidated or dissolved or
holders of the Common Stock approve any plan or proposal for the liquidation or
dissolution of the Company.

 

A “Termination of Trading” shall be deemed to have occurred if, after the date
hereof, the Common Stock (or other common stock into which the Securities are
then convertible) is not listed for trading on a United States national
securities exchange, quoted on the Nasdaq National Market, or approved for
trading on an established automated over-the-counter trading market in the
United States.

 

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A Repurchase Event will not be deemed to have occurred if in the case of a
merger or consolidation, all of the consideration (other than Cash payments for
fractional shares or pursuant to statutory appraisal rights) in the merger or
consolidation constituting the Change in Control consists of common stock and
any associated rights traded on a US national securities exchange or quoted on
The Nasdaq National Market (or which will be so traded or quoted when issued or
exchanged in connection with such change in control), and, as a result of such
transaction or transactions, the securities become convertible solely into such
common stock and associated rights.

 

If a Repurchase Event (except for any Repurchase Event solely pursuant to clause
(iv) of the definition of “Change of Control”) occurs prior to September 15,
2009, the Company shall pay, in addition to the Repurchase Price, a Repurchase
Event Make-Whole Premium to Holders of Securities who elect to require the
Company to repurchase such Securities in connection with a Repurchase Event.  If
the Holder surrenders the Securities for conversion in accordance with the
Indenture in connection with a Repurchase Event, in lieu of requiring the
Company to repurchase such Securities, such Holder will receive (i) Cash and, if
applicable, shares of Common Stock in respect of such conversion obligation,
plus (ii) the applicable Repurchase Event Make-Whole Premium.

 

The Repurchase Event Make-Whole Premium may be paid, subject to the terms of the
Indenture, in Cash, shares of Common Stock, or a combination thereof.  If the
Company elects to pay the Repurchase Event Make-Whole Premium, in whole or in
part, in shares of Common Stock, the number of shares of Common Stock to be
delivered by the Company will be equal to the portion of the Repurchase Event
Make-Whole Premium to be paid in shares of Common Stock divided by 95% of the
Repurchase Market Price (as defined below) of such shares Common Stock.  If the
Company elects to pay the Repurchase Event Make-Whole Premium in whole or in
part in shares of Common Stock, the Company shall pay Cash in lieu of fractional
shares.

 

Subject to the terms and conditions in the Indenture, the Repurchase Event
Make-Whole Premium shall equal an amount derived by multiplying each $1,000
principal amount of Securities by a specified percentage (the “Repurchase Event
Make-Whole Premium”) which shall be determined by reference to the table set
forth in the Indenture (the “Make-Whole Premium Table”) and is based on the date
on which the Repurchase Event becomes effective (the “effective date”) and the
price (the “Stock Price”) paid per share of the Company’s Common Stock in the
transaction constituting the Repurchase Event.  If a Holder of Common Stock
receives only Cash in the Repurchase Event, the Stock Price shall be the Cash
amount paid per share of Common Stock.  Otherwise, the Stock Price shall equal
the average of the Sale Prices of Common Stock on the five Trading Days up to,
but not including, the Effective Date of the Repurchase Event.

 

The stock prices set forth in the first column of the Make-Whole Premium Table
in the Indenture shall be adjusted in accordance with the Indenture as of any
date on which the Conversion Rate is adjusted and shall equal the Stock Prices
applicable immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the adjustment
giving rise to the Stock Price adjustment and the denominator of which is the
Conversion Rate as so adjusted.

 

If the Stock Price is between two Stock Price amounts in the Make-Whole Premium
Table or the repurchase date is between two dates on the Make-Whole Premium
Table, the Repurchase Event Make-Whole Premium shall be determined by
straight-line interpolation between the make-whole premium amounts set forth for
the higher and lower Stock Price amounts and the two dates, as applicable, based
on a 365 day years.

 

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If the Stock Price is equal to or in excess of $120.00 per share of Common Stock
(subject to adjustment for any event requiring an adjustment of the Conversion
Rate as set forth in the Indenture), no Repurchase Event Make-Whole Premium will
be paid.

 

If the Stock Price is less than or equal to $28.64 per share of Common Stock
(subject to adjustment for any event requiring an adjustment of the Conversion
Rate as set forth in the Indenture), no Repurchase Event Make-Whole Premium will
be paid.

 

To exercise such right, a Holder shall deliver to the Paying Agent a Repurchase
Event Repurchase Notice containing the information set forth in the Indenture,
at any time from the opening of business on the date of the Repurchase Event
Company Notice until 5:00 p.m., New York City time, on the Business Day
immediately preceding such Repurchase Date, and shall deliver the Securities to
the Paying Agent as set forth in the Indenture.

 

Holders have the right to withdraw any Repurchase Event Company Notice by
delivering to the Paying Agent a written notice of withdrawal in accordance with
the provisions of the Indenture. The Paying Agent shall promptly notify the
Company of the receipt by it of any Repurchase Event Company Notice or written
notice of withdrawal thereof.

 

If Cash (including any Cash constituting any part of the Repurchase Event
Make-Whole Premium) and shares of Common Stock (if all or any portion of the
Repurchase Price or the Repurchase Event Make-Whole Premium is to be paid in
shares of Common Stock) sufficient to pay the Repurchase Price of all Securities
or portions thereof to be repurchased with respect to a Repurchase Event
Repurchase Notice, has been deposited with the Paying Agent, at 10:00 a.m., New
York City time, on the Business Day immediately following the Repurchase Event
Repurchase Date, then, immediately after Repurchase Event Repurchase Date, such
Securities will cease to be outstanding and interest (including Contingent
Interest, if any and Special Interest, if any), on such Securities will cease to
accrue, whether or not such Securities are delivered to the Paying Agent, and
the Holder thereof shall have no other rights as such other than the right to
receive the Repurchase Price upon and the Repurchase Event Make-Whole Premium,
if any, surrender of such Security.

 

11.                                 Conversion

 

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

 

(i)                                     Conversion Based on Sale Price of Common
Stock.  The Securities may be surrendered for conversion during any calendar
quarter (beginning with the quarter ending March 31, 2005) if the Sale Price of
the Common Stock for at least 20 consecutive Trading Days in the Measurement
Period of the immediately preceding calendar quarter exceeds 120% of the
Conversion Price in effect on the last Trading Day of the immediately preceding
calendar quarter (in the event that the Conversion Price on such last Trading
Day of the immediately preceding calendar quarter is not the same as the
Conversion Price in effect for each of the Trading Days in such Measurement
Period, the Board of Directors shall make such adjustments as it, in its
discretion, deems appropriate in determining whether the foregoing condition has
been met).

 

(ii)                                  Conversion Based on Satisfaction of
Trading Price Condition.  The Securities may be surrendered for conversion
during any five consecutive Business Day

 

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period immediately following any five consecutive Trading Day period (the
“Security Measurement Period”) in which the average Trading Price per $1,000
principal amount of Securities during such Security Measurement Period was equal
to or less than 98% of the average Conversion Value during such Security
Measurement Period; provided that a Holder may not surrender Securities for
conversion pursuant to this Section 11(ii) after September 15, 2019 if, on any
Trading Day during the applicable Security Measurement Period, the Sale Price of
Common Stock was between 100% and 120% of the Conversion Price of the Securities
in effect on that Trading Day.

 

(iii)                               Conversion Based on Redemption.  The
Securities may be surrendered for conversion at any time prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Redemption Date,
if such Security has been called for redemption pursuant to Article 3 of the
Indenture.

 

(iv)                              Conversion Upon Occurrence of Certain
Corporate Transactions.  If either: (A) the Company is a party to any
consolidation or merger of the Company with or into another Person (or vice
versa) pursuant to which all of the outstanding shares of Common Stock are
converted into cash, securities or other property; (B) any “person” or “group,”
within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act, becomes the “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of 50% or
more of the total voting power of all classes of the Company’s Voting Stock
entitled to vote generally in the election of directors; (C) the Company sells,
transfers, conveys or otherwise disposes, in one or a series of related
transactions, of all or substantially all of its properties or assets to any
“person” or “group” (as such terms are defined above); or (D) the Company
distributes to all holders of shares of its Common Stock, its assets, cash, debt
securities or certain rights to purchase its securities, which distribution has
a per share value exceeding 10% of the closing price of the Common Stock on the
day preceding the declaration date for such distribution or (E) except as
described in clauses (A) to (D) above, the Company takes any action, or becomes
aware of any event, that would require adjustment to the Conversion Rate
pursuant to Sections 4.4(b), (c), (d), (e) and (f) of the Indenture, then (x) in
the case of (A), (B) and (C) above, a Holder may surrender Securities for
conversion at any time from and after the date that is 15 Business Days before
the date the Company announces as the anticipated effective date of the
transaction or event until the date that is 15 Business Days after the actual
effective date of the transaction or event, and (y) in the case of (D) and (E)
above, the Company shall mail to Holders written notice of the distribution at
least 20 days prior to the record, effective or expiration date, as the case may
be, of the distribution or transaction and once the Company has given such
notice, Holders may surrender their Securities for conversion beginning on the
date that the Company mails such notice (or, if earlier, the date that the
Company is required to mail such notice pursuant to this Indenture) until the
close of business on the Business Day immediately preceding the “ex-dividend
trading date” of the distribution or the Company’s announcement that such
distribution or transaction shall not take place.

 

The Company will notify Holders of any event triggering the right to convert the
Securities as specified above in accordance with the Indenture, and will
publicly announce that the Securities have become convertible.

 

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A Security in respect of which a Holder has delivered a Purchase Notice or
Repurchase Event Repurchase Notice, as the case may be, exercising the right of
such Holder to require the Company to repurchase such Security may be converted
only if such Purchase Notice or Repurchase Event Repurchase Notice is withdrawn
in accordance with the terms of the Indenture, unless the Company defaults in
the payment of the Repurchase Price or the Repurchase Price.

 

The initial Conversion Rate is 25.4863 shares per $1,000 principal amount of
Securities, subject to adjustment in certain events described in the Indenture.

 

To surrender a Security for conversion, a Holder must, in the case of Global
Securities, comply with the Applicable Procedures of the Depositary in effect at
that time, and in the case of Certificated Securities, (1) surrender the
Security duly endorsed to the Company or in blank, at the office of the
Conversion Agent, (2) complete and manually sign the conversion notice below (or
complete and manually sign a facsimile of such notice) and deliver such notice
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents and (4) pay all funds required, if any, relating to interest
(including Contingent Interest, if any or Special Interest, if any), and any
withholding, transfer or similar tax, if required.

 

No fractional share of Common Stock shall be issued upon conversion of any
Security.  Instead, the Company shall pay a Cash adjustment as provided in the
Indenture.

 

No payment or adjustment will be made for accrued and unpaid interest (including
Contingent Interest, if any and Special Interest, if any), or dividends on the
shares of Common Stock, except as provided in the Indenture.

 

If more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Security (or specified portions thereof to the extent
permitted thereby) so surrendered.  Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to such Holder’s nominee or
nominees, certificates (other than in the case of Holders of Securities in
book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Common Stock to which such Holder shall be entitled as aforesaid,
together with Cash in lieu of any fraction of a share to which such Holder would
otherwise be entitled.  The Company shall not be required to deliver
certificates for shares of Common Stock while the stock transfer books for such
stock or the security register are duly closed for any purpose, but certificates
for shares of Common Stock shall be issued and delivered as soon as practicable
after the opening of such books or security register.

 

If shares of Common Stock to be issued upon conversion of a Transfer Restricted
Security are to be issued in the name of a Person other than the Holder of such
Transfer Restricted Security, such Holder must deliver to the Conversion Agent a
certification in substantially the form set forth in a Transfer Certificate
dated the date of surrender of such Transfer Restricted Security and signed by
such Holder, as to compliance with the restrictions on transfer applicable to
such Transfer Restricted Security.  The Company shall not be required to issue
Common Stock upon conversion of any such Transfer Restricted Security to a
Person other than the Holder if such Transfer Restricted Security is not so
accompanied by a properly completed certification, and the Registrar shall not
be required to register Common Stock upon conversion of any such Transfer
Restricted Security in the name of a Person other than the Holder if such
Transfer Restricted Security is not so accompanied by a properly completed
certification.

 

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If the Company (i) reclassifies or changes the shares of Common Stock into
another class of Capital Stock, (ii) is a party to a merger, consolidation,
statutory share exchange or combination of the Company with another corporation
and as a result of which all the holders of the Common Stock shall be entitled
to receive stock, securities or other property or assets (including Cash or a
combination thereof) with respect to or in exchange for all of their Common
Stock, or (iii) sells or conveys all or substantially all of its properties and
assets to any person as a result of which all Holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
Cash or any combination thereof) with respect to or in exchange for all of their
Common Stock, the right to convert a Security into shares of Common Stock may be
changed into a right to convert a Security into the kind and amount of shares of
stock and other securities or property or assets (including Cash) which such
Holder would have been entitled to receive upon such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
had such Holder converted its Security into Common Stock immediately prior to
such transaction, in each case, in accordance with the Indenture.

 

In case any Certificated Security shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall, upon the written order of the
Company, authenticate and deliver to the Holder of the Security so surrendered,
without charge to such Holder (subject to the provisions of Section 4.8 of the
Indenture), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Certificated Securities.

 

Any shares of Common Stock issued upon conversion of a Security shall bear the
Legend until after the second anniversary of the later of the Issuance Date and
the last date on which the Company or any Affiliate was the owner of such shares
of the Security (or any predecessor security) from which such shares were
converted (or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder)  (or such longer period of
time as may be required under the Securities Act or applicable state securities
laws, as set forth in an Opinion of Counsel, unless otherwise agreed by the
Company and the Holder hereof.

 

12.                                 Merger or Consolidation

 

The Company and/or Guarantor shall not consolidate with or merge into any other
Person (in a transaction in which the Company is not the surviving corporation)
or convey, transfer, lease or otherwise dispose of all or substantially all of
its properties and assets to any Person, whether in a single transaction or
series of related transactions, unless:

 

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

 

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

 

(c)                                  the Company shall have delivered to the
Trustee an Officers’ Certificate and, if requested by the Trustee, an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer,
sale, lease or other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with
Article 7 of the Indenture and that all conditions precedent herein provided for
relating to such transaction have been satisfied.

 

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13.                                 Conversion Arrangement on Call for
Redemption

 

Any Securities called for redemption, unless surrendered for conversion before
the close of business on the Business Day immediately preceding the Redemption
Date, may be deemed, to the fullest extent permitted by law, to be purchased
from the Holders of such Securities at an amount not less than the Redemption
Price, together with accrued interest (including Contingent Interest, if any and
Special Interest, if any), to, but not including, the Redemption Date, by one or
more investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Common Stock of
the Company and to make payment for such Securities to the Paying Agent in trust
for such Holders.

 

14.                                 Automatic Conversion

 

If at any time the Current Market Price of the Company’s Common Stock exceeds
150% of the Conversion Price for at least 20 Trading Days during any 30-day
Trading Day period ending within five Trading Days prior to the date of the
notice of automatic conversion, the Company may elect to automatically convert
the Securities pursuant to the terms of the Indenture; provided, however, that,
during the two-year period commencing on the date of the last delivery of the
Securities under the Indenture, the Company may only automatically convert the
Securities if, in accordance with the terms of the Registration Rights
Agreement, a registration statement registering the resale of the Securities and
Common Stock issuable upon conversion of the Securities is declared effective
under the Securities Act prior to the date of the Automatic Conversion Notice
and such registration statement remains effective on the date selected for
automatic conversion. In the event that the date on which the Securities will be
automatically converted occurs on or prior to September 15, 2009, the Company
will pay the Make-Whole Interest Payment on the Automatic Conversion Date.

 

The Make-Whole Interest Payment shall equal five full years of interest on the
Securities, less any interest actually paid or provided for on the Securities
prior to such Automatic Conversion.  The Company may, at its option, pay the
Make-Whole Interest Payment in Cash or in Common Stock.  In the event that the
Company elects to pay the Make-Whole Interest Payment in Common Stock, the
shares of Common Stock will be valued at 95% of the average Sale Price for each
of the five Trading Days immediately preceding the second Trading Day prior to
the Automatic Conversion Date.

 

15.                                 Denominations, Transfer, Exchange

 

The Securities are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000.  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.

 

16.                                 Persons Deemed Owners

 

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

 

17.                                 Unclaimed Money

 

If money for the payment of principal or interest (including Contingent
Interest, if any and Special Interest, if any), remains unclaimed for two years,
the Trustee or Paying Agent will pay the money back to the Company at its
written request, subject to applicable unclaimed property law.  After

 

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that, Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.

 

18.                                 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 certain existing
defaults or Events of Default and their 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 and the Trustee may amend or supplement the Indenture or
the Securities to, among other things, cure any ambiguity, defect or
inconsistency or make any other change that does not adversely affect the rights
of any Holder.

 

19.                                 Successor Entity

 

When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture 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.

 

20.                                 Defaults and Remedies

 

Under the Indenture, an Event of Default includes:  (i) default for 30 days in
payment of any accrued and unpaid interest (including Contingent Interest, if
any or Special Interest) on any Securities; (ii) default in payment of any
principal (including, without limitation, any premium, if any) on the Securities
when due; (iii) failure by the Company for 30 days after notice to it to comply
with any of its other agreements contained in the Indenture or the Securities;
(iv) default in the payment of certain indebtedness of the Company or a
Significant Subsidiary; and (v) certain events of bankruptcy, insolvency or
reorganization of the Company or any Significant Subsidiary.

 

If an Event of Default (other than as a result of certain events of bankruptcy,
insolvency or reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, declare all unpaid principal to the date of
acceleration on the Securities then outstanding to be due and payable
immediately, all as and to the extent provided in the Indenture.  If an Event of
Default occurs as a result of certain events of bankruptcy, insolvency or
reorganization of the Company, unpaid principal of the Securities then
outstanding shall become due and payable immediately without any declaration or
other act on the part of the Trustee or any Holder, all as and to the extent
provided in the Indenture.  Holders may not enforce the Indenture or the
Securities except as provided in the Indenture.  The Trustee may require
indemnity reasonably 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 it determines that withholding notice is in their interests.  The
Company is required to file periodic reports with the Trustee as to the absence
of default.

 

21.                                 Guaranty

 

To the extent provided in, and in accordance with, the Indenture, the Securities
will be guaranteed by Guarantor. The obligations of Guarantor under its
Subsidiary Guarantee will rank equally in right of

 

A-18

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payment with all existing and future unsecured and unsubordinated indebtedness
of Guarantor senior to existing and future subordinated indebtedness of
Guarantor.

 

22.                                 Trustee Dealings with the Company

 

U.S. Bank National Association, the 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.

 

23.                                 No Recourse Against Others

 

A director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
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.

 

24.                                 Calculations in Respect of Securities

 

The Company and its agents shall be responsible for making all calculations as
contemplated under this Indenture and the Securities.  Such calculations
include, but are not limited to, the determination of the trading price of the
Securities, the Current Market Price of the Common Stock and any amounts of
interest and any Make-Whole payments that are payable on the Securities.  Any
calculations made in good faith and without manifest error shall be final and
binding upon all Holders of the Securities.  The Company shall provide a copy of
its calculations to the Trustee, and, absent manifest error, the Trustee shall
be entitled to rely on the accuracy of such calculations without conducting an
independent verification as to their accuracy.

 

25.                                 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.

 

26.                                 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.

 

27.                                 Indenture to Control; Governing Law

 

In the case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture shall control.  This Security shall
be governed by, and construed in accordance with, the laws of the State of New
York, without regard to principals of conflicts of law.

 

A-19

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The Company will furnish to any Holder, upon written request and without charge,
a copy of the Indenture.  Requests may be made to:  United Industrial
Corporation, 124 Industry Lane, Hunt Valley Maryland 21030, Att:  General
Counsel.

 

A-20

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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:

 

 

 

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*                 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-21

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CONVERSION NOTICE

 

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

 

To convert only part of this Security, state the principal amount to be
converted (must be $1,000 or a 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:

 

 

 

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*                 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-22

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SCHEDULE OF EXCHANGES OF SECURITIES(3)

 

The following exchanges, redemptions, repurchases or conversions of a part of
this global Note 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

A-23

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EXHIBIT B

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(4)

 

Re:        3.75% Convertible Senior Securities due 2024 (the “Securities”) of
United Industrial Corporation

 

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 September 15, 2004 between United Industrial Corporation
and U.S. Bank National Association, as trustee (the “Indenture”), and the
transfer of such Security is being made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”)
(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.

 

o                        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.

 

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)

 

 

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(4)                                  This certificate should only be included if
this Security is a Transfer Restricted Security.

 

B-1

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EXHIBIT C

 

FORM OF NOTATION OF GUARANTEE

 

For value received, Guarantor (which term includes any successor Person of
Guarantor in accordance with the Indenture) has unconditionally guaranteed, to
the extent set forth, and subject to the provisions provided, in the Indenture
(the “Indenture;” all capitalized terms used but not defined herein shall have
the meanings assigned to them in the Indenture), dated September 15, 2004, among
United Industrial Corporation, a Delaware corporation (the “Company”), Guarantor
and U.S. Bank, National Association, a national banking association organized
and existing under the laws of the United States, as trustee (the “Trustee”),
(a) the principal of, premium, if any, and interest (including Contingent
Interest, if any, and Special Interest, if any) on the Securities will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption, repurchase or otherwise, and interest on the overdue principal of
and premium, if any, and interest (including Contingent Interest, if any and
Special Interest, if any), on the Securities or such shares, if lawful, and all
other obligations of the Company to the Holders or the Trustee under the
Indenture, the Securities or under the Registration Rights Agreement will be
promptly paid in full or performed, all in accordance with the terms thereof;
and (b) in case of any extension of time of payment or renewal of any
Securities, any such shares 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 stated maturity, by acceleration or
otherwise.  Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, Guarantor shall be obligated to
pay the same immediately.  The obligations of the Guarantor to the Holders and
to the Trustee pursuant to the Subsidiary Guarantee are expressly set forth in
Article 5 of the Indenture, and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee.

 

Guarantor hereby confirms that it is the intention of the Guarantor, the
Company, Trustee and the Holders that the Subsidiary Guarantee of Guarantor not
constitute a fraudulent transfer or conveyance for purposes of bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Subsidiary
Guarantee.  To effectuate the foregoing intention, the Guarantor hereby
irrevocably agrees with the Company, the Trustee and the Guarantors that the
obligations of Guarantor shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, result in the obligations of Guarantor under
its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.

 

The Subsidiary Guarantee shall be a senior unsecured obligation of Guarantor and
ranks equally in right of payment with all existing and future unsecured and
unsubordinated indebtedness of Guarantor senior to existing and future
subordinated indebtedness of Guarantor.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

C-1

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IN WITNESS WHEREOF, the Guarantor has caused this Subsidiary Guarantee to be
duly executed as of this      day of                  , 2004.

 

 

 

AAI CORPORATION, a Maryland corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

C-2

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