exv4w1



 





Exhibit 4.1




      













CAPITAL AUTOMOTIVE REIT,




as Issuer




and




WELLS FARGO BANK, NATIONAL ASSOCIATION,




as Trustee




SECOND SUPPLEMENTAL TRUST INDENTURE




Dated as of May 12, 2004




Providing for Issuance of




6.0% CONVERTIBLE NOTES DUE 2024
















 









 





TABLE OF CONTENTS

 


	 	 	 	 	 
	ARTICLE I DEFINED TERMS
	 	 	1	 
	ARTICLE II DESCRIPTION OF CONVERTIBLE NOTES
	 	 	7	 
	SECTION 2.1 Establishment
	 	 	7	 
	SECTION 2.2 Payment of Principal and Interest
	 	 	7	 
	SECTION 2.3 Global Securities
	 	 	8	 
	SECTION 2.4 Transfer
	 	 	9	 
	SECTION 2.5 Denominations
	 	 	9	 
	SECTION 2.6 Ranking
	 	 	9	 
	ARTICLE III REDEMPTION
	 	 	9	 
	SECTION 3.1 Optional Redemption
	 	 	9	 
	SECTION 3.2 Notice of Redemption
	 	 	9	 
	SECTION 3.3 Purchase of Convertible Notes at the Option of the Holder
	 	 	10	 
	SECTION 3.4 Purchase of Convertible Notes at Option of the Holder upon a Change in Control
	 	 	14	 
	SECTION 3.5 Effect of Purchase Notice or Change in Control Purchase Notice
	 	 	16	 
	SECTION 3.6 Covenant to Comply With Convertible Notes Laws Upon Purchase of
Convertible Notes
	 	 	18	 
	SECTION 3.7 Repayment to the Company
	 	 	18	 
	ARTICLE IV CONVERSION OF CONVERTIBLE NOTES
	 	 	18	 
	SECTION 4.1 Conversion of Convertible Notes
	 	 	18	 
	SECTION 4.2 Adjustment of Conversion Rate
	 	 	22	 
	SECTION 4.3 When Adjustment May Be Deferred
	 	 	26	 
	SECTION 4.4 When No Adjustment Required
	 	 	26	 
	SECTION 4.5 Notice of Adjustment
	 	 	27	 
	SECTION 4.6 Voluntary Decrease
	 	 	27	 
	SECTION 4.7 Notice of Certain Transactions
	 	 	27	 
	SECTION 4.8 Reorganization of the Company; Special Distributions
	 	 	27	 
	SECTION 4.9 Company Determination Final
	 	 	28	 
	SECTION 4.10 Trustee’s Adjustment Disclaimer
	 	 	28	 
	SECTION 4.11 Simultaneous Adjustments
	 	 	29	 
	SECTION 4.12 Successive Adjustments
	 	 	29	 
	SECTION 4.13 Additional Events of Default; Inapplicability of Certain Events
of Default; Withholding Notice; Rescission
	 	 	29	 
	ARTICLE V COVENANTS
	 	 	30	 
	SECTION 5.1 Limitations on Incurrence of Debt
	 	 	30	 
	SECTION 5.2 Maintenance of Unencumbered Total Assets
	 	 	30	 
	SECTION 5.3 Restriction on Subsidiary Indebtedness and Preferred Stock
	 	 	30	 
	SECTION 5.4 Provision of Financial Information
	 	 	31	 
	ARTICLE VI MISCELLANEOUS PROVISIONS
	 	 	31	 
	SECTION 6.1
Ratification and InCompany of Base Indenture
	 	 	31	 
	SECTION 6.2 Governing Law
	 	 	31	 
	SECTION 6.3 Counterparts
	 	 	32	 
	SECTION 6.4 Entire Agreement
	 	 	32	 








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     THIS SECOND SUPPLEMENTAL TRUST INDENTURE is made as of this 12th day of
May, 2004 (the “Supplemental Indenture”), by and between Capital Automotive
REIT, a real estate investment trust organized under the laws of the State of
Maryland, as issuer (the “Company”), and Wells Fargo Bank, National
Association, a national banking association organized under the laws of the
United States of America, as trustee (the “Trustee”).



RECITALS OF THE COMPANY




     WHEREAS, the Company has heretofore entered into that Base Indenture of
even date herewith (the “Base Indenture,”) with the Trustee, providing for the
issuance from time to time of unsubordinated debentures, notes or other
evidences of indebtedness in series;



     WHEREAS, the Base Indenture is incorporated herein by this reference and
the Base Indenture, as supplemented by this Supplemental Indenture, is herein
called the “Indenture;”



     WHEREAS, under the Indenture, the Board of Directors of the Company may at
any time establish a new series of Securities, in accordance with the
provisions of the Indenture, with the terms of such series established pursuant
to a supplemental indenture executed by the Company and the Trustee;



     WHEREAS, the Company proposes to create under the Indenture a new series
of Securities;



     WHEREAS, the Company desires to issue $110,000,000 of its 6.0% Convertible
Notes due May 15, 2024, having the terms and conditions hereinafter set forth,
in order to pay down existing Indebtedness and pursue other general corporate
purposes;



     WHEREAS, all conditions necessary to authorize the execution and delivery
of this Supplemental Indenture and to make it a valid and binding obligation of
the Company have been done or performed;



     NOW THEREFORE, for and in consideration of the agreements and obligations
set forth herein and for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:



ARTICLE I




DEFINED TERMS




     The following defined terms used herein shall, unless the context
otherwise requires, have the meanings specified below. Capitalized terms used
and not otherwise defined herein shall have the respective meanings given them
in the Base Indenture:



     "Accounting Event” shall be deemed to occur if (a) the authoritative
guidance promulgated by the Financial Accounting Standards Board, the SEC, or
other national accounting standard setters permits the settlement of an
issuer’s requirement to repurchase securities at the option of the holder
thereof in shares of the issuer’s capital stock and expressly provides that
such shares issuable in satisfaction of such repurchase obligation shall not be
taken



 









 







into account for purposes of computing the issuer’s diluted earnings per
share (unless and until such shares are actually issued) and such guidance
remains in effect, or (b) the Company receives advice from a nationally
recognized accounting firm that such settlement and accounting treatment are
permitted.



     "Capital Stock” of any Person means any and all shares (including ordinary
shares or American Depositary Shares), interests, participations, or other
equivalents, however designated, of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an equity
interest in such Person.



     "Change in Control” will be deemed to have occurred at the time after
Original Issue Date that any of the following occurs:




     (a) any “person” or “group” within the meaning of Sections 13(d) or
14(d)2 of the Exchange Act, including our affiliates and associates,
other than the Company, Its Subsidiaries or its or their employee benefit
plans, files a Schedule 13D or Schedule TO or any successor schedule,
form or report under the Exchange Act disclosing that such person or
group has become the “beneficial owner,” as defined in Rule 13d-3 under
the Exchange Act, of greater than 50% of the voting power of the Common
Shares or other Capital Stock into which the Common Shares are
reclassified or sold; provided, however, that a person shall not be
deemed a beneficial owner of, or to own beneficially, (i) any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person’s Affiliates or Associates (as defined
in Rule 12b-2 under the Exchange Act as currently in effect) until such
tendered securities are accepted for purchase or exchange thereunder or
(ii) any securities revocable proxy delivered in response to a proxy or
consent solicitation made pursuant to the applicable rules and
regulations under the Exchange Act and (iii) is not then reportable on
Schedule 13D or any successor schedule under the Exchange Act.




