exv4w2






Exhibit 4.2




USG CORPORATION




SUPPLEMENTAL INDENTURE NO. 1




10% Contingent Convertible Senior Notes due 2018




     THIS SUPPLEMENTAL INDENTURE NO. 1, dated as of November 26, 2008 (this “Supplemental
Indenture”), between USG CORPORATION, a Delaware corporation (the “Company”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”).



RECITALS OF THE COMPANY:




     WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated
as of November 1, 2008 (the “Indenture”), providing for the issuance from time to time of one or
more Series of Securities;



     WHEREAS, Article Eight of the Indenture provides for various matters with respect to any
Series of Securities issued under the Indenture to be established in an indenture supplemental to
the Indenture;



     WHEREAS, Section 8.1(e) of the Indenture provides that the Company and the Trustee may enter
into an indenture supplemental to the Indenture to establish the form or terms of Securities of any
Series as permitted by Sections 2.1 and 2.3 of the Indenture; and



     WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture,
when duly executed and delivered, a valid and binding agreement in accordance with its terms and
for the purposes herein expressed, have been performed and fulfilled.



     NOW THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:



     For and in consideration of the premises and the issuance of the Series of Securities provided
for herein, the Company and the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective Holders of the Securities of such Series as follows:



ARTICLE ONE




RELATION TO INDENTURE; DEFINITIONS; RULES OF CONSTRUCTION




     SECTION 1.1 Relation to Indenture. This Supplemental Indenture constitutes an
integral part of the Indenture.



     SECTION 1.2 Definitions. For all purposes of this Supplemental Indenture, the
following terms shall have the respective meanings set forth in this Section.













 






     “Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen
by the Company and one by the Holder (or if there is more than one Holder, a majority in
interest of Holders), shall mutually agree upon the determinations then the subject of
appraisal. Each party shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If within 30 days after appointment of
the two appraisers they are unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual consent of such first two
appraisers or, if such two first appraisers fail to agree upon the appointment of a third
appraiser, such appointment shall be made by the American Arbitration Association, or any
organization successor thereto, from a panel of arbitrators having experience in appraisal
of the subject matter to be appraised. The decision of the third appraiser so appointed and
chosen shall be given within 30 days after the selection of such third appraiser. If three
appraisers shall be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other determination is
disparate from the middle determination, then the determination of such appraiser shall be
excluded, the remaining two determinations shall be averaged and such average shall be
binding and conclusive upon the Company and the Holder; otherwise, the average of all three
determinations shall be binding upon the Company and the Holder. The costs of conducting
any Appraisal Procedure shall be borne equally by the Company and the Holder or Holders
objecting to the determination of Fair Market Value.




     “Attributable Debt” means as of any particular time, the present value in respect of
any Sale and Leaseback Transaction, calculated using a rate of interest implicit in such
transaction determined in accordance with generally accepted accounting principles in the
United States, of the obligation of the lessee for rental payments during the remaining term
of the lease related to such Sale and Leaseback Transaction, including any period for which
that lease has been extended or may, at the option of the lessor, be extended, after
excluding all amounts required to be paid in respect of maintenance and repairs, insurance,
taxes, assessments, water and utility rates, management fees and similar charges.




     “Business Combination” has the meaning specified in Section 4.10.




     “Capital Lease” means at any date any lease of property which, in accordance with
generally accepted accounting principles, would be required to be capitalized on the balance
sheet of the lessee.




     “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.




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




          (1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,



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of all or substantially all of the properties or assets of the Company and its
subsidiaries taken as a whole to any “person” or “group” (as that term is used in Section
13(d)(3) of the Exchange Act), other than to the Company or one of its wholly-owned
subsidiaries;




          (2) the adoption of a plan relating to the liquidation or dissolution of the Company;




          (3) the first day on which a majority of the members of the Board of Directors are not
Continuing Directors; or




          (4) the consummation of any transaction or series of related transactions (including,
without limitation, any merger or consolidation) the result of which is that any “person” or
“group” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the
Company or one of its wholly-owned subsidiaries, becomes the beneficial owner, directly or
indirectly, of more than 50% of the then outstanding number of shares of the Voting Stock of
the Company, measured by voting power rather than number of shares.




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




     “Company” has the meaning given in the first introductory paragraph hereof.




     “Company Common Stock” means the common stock of the Company, par value $0.10 per
share, as it exists on the date of this Supplemental Indenture and any shares of any class
or classes of Capital Stock of the Company resulting from any reclassification or
reclassifications thereof, or, in the event of a merger, consolidation or other similar
transaction involving the Company that is otherwise permitted hereunder in which the Company
is not the surviving corporation, the common stock, common equity interests, ordinary shares
or depositary shares or other certificates representing common equity interests of such
surviving corporation or its direct or indirect parent corporation, and which have no
preference in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however, that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable on conversion
of Securities shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.



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     “Consolidated Net Tangible Assets” means, as of any particular date, the aggregate
amount of assets (less applicable reserves and other properly deductible items) after
deducting (a) all current liabilities (excluding the current portion of any Funded Debt and
any other current liabilities that constitute Funded Debt by reason of being extendible or
renewable), and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as computed in accordance with
generally accepted accounting principles in the United States and as shown in the latest
annual or quarterly balance sheet of the Company and its consolidated subsidiaries contained
in the Company’s then most recent annual report to stockholders or quarterly report filed
with the Commission, as the case may be.




     “Continuing Directors” means, as of any date of determination, any member of the Board
of Directors who (1) was a member of the Board of Directors on the date of the issuance of
the Securities; or (2) was nominated for election or elected to the Board of Directors with
the approval of a majority of the Continuing Directors who were members of the Board of
Directors at the time of such nomination or election (either by a specific vote or by
approval of the Company’s proxy statement in which such member was named as a nominee for
election as a director).




     “Conversion Agent” has the meaning specified in Section 4.2(a).




     “Conversion Condition” means the earlier of (a) (i) the obtaining of Stockholder
Approval and (ii) the Company’s certification to the Trustee in an Officers’ Certificate
that the Stockholder Approval has been obtained and (b) the time at which the Company
certifies to the Trustee in an Officers’ Certificate that Stockholder Approval is no longer
required to permit the conversion of all of the Securities into shares of Company Common
Stock without a Violation.




     “Conversion Date” has the meaning specified in Section 4.2(b).




     “Conversion Rate” means the rate at which shares of Company Common Stock shall be
delivered upon conversion, which rate, for each $1,000 principal amount of Securities, shall
be determined initially by dividing 1,000.00 by 11.40, as adjusted from time to time
pursuant to the provisions of this Supplemental Indenture.




     “Convertible Securities” has the meaning specified in Section 4.6(a)(vii).




     “Credit Facility” means each of (a) the credit agreement dated September 9, 2008 among
the Company, JP Morgan Chase Bank, N.A., as administrative agent, and the other lenders
party thereto and (b) the amended and restated credit agreement dated as of July 31, 2007
among the Company, JPMorgan Chase Bank, N.A., as administrative agent, Goldman Sachs Credit
Partners L.P., as syndication agent, and the other lenders party thereto; in each case in
the form thereof existing as of the date of this Supplemental Indenture.




     “Credit Facility Condition” means (a) that each Credit Facility has been (i)
terminated, or (ii) amended or modified, or a consent, waiver or acknowledgement from the
respective agent and the required lenders thereunder is received, in each case



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providing that no “change of control,” “change in control” or similar event would occur
by virtue of the Designated Original Purchaser converting all of its Securities into shares
of Company Common Stock, assuming that the Designated Original Purchaser beneficially owns
the Designated Original Purchaser Issue Date Company Common Stock and (b) the Company
certifies to the Trustee in an Officers’ Certificate that the foregoing requirements of
clause (a) have been fulfilled.




     “Current Market Price” has the meaning specified in Section 4.6(a)(ix).




     “Definitive Security” means a certificated Security.




     “Depositary” means The Depository Trust Company, its nominees and their respective
successors.




     “Designated Original Purchaser” means the original beneficial owner of Securities
identified on Exhibit C hereto and entities where it beneficially owns more than 50% of the
equity interests (measured by voting rights and value.




     “Designated Excess Securities” means $42,483,000 aggregate principal amount of the
Securities beneficially owned by the Designated Original Purchaser, minus the net reduction
in Securities beneficially owned by the Designated Original Purchaser from the issue date,
which shall not be less than zero.




     “Designated Original Purchaser Issue Date Company Common Stock” means, with respect to
the Designated Original Purchaser, the number of shares of Company Common Stock beneficially
owned by such Designated Original Purchaser on November 26, 2008.




     “Expiration Date” has the meaning specified in Section 4.6(a)(vi).




     “Expiration Time” has the meaning specified in Section 4.6(a)(vi).




     “Fair Market Value” means, with respect to any security or other property, the fair
market value of such security or other property as determined by the Board of Directors,
acting in good faith. If the Holder (or if there is more than one Holder, a majority in
interest of Holders) objects in writing to the Board of Director’s calculation of fair
market value within 10 days of receipt of written notice thereof and the Holder or Holders
and the Company are unable to agree on fair market value during the 10-day period following
the delivery of the Holder’s or Holders’ objection, the Appraisal Procedure may be invoked
by either party to determine Fair Market Value by delivering written notification thereof
not later than the 30th day after delivery of the Holder’s or Holders’ objection.




     “Final Maturity Date” means December 1, 2018.




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



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     “Fundamental Change Company Notice” has the meaning specified in Section 3.2(b).




     “Fundamental Change Repurchase Date” has the meaning specified in Section 3.2(a).




     “Fundamental Change Repurchase Notice” has the meaning specified in Section 3.2(c).




     “Fundamental Change Repurchase Price” of any Security, means 105% of the principal
amount of the Security to be purchased plus accrued and unpaid interest, if any, to, but
excluding, the Fundamental Change Repurchase Date.




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




     “Funded Debt” means all indebtedness (other than indebtedness among the Company and its
subsidiaries) for the repayment of money borrowed, whether or not evidenced by a bond,
debenture, note or similar instrument or agreement, having a final maturity of more than
twelve months after the date of its creation or having a final maturity of less than twelve
months after the date of its creation but by its terms being renewable or extendible beyond
twelve months after such date at the option of the borrower (excluding obligations under any
Capital Leases). For the purpose of determining “Funded Debt,” any particular indebtedness
will be excluded if, on or prior to the final maturity of that indebtedness, the necessary
funds for the payment, redemption or satisfaction of that indebtedness have been deposited
with the proper depositary in trust.




     “Global Security” means a Security in global form that is in substantially the form
attached as Exhibit A and that includes the global securities legend which forms the
first full paragraph thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.




     “Legend” has the meaning specified in Section 2.4(a).




     “Lien” has the meaning specified in Section 5.1.




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




     “Non-Company Common Stock Dividend” has the meaning specified in Section 4.6(a)(iv).



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     “Original Purchasers” means the Purchasers under each of that certain Securities
Purchase Agreement, dated November 21, 2008, by and between the Company and Fairfax
Financial Holdings Limited, and that certain Securities Purchase Agreement, dated November
21, 2008, by and between the Company and Berkshire Hathaway Inc., and such Purchasers’
subsidiaries in which such Purchasers beneficially own more than 50% of the equity interests
(measured by both voting rights and value).




     “Participant” means members of, or participants in, the Depositary.




     “Permitted Liens” means (i) Liens existing as of the date of this Supplemental
Indenture; (ii) Liens on property or assets of, or any shares of stock or securing
indebtedness of, any corporation existing at the time such corporation becomes a Subsidiary;
(iii) Liens on property, assets, shares of stock or securing indebtedness existing at the
time of an acquisition, including an acquisition through merger or consolidation, and Liens
to secure indebtedness incurred prior to, at the time of or within 180 days after the later
of the completion of the acquisition, or the completion of any construction, improvement or
renovation and commencement of the operation of, any such property, for the purpose of
financing all or any part of the purchase price or construction cost of that property; (iv)
Liens to secure all or any portion of the cost of development, operation, construction,
alteration, repair or improvement of all or any part of such property or assets, or to
secure Funded Debt incurred prior to, at the time of or within 180 days after the completion
of such development, operation, construction, alteration, repair or improvement for the
purpose of financing all or any part of such costs; (v) Liens in favor of, or which secure
indebtedness owing to, the Company or a Subsidiary; (vi) Liens arising from the assignment
of moneys due and to become due under contracts between the Company or any Subsidiary and
the United States of America, any State, Commonwealth, Territory or possession thereof or
any agency, department, instrumentality or political subdivision of any thereof; or Liens in
favor of the United States of America, any State, Commonwealth, Territory or possession
thereof or any agency, department, instrumentality or political subdivision of any thereof,
to secure progress, advance or other payments pursuant to any contract or provision of any
statute, or pursuant to the provisions of any contract not directly or indirectly in
connection with securing any Funded Debt; (vii) Liens arising by reason of any attachment,
judgment, decree or order of any court or other governmental authority, so long as such Lien
is adequately bonded or reserved for and any appropriate legal proceedings which may have
been initiated for review of such attachment, judgment, decree or order shall not have been
finally terminated or so long as the period within which such proceedings may be initiated
shall not have expired; (viii) Liens arising by operation of law in favor of mechanics,
materialmen, laborers, employees, carriers, landlords or suppliers, incurred in the ordinary
course of business for sums which are not yet delinquent or are being contested in good
faith by negotiations or by appropriate proceedings which suspend the collection thereof;
(ix) Liens on property leased to or purchased by the Company or any Subsidiary and securing,
directly or indirectly, obligations issued by a State, a Territory or a possession of the
United States of America, or any political subdivision of any of the foregoing, or the
District of Columbia, to finance the cost of acquisition or cost of construction of such
property; (x) extensions, substitutions, replacements or renewals of the foregoing if the
principal amount of the



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indebtedness secured thereby is not increased and is not secured by any additional
assets; (xi) Liens existing or arising securing indebtedness or any other obligations under
the Credit Agreement, dated as of August 2, 2006 among the Company, the Lenders party
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Goldman Sachs Credit
Partners, L.P., as Syndication Agent, or any renewals, amendments, increases, or extensions,
replacements or refinancings thereof intended to rank equal in priority to the foregoing;
(xii) Liens arising from the granting of a license to any person in the ordinary course of
business; provided that such Liens attach only to the assets subject to such license; (xiii)
Liens arising by operation of law or contract on insurance policies and the proceeds thereof
to secure premiums thereunder; (xiv) Liens incurred with respect to rights of agents for
collection for the Company under assignments of chattel paper, accounts, instruments or
general intangibles for purposes of collection in the ordinary course of business; (xv)
Liens existing or deemed to exist in connection with securitization or similar transactions
relating to accounts, receivables or other rights to payment or interests therein; (xvi)
Liens securing obligations under swap agreements and related netting agreements; (xvii)
Liens created by sales contracts on assets subject to such contract; (xviii) Liens
consisting of the interest of any lessee under any lease or sublease on such property; (xix)
Liens attaching or resulting in connection with any letter of intent or purchase agreement
relating to such property subject to such letter of intent or purchase agreement; (xx) Liens
for taxes, assessments or other governmental charges; and (xxi) easements, zoning
restrictions, rights of way and similar encumbrances on real property that do not secure
monetary obligations.




     “Permitted Transactions” has the meaning specified in Section 4.6(a)(vii).




     “Pricing Date” has the meaning specified in Section 4.6(a)(vii).




     “Principal Property” means, as of any date any Lien thereon is to become effective, any
building, structure or other facility, together with the land upon which it is erected and
any fixtures which are a part of the building, structure or other facility, used primarily
for manufacturing, processing or production (other than any such land, building, structure
or other facility or portion thereof which is a pollution control facility or sewage or
waste disposal facility), in each case located in the United States, and owned or leased or
to be owned or leased by the Company or any of its Subsidiaries, and in each case the net
book value of which as of that date exceeds 1% of the Company’s Consolidated Net Tangible
Assets, other than any such land, building, structure or other facility or portion thereof
which is financed through the issuance of tax-exempt government obligations or which in the
opinion of the Board of Directors, is not of material importance to the total business
conducted by the Company and its Subsidiaries, considered as one enterprise.




     “Pro Rata Repurchases” means any purchase of shares of Company Common Stock by the
Company or any affiliate of the Company thereof pursuant to (A) any tender offer or exchange
offer subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated
thereunder or (B) any other offer available to substantially all holders of Company Common
Stock, in the case of both (A) or (B), whether for cash, shares of Company Capital Stock,
other securities of the Company, evidences of



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indebtedness of the Company or any other Person or any other property (including,
without limitation, shares of Capital Stock, other securities or evidences of indebtedness
of a subsidiary), or any combination thereof. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under
any tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with
respect to any Pro Rata Purchase that is not a tender or exchange offer.




     “Purchased Shares” has the meaning specified in Section 4.6(a)(vi).




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




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




     “Restricted Subsidiary” means a Subsidiary that owns a Principal Property.




     “Sale and Leaseback Transaction” means any arrangement with any person (other than
among the Company and/or its Restricted Subsidiaries (including any Subsidiary that would
become a Restricted Subsidiary upon the consummation of any such sale thereto)) pursuant to
which the Company or a Restricted Subsidiary agrees to lease any Principal Property (except
for leases for a term of not more than three years) which has been or is to be sold or
transferred more than 180 days after the later of the date (i) on which such Principal
Property has been acquired by the Company or a Restricted Subsidiary and (ii) of completion
of construction and commencement of full operation thereof, by the Company or a Restricted
Subsidiary to that person. Notwithstanding the above, a Sale and Leaseback Transaction
shall not include any such arrangement for financings of air, water or noise pollution
control facilities or sewage or solid waste disposal facilities or involving industrial
development bonds or other securities which are tax-exempt pursuant to Section 103 of the
Internal Revenue Code of 1986, as amended from time to time (or which receive similar tax
treatment under any subsequent amendments thereto or successor laws thereof).




     “Securities Act” means the Securities Act of 1933, as amended.




     “Securities” means the 10% Contingent Convertible Senior Notes due 2018, constituted
pursuant to the terms of this Supplemental Indenture.




     “Securities Custodian” means the custodian with respect to a Global Security (as
appointed by the Depositary) or any successor person thereto, who will initially be the
Trustee.




     “Shareholders Rights Plan” has the meaning specified in Section 4.6(a)(iv).




     “Spinoff Securities” has the meaning specified in Section 4.6(a)(iv).




     “Spinoff Valuation Period” has the meaning specified in Section 4.6(a)(iv).



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     “Stockholder Approval” means approval of the Company’s stockholders necessary to
approve the conversion of all of the Securities into shares of Company Common Stock for
purposes of satisfying the requirements of the Listed Company Manual of the New York Stock
Exchange.




     “Supplemental Indenture” has the meaning given in the first introductory paragraph
hereof.




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




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




     “Trustee” has the meaning given in the first introductory paragraph hereof.




     “Violation” means a violation of the stockholder approval requirements of the Listed
Company Manual of the New York Stock Exchange to the extent then applicable.




     “Voting Stock” means, with respect to any Person, capital stock of any class or kind
the holders of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.



     SECTION 1.3 Rules of Construction. For all purposes of this Supplemental Indenture:



     (a) capitalized terms used herein without definition shall have the meanings specified in the
Indenture;



     (b) all references herein to Articles and Sections, unless otherwise specified, refer to the
corresponding Articles and Sections of this Supplemental Indenture;



     (c) the terms “herein”, “hereof’, “hereunder” and other words of similar import refer to this
Supplemental Indenture; and



     (d) in the event of a conflict with the definition of terms in the Indenture, the definitions
in this Supplemental Indenture shall control.



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ARTICLE TWO




THE SECURITIES




     SECTION 2.1 Title of the Securities. There shall be a Series of Securities
designated the 10% Contingent Convertible Senior Notes due 2018.



     SECTION 2.2 Limitation on Aggregate Principal Amount. The Securities will be issued
in an aggregate principal amount of $400,000,000. Securities that have been issued and paid,
converted or acquired by the Company or its subsidiaries and cancelled shall not be reissued under
this Supplemental Indenture.



     SECTION 2.3 Form and Dating.



     (a) General. The Securities and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the
date of its authentication. The Securities shall be in denominations of $1,000 and integral
multiples thereof.



     The terms and provisions contained in the Securities shall constitute, and are hereby
expressly made, a part of this Supplemental Indenture, and the Company and the Trustee, by their
execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions
and to be bound thereby. However, to the extent any provision of any Security conflicts with the
express provisions of this Supplemental Indenture, the provisions of this Supplemental Indenture
shall govern and be controlling.



     The Company hereby designates the Depositary as the initial depositary for the Global
Securities.



     (b) Restricted Global Securities. All of the Securities are initially being offered
and sold in reliance on exemptions from the registration requirements of the Securities Act and
shall be issued initially in the form of one or more Restricted Global Securities in definitive,
fully registered form without interest coupons, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian, and registered in
the name of the Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture. The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter provided.



     (c) Book-Entry Provisions. This Section 2.3(c) shall apply only to a Global Security
deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in
accordance with this Section 2.3(c) and pursuant to an order of the Company, authenticate and
deliver initially one or more Global Securities that (a) shall be registered in the name of the
Depositary for such Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions
or held by the Trustee as Securities Custodian.



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     Participants shall have no rights under the Indenture with respect to any Global Security held
on their behalf by the Depositary or by the Trustee as Securities Custodian or under such Global
Security, and the Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner 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 impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.



     (d) Definitive Securities. Except as provided in Section 2.5, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery of certificated
Securities.



     SECTION 2.4 Transfer and Exchange.



     (a) If Securities are issued upon the transfer, exchange or replacement of Securities subject
to restrictions on transfer and bearing the legends set forth on the forms of Securities attached
as Exhibit A (collectively, the “Legend”), or if a request is made to remove the Legend on
a Security, the Securities so issued shall bear the Legend, or the Legend shall not be removed, as
the case may be, unless there is delivered to the Company and the Registrar such satisfactory
evidence, which shall include an opinion of counsel if requested by the Company or such Registrar,
as may be reasonably required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that such Securities are
not “restricted” within the meaning of Rule 144 under the Securities Act; provided that no such
evidence need be supplied in connection with the sale of such Security pursuant to a registration
statement that is effective at the time of such sale. Upon (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) Transfer and Exchange of Definitive Securities. When Definitive Securities are
presented to the Registrar with a request:




     (i) to register the transfer of such Definitive Securities; or




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



     the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met including compliance with the requirements of Section
2.4(a) hereof, if applicable; provided, however, that the Registrar shall not be obligated to
register such transfer or make such exchange unless and until the Definitive



12









 







Securities surrendered for transfer or exchange have been duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.



     (c) Transfer and Exchange of Global Securities.




     (i) The transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Supplemental Indenture
(including the restrictions set forth in this Section 2.4(a) hereof, if applicable, and all
other applicable restrictions on transfer set forth herein, if any) and the procedures of
the Depositary therefor. A transferor of a beneficial interest in a Global Security shall
deliver a written order given in accordance with the Depositary’s procedures containing
information regarding the participant account of the Depositary to be credited with a
beneficial interest in such Global Security or another Global Security and such account
shall be credited in accordance with such order with a beneficial interest in the applicable
Global Security and the account of the Person making the transfer shall be debited by an
amount equal to the beneficial interest in the Global Security being transferred.




     (ii) Notwithstanding any other provisions of this Supplemental Indenture (other than
the provisions set forth in Section 2.5), a Global Security may not be transferred as a
whole except 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.



     (d) Subject to Section 2.4(c)(ii) and in compliance with Section 2.4(e), every Security shall
be subject to the restrictions on transfer provided in the Legend. Whenever any Restricted
Security other than a Restricted Global Security is presented or surrendered for registration of
transfer or in exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set forth in Exhibit
A, dated the date of such surrender and signed by the Holder of such Security, as to compliance
with such restrictions on transfer. The Registrar shall not be required to accept for such
registration of transfer or exchange any Security not so accompanied by a properly completed
certificate.



     (e) The restrictions imposed by the Legend upon the transferability of any Security shall
cease and terminate when such Security has been sold pursuant to an effective registration
statement under the Securities Act or transferred in compliance with Rule 144 under the Securities
Act (or any successor provision thereto) or, if earlier, upon the expiration of the holding period
applicable to sales thereof under Rule 144 under the Securities Act (or any successor provision).
Any Security as to which such restrictions on transfer shall have expired in accordance with their
terms or shall have terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.4 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance with Rule 144 or any
successor provision, by, if requested by the Company or the Registrar, an opinion of counsel
reasonably acceptable to the Company and the Registrar and addressed to the Company and the
Registrar, to the effect that the transfer of such Security has been made in



13









 







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 offer and sale of the Securities under the Securities Act. The Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.



     As used in Sections 2.4(d) and (e), the term “transfer” encompasses any sale, pledge,
transfer, hypothecation or other disposition of any Security.



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


THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING
THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.




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



     (g) Cancellation or Adjustment of Global Security. At such time as all beneficial
interests in a Global Security have either been exchanged for Definitive Securities, transferred,
redeemed, repurchased or canceled, such Global Security shall be returned by the Depositary to the
Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for Definitive
Securities,



14









 







transferred in exchange for an interest in another Global Security, redeemed, repurchased or
canceled, the principal amount of Securities represented by such Global Security shall be reduced
and an adjustment shall be made on the books and records of the Trustee (if it is then the
Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee
or the Securities Custodian, to reflect such reduction.



     (h) Obligations with Respect to Transfers and Exchanges of Securities.




     (i) To permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate, Definitive Securities and Global Securities at the
Registrar’s request.




     (ii) No service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax, assessments,
or similar governmental charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant
to Sections 8.5 or 12.2 of the Indenture).




     (iii) Prior to the due presentation for registration of transfer of any Security, the
Company, the Trustee, the Paying Agent or the Registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such Security for the purpose
of receiving payment of principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.




     (iv) The Company shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities
for a period of 15 days before the mailing of a notice of redemption of Securities to be
redeemed.




     (v) All Securities issued upon any transfer or exchange pursuant to the terms of this
Supplemental Indenture shall evidence the same debt and shall be entitled to the same
benefits under the Indenture as the Securities surrendered upon such transfer or exchange.



     (i) No Obligation of the Trustee.




     (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Security, a member of, or a participant in the Depositary or any other Person with
respect to the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in Global Securities
or with respect to the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of redemption or repurchase)
or the payment of any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders under the
Securities shall be given or made only to the registered



15









 






Holders (which shall be the Depositary or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be exercised only
through the Depositary subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and shall be fully protected in relying upon information furnished by the
Depositary with respect to its members, participants and any beneficial owners.




     (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under this Supplemental Indenture or
under applicable law with respect to any transfer of any interest in any Security (including
any transfers between or among Depositary participants, members or beneficial owners 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 Supplemental Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.



     SECTION 2.5 Definitive Securities.



     (a) A Global Security deposited with the Depositary or with the Trustee as Securities
Custodian pursuant to Section 2.3 shall be transferred to the beneficial owners thereof in the form
of Definitive Securities in an aggregate principal amount equal to the principal amount of such
Global Security, in exchange for such Global Security, only if such transfer complies with Section
2.4 and (i) the Company notifies the Trustee that the Depositary is no longer willing or able to
act as a depositary or clearing system for the Securities or the Depositary ceases to be a
“clearing agency” registered under the Exchange Act, and a successor depositary or clearing system
is not appointed by the Company within 90 days of such notice or cessation, (ii) the Company, in
its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of
Definitive Securities under the Indenture, or (iii) upon the occurrence and continuation of an
Event of Default.



     (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this
Section 2.5 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate principal amount of
Definitive Securities of authorized denominations. Any portion of a Global Security transferred
pursuant to this Section 2.5 shall be executed, authenticated and delivered only in denominations
of $1,000 of principal amount and any integral multiple thereof and registered in such names as the
Depositary shall direct.



     (c) The registered Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through Participants, to take
any action which a Holder is entitled to take under the Indenture or the Securities.



     (d) In the event of the occurrence of any of the events specified in Section 2.5(a)(i), (ii)
or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive
Securities in fully registered form without interest coupons.



16









 





ARTICLE THREE

REPURCHASE




     SECTION 3.1 Optional Redemption. On or after December 1, 2013, the Company may
redeem, in accordance with the terms of the Indenture, all or a part of the Securities on any one
or more occasions, at the redemption prices (expressed as percentages of principal amount of the
Securities to be redeemed) set forth below plus accrued and unpaid interest on the Securities
redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on
December 1 of each of the years indicated below:



	 	 	 	 	 
	Year	 	Percentage
	2013
	 	 	105.00	%
	2014
	 	 	103.30	%
	2015
	 	 	101.70	%
	2016 and thereafter
	 	 	100.00	%






     Any Security selected for redemption pursuant to this Section 3.1 can be converted into shares
of Company Common Stock, in accordance with Article 4 hereof, at any time until and including the
Business Day prior to the redemption date specified in the notice of redemption issued by the
Company in respect of such redemption.



     If less than all of the Securities are to be redeemed, the Trustee shall select, in such
manner as it shall deem appropriate and fair, the Securities to be redeemed in whole or in part.
Securities may be redeemed in part only in multiples of $1,000 principal amount.



     The Company shall provide notice of redemption to each Holder of a Security to be redeemed not
less than 30 days nor more than 60 days prior to the date fixed for redemption. If any Security is
to be redeemed in part, the notice of redemption shall state the portion of the principal amount of
such Security to be redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities in such aggregate principal amount (which
must be equal to $1,000 principal amount or any integral thereof) equal to the portion of the
principal amount of the Security so surrendered that is not redeemed will be issued.



     If any Security selected for partial redemption pursuant to this Section 3.1 is converted in
part before termination of the conversion right with respect to the portion of the Security so
selected the converted portion of such Security shall be deemed so far as possible to be the
portion selected for redemption.



     Any Security in the form of a Global Security that is to be redeemed only in part shall be
adjusted to reflect the amount of any decrease in the amount of outstanding Securities represented
thereby by the Trustee, which adjustment shall be made on the records of the Trustee and the
Depository.



     SECTION 3.2 Repurchase of Securities at Option of the Holder upon a Fundamental
Change.



17









 





     (a) If a Fundamental Change occurs prior to the Final Maturity Date, each Holder of a
Security shall have the right, at the option of the Holder, to require the Company to repurchase
for cash all or any portion of the Securities of such Holder equal to $1,000 principal amount (or
an integral multiple thereof) at the Fundamental Change Repurchase Price, on a date that is not
less than 30 days nor more than 45 days after the date of the Fundamental Change Company Notice
pursuant to subsection 3.2(b) or, if later, not less than five Business Days after the Fundamental
Change Effective Date (the “Fundamental Change Repurchase Date”).



     (b) As promptly as reasonably practicable following the public announcement of a Fundamental
Change, the Company shall mail a written notice of the Fundamental Change and of the resulting
repurchase right to the Trustee, Paying Agent and to each Holder (and to beneficial owners as
required by applicable law) (the “Fundamental Change Company Notice”). The Fundamental Change
Company Notice shall include the form of a Fundamental Change Repurchase Notice to be completed by
the Holder and shall state:




     (i) the events causing such Fundamental Change;




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




     (iii) the last date by which the Fundamental Change Repurchase Notice must be
delivered to elect the repurchase option pursuant to this Section 3.2;




     (iv) the Fundamental Change Repurchase Date;




     (v) the Fundamental Change Repurchase Price;




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




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




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




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




     (x) the procedures that the Holder must follow to exercise rights under this Section
3.2;




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




     (xii) that, unless the Company fails to pay such Fundamental Change Repurchase Price,
Securities covered by any Fundamental Change Repurchase Notice will cease to be



18









 







outstanding and interest will cease to accrue on and after the Fundamental Change
Repurchase Date; and




     (xiii) the CUSIP number of the Securities.



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



     (c) A Holder may exercise its rights specified in Section 3.2(a) upon delivery of a written
notice (which shall be in substantially the form attached as Exhibit B hereto under the
heading “Fundamental Change Repurchase Notice” and which may be delivered by letter, overnight
courier, hand delivery, facsimile transmission or in any other written form and, in the case of
Global Securities, may be delivered electronically or by other means in accordance with the
applicable procedures of the Depositary) of the exercise of such rights (a “Fundamental Change
Repurchase Notice”) to the Company or any Paying Agent at any time prior to the close of business
on the Business Day next preceding the Fundamental Change Repurchase Date, subject to extension to
comply with applicable law.




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




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




     (iii) The Company shall only be obliged to purchase, pursuant to this Section 3.2, a
portion of a Security if the principal amount of such portion is $1,000 or an integral
multiple of $1,000 (provisions of this Supplemental Indenture and the Indenture that apply
to the purchase of all of a Security also apply to the purchase of such portion of such
Security).




     (iv) Notwithstanding anything herein to the contrary, any Holder delivering to a
Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 3.2(c)
shall have the right to withdraw such Fundamental Change Repurchase



19









 







Notice in whole or in a portion thereof that is a principal amount of $1,000 or in an integral
multiple thereof at any time prior to the close of business on the Business Day prior to the
Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.3.




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




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



     SECTION 3.3 Effect of Fundamental Change Repurchase Notice.



     (a) Upon receipt by any Paying Agent of a properly completed Fundamental Change Repurchase
Notice from a Holder, the Holder of the Security in respect of which such Fundamental Change
Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn as
specified in Section 3.3(b)) thereafter be entitled to receive the Fundamental Change Repurchase
Price with respect to such Security, subject to the occurrence of the Fundamental Change Effective
Date and an absence of an Event of Default, or a continuation thereof (other than a Default in the
payment of the Fundamental Change Repurchase Price). Such Fundamental Change Repurchase Price
shall be paid to such Holder promptly following the later of (1) the Fundamental Change Repurchase
Date (provided that the conditions in Section 3.2 have been satisfied) and (2) the time of delivery
of such Security to a Paying Agent by the Holder thereof in the manner required by Section 3.2(c).
Securities in respect of which a Fundamental Change Repurchase Notice has been given by the Holder
thereof may not be converted into shares of Company Common Stock pursuant to Article 4 on or after
the date of the delivery of such Fundamental Change Repurchase Notice unless such Fundamental
Change Repurchase Notice has first been validly withdrawn in accordance with Section 3.3(b) with
respect to the Securities to be converted.



     (b) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice
(which may be delivered by mail, overnight courier, hand delivery, facsimile transmission or in any
other written form and, in the case of Global Securities, may be delivered electronically or by
other means in accordance with the applicable procedures of the Depositary) of withdrawal delivered
by the Holder to a Paying Agent at any time prior to the close of business on the Business Day
immediately prior to the Fundamental Change Repurchase Date, specifying (1) the principal amount of
the Security or portion thereof (which must be a principal amount of $1,000 or an integral multiple
thereof) with respect to which such notice of withdrawal is being submitted, (2) if certificated
Securities have been issued, the certificate number of the Security being withdrawn in whole or in
withdrawable part (or if the Securities are not certificated, such written notice must comply with
the applicable procedures of the Depositary) and (3) the portion of the principal amount of the
Security that will remain subject to the Fundamental Change Repurchase Notice, which portion must
be a principal amount of $1,000 or an integral multiple thereof.




20











 





     SECTION 3.4 Deposit of Fundamental Change Repurchase Price.



     (a) On or before 12:00 p.m. (noon) New York City time on the Business Day following the
applicable Fundamental Change Repurchase Date, the Company shall deposit with the Trustee or with a
Paying Agent (or if the Company is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 3.4 of the Indenture) an amount of money (in immediately available funds if
deposited on or after such Fundamental Change Repurchase Date), sufficient to pay the aggregate
Fundamental Change Repurchase Price of all the Securities or portions thereof that are to be
purchased as of such Fundamental Change Repurchase Date.



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



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



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



     SECTION 3.5 Repayment to the Company. To the extent that the aggregate amount of
cash deposited by the Company pursuant to Section 3.4 exceeds the aggregate Fundamental Change
Repurchase Price of the Securities or portions thereof that the Company is obligated to purchase,
then promptly after the Fundamental Change Repurchase Date the Trustee or a Paying Agent, as the
case may be, shall return any such excess cash to the Company.



     SECTION 3.6 Securities Purchased in Part. Any Security in the form of a Global
Security that is to be purchased only in part shall be adjusted to reflect the amount of any
decrease in the amount of outstanding Securities represented thereby by the Trustee, which
adjustment shall be made on the records of the Trustee and the Depositary. Any Security in the
form of a Definitive Security that is to be purchased only in part shall be surrendered at the
office of a Paying Agent, and promptly after the Fundamental Change Repurchase Date, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of such authorized denomination or
denominations as may be requested by such Holder (which must be equal to $1,000 principal



21









 







amount or any integral thereof), in aggregate principal amount equal to, and in exchange for,
the portion of the principal amount of the Security so surrendered that is not purchased.



     SECTION 3.7 Compliance with Securities Laws upon Purchase of Securities. In
connection with any offer to purchase of Securities under Section 3.2, the Company shall (a) comply
with Rule 13e-4 and Rule 14e-1 (or any successor to either such Rule), and any other tender offer
rules, if applicable, under the Exchange Act, (b) file the related Schedule TO (or any successor or
similar schedule, form or report) if required under the Exchange Act, and (c) otherwise comply with
all federal and state securities laws in connection with such offer to purchase or purchase of
Securities, all so as to permit the rights of the Holders and obligations of the Company under
Sections 3.2 through 3.5 to be exercised in the time and in the manner specified therein. To the
extent that compliance with any such laws, rules and regulations would result in a conflict with
any of the terms hereof, this Supplemental Indenture and the Indenture is hereby modified to the
extent required for the Company to comply with such laws, rules and regulations.



     SECTION 3.8 Cancellation of Tendered Securities. The Company will surrender any
Security purchased by the Company pursuant to this Article 3 to the Trustee for cancellation. Any
securities surrendered to the Trustee for cancellation will be canceled promptly in accordance with
Section 2.10 of the Indenture and Section 2.4 hereof.



ARTICLE FOUR

CONVERSION




     SECTION 4.1 Conversion Privilege and Conversion Rate.



     (a) At any time (i) after the Conversion Condition has occurred and (ii) with respect to the
Designated Excess Securities only, so long as the Designated Original Purchaser is the beneficial
owner of such Designated Excess Securities, after the Credit Facility Condition has occurred,
subject to and upon compliance with the provisions of this Article 4, at the option of the Holder
thereof, any Security or portion thereof that is an integral multiple of $1,000 principal amount,
may be converted into fully paid and non-assessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of Company Common Stock at any time prior to the close of business on
the Business Day immediately preceding the Final Maturity Date at the Conversion Rate in effect at
such time, determined as hereinafter provided.



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



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



     (d) The Conversion Rate shall be adjusted in certain instances as provided in Section 4.6.



22









 





     (e) By delivering the number of shares of Company Common Stock issuable on conversion to the
Trustee, or to the Conversion Agent, if the Conversion Agent is other than the Trustee, the Company
will be deemed to have satisfied its obligation to pay the principal amount of the Securities so
converted and its obligation to pay accrued and unpaid interest attributable to the period from the
most recent interest payment date through the Conversion Date (which amount will be deemed paid in
full rather than cancelled, extinguished or forfeited) except to the extent that such interest is
required to be paid by the last paragraph of Section 2.7 of the Indenture.



     (f) Notwithstanding anything contained herein to the contrary, the Company shall not be
obligated to deliver shares of Company Common Stock in connection with any conversion of Securities
to the extent such delivery would constitute a violation of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, the Competition Act (Canada), or any other foreign antitrust
laws or requirements and any applicable waiting period (and any extension thereof) under any such
antitrust laws or requirements has not expired or terminated.



     SECTION 4.2 Conversion Procedure.



     (a) So long as any of the Securities remain outstanding, the Company will maintain one or more
offices or agencies where Securities may be presented for conversion (each, a “Conversion Agent”).
The Company initially designates the Trustee to act as Conversion Agent.



     (b) To convert a Security, a Holder must (i) complete and manually sign the conversion notice
on the back of the Security and deliver such notice to a Conversion Agent, (ii) surrender the
Security to a Conversion Agent, (iii) furnish appropriate endorsements and transfer documents if
required by a Registrar or a Conversion Agent, and (iv) pay all transfer or similar taxes, if
required pursuant to Section 4.4. The date on which the Holder satisfies all of those requirements
is the “Conversion Date.” Upon the conversion of a Security, the Company will pay the cash and
deliver the shares of Company Common Stock to the Trustee or to the Conversion Agent, if the
Conversion Agent is other than the Trustee, as applicable, as promptly as practicable after the
later of the Conversion Date and the date that all calculations necessary to make such payment and
delivery have been made, but in no event later than five Business Days after the later of those
dates. Anything herein to the contrary notwithstanding, in the case of Global Securities,
conversion notices may be delivered and such Securities may be surrendered for conversion in
accordance with the applicable procedures of the Depositary as in effect from time to time.



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



23









 







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



     (d) Holders of Securities surrendered for conversion (in whole or in part) during the period
from the close of business on any regular record date next preceding any interest payment date to
the opening of business on the next succeeding interest payment date will receive the semi-annual
interest payable on such Securities on the corresponding interest payment date notwithstanding the
conversion. Upon surrender of any such Securities for conversion during the period from the close
of business on any regular record date to the opening of business on the next succeeding interest
payment date, unless (i) such Securities have been surrendered for conversion following the regular
record date immediately preceding the final interest payment date (December 1, 2018), (ii) the
Company has specified a Fundamental Change Repurchase Date or a redemption date that is after a
regular record date and on or prior to the Business Day following the corresponding interest
payment date, or (iii) to the extent of overdue interest, if any, which exists at the time of the
Conversion with respect to such Security, such Securities shall also be accompanied by payment in
funds acceptable to the Company of an amount equal to the interest payable on such corresponding
interest payment date. Except as otherwise provided in this Section 4.2(d), no payment or
adjustment will be made for accrued interest on a converted Security.



     (e) Subject to Section 4.2(d), nothing in this Section shall affect the right of a Holder in
whose name any Security is registered at the close of business on a regular record date to receive
the interest payable on such Security on the related interest payment date in accordance with the
terms of this Supplemental Indenture and the Indenture and the Securities. If a Holder converts
more than one Security at the same time, the number of shares of Company Common Stock issuable upon
the conversion, if any, (and the amount of any cash in lieu of fractional shares pursuant to
Section 4.3) shall be based on the aggregate principal amount of all Securities so converted.



     (f) In the case of any Security in the form of a Global Security which is converted in part
only, upon such conversion, the Security shall be adjusted to reflect the amount of any decrease in
the amount of outstanding Securities represented thereby by the Trustee, which adjustment shall be
made on the records of the Trustee and the Depositary. In the case of any Security in the form of
a Definitive Security which is converted in part only, upon such conversion the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, without service
charge, a new Security or Securities of authorized denominations in an aggregate principal amount
equal to, and in exchange for, the unconverted portion of the principal amount of such Security. A
Security may be converted in part, but only if the principal amount of such part is an integral
multiple of $1,000 and the principal amount of such Security to remain outstanding after such
conversion is equal to $1,000 or any integral multiple of $1,000 in excess thereof.



     SECTION 4.3 Fractional Shares. The Company will not issue fractional shares of
Company Common Stock upon conversion of Securities. If more than one Security shall be



24









 







surrendered for conversion at one time by the same Holder, the number of full shares that
shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount
of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered.
In lieu of any fractional share, the Company will pay an amount in cash for the current market
value of the fractional share on the date of conversion. The current market value of a fractional
share shall be determined (calculated to the nearest 1/100th of a share) by multiplying the Closing
Price of the Company Common Stock on the Trading Day immediately preceding the Conversion Date by
such fractional share and rounding the product to the nearest whole cent.



     SECTION 4.4 Taxes on Conversion. If a Holder converts a Security, the Holder shall
pay any transfer, stamp or similar taxes or duties related to the issue or delivery of shares of
Company Common Stock upon such conversion. The Holder shall also pay any such tax with respect to
cash received in lieu of fractional shares. In addition, the Holder shall pay any such tax which
is due because the Holder requests the shares to be issued in a name other than the Holder’s name.
The Conversion Agent may refuse to deliver the certificate representing the Company Common Stock
being issued in a name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued in a name other
than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or
regulation.



     SECTION 4.5 Company to Provide Stock.



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



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



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



     SECTION 4.6 Adjustment of Conversion Rate.



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




     (i) If the Company shall pay a dividend or make a distribution on outstanding Company
Common Stock in shares of Company Common Stock, the Conversion Rate in effect immediately
prior to the record date for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased so that the same shall equal the rate
determined by the Company by multiplying the Conversion Rate in effect immediately prior to
such record date by a fraction of which the numerator shall be the sum of the number of
shares of Company Common Stock outstanding at the close of



25









 







business on such record date plus the total number of shares of Company Common Stock
constituting such dividend or other distribution and of which the denominator shall be the
number of shares of Company Common Stock outstanding at the close of business on such record
date. Such adjustment shall be made successively whenever any such dividend or distribution
is made and shall become effective immediately after such record date. For the purpose of
this clause (i), the number of shares of Company Common Stock at any time outstanding shall
not include shares held in the treasury of the Company. The Company will not pay any
dividend or make any distribution on Company Common Stock held in the treasury of the
Company. If any dividend or distribution of the type described in this clause is declared
but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
that would then be in effect if such dividend or distribution had not been declared.




     (ii) If the Company shall subdivide its outstanding Company Common Stock into a greater
number of shares, or combine its outstanding Company Common Stock into a smaller number of
shares, the Conversion Rate in effect immediately prior to the day upon which such
subdivision or combination becomes effective shall be, in the case of a subdivision of
Company Common Stock, proportionately increased and, in the case of a combination of Company
Common Stock, proportionately reduced. A reclassification of Company Common Stock into
securities other than Company Common Stock shall be deemed to involve (A) a distribution of
such other than Company Common Stock securities pursuant to Section 4.6(a)(iv) hereof and
(B) a subdivision or combination, as the case may be, of the number of shares of Company
Common Stock outstanding immediately prior to such reclassification into the number of
shares of Company Common Stock outstanding immediately thereafter pursuant to the terms of
this Section 4.6(a)(ii). In the case of (A) above the “record date for the determination of
stockholders entitled to receive such dividend or other distribution” and in the case of (B)
above the “day upon which such subdivision or combination becomes effective” shall be the
date upon which such reclassification becomes effective. Such adjustments shall be made
successively whenever any such subdivision, combination or reclassification of the Company
Common Stock occurs and shall become effective immediately after the date upon which such
subdivision, combination or reclassification becomes effective.




     (iii) If the Company effects a Pro Rata Repurchase of Company Common Stock, then,
unless such transaction results in a change to the Conversion Rate pursuant to Section
4.6(a)(vi) hereof, the Conversion Rate shall be adjusted by multiplying the Conversion Rate
in effect immediately prior to the effective date of such Pro Rata Repurchase by a fraction
of which the numerator shall be the product of (A) the number of shares of Company Common
Stock outstanding immediately prior to such Pro Rata Repurchase minus the number of shares
of Company Common Stock so repurchased and (B) the Current Market Price per share of Company
Common Stock on the Trading Day immediately preceding the first public announcement by the
Company or any of its affiliates of the intent to effect such Pro Rata Repurchase and of
which the denominator shall be (A) the product of (I) the number of shares of Company Common
Stock outstanding immediately before such Pro Rata Repurchase and (II) the Current Market
Price of a share of Company Common Stock on the Trading Day immediately preceding the first
public announcement by the Company or any of its affiliates of the intent to



26









 







effect such Pro Rata Repurchase, minus (B) the aggregate purchase price (based on the
Fair Market Value of any non-cash consideration) of the Pro Rata Repurchase.




     (iv) If the Company shall make a dividend or other distribution to all or substantially
all holders of its Company Common Stock of Capital Stock (other than Company Common Stock)
evidences of indebtedness, cash, rights warrants, other assets or property of the Company,
including securities (excluding dividends or distributions in connection with a business
combination resulting in a change in the conversion consideration that includes the value of
such dividend or distribution or pursuant to any Shareholder Rights Plan (as hereinafter
defined)) (a “Non-Company Common Stock Dividend”), then in each such case the Conversion
Rate in effect immediately prior to the record date fixed for the determination of
stockholders entitled to receive such dividend or distribution shall be adjusted so that the
same shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to such record date by a fraction of which the numerator shall be the
Current Market Price per share of the Company Common Stock on such record date and of which
the denominator shall be Current Market Price per share of Company Common Stock on such
record date less the Fair Market Value on such record date of the portion of the Non-Company
Common Stock Dividend so distributed applicable to one share of Company Common Stock
(determined on the basis of the number of shares of Company Common Stock outstanding at the
close of business on such record date). Such adjustment shall be made successively whenever
any such distribution is made and shall become effective immediately after the record date
for the determination of stockholders entitled to receive such distribution. In the event
that such dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.




     If the Fair Market Value (as so determined) of the portion of the Non-Company Common
Stock Dividend so distributed applicable to one share of Company Common Stock is equal to or
greater than the Current Market Price per share of the Company Common Stock on such record
date, in lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of a Security shall have the right to receive upon conversion the amount of
Non-Company Common Stock Dividend so distributed that such Holder would have received had
such Holder converted each Security on such record date. If the Board of Directors
determines the Fair Market Value of any distribution for purposes of this Section 4.6(a)(iv)
by reference to the actual or when issued trading market for any securities, it must in
doing so consider the prices in such market over the same period used in computing the
Current Market Price of the Company Common Stock.




     Notwithstanding the foregoing, if the securities distributed by the Company to all
holders of its Company Common Stock consist of Capital Stock of, or similar equity interests
in, a Subsidiary or other business unit of the Company (the “Spinoff Securities”), the
Conversion Rate shall be adjusted, so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the record date fixed for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator of which
shall be the sum of (A) the average Closing Price of one share of



27









 







Company Common Stock over the ten consecutive Trading Day period (the “Spinoff
Valuation Period”) commencing on and including the fifth Trading Day after the date on which
ex-dividend trading commences for such distribution on the New York Stock Exchange or such
other U.S. national or regional exchange or market on which the Company Common Stock is then
listed or quoted and (B) the average of the Closing Prices over the Spinoff Valuation Period
of the Spinoff Securities multiplied by the number of Spinoff Securities distributed in
respect of one share of Company Common Stock and the denominator of which shall be the
average Closing Price of one share of Company Common Stock over the Spinoff Valuation
Period, such adjustment to become effective immediately prior to the opening of business on
the fifteenth Trading Day after the date on which ex-dividend trading commences.




     (v) The Company shall provide that, pursuant to the Company’s shareholder rights plan
adopted December 21, 2006 and under any future shareholder rights plan of the Company (the
“Shareholder Rights Plan”), Holders of Securities will receive, upon conversion of their
Securities for shares of Company Common Stock, in addition to shares of Company Common
Stock, common stock purchase rights issuable under such Shareholder Rights Plan unless,
prior to conversion, the common stock purchase rights have expired, terminated or been
redeemed or exchanged or unless the rights have separated from the Company Common Stock. If
the common stock purchase rights provided for in the Shareholder Rights Plan adopted by the
Company have separated from the Company Common Stock in accordance with the provisions of
the Shareholder Rights Plan so that Holders of Securities would not be entitled to receive
any rights in respect of shares of Company Common Stock issuable upon conversion of the
Securities, the Conversion Rate will be adjusted at the time of separation as if the Company
had distributed, to all holders of Company Common Stock, shares of Capital Stock, evidences
of indebtedness or other assets or property pursuant to Section 4.6(a)(i), (iii) or (iv)
hereof, as applicable, subject to readjustment upon the subsequent expiration, termination
or redemption of the rights. In lieu of any such adjustment, the Company may take such
steps (if any) that may be necessary so that, upon conversion of Securities, the Holders
will receive, in addition to shares of Company Common Stock issuable upon such conversion,
the common stock purchase rights which would have attached to such shares of Company Common
Stock if the common stock purchase rights had not become separated from the Company Common
Stock under its Shareholder Rights Plan. Notwithstanding the foregoing, the conversion rate
with respect to Securities held by a Holder that causes the separation of common stock
purchase rights under a Shareholder Rights Plan will not be adjusted in accordance with this
Section 4.6(a)(v).




     (vi) If any tender offer made by the Company or any of its Subsidiaries for all or any
portion of Company Common Stock shall expire, then, if the tender offer shall require the
payment to stockholders of consideration per share of Company Common Stock having a Fair
Market Value that exceeds the Closing Price per share of Company Common Stock on the Trading
Day next succeeding the last date (the “Expiration Date”) tenders could have been made
pursuant to such tender offer (as it may be amended) (the last time at which such tenders
could have been made on the Expiration Date is hereinafter sometimes called the “Expiration
Time”), the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion



28









 







Rate in effect immediately prior to the close of business on the Expiration Date by a
fraction of which the numerator shall be the sum of (A) the Fair Market Value of the
aggregate consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the “Purchased Shares”) and (B) the product of the number of shares of
Company Common Stock outstanding (less any Purchased Shares and excluding any shares held in
the treasury of the Company) at the Expiration Time and the Closing Price per share of
Company Common Stock on the Trading Day next succeeding the Expiration Date and the
denominator of which shall be the product of the number of shares of Company Common Stock
outstanding (including Purchased Shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the Closing Price per share of the Company
Common Stock on the Trading Day next succeeding the Expiration Date, such increase to become
effective immediately prior to the opening of business on the day following the Expiration
Date. In the event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from effecting any
or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would have been in effect based upon the
number of shares actually purchased, if any. If the application of this Section 4.6(a)(vi)
to any tender offer would result in a decrease in the Conversion Rate, no adjustment shall
be made for such tender offer under this Section 4.6(a)(vi).




     (vii) If the Company shall issue shares of Company Common Stock (or rights or warrants
or other securities exercisable or convertible into or exchangeable for shares of Company
Common Stock) (collectively, “Convertible Securities”) (other than in Permitted Transactions
(as defined below) or a transaction to which Section 4.6(a)(i) is applicable) without
consideration or at a consideration per share (or having a conversion price per share) that
is less than 95% of the Closing Price on the last Trading Day preceding the date of the
agreement on pricing such shares (or such Convertible Securities) (such date of the
agreement on pricing, the “Pricing Date”) then, in such event, the Conversion Rate in effect
immediately prior to the Pricing Date shall be increased so that the same shall equal the
rate determined by multiplying such Conversion Rate by a fraction of which the numerator
shall be the sum of (A) the number of shares of Company Common Stock outstanding immediately
prior to the Pricing Date and (B) the number of additional shares of Company Common Stock
issued (or into which Convertible Securities may be exercised or converted) and of which the
denominator shall be the sum of (A) the number of shares of Company Common Stock outstanding
immediately prior to the Pricing Date and (B) the number of shares of Company Common Stock
which the aggregate consideration receivable by the Company for the total number of shares
of Company Common Stock so issued (or into which Convertible Securities may be exercised or
convert) would purchase at the Closing Price on the last Trading Day preceding the Pricing
Date.




     For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Company Common Stock or Convertible
Securities shall be deemed to be equal to the sum of the net offering price



29









 







(including the Fair Market Value of any non-cash consideration and after deduction of
any related expenses payable to third parties) of all such securities plus the minimum
aggregate amount, if any, payable upon exercise or conversion of any such Convertible
Securities into shares of Company Common Stock; and “Permitted Transactions” shall mean
issuances (i) in a merger or consolidation transaction, (ii) in connection with employee
benefit plans and compensation related arrangements in the ordinary course and consistent
with past practice approved by the Board of Directors, or (iii) in connection with a public
or broadly marketed offering and sale of Company Common Stock, securities convertible into
Company Common Stock or rights or warrants entitling the holder to purchase Company Common
Stock for cash, conducted on a basis consistent with offerings by public companies of
similar size in their own capital raising transactions. Such adjustments shall be made
successively whatever any shares of Company Common Stock are issued (or into which
Convertible Securities may be exercised or convert). Any adjustment made pursuant to this
Section 4.6(a)(vii) shall become effective immediately upon the Pricing Date.




     (viii) For purposes of this Section 4.6, the term “tender offer” shall mean and include
both tender offers and exchange offers, all references to “purchases” of shares in tender
offers (and all similar references) shall mean and include both the purchase of shares in
tender offers and the acquisition of shares pursuant to exchange offers, and all references
to “tendered shares” (and all similar references) shall mean and include shares tendered in
both tender offers and exchange offers.




     (ix) For purposes of any computation under this Section 4.6, “Current Market Price”
shall mean the average of the daily Closing Prices per share of Company Common Stock for
each of the ten consecutive Trading Days immediately prior to the date in question;
provided, however, that if:




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




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




     (C) the “ex” date for the issuance or distribution requiring such computation
is prior to the day in question, after taking into account any adjustment required
pursuant to the immediately preceding clause (A) or (B) of this Section 4.6(a)(ix),
the Closing Price for each Trading Day on or after such



30









 







“ex” date shall be adjusted by adding thereto the amount of any cash and the
Fair Market Value of the evidences of indebtedness, shares of capital stock or
assets being distributed applicable to one share of Company Common Stock as of the
close of business on the day before such “ex” date.




     For purposes of any computation under Section 4.6(a)(vi), if the “ex” date for any
event (other than the tender offer that is the subject of the adjustment pursuant to Section
4.6(a)(vi)) that requires an adjustment to the Conversion Rate occurs on the date of the
Expiration Time for the tender or exchange offer requiring such computation or on the
Trading Day next following the Expiration Time, the Closing Price for each Trading Day on
and after the “ex” date for such other event shall be adjusted by dividing such Closing
Price by the reciprocal of the fraction by which the Conversion Rate is so required to be
adjusted as a result of such other event. For purposes of this Section 4.6(a)(ix) the term
“ex” date, when used:




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




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




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




     Notwithstanding the foregoing, whenever successive adjustments to the Conversion Rate
are called for pursuant to this Section 4.6, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the intent of this Section
4.6, which is to protect the value of the conversion right of the Holders, and to avoid
unjust or inequitable results as determined in good faith by the Board of Directors and
evidenced by an Officers’ Certificate delivered to the Trustee.



     (b) In any case in which this Section 4.6 shall require that an adjustment be made following a
record date, an effective date or an Expiration Date, as the case may be, established for the
purposes specified in this Section 4.6, the Company may elect to defer (but only until five
Business Days following the filing by the Company with the Trustee of the certificate described in
Section 4.8) issuing to the Holder of any Security converted after such record date, effective date
or Expiration Date the shares of Company Common Stock and other Capital Stock of the Company
issuable upon such conversion over and above the shares of Company Common Stock and other Capital
Stock of the Company (or other cash, property or securities, as applicable) issuable upon such
conversion only on the basis of the Conversion Rate prior to adjustment; and, in lieu of any cash,
property or securities the issuance of which is so deferred, the Company shall



31









 







issue or cause its transfer agents to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such cash, property or securities. If any distribution in
respect of which an adjustment to the Conversion Rate is required to be made as of the record date,
effective date or Expiration Date therefore is not thereafter made or paid by the Company for any
reason, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in
effect if such record date had not been fixed or such record date, effective date or Expiration
Date had not occurred.



     (c) For purposes of this Section 4.6, “record date” shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Company Common Stock have the
right to receive any cash, securities or other property or in which the Company Common Stock (or
other applicable security) is exchanged or converted into any combination of cash, securities or
other property, the date fixed for determination of stockholders entitled to receive such cash,
security or other property (whether or not such date is fixed by the Board of Directors or by
statute, contract or otherwise).



     (d) If one or more events occurs requiring an adjustment be made to the Conversion Rate for a
particular period, adjustments to the Conversion Rate shall be determined in good faith by the
Board of Directors to reflect the combined impact of such Conversion Rate adjustment events, as set
out in this Section 4.6, during such period.



     (e) If an adjustment to the Conversion Rate pursuant to this Section 4.6 results in a Holder’s
deemed receipt of a distribution for U.S. federal income tax purposes, the Company may set off any
withholding tax the Company is required to collect with respect to such distribution from cash
payments of interest, from Company Common Stock and cash, if any, deliverable to such Holder upon
the conversion of a Security, or from cash deliverable to such holder upon a Security’s redemption
or repurchase.



     SECTION 4.7 No Adjustment.



     (a) No adjustment in the Conversion Rate shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Conversion Rate as last adjusted; provided,
however, that any adjustments which would be required to be made but for this Section 4.7(a) shall
be carried forward and taken into account in the determination of any subsequent adjustment. The
Company shall adjust for any carry forward amount upon conversion regardless of the 1% threshold.
All calculations under this Article 4 shall be made to the nearest cent or to the nearest one-ten
thousandth of a share, as the case may be, with one half cent and 0.00005 of a share, respectively,
being rounded upward.



     (b) No adjustment in the Conversion Rate shall be required for issuances of Company Common
Stock pursuant to a Company plan for reinvestment of dividends or interest or for a change in the
par value, or a change to no par value, of the Company Common Stock.



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



     SECTION 4.8 Adjustment Procedures and Notices.



32









 





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



     (b) In the event that the Company shall propose to take any action of the type described in
this Section 4.6 (but only if the action of the type described in this Section 4.6 would result in
an adjustment in the Conversion Rate or conversion privilege), the Company shall promptly mail to
Holders a notice, which notice shall specify the record date, if any, with respect to any such
action and the approximate date on which such action is to take place. Such notice shall also set
forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on the
Conversion Rate or conversion privilege which shall be deliverable upon conversion. In the case of
any action which would require the fixing of a record date, such notice shall be given at least 10
days prior to the date so fixed, and in case of all other action, such notice shall be given at
least 15 days prior to the taking of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.



     (c) As a condition precedent to the taking of any action which would require an adjustment
pursuant to Section 4.6, the Company shall take any action which may be necessary, including
obtaining regulatory, New York Stock Exchange or stockholder approvals or exemptions, in order that
the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of
Company Common Stock that the Holders are entitled to receive upon conversion pursuant to Section
4.6.



     SECTION 4.9 Notice of Certain Transactions. In the event that there is a dissolution
or liquidation of the Company, the Company shall mail to Holders and file with the Trustee a notice
stating the proposed effective date. The Company shall mail such notice at least 10 days before
such proposed effective date. Failure to mail such notice or any defect therein shall not affect
the validity of any transaction referred to in this Section 4.9.



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



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



     (ii) a consolidation, merger or combination involving the Company;



     (iii) a sale, conveyance or lease to another corporation of all or substantially all of the
property and assets of the Company; or



     (iv) any statutory share exchange,



33









 







in each case as a result of which holders of Company Common Stock are entitled to receive stock,
other securities, other property or assets (including cash or any combination thereof) with respect
to or in exchange for Company Common Stock, the Company or the successor or purchasing corporation,
as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act of 1939 as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply) providing that the Holders
of the Securities then outstanding will be entitled thereafter to convert such Securities into the
kind and amount of shares of stock, other securities or other property or assets (including cash or
any combination thereof) which they would have owned or been entitled to receive upon such Business
Combination had such Securities been converted into Company Common Stock immediately prior to such
Business Combination. In the event holders of Company Common Stock have the opportunity to elect
the form of consideration to be received in such Business Combination, the Holders of Securities
shall have the right to make a similar election (including without limitation, being subject to
similar proration constraints) upon conversion of the Securities with respect to the number or
amount of shares of stock, other securities, cash, property or other assets, or any combination
thereof, which the holders of the Securities will receive upon conversion of the Securities. The
Company may not become a party to any such transaction unless its terms are consistent with this
Section 4.10. Such supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 4. If, in the
case of any such Business Combination, the stock or other securities and assets receivable
thereupon by a holder of shares of Company Common Stock includes shares of stock or other
securities and assets of a corporation other than the successor or purchasing corporation, as the
case may be, in such Business Combination, then such supplemental indenture shall also be executed
by such other corporation and shall contain such additional provisions to protect the interests of
the Holders of the Securities as the Board of Directors shall reasonably consider necessary by
reason of the foregoing, including to the extent practicable the provisions providing for the
repurchase rights set forth in Article 3 hereof. Notwithstanding anything contained in this
Section, and for the avoidance of doubt, this Section shall not affect the right of a Holder to
convert its Securities into shares of Company Common Stock prior to the effective date of a
Business Combination.



     SECTION 4.11 Trustee’s Disclaimer.



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



     (b) The Trustee shall not be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture executed pursuant to Section 4.10, but may
accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying
upon, the Officers’ Certificate and Opinion of Counsel, with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 8.4 of the Indenture.



34









 





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



ARTICLE FIVE




COVENANTS




     SECTION 5.1 Limitation on Liens. The Company will not, nor will it permit any
Restricted Subsidiary to, directly or indirectly, issue, assume or guarantee any indebtedness that
is secured by a mortgage, pledge, security interest or other lien or encumbrance (a “Lien”), other
than Permitted Liens, upon or with respect to any Principal Property or on the capital stock of any
Restricted Subsidiary unless:



     (a) the Company secures the Securities equally and ratably with (or prior to) any and all
other obligations and indebtedness secured by that Lien; or



     (b) the aggregate amount of the consolidated indebtedness of the Company and its Restricted
Subsidiaries that is secured by Liens (other than Permitted Liens) on any Principal Property or on
the capital stock of any Restricted Subsidiary, together with all Attributable Debt in respect of
Sale and Leaseback Transactions existing at such time, does not at the time exceed the greater of
(i) 15% of the Company’s Consolidated Net Tangible Assets, as shown on the latest quarterly
consolidated financial statements of the Company and its Subsidiaries preceding the date of
determination and (ii) and $200,000,000.



     SECTION 5.2 Information Rights. In the event the Company is at any time no longer
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
continue to provide the Trustee, the Holders, and, upon request, beneficial owners of Securities
with reports containing substantially the same information as would have been required to be filed
with the Commission had the Company continued to have been subject to such reporting requirements.
In such event, such reports will be required to be provided at the times the Company would have
been required to have provided such reports had it continued to be subject to such reporting
requirements. In such event the Company will (i) hold a quarterly conference call to discuss the
quarterly and annual information contained in the reports no later than five Business Days from the
time the Company furnishes such information to the Trustee; (ii) no fewer than three Business Days
prior to the date of the conference call required to be held in accordance with clause (i) above,
issue a press release to the appropriate wire services for broad dissemination in the United States
and Canada announcing the time and date of such conference call and directing the beneficial owners
of the Securities, prospective investors and securities analysts to contact the investor relations
office of the Company to obtain the reports and information and how to access such conference call;
and (iii) either (A) maintain an



35









 







unrestricted public website on which the reports and conference call access details are
posted; (B) maintain a non-public website to which beneficial owners of the Securities, prospective
investors and securities analysts are given access and to which the reports and conference call
access details are posted or (C) distribute via e-mail such reports and conference call details to
beneficial owners of the Securities, prospective investors and securities analysts who request to
receive such distributions.



     SECTION 5.3 Conversion Condition. The Company shall use commercially reasonable
efforts to obtain Stockholder Approval and to cause the Conversion Condition to occur as soon as
practicable after the date hereof.



     SECTION 5.4 Credit Facility Condition. The Company shall use commercially reasonable
efforts to cause the Credit Facility Condition to occur as soon as practicable after the date
hereof.



ARTICLE SIX




EVENTS OF DEFAULT




     SECTION 6.1 Amendments to Article Five Events of Default. Section 5.1 of the Indenture
is hereby amended with respect to the Securities by deleting the “;” from the end of clause (f)
thereof and substituting a “; or” in its place and by adding the following at the end thereof:



     “(g) failure to deliver when due shares of Company Common Stock, cash, and/or any other
consideration payable upon conversion with respect to the Securities, which failure continues for 5
days;



     (h) failure to provide Fundamental Change Company Notice when required, which failure
continues for 10 days;



     (i) failure to purchase Securities at the option of the holder upon a Fundamental Change;”.



ARTICLE SEVEN




MISCELLANEOUS PROVISIONS




     SECTION 7.1 Ratification. The Indenture, as supplemented and amended by this
Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.



     SECTION 7.2 Counterparts. This Supplemental Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed an original, and all such
counterparts shall together constitute but one and the same instrument.



     SECTION 7.3 Governing Law. THIS SUPPLEMENTAL INDENTURE AND EACH SECURITY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH



36









 







THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.



     SECTION 7.4 Supplemental Indentures Without Consent of the Holders. For so long as
the Original Purchasers beneficially own a majority of the outstanding Securities, Section 8.1(d)
of the Indenture shall not be applicable to amendments to this Supplemental Indenture.



[signature page follows]




37









 








     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to be
duly executed as of the day and year first above written.



	 	 	 	 	 
	 	USG CORPORATION

 	 
	 	By:  	/s/ Karen L. Leets
 	 
	 	Name:  	 	Karen L. Leets 	 
	 	Title:  	 	Vice President and Treasurer 	 
	 
	 	 	 
	 	By:  	                        /s/ Ellis A. Regenbogen
 	 
	 	Name:  	 	Ellis A. Regenbogen 	 
	 	Title:  	 	Vice President, Corporate Secretary

and Associate General Counsel 	 
	 
	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION,

     as Trustee

 	 
	 	By:  	/s/ Gregory S. Clarke
 	 
	 	Name:  	 	Gregory S. Clarke 	 
	 	Title:  	 	Vice President 	 
	 




38











 





EXHIBIT A — Form of Note




USG CORPORATION




10% Contingent Convertible Senior Notes due 2018




     Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Company (as defined below) or its agent for
registration of transfer, exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.




THIS NOTE AND THE SECURITIES ISSUEABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT
OR SUCH LAWS.




UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.



 A-1









 





			
	 	 	 
	No. 1
	 	U.S.$400,000,000

CUSIP No.: 903293AT5






     USG Corporation, a corporation duly organized and existing under the laws of Delaware (herein
called the “Company”, which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal amount set forth above on December 1, 2018, and to pay interest thereon from November 26,
2008 or from the most recent interest payment date to which interest has been paid or duly provided
for, semiannually on June 1 and December 1 in each year, commencing June 1, 2009, at the rate of
10% per annum, which interest shall be computed on the basis of a 360-day year of twelve 30-day
months. Notwithstanding the foregoing, (i) if the Conversion Condition has not occurred before
April 10, 2009 the interest rate on the notes will be increased to 20% per annum from and including
November 26, 2008 and shall remain at 20% per annum until the next interest payment date after the
Conversion Condition shall have occurred and (ii) with respect to Designated Excess Securities
only, if the Credit Facility Condition has not occurred before April 10, 2009, the interest rate
payable in respect of Designated Excess Securities shall be increased to 20% per annum, which
interest shall be computed on the basis of a 360-day year of twelve 30-day months, from and
including November 26, 2008 and shall remain at 20% per annum, until the next interest payment date
after the Credit Facility Condition shall have occurred.



     The interest so payable, and punctually paid or duly provided for, on any interest payment
date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the regular record date
for such interest, which shall be the May 15 or November 15 (whether or not a Business Day), as the
case may be, next preceding such interest payment date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such regular record date
and may either be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such special record date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.



     Payment of the principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, 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 shall appear in the Security Register or by



 A-2









 







wire transfer to an account maintained by the Person entitled thereto as specified in the
Security Register, provided that such Person shall have given the Trustee written wire instructions
at least five Business Days prior to the applicable interest payment date.



     Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.



     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.



[Signatures appear on next page]




 A-3









 








     IN WITNESS WHEREOF, USG Corporation has caused this instrument to be duly signed.



	 	 	 	 	 
	 	USG CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Karen L. Leets 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Ellis A. Regenbogen 	 
	 	 	Title:  	Vice President, Corporate Secretary and Associate General Counsel 	 
	 



Dated: November 26, 2008




 A-4









 








TRUSTEE’S CERTIFICATE OF AUTHENTICATION





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



	 	 	 	 	 
	 	Wells Fargo Bank, National Association,

     as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 



Dated: November 26, 2008




 A-5









 








[FORM OF REVERSE SIDE OF SECURITY]


10% Contingent Convertible Senior Notes due 2018





     Section 1. Indenture



     The Company issued the Securities under an Indenture, dated as of November 1, 2008, between
the Company and the Trustee, and Supplemental Indenture No. 1 thereto, dated as of November 26,
2008 (collectively, the “Indenture”). The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act as in effect
on the date of the Indenture. Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and Securityholders are referred to the Indenture and the Trust Indenture Act for
a statement of such terms and provisions.



     The Securities are senior unsecured obligations of the Company limited to $400,000,000
aggregate principal amount outstanding on initial issuance, none of which may be reissued following
cancellation thereof.



     Section 2. Redemption



     Subject to and upon compliance with the provisions of the Indenture, on and after December 1,
2013, the Company may repurchase any Security that is $1,000 principal amount or integral multiples
thereof.



     Section 3. Repurchase on a Fundamental Change



     Subject to and upon compliance with the provisions of the Indenture, a Holder may require the
Company to repurchase any Security that is $1,000 principal amount or integral multiples thereof,
upon the occurrence of a Fundamental Change.



     Section 4. Conversion



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



     Section 5. Sinking Fund



     The Securities are not subject to any sinking fund.



     Section 6. Denominations; Transfer; Exchange



     The Securities are in registered form without coupons in denominations of $1,000 and whole
multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder,



 A-6









 







among other things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption or to transfer or exchange any Securities for
a period of 15 days prior to the mailing of a notice of redemption of Securities to be redeemed.



     Section 7. Persons Deemed Owners



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



     Section 8. Unclaimed Money



     If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its written request unless an abandoned
property law designates another Person. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.



     Section 9. Discharge and Defeasance



     Subject to certain conditions as set forth in the Indenture, the Company at any time may
terminate some of or all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment of principal and
interest on the Securities to redemption or maturity, as the case may be.



     Section 10. Trustee Dealings with the Company



     Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and
may otherwise deal with the Company or its Affiliates with the same rights it would have if it were
not Trustee.



     Section 11. No Recourse Against Others



     A director, officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.



     Section 12. Authentication



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




 A-7












 





     Section 13. Governing Law



     THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.



     Section 14. CUSIP Numbers



     Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed
the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.



A-8









 





SCHEDULE OF EXCHANGES




     The following exchanges of a part of this Book-Entry Security have been made:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	Amount of increase in	 	Principal Amount of this	 	Signature of
	 	 	Amount of decrease in	 	Principal Amount of	 	Book-Entry Security	 	authorized signatory
	Date of	 	Principal Amount of	 	this Book-Entry	 	following such decrease	 	of Trustee or
	Exchange	 	this Book-Entry Security	 	Security	 	(or increase)	 	Security Custodian
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 





A-9









 





ASSIGNMENT FORM




To assign this Security, fill in the form below:

I or we assign and transfer this Security to




 




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




 




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



and irrevocably appoint                                          agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.




Date:                                          Your Signature:                        
                 



      



Sign exactly as your name appears on the other side of this Security.




A-10









 








CONVERSION NOTICE




     To convert this Security into common stock of the Company, par value $0.10 per share, check
the box:



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



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


 




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




      




       




      



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




	 	 	 	 	 
	 

	 	 	 	Your Signature
	 
	 	 	 	 
	Date:

	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	(Sign exactly as your name appears on the other side of this
Security)






A-11









 






CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF

TRANSFER OF RESTRICTED SECURITIES




	 	 	 
	Re:

	 	10% Contingent Convertible Senior Notes Due 2018 (the “Securities”) of
USG Corporation





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




	 	 	 	 	 
	o book-entry or
	 	o 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 2.4 of the Supplemental Indenture dated as of November 26, 2008 between USG
Corporation and Wells Fargo Bank, National Association, as trustee (the “Supplemental Indenture”),
which Supplemental Indenture was made pursuant to an Indenture dated as of November 1, 2008 between
USG Corporation and Wells Fargo 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):





	o	 	Such Security is being acquired for the Transferor’s own account, without transfer.
	 
	o	 	Such Security is being transferred to the Company or a Subsidiary (as defined in the
Indenture) of the Company.
	 
	o	 	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.
	 
	o	 	Such Security is being transferred pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act (other than an exemption referred to
above) and as a result of which such Security will, upon such transfer,




A-12









 






	 	 	cease to be a “restricted security” within the meaning of 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)
	 
	 	 	 	 
	 

	 	 	 	NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within instrument in every particular,
without alteration or enlargement or any change
whatever.
	 
	 	 	 	 
	 

	 	 	 	Signature Guaranteed By:
	 

	 	 	 	 
	 

	 	 	 	(Name of Eligible Guarantor Institution as
defined by SEC Rule 17 Ad-15 (17 CFR 240.17
Ad-15))






	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




A-13









 








EXHIBIT B — Form of Fundamental Change Repurchase Notice




FUNDAMENTAL CHANGE REPURCHASE NOTICE




To: USG Corporation





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



 



	 	 	 	 	 
	Dated:

	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature (s)
	 
	 	 	 	 
	 

	 	 	 	 





Principal amount to be redeemed




(in an integral multiple of $1,000, if less than all):




 





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

 




Send this notice by mail to:




USG Corporation

c/o Wells Fargo Bank, National Association

608 Second Avenue South

MAC N9303-121

Minneapolis, MN 55479

Attention Corporate Trust Operations





B-1









 








EXHIBIT C — Designated Original Purchaser Subsidiaries




Berkshire Hathaway Inc., a Delaware corporation.





C-1