     (b) consummation of any share exchange, consolidation or merger of
the Company pursuant to which the Common Shares will be converted into
cash, securities or other property in each case other than a share
exchange, consideration, or merger of the Company in which the holders of
the Company’s Common Shares immediately prior to such transaction have,
directly or indirectly, at least a majority of the total voting power in
aggregate of all classes of Capital Stock of the continuing or surviving
Company immediately after such transaction.



     A Change in Control will not be deemed to have occurred in respect of either of
the foregoing, however, if either:




     (i) the Current Market Price of the Common Shares for any five
Trading Days within the five consecutive Trading Days ending immediately
before the later of the Change in Control or the public announcement
thereof, equals or exceeds 105% of the Conversion Price of the
Convertible Notes immediately before the Change in Control or the public
announcement thereof, or



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     (ii) at least 90% of the consideration in the transaction or
transactions constituting the Change in Control consists of shares of
capital stock traded on a national securities exchange or quoted on the
Nasdaq National Market or which will be so traded or quoted when issued
or exchanged in connection with a Change in Control.



     "Change in Control Purchase Date” has the meaning provided in Section
3.4(a) hereof.



     "Change in Control Purchase Notice” has the meaning provided in Section
3.4(c) hereof.



     "Change in Control Purchase Price” has the meaning provided in Section
3.4(a) hereof.



     "Closing Price” means, as of any date of determination, the closing per
share sale price of the Common Shares on such date (or if no closing sale price
is reported, the average of the bid and asked prices or, if more than one in
either case, the average of the average bid and the average asked prices) on
such date as reported by the Nasdaq National Market, or if the Common Shares
are not quoted on the Nasdaq National Market, as reported by the principal U.S.
exchange or quotation system on which the Common Shares are then listed. If
the Common Shares are not listed for trading on a principal U.S. exchange or
automated quotation system, the “Closing Price” will be the average of the
mid-point of the last bid and asked prices for the Common Shares on the
relevant date from each of at least three nationally recognized independent
investment banking firms selected by the Company for this purpose.



     "Common Shares” means the shares of beneficial interest, $0.01 par value
per the Company, which is the Company’s only outstanding class of Common
Shares.



     "Company Notice” has the meaning provided in Section 3.3(f) hereof.



     "Company Notice Date” has the meaning provided in Section 3.3(f) hereof.



     "Conversion Agent” means the Trustee or such other office or agency
designated by the Company where Convertible Notes may be presented for
conversion.



     "Conversion Date” has the meaning provided in Section 4.1(c) hereof.



     "Conversion Price” means $1,000 divided by the then-applicable Conversion
Rate.



     "Conversion Rate” means, as of any date of determination, the number of
Common Shares into which a Convertible Note may be converted in accordance with
Article IV hereof.



     "Conversion Value” of a Convertible Note means, as of any date of
determination, the product of the Closing Price multiplied by the Conversion
Rate.



     "Convertible Notes” has the meaning provided in Section 2.1 hereof.



     "Corporate Trust Office of the Trustee” means 213 Court Street, Suite 703,
Middletown, CT, 06457.



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     "Current Market Price” means, (i) for purposes of Section 4.2(b), (c) or
(d), with respect to a Common Share on any day, the average of the daily
Closing Prices for the five consecutive Trading Days commencing six Trading
Days before the date on which Common Share traded on such date settles regular
way on the record date with respect to distributions, issuances or other events
requiring computation under Section 4.2(b), (c) or (d); and (ii) for purposes
of Section 4.2(e), the average of the daily Closing Prices for the five
consecutive Trading Days commencing on the Trading Day next succeeding the
Expiration Date.



     "Debt Service Coverage Ratio” means, for the period for which such ratio
is being calculated, the ratio expressed a fraction, the numerator of which is
the Company’s EBITDA and the denominator of which is the scheduled principal
plus the Company’s interest expense and the preferred dividends as reflected on
the Company’s consolidated financial statements.



     "Debt to Total Assets Ratio” means, for the period for which such ratio is
being calculated, the ratio expressed as a fraction, the numerator of which is
the Company’s consolidated long-term Indebtedness (less payments due within one
year) and the denominator of which shall be the aggregate book value of all of
the Company’s assets plus accumulated depreciation and amortization (less
goodwill) as reflected on the Company’s consolidated financial statements.



     "Depositary” means The Depositary Trust Company.



     "EBITDA” means, for any period, the Company’s net income before minority
interest (determined on a consolidated basis without duplication in accordance
with GAAP) for such period (calculated before taxes, interest expense,
depreciation, and amortization) excluding any extraordinary or unusual gains or
losses during such period, including but limited to, provisions for gains or
losses from sales, provision for impairment losses, charges for early
extinguishment of debt and charges resulting from a change in accounting
principles.



     "Expiration Date” has the meaning provided in Section 4.2(e) hereof.



     "Expiration Time” has the meaning provided in Section 4.2(e) hereof.



     "Interest Payment Date” means each May 15 and November 15 of each year,
commencing November 15, 2004.



     "Interest Period” means any six-month period from May 15 to November 15
and from November 15 to May 15, as appropriate. Notwithstanding, the initial
Interest Period shall begin on the Original Issue Date and end on November 15,
2004.



     "Market Price” of Common Shares on a Purchase Date means the average of
the Closing Prices of the Common Shares for the five trading day period ending
on the third Business Day Prior to such Purchase Date (if the third Business
Day prior to such Purchase Date is a Trading Day, or if not, then on the last
Trading Day immediately prior to third Business Day), appropriately adjusted to
take into account the occurrence, during the period commencing on the first of
the Trading Days of the five Trading Day period and ending on such Purchase
Date, of any event described in Section 4.2; subject, however to the conditions
set forth in Sections 4.3 and 4.4.



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     "Original Issue Date” means May 12, 2004.



     "Principal Value Conversion” has the meaning provided in Section 4.1(b(i).



     "Purchase Price” has the meaning provided in Section 3.3(a) hereof.



     "Purchased Shares” has the meaning provided in Section 4.2(e).



     "Purchase Date” has the meaning provided in Section 3.3(a) hereof.



     "Purchase Notice” has the meaning provided in Section 3.3(b) hereof.



     "Record Date” means, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Shares have the right to
receive any cash, securities or other property or in which the Common Shares
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).



     "Redemption Date” has the meaning provided in Section 3.1 hereof.



     "Redemption Price” has the meaning provided in Section 3.1 hereof.



     "Regular Record Date” means, with respect to each Interest Payment Date,
the close of business on the last calendar day of the month immediately
preceding the month in which such Interest Payment Date (whether or not a
Business Day) occurs.



     "Restricted Subsidiary” means, for the avoidance of doubt, Capital
Automotive L.P. and its Subsidiaries.



     "Sale Price” means, on any date of determination, the average of the
secondary market bid quotations per Note, obtained by the Conversion Agent for
$5 million aggregate principal amount of Convertible Notes at approximately
3:30 p.m., New York City time, on such determination date from three recognized
securities dealers (none of which shall be an Affiliate of the Company) in The
City of New York (or such other place that may be determined from time to time
by the Company) selected by the Company; provided, however, if (a) three such
bids can not be obtained by the Conversion Agent, then the average of the two
bids shall be obtained; (b) only one such bid can reasonably be obtained by the
Conversion Agent, that one bid shall be used. If the Conversion Agent cannot
reasonably obtain at least one such bid, or (c) in the Company’s reasonable
judgment, the bid quotations are not indicative of the secondary market value
of the Convertible Notes as of such determination date, then the Sale Price for
such determination date shall be deemed to be less than 94% of the Conversion
Values of the Convertible Notes during that period.



     "Significant Subsidiary” means (1) any guarantor that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to
the Securities Act as such Regulation is in effect on the Original Issue Date
and (2) any guarantor that, when aggregated with all other guarantors that are
not otherwise Significant Subsidiaries and as to which any bankruptcy event



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has occurred and is continuing, would constitute a Significant Subsidiary
under clause (1) of this definition.



     "Special Record Date” has the meaning provided in Section 2.2(a) hereof.



     "Stated Maturity” means May 15, 2024.



     "SEC” means the U.S. Securities and Exchange Commission.



     "Subsidiary” means, with respect to any Person:



     (1) any Company, limited liability company, association or other business
entity of which more than 50% of the total voting power of the Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of the Board of Directors thereof are at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and



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



Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Company.



     "Trading Day” means (a) if the applicable security is listed, admitted for
trading or quoted on the New York Stock Exchange, the Nasdaq National Market or
another U.S. national or regional securities exchange, a day on which the New
York Stock Exchange, the Nasdaq National Market or such other national or
regional securities exchange, as the case may be, is open for business or (b)
if the applicable security is not so listed, admitted for trading or quoted,
any Business Day.



     "Trigger Event” has the meaning provided in Section 4.2(c).



     "Triggering Distribution” has the meaning provided in Section 4.2(d).



     "Unencumbered Total Assets” means, as of any date, the sum of (i) the cost
(the original cost plus the cost of capital improvements) on all of the
Company’s real estate on such date, before depreciation and amortization, and
(ii) the Company’s other assets (but excluding intangibles and accounts
receivable), in each case which assets are unencumbered by any mortgage, lien,
charge, pledge or security interest, all determined on a consolidated basis and
in accordance with GAAP.



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ARTICLE II




DESCRIPTION OF CONVERTIBLE NOTES




     SECTION 2.1 Establishment.



     (a) There is hereby established a new series of notes to be issued under
the Indenture, to be designated as the Company’s 6.0% Convertible Notes due May
15, 2024 (the “Convertible Notes”).



     (b) There are to be authenticated and delivered $110,000,000 principal
amount of Convertible Notes. The maximum principal amount of Convertible Notes
of this series that may be issued is $110,000,000.



     (c) The Convertible Notes shall be issued in definitive fully registered
form. The Convertible Notes shall be issued in the form of one or more Global
Securities in substantially the form set out in Exhibit A hereto. The
Depositary with respect to the Convertible Notes shall be The Depository Trust
Company.



     (d) The form of the Trustee’s Certificate of Authentication for the
Convertible Notes shall be in substantially the form attached to the form of
Note.



     (e) Each Convertible Note shall be dated the date of authentication
thereof and shall bear interest from the Original Issue Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.



     SECTION 2.2 Payment of Principal and Interest.



     (a) The principal of the Convertible Notes shall be due at Stated Maturity
(unless earlier redeemed, or accelerated, purchased or converted). The unpaid
principal amount of the Convertible Notes shall bear interest at the rate of
6.0% per annum until paid. Interest for each Interest Period shall be paid
semi-annually in arrears on each Interest Payment Date to the Person in whose
name the Convertible Notes are registered on the Regular Record Date for such
Interest Payment Date, provided that interest payable at the Stated Maturity of
principal or on a Redemption Date or Purchase Date as provided herein shall be
paid to the Person to whom principal is payable, except as otherwise provided
herein. Any such interest that is not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holders on such Regular Record Date
and may either be paid to the Person or Persons in whose name the Convertible
Notes are registered at the close of business on a special record date
(“Special Record Date”) for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of the Convertible
Notes not less than ten 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, if any, on which the Convertible Notes shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in the Base Indenture.



     (b) Payments of interest on the Convertible Notes shall include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Convertible Notes



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shall be computed and paid on the basis of a 360-day year of twelve,
30-day months. In the event that any date on which interest is payable on the
Convertible Notes is not a Business Day, then a payment of the interest payable
on such date shall be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay), with
the same force and effect as if made on the date the payment was originally
payable.



     (c) Subject to the rules of the Depositary with respect thereto, payment
of the principal and interest due at the Stated Maturity or earlier redemption
purchase or conversion of the Convertible Notes shall be made upon surrender of
the Convertible Notes at the Corporate Trust Office of the Trustee. The
Company will pay cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may pay interest, the Redemption Price, Purchase Price, Change in
Control Purchase Price and the principal amount at Stated Maturity, as the case
may be, by check or wire payable in such money; provided, however, that a
Holder holding Convertible Notes with an aggregate principal amount in excess
of $2,000,000 will be paid by wire transfer in immediately available funds at
the election of such Holder. The Company may mail an interest check to the
Holder’s registered address. Notwithstanding the foregoing, so long as this
Convertible Note is registered in the name of a Depositary or its nominee, all
payments hereon shall be made by wire transfer of immediately available funds
to the account of the Depositary or its nominee.



     SECTION 2.3 Global Securities.



     (a) The Convertible Notes will be issued in the form of one or more Global
Securities registered in the name of the Depositary or its nominee. Except
under the limited circumstances described below, Convertible Notes represented
by one or more Global Securities will not be exchangeable for, and will not
otherwise be issuable as, Convertible Notes in definitive form. The Global
Securities described above may not be transferred 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 to a successor Depositary or its
nominee.



     (b) Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Convertible Note shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.



     (c) A Global Security shall be exchangeable for Convertible Notes
registered in the names of persons other than the Depositary or its nominee
only if (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a Depositary for such Global Security and no successor
Depositary shall have been appointed by the Company, or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, at
a time when the Depositary is required to be so registered to act as such
Depositary and no successor Depositary shall have been appointed by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Convertible Notes.
Any Global Security that is



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exchangeable pursuant to the preceding sentence shall be exchangeable for
Convertible Notes registered in such names as the Depositary shall direct.



     SECTION 2.4 Transfer.



     (a) No service charge will be made for any transfer or exchange of
Convertible Notes, but payment will be required of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.



     (b) The Company shall not be required (a) to issue, transfer or exchange
any Convertible Notes during a period beginning at the opening of business 15
days before the date of the mailing of a notice pursuant to Section 11.5 of the
Base Indenture identifying the numbers of the Convertible Notes to be called
for redemption, and ending at the close of business on the day of the mailing,
or (b) to transfer or exchange any Convertible Notes theretofore selected for
redemption in whole or in part, except the unredeemed portion of any
Convertible Notes redeemed in part.



     SECTION 2.5 Denominations.



     The Convertible Notes may be issued in denominations of $1,000.00, or any
integral multiple thereof.



     SECTION 2.6 Ranking.



     The Convertible Notes will rank pari passu with all of the Company’s other
unsecured and unsubordinated debt.



ARTICLE III




REDEMPTION




     SECTION 3.1 Optional Redemption.



     The Company, at its option, may redeem the Convertible Notes in cash, at
any time in whole or from time to time in part, on or after May 15, 2009 on any
date (a “Redemption Date”), at a redemption price equal to 100% of the
principal amount of the Convertible Notes to be redeemed (the “Redemption
Price”) plus any accrued and unpaid interest on the principal amount to be
redeemed to but excluding the Redemption Date; provided that if the Redemption
Date is on or after a Record Date but on or prior to the related Interest
Payment Date, interest will be payable to the Holders in whose names the
Convertible Notes are registered at the close of business on the relevant
Record Date for payment of such interest.



     SECTION 3.2 Notice of Redemption.



     (a) The Company shall provide notice to the Trustee and to each Holder of
Securities of Convertible Notes as provided in Sections 11.3 and 11.5 of the
Base Indenture. In addition to the information required by Section 11.5, the
Company shall provide to each Holder with the Notice of Redemption:



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     (i) the Conversion Price;




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




     (iii) that the Convertible Notes called for redemption may be
converted at any time before the close of business on the Business Day
preceding the Redemption Date; and




     (iv) that the Holders who want to convert Convertible Notes must
satisfy the requirements set for in paragraph 8 of the Global Security;



     (b) If any Convertible Note selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Convertible Note so selected, the converted portion of such Convertible
Note shall be deemed (so far as may be) to be the portion selected for
redemption. Convertible Notes that have been converted during a selection of
Convertible Notes to be redeemed may be treated by the Trustee as outstanding
for the purpose of such selection.



     SECTION 3.3 Purchase of Convertible Notes at the Option of the Holder.



     (a) General. On each of May 15, 2009, May 15, 2014 and May 15, 2019
(each, a “Purchase Date”), each Holder shall have the right, at such Holder’s
option, to require the Company to purchase for cash any or all of such Holder’s
Convertible Notes. The Company shall purchase such Convertible Notes at a
price equal to 100% of the principal amount of the Convertible Notes to be
purchased (the “Purchase Price”) plus any accrued and unpaid interest on the
principal amount to be purchased to but excluding the Purchase Date; provided
that if the Purchase Date is on or after a Regular Record Date but on or prior
to the related Interest Payment Date, interest will be payable to Holders in
whose names the Convertible Notes are registered at the close of business on
the relevant Regular Record Date.



     (b) Exercise of Purchase Option. For a Convertible Note to be so
purchased at the option of the Holder, the Paying Agent must receive:




     (i) from the Holder a written notice of purchase (a “Purchase
Notice”) at any time from the opening of business on the date that is 20
Business Days prior to the Purchase Date until the close of business on
the fifth Business Day prior to such Purchase Date stating:




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




     (B) that such Convertible Note shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified in
paragraph 6 of the Global Security and in this Indenture,




     (C) if an Accounting Event has occurred and the Company has
elected, pursuant to Section 3.3(c), to pay all or part of the
Purchase Price in Common



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Shares, whether, if such portion of the Purchase Price shall
ultimately become payable entirely in cash because any of the
conditions to payment of the Purchase Price in Common Shares is not
satisfied prior to the close of business on the relevant Purchase
Date as set forth in Section 3.3(e), such Holder elects (i) to
withdraw such Purchase Notice as to some or all of the Convertible
Notes to which such Purchase Notice relates (stating the expected
principal amount of the Convertible Notes as to which such
withdrawal shall relate), or (ii) to receive cash in respect of the
entire Purchase Price for all Convertible Notes (or portions
thereof) to which such Purchase Notice relates, and




     (D) delivery of such Convertible Note to the Paying Agent
prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such
delivery being a condition to receipt by the Holder of the Purchase
Price therefor, together with all accrued interest; provided,
however that such Purchase Price, together with all accrued
interest, shall be so paid pursuant to this Section 3.3 only if the
Convertible Note so delivered to the Paying Agent shall conform in
all respects to the description thereof in the related Purchase
Notice, as determined by the Company.



     If a Holder, in a Purchase Notice or a written notice of withdrawal
delivered to the Paying Agent in accordance with Section 3.5, fails to indicate
such Holder’s choice with respect to the election set forth in clause (C) of
Section 3.3(b)(i), such Holder shall be deemed to have elected to receive cash
in respect of the entire Purchase Price for all Convertible Notes subject to
such Purchase Notice in the circumstances set forth in such clause (C).



     The Company shall purchase from the Holder thereof, pursuant to this
Section 3.3, a portion of a Convertible Note if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Convertible Note also apply to
the purchase of such portion of such Convertible Note.



     Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.3 shall be consummated by the delivery of the consideration to
be received by the Holder within three Business Days following the Purchase
Date.



     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.3(b) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 3.5.



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



     (c) Manner of Payment of Purchase Price. The Purchase Price of
Convertible Notes in respect of which a Purchase Notice pursuant to Section
3.3(b) has been given shall be paid in U.S. legal tender. Notwithstanding the
foregoing, upon the occurrence of an Accounting Event, the Company may elect to
pay the Purchase Price of Convertible Notes, in whole or in part, in cash or
Common Shares.



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     (d) Payment of Purchase Price in Cash. If the Purchase Price is to be
paid in cash, the Company shall deposit cash, in respect of purchases under
this Section 3.3, at the time and in the manner as provided in Section 3.5(b),
sufficient to pay the aggregate Purchase Price of all Convertible Notes,
together with all accrued interest to, but not including, the Purchase Date and
Liquidated Damages Amount, if any, thereon, to be purchased pursuant to this
Section 3.3.



     (e) Payment of Purchase Price in Common Shares. If an Accounting Event
has occurred and the Company has elected to pay the Purchase Price of
Convertible Notes in Common Shares, the Company shall issue a number of Common
Shares equal to the quotient obtained by dividing (i) the portion of the
Purchase Price to be paid by Common Shares by (ii) the Market Price of one
Common Share as determined by the Company in the Company Notice, subject to the
next succeeding paragraph.



     The Company shall not issue fractional Common Shares in payment of the
Purchase Price. Instead, the Company shall pay cash based on the Market Price
for all fractional shares. It is understood that if a Holder elects to have
more than one Convertible Note purchased, the number of Common Shares shall be
based on the aggregate amount of Convertible Notes to be purchased.



     The Company’s right to exercise its election to purchase Convertible Notes
through the issuance of Common Shares shall be conditioned upon:




     (i) the occurrence of an Accounting Event;




     (ii) the Company not having given its Company Notice of an election
to pay entirely in cash and its giving of a timely Company Notice of an
election to purchase all or a specified percentage of the Convertible
Notes with Common Shares as provided herein;




     (iii) the registration of such Common Shares under the Securities
Act or the Exchange Act, in each case, if required by applicable law;




     (iv) the listing of such Common Shares on the principal national
Convertible Notes exchange on which the Common Shares are listed or, if
the Common Shares are not then listed on a national or regional
Convertible Notes exchange, on the Nasdaq National Market;




     (v) any necessary qualifications or registration under applicable
state securities laws or the availability of an exemption therefrom; and




     (vi) the receipt by the Trustee of an Officers’ Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Shares are in conformity with this Indenture and (B) the Common
Shares to be issued by the Company in payment of the Purchase Price in
respect of the Convertible Notes have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment
of the Purchase Price in respect of the Convertible Notes, shall be
validly issued, fully paid and non-assessable and, to the best of such
counsel’s knowledge, free from preemptive rights, and, in the case of
such Officers’ Certificate, stating that the conditions


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above and the condition set forth in the second succeeding sentence
have been satisfied and, in the case of such Opinion of Counsel, stating
that the conditions in clauses (iii) through (v) above have been
satisfied.



     Such Officers’ Certificate shall also set forth the number of Common
Shares to be issued for each $1,000 principal amount and the Closing Price of a
single Common Share on each trading day during the period commencing on the
first trading day of the period during which the Market Price is calculated and
ending on the third day prior to the applicable Purchase Date. The Company may
pay the Purchase Price (in whole or in part) in Common Shares only if the
information necessary to calculate the Market Price is published in a daily
newspaper of national circulation. If the foregoing condition and the
conditions in clauses (i) through (vi) above are not satisfied prior to the
close of business on the Purchase Date, and the Company has elected to purchase
the Convertible Notes pursuant to this Section 3.3 through the issuance of
Common Shares, the Company shall pay the entire Purchase Price of Convertible
Notes in cash.



     Upon determination of the actual number of Common Shares to be issued upon
redemption of Convertible Notes, the Company shall (i) disseminate a press
release containing such information through any two of Reuter’s Economic
Services, Bloomberg Business News and Dow Jones & Company Inc. and (ii)
publish such information on its web site or through such other public medium as
it may use at that time.



     (f) Company Notice. In connection with any purchase of Convertible Notes
pursuant to Section 3.3, the Company shall give written notice of the Purchase
Date to the Holders (the “Company Notice”). The Company Notice shall be sent
by first-class mail to the Trustee and to each Holder (and to each beneficial
owner as required by applicable law) not less than 20 Business Days prior to
any Purchase Date (the “Company Notice Date”). Each Company Notice shall
include a form of Purchase Notice to be completed by a Convertible Noteholder
and shall state:




     (i) the Purchase Price and the Conversion Price per $1,000 principal
amount of Convertible Notes and any Convertible Notes and any adjustment
thereto;




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




     (iii) if an Accounting Event has occurred, whether the Company is
electing to pay the Purchase Price in cash or Common Shares;




     (iv) if an Accounting Event has occurred and the Company has elected
to pay the Purchase Price in Common Shares, the Market Price;




     (v) that Convertible Notes as to which a Purchase Notice has been
given may be converted if they are otherwise convertible only in
accordance with Article IV hereof and paragraph 8 of the Global Security
if the applicable Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;




     (vi) that Convertible Notes must be surrendered to the Paying Agent
to collect payment;



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     (vii) that the Purchase Price for, and any accrued interest on, any
Convertible Note as to which a Purchase Notice has been given and not
withdrawn will be paid on the third Business Day following the Purchase
Date;




     (viii) the procedures the Holder must follow to exercise rights
under Section 3.3 and a brief description of those rights;




     (ix) briefly, the conversion rights of the Convertible Notes;




     (x) the procedures for withdrawing a Purchase Notice (including
pursuant to the terms of Section 3.5);




     (xi) that, unless the Company defaults in making payments on
Convertible Notes for which a Purchase Notice has been submitted,
interest on such Convertible Notes will cease to accrue on the Purchase
Date; and




     (xii) the CUSIP number of the Convertible Notes.



     At the Company’s request, the Trustee shall give such Company Notice in
the Company’s name and at the Company’s expense; provided, however that, in all
cases, the text of such Company Notice shall be prepared by the Company.



     SECTION 3.4 Purchase of Convertible Notes at Option of the Holder upon a
Change in Control.



     (a) If at any time the Convertible Notes remain outstanding there shall
have occurred a Change in Control, Convertible Notes shall be purchased by the
Company, at the option of the Holder thereof, at a purchase price specified in
paragraph 6 of the Global Security (the “Change in Control Purchase Price”) as
of the date that is 45 Business Days after the occurrence of the Change in
Control (the “Change in Control Purchase Date”) subject to satisfaction by or
on behalf of the Holder of the requirements set forth in Section 3.4(c).



     (b) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice of the Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Convertible Noteholder and shall state:




     (i) briefly, the events causing a Change in Control and the date of
such Change in Control;




     (ii) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.4 must be given;




     (iii) the Change in Control Purchase Date and the last date on which
a Holder may exercise its purchase right;




     (iv) the Change in Control Purchase Price;



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




     (vi) the Conversion Price and any adjustments thereto;




     (vii) that Convertible Notes as to which a Change in Control
Purchase Notice has been given may be converted pursuant to Article IV
hereof only if the Change in Control Purchase Notice has been withdrawn
in accordance with the terms of this Indenture;




     (viii) that Convertible Notes must be surrendered to the Paying
Agent to collect payment;




     (ix) that the Change in Control Purchase Price for any Convertible
Note as to which a Change in Control Purchase Notice has been duly given
and not withdrawn will be paid within three Business Days following the
Change in Control Purchase Date of surrender of such Convertible Note as
described in clause (viii);




     (x) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.4;




     (xi) briefly, the conversion rights of the Convertible Notes;




     (xii) the procedures for withdrawing a Change in Control Purchase
Notice;




     (xiii) that, unless the Company defaults in making payment of such
Change in Control Purchase Price, interest on Convertible Notes
surrendered for purchase by the Company will cease to accrue on and after
the Change in Control Purchase Date; and




     (xiv) the CUSIP number of the Convertible Notes.



     (c) A Holder may exercise its rights specified in Section 3.4(a) upon
delivery of a written notice of purchase (a “Change in Control Purchase
Notice”) to the Paying Agent at any time prior to the close of business on the
fifth business day prior to the Change in Control Purchase Date, stating:




     (i) the portion of the principal amount of the Convertible Note
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and




     (ii) that such Convertible Note shall be purchased pursuant to the
terms and conditions specified in paragraph 6 of the Global Security.



     The delivery of such Convertible Note to the Paying Agent prior to, on or
after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.4 only if the Convertible Note so delivered to the
Paying Agent shall



-15-









 







conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.



     The Company shall purchase from the Holder thereof, pursuant to this
Section 3.4, a portion of a Convertible Note if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Convertible Note also apply to
the purchase of such portion of such Convertible Note.



     Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.4 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Convertible Note to the Paying
Agent in accordance with this Section 3.4.



     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.4(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.5.



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



     SECTION 3.5 Effect of Purchase Notice or Change in Control Purchase
Notice.



     Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.3(b) or Section 3.4(c), as
applicable, the Holder of the Convertible Note in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be, was
given shall (unless such Purchase Notice or Change in Control Purchase Notice
is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price, together with all accrued
interest to, but not including, the Purchase Date and Liquidated Damages
Amount, if any, thereon, or Change in Control Purchase Price, as the case may
be, with respect to such Convertible Note. Such Purchase Price, together with
all accrued interest to, but not including, the Purchase Date or Change in
Control Purchase Price, as the case may be, shall be paid to such Holder,
subject to receipt of funds and/or Convertible Notes by the Paying Agent,
promptly following the later of (x) the Purchase Date or the Change in Control
Purchase Date, as the case may be, with respect to such Convertible Note
(provided the conditions in Section 3.3(b) or Section 3.4(c), as applicable,
have been satisfied) and (y) the time of delivery of such Convertible Note to
the Paying Agent by the Holder thereof in the manner required by Section 3.3(b)
or Section 3.4(c), as applicable. Convertible Notes in respect of which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted pursuant to Article IV
hereof on or after the date of the delivery of such Purchase Notice or Change
in Control Purchase Notice, as the case may be, unless such Purchase Notice or
Change in Control Purchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.



     A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying



-16-









 







Agent in accordance with the Purchase Notice or Change in Control Purchase
Notice, as the case may be, at any time prior to the close of business on the
Purchase Date or the Change in Control Purchase Date, as the case may be,
specifying:




     (i) the principal amount of the Convertible Note with respect to
which such notice of withdrawal is being submitted, and




     (ii) the principal amount, if any, of such Convertible Note which
remains subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.



     A written notice of withdrawal of a Purchase Notice shall be in the form
set forth in the preceding paragraph.



     There shall be no purchase of any Convertible Notes pursuant to Section
3.3 or 3.4 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Convertible Notes, of the required Purchase
Notice or Change in Control Purchase Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Convertible Notes). The Paying Agent will promptly return to
the respective Holders thereof any Convertible Notes (x) with respect to which
a Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Convertible Notes) in which case, upon such return, the
Purchase Notice or Change in Control Purchase Notice with respect thereto shall
be deemed to have been withdrawn.



     (b) Deposit of Purchase Price or Change in Control Purchase Price. Prior
to 10:00 a.m. (local time in the City of New York) on the Business Day
following the Purchase Date or the Change in Control Purchase Date, as the case
may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as the Paying Agent, shall segregate and hold in trust as provided in Section
6.5 of the Base Indenture) an amount of money (in immediately available funds
if deposited on such Business Day) sufficient to pay the aggregate Purchase
Price, together with all accrued interest to, but not including, the Purchase
Date or Change in Control Purchase Price, as the case may be, of all the
Convertible Notes or portions thereof which are to be purchased as of the
Purchase Date or Change in Control Purchase Date, as the case may be.



-17-









 





     SECTION 3.6 Covenant to Comply With Convertible Notes Laws Upon Purchase
of Convertible Notes.



     When complying with the provisions of Section 3.3 or 3.4 hereof (provided
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), the
Company shall (i) comply in all material respects with Rule 13e-4 and Rule
14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, and (iii) otherwise
comply in all material respects with all Federal and state securities laws so
as to permit the rights and obligations under Sections 3.3 and 3.4 to be
exercised in the time and in the manner specified in Sections 3.3 and 3.4.



     SECTION 3.7 Repayment to the Company.



     The Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon
(subject to the provisions of Section 6.2(j) of the Base Indenture), held by
them for the payment of the Purchase Price or Change in Control Purchase Price,
as the case may be, and accrued interest; provided, however, that to the extent
that the aggregate amount of cash deposited by the Company pursuant to Section
3.5 exceeds the aggregate Purchase Price or Change in Control Purchase Price,
as the case may be, of the Convertible Notes or portions thereof which the
Company is obligated to purchase as of the Purchase Date or Change in Control
Purchase Date, as the case may be, and accrued interest thereon, then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case may
be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
6.2(j) of the Base Indenture).



ARTICLE IV




CONVERSION OF CONVERTIBLE NOTES




     SECTION 4.1 Conversion of Convertible Notes.



     (a) Subject to the further provisions of this Article IV and paragraph 8
of the Global Security, a Holder of a Convertible Note may convert the
principal amount of such Convertible Note (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) into Common Shares
on any Business Day, if the average of the Closing Prices of the Common Shares
for the immediately preceding 30 consecutive trading day period is more than
110% of the average of the Effective Conversion Prices of our Common Shares
during such 30-trading day period (the “Closing Price Condition”) subject to
the exceptions provided below; provided, however, that, if such Convertible
Note is called for redemption or submitted or presented for purchase pursuant
to Article III such conversion right shall terminate at the close of business
on the Business Day immediately preceding the Redemption Date or Change in
Control Purchase Date, as the case may be, for such Convertible Note or such
earlier date as the Holder presents such Convertible Note for redemption or for
purchase (unless the Company shall default in making the redemption payment or
Change in Control Purchase Price payment when due, in



-18-









 







which case the conversion right shall not apply following the close of
business on the date such default is cured and such Convertible Note is
redeemed or purchased, as the case may be). The number of Common Shares
deliverable upon conversion of a Convertible Note is determined by dividing (x)
the Principal Amount of the Convertible Notes, or the portion thereof being
converted, by (y) the Conversion Price in effect on the Conversion Date. The
initial Conversion Price and the Conversion Rate shall be that set forth in
paragraph 8 of the Global Security.



     Holders will not receive any cash payment representing accrued and unpaid
interest upon conversion of a Convertible Note. Accrued and unpaid interest
on the Convertible Note shall be deemed paid in full rather than canceled,
extinguished or forfeited. The Company will not adjust the Conversion Rate to
account for accrued interest, if any.



     A Holder of Convertible Notes is not entitled to any rights of a holder of
Common Shares until such Holder has converted its Convertible Note to Common
Shares, and only to the extent such Convertible Note are deemed to have been
converted into Common Shares pursuant to this Article IV.



     (b) Even if the Closing Price Condition is not satisfied,





     (i) if during any five consecutive trading day period, the average
of the Sale Prices for the Convertible Notes for that five consecutive
trading day period was less than 94% of the average of the Conversion
Values for the Convertible Notes during that period, a holder may
surrender Convertible Notes for conversion at any time during the
following five business days; provided, however, that if on any
Conversion Date on which a Convertible Note is surrendered for conversion
based on the condition described in this paragraph that is on or after
May 15, 2019, the closing price of the Common Shares on the trading day
before the Conversion Date is greater than 100% of the Effective
Conversion Price and less than 110% of the Effective Conversion Price,
then holders surrendering Convertible Notes for conversion will receive,
at the option of the Company, in lieu of Common Shares based on the then
applicable Conversion Rate, cash or Common Shares with a value equal to
the principal amount of the Convertible Notes being converted (a
“Principal Value Conversion”). Common Shares delivered upon a Principal
Value Conversion will be valued at the Closing Price on the Conversion
Date. The Company shall deliver Common Shares upon a Principal Value
Conversion no later than the third business day following the
determination of the closing price;



     The Conversion Agent will determine whether the Convertible Notes are
convertible pursuant to this Section 4.1(b)(i) only after being instructed to
do so by the Company. The Company has no obligation to so instruct the
Conversion Agent unless a Holder provides the Company with reasonable evidence
that the provisions of this Section 4.1(b)(i) have been satisfied. If such
reasonable evidence is so presented, the Company shall instruct the Conversion
Agent to determine the Sale Prices and Conversion Values for the applicable
period.




     (ii) a Holder may surrender for conversion a Convertible Note that
has been called for redemption pursuant to Section 3.1 at any time prior
to close of business on the business day prior to the Redemption Date;



-19-









 






     (iii) in the event that the Company declares:




     (A) a dividend or distribution of any rights or warrants to
all holders of Common Shares entitling them to subscribe for or
purchase, for a period expiring within 60 days, Common Shares at a
price per share less than the Current Market Price per share, or




     (B) a dividend or distribution of cash, debt Convertible Notes
(or other evidences of indebtedness), or other assets (excluding
dividends or distributions for which Conversion Rate adjustment is
required to be made under Section 4.1 or Section 4.2 below), where
the fair market value of such dividend or distribution, together
with all other such dividends and distributions within the
preceding twelve months, has a per share value exceeding 10% of the
Current Market Price of the Common Shares as of the trading day
immediately preceding the declaration date for such dividend or
distribution,


then the Convertible Notes may be surrendered for conversion beginning on the
date the Company gives notice to the Holders of such right, which shall not be
less than 20 days prior to the ex-dividend date for such dividend or
distribution and Convertible Notes may be surrendered for conversion at any
time until the earlier of the close of business on the Business Day prior to
the ex-dividend date or our announcement that such distribution will not take
place. No adjustment to the ability of the holders to convert will be made if
the holders are entitled to participate in the distribution without conversion;
and




     (iv) in the event that the Company is a party to a consolidation,
merger, transfer or lease of all or substantially all of its assets or a
merger that reclassifies or changes the Common Shares pursuant to which
our common stock would be converted into cash, Convertible Notes or other
assets, the Convertible Notes may be surrendered for conversion at any
time from or after the date which is 15 days prior to the anticipated
effective time of the transaction until 15 days after the actual date of
such transaction.



     (c) Conversion Procedure. To convert a Convertible Note, a Holder must
satisfy the requirements in paragraph 8 of the Global Security. The first
Business Day on which the Holder satisfies all those requirements is the
conversion date (the “Conversion Date”).



     As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full Common Shares deliverable upon the conversion or exchange and
cash in lieu of any fractional share determined pursuant to Section 4.1(d);
provided that, in case of a Principal Value Conversion pursuant to Section
4.1(b)(i), the Company shall deliver such Common Shares or cash pursuant to
Section 4.1(d) not later than three Business Days following the Conversion
Date. The person in whose name the certificate is registered shall be treated
as a shareholder of record on and after the next Business Day following the
Conversion Date. Upon conversion of a Convertible Note, such person shall no
longer be a Holder of such Convertible Note. No payment or adjustment will be
made for dividends on, or other distributions with respect to, any Common
Shares except as provided in this Article IV.



-20-









 





     If any Holder surrenders a Convertible Note for conversion (in whole or in
part) during the period from the close of business on any regular record date
for the payment of an installment of interest to the opening of business on the
next succeeding interest payment date, then such Convertible Note so
surrendered shall be accompanied by payment in funds acceptable to the Company
of an amount equal to the interest payable on such interest payment date on the
Principal Amount of such Convertible Note then being converted, and such
interest installment shall be payable to such registered Holder notwithstanding
the conversion of the Convertible Note, subject to the provisions of this
Indenture relating to the payment of defaulted interest by the Company. If the
Company defaults in the payment of interest payable on such interest payment
date, the Company shall promptly repay such funds to such Holder.



     Nothing in this Section 4.1 shall affect the right of a Holder in whose
name any Convertible Note is registered at the close of business on a record
date to receive the interest payable on such Convertible Note on the related
interest payment date in accordance with the terms of this Indenture and the
Convertible Notes. If the Holder converts more than one Convertible Note at
the same time, the number of Common Shares deliverable upon the conversion
shall be based on the total Principal Amount of the Convertible Notes
converted.



     If the last day on which a Convertible Note may be converted is not a
Business Day, the Convertible Note may be surrendered on the next succeeding
day that is a Business Day.



     Upon surrender of a Convertible Note that is converted in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, a new Convertible Note in an authorized denomination equal in Principal
Amount to the unconverted portion of the Convertible Note surrendered.



     A Convertible Note in respect of which a Holder has delivered a Purchase
Notice pursuant to Section 3.3 or a Change in Control Purchase Notice pursuant
to Section 3.4 exercising the option of such Holder to require the Company to
purchase such Convertible Note may be converted only if such Purchase Notice or
Change in Control Purchase Notice is withdrawn by a written notice of
withdrawal complying in all respects with each of the provisions of this
Indenture relating to such notice and delivered to the Paying Agent prior to
the close of business on the Purchase Date or Change in Control Purchase Date,
as the case may be.



     (d) Cash Payments in Lieu of Fractional Shares. The Company shall not
issue fractional Common Shares upon conversion of Convertible Notes. Instead
the Company shall deliver cash for the current market value of the fractional
share. The current market value of a fractional share shall be determined to
the nearest 1/1,000 of a share by multiplying the Closing Price of a Common
Share on the Trading Day immediately preceding the Conversion Date by the
fractional amount and rounding the product to the nearest whole cent.



-21-









 





     (e) Taxes on Conversion. If a Holder submits a Convertible Note for
conversion, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of Common Shares upon the conversion. However,
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 certificates representing the Common Shares
being issued in a name other than the Holder’s name until the Conversion Agent
receives a sum sufficient to pay any tax which shall be due because the shares
are to be issued in a name other than the Holder’s name. Nothing herein shall
preclude the Company’s withholding any tax required by law or regulations.



     (f) Covenants of the Company. The Company shall, prior to issuance of any
Convertible Notes hereunder, and from time to time as may be necessary, reserve
out of its authorized but unissued Common Shares a sufficient number of Common
Shares to permit the conversion of the Convertible Notes. All Common Shares
delivered upon conversion of the Convertible Notes shall be newly issued shares
or treasury shares, shall be duly and validly issued and fully paid and
nonassessable, and shall be free from preemptive rights and free of any lien or
adverse claim. The Company shall endeavor promptly to comply with all federal
and state securities laws regulating the order and delivery of Common Shares
upon the conversion of Convertible Notes, if any, and shall cause to have
listed or quoted all such Common Shares on each United States national
securities exchange or over-the-counter or other domestic market on which the
Common Shares are then listed or quoted.



     SECTION 4.2 Adjustment of Conversion Rate.



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



     (a) In case the Company shall (i) pay a dividend on its Common Shares in
Common Shares, (ii) make a distribution on its Common Shares in Common Shares,
(iii) subdivide its outstanding Common Shares into a greater number of shares,
or (iv) combine its outstanding Common Shares into a smaller number of shares,
the Conversion Rate in effect immediately prior thereto shall be adjusted so
that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to such event by a fraction of which the
numerator shall be the number of Common Shares outstanding immediately after
such event and the denominator of which shall be the number of Common Shares
outstanding immediately prior to such event. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the record date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of subdivision or combination.



     (b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Shares entitling them (for a period
commencing no earlier than the record date described below and expiring not
more than 60 days after such record date) to subscribe for or purchase Common
Shares (or Convertible Notes convertible into Common Shares) at a price per
share (or having a conversion price per share) less than the Closing Price per
share of Common Shares on the Business Day immediately prior to the date of
announcement of such issuance, the Conversion Rate in effect shall be adjusted
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to such announcement by a fraction of which
the numerator shall be the number of Common Shares



-22-









 







outstanding at the close of business on the date of announcement plus the
number of additional Common Shares offered (or into which the Convertible Notes
so offered are convertible), and the denominator of which shall be the number
of Common Shares outstanding at the close of business on the date of
announcement plus the number of shares which the aggregate offering price of
the total number of Common Shares so offered (or the aggregate conversion price
of the Convertible Notes so offered, which shall be determined by multiplying
the number of Common Shares issuable upon conversion of such Convertible Notes
by the conversion price per Common Share pursuant to the terms of such
Convertible Notes) would purchase at the Current Market Price per Common Share
on the Business Day immediately preceding the date of announcement of such
issuance. Such adjustment shall be made successively whenever any such rights
or warrants are issued, and shall become effective on the day following the
date of announcement of such issuance. If at the end of the period during
which such rights or warrants are exercisable not all rights or warrants shall
have been exercised, the adjusted Conversion Rate shall be immediately
readjusted to what it would have been based upon the number of additional
Common Shares actually issued (or the number of Common Shares issuable upon
conversion of Convertible Notes actually issued).



     (c) In case the Company shall distribute to all or substantially all
holders of its Common Shares any shares of Capital Stock of the Company (other
than Common Shares), Extraordinary Cash Dividends or any evidences of
indebtedness or other non-cash assets (including Convertible Notes of any
person other than the Company but excluding dividends or distributions referred
to in subsection (a) of this Section 4.2), or shall distribute to all or
substantially all holders of its Common Shares rights or warrants to subscribe
for or purchase any of its Convertible Notes (excluding those rights and
warrants referred to in subsection (b) of this Section 4.2, then in each such
case the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to such distribution by a fraction of which the numerator shall be the Current
Market Price per Common Share on the record date mentioned below and the
denominator shall be the Current Market Price per Common Share on such record
date less the fair market value on such record date (as determined by the Board
of Directors, whose determination shall be conclusive evidence of such fair
market value and which shall be evidenced by an Officers’ Certificate delivered
to the Trustee) of the portion of the Capital Stock, evidences of indebtedness
or other non-cash assets so distributed or of such rights or warrants
applicable to one Common Share (determined on the basis of the number of Common
Shares outstanding on the record date). Such adjustment shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders
entitled to receive such distribution.



     In the event the then fair market value (as so determined) of the portion
of the Capital Stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one Common Share is
equal to or greater than the Current Market Price per Common Share on such
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Convertible Note shall have the right to receive
upon conversion the amount of Capital Stock, evidences of indebtedness or other
non-cash assets so distributed or of such rights or warrants such holder would
have received had such holder converted each Convertible Note on such record
date. In the event that such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the



-23-









 







Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 4.2 by
reference to the actual or when issued trading market for any Convertible
Notes, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Shares.



     Rights or warrants distributed by the Company to all holders of Common
Shares entitling the holders thereof to subscribe for or purchase shares of the
Company’s Capital Stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”) (i) are deemed to be transferred with such Common
Shares; (ii) are not exercisable; and (iii) are also issued in respect of
future issuances of Common Shares, shall be deemed not to have been distributed
for purposes of this Section 4.2 (and no adjustment to the Conversion Rate
under this Section 4.2 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 4.2. If any such right or
warrant, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different Convertible
Notes, evidences of indebtedness or other assets, then the date of the
occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 4.2
was made, (i) in the case of any such rights or warrants, all of which shall
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Shares with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Shares as of the date of such
redemption or repurchase, and (ii) in the case of such rights or warrants which
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights and warrants had not
been issued.



     (d) In case the Company shall distribute a Regular Cash Dividend (a
“Triggering Distribution”) to all or substantially all holders of its
Common Shares in excess of $0.42 per share in any quarterly period, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying such Conversion Rate in effect on the Business Day
immediately preceding the record date for such Triggering Distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Shares on the determination date, and the denominator shall be the
Current Market Price per share of the Common Shares on the determination date
less the aggregate amount by which the cash so distributed applicable to one
share of the Common Shares (determined on the basis of the number of Common
Shares outstanding on the determination date) exceeds $0.42 in any quarterly
period, such increase to become effective immediately prior to the opening of
business



-24-









 







on the day following the date on which the Triggering Distribution is
paid. It is expressly understood that a stock buyback, repurchase or similar
transaction or program shall in no event be considered a Triggering
Distribution for purposes of this Section 4.2(d) or Section 4.2(e).



     (e) In case the Company or any of its Subsidiaries shall purchase any of
the Company’s Common Shares (excluding stock options) by means of a tender
offer, other than an odd-lot offer by the Company or any of its Subsidiaries,
then, effective immediately prior to the opening of business on the day after
the last date (the “Expiration Date” tenders could have been made
pursuant to such tender offer (as it may be amended) (the last time at which
such tenders could have been made on the Expiration Date is hereinafter
sometimes called the “Expiration Time”) the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect at the close of business on the Expiration Date by a
fraction of which the numerator shall be the sum of (i) the aggregate
consideration (determined as set forth below) payable to stockholders of the
Company 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 (ii) the product of the number
of Common Shares outstanding (less any Purchased Shares and excluding any
shares held in the treasury of the Company) immediately after the Expiration
Time and the Current Market Price per share of the Common Shares and the
denominator shall be the product of the number of Common Shares outstanding
(including Purchased Shares but excluding any shares held in the treasury of
the Company) immediately prior to the Expiration Time multiplied by the Current
Market Price per share of the Common Shares. For purposes of this Section
4.2(e), the aggregate consideration in any such tender offer shall equal the
sum of the aggregate amount of cash consideration and the aggregate fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive evidence thereof and which shall be evidenced by an Officers’
Certificate delivered to the Trustee) of any other consideration payable in
such tender offer. 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 the application of this Section 4.2(e) 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 4.2(e). For purposes of
this Section 4.2(e), 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.



     (f) In any case in which this Section 4.2 shall require that an adjustment
be made following a record date, an announcement date or a determination date
or Expiration Date, as the case may be, established for purposes of this
Section 4.2, 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 4.5) issuing to the Holder of any Convertible Note
converted after such record date or announcement date or determination date or
Expiration Date the Common Shares and other Capital Stock of the Company
issuable upon such conversion over



-25-









 







and above the Common Shares and other Capital Stock of the Company
issuable upon such conversion only on the basis of the Conversion Rate prior to
adjustment; and, in lieu of the shares the issuance of which is so defined, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence prepared by the Company of the right to receive such
shares. If any distribution in respect of which an adjustment to the
Conversion Rate is required to be made as of the record date or announcement
date or determination date or Expiration Date therefor 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 announcement date or effective date or determination
date or Expiration Date had not occurred.



     (g) No adjustment shall be made pursuant to this Section 4.2 if the
Holders may participate in the transaction that would otherwise give rise to an
adjustment pursuant to this Section 4.2.



     SECTION 4.3 When Adjustment May Be Deferred.



     No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate.
Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.



     All calculations under this Article IV shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.



     SECTION 4.4 When No Adjustment Required.



     No adjustment need be made for a transaction referred to in Section 4.2 or
4.8 if Convertible Noteholders are to participate in the transaction without
conversion on a basis and with notice that the Board of Directors of the
Company determines to be fair and appropriate in light of the basis and notice
on which holders of Common Shares participate in the transaction. No
adjustment need be made for rights to purchase Common Shares pursuant to the
Company plan for reinvestment of dividends or interest.



     No adjustment need be made for a change in the par value or no par value
of the Common Shares.



     To the extent the Convertible Notes become convertible pursuant to this
Article IV in whole or in part into cash, no adjustment need be made thereafter
as to the cash. Interest will not accrue on the cash.



-26-









 





     SECTION 4.5 Notice of Adjustment.



     Whenever the Conversion Rate is adjusted, the Company shall promptly mail
to Securityholders a notice of the adjustment. The Company shall file with the
Trustee and the Conversion Agent such notice and a certificate from the
Company’s independent public accountants briefly stating the facts requiring
the adjustment and the manner of computing it, The certificate shall be
conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
any such certificate except to exhibit the same to any Holder desiring
inspection thereof.



     SECTION 4.6 Voluntary Decrease.



     The Company from time to time may decrease the Conversion Rate by any
amount for any period of time. Whenever the Conversion Rate is decreased, the
Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice of the decrease. The Company shall mail the notice
at least 15 days before the date the decreased Conversion Rate takes effect.
The notice shall state the decreased Conversion Rate and the period it will be
in effect. A voluntary decrease of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of this Article IV.



     SECTION 4.7 Notice of Certain Transactions 



     If:



     (a) the Company takes any action that would require an adjustment in the
Conversion Rate pursuant to Section 4.2 (unless no adjustment is to occur
pursuant to Section 2.14); or



     (b) the Company takes any action that would require a supplemental
indenture pursuant to Section 4.8; or



     (c) there is a liquidation or dissolution of the Company;



then the Company shall mail to Securityholders and file with the Trustee and
the Conversion Agent a notice stating the proposed record date for a dividend
or distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at
least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.



     SECTION 4.8 Reorganization of the Company; Special
Distributions.



     If the Company is a party to a transaction subject to Section 8.1 of the
Base Indenture (other than a sale of all or substantially all of the assets of
the Company in a transaction in which the holders of Common Shares immediately
prior to such transaction do not receive Convertible Notes, cash or other
assets of the Company or any other person) or a merger or binding share
exchange which reclassifies or changes its outstanding Common Shares, the
person obligated to deliver Convertible Notes, cash or other assets upon
conversion of Convertible Notes shall enter into a supplemental indenture. If the issuer of Convertible Notes
deliverable upon conversion of



-27-









 







Convertible Notes is an Affiliate of the
successor to the Company, that issuer shall join in the supplemental indenture.



     The supplemental indenture shall provide that the Holder of a Convertible
Note may convert it into the kind and amount of Convertible Notes, cash or
other assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder had
converted the Convertible Note immediately before the effective date of the
transaction, assuming (to the extent applicable) that such Holder (i) was not a
constituent person or an Affiliate of a constituent person to such transaction;
(ii) made no election with respect thereto; and (iii) was treated alike with
the plurality of non-electing Holders. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be practical
to the adjustments provided for in this Article IV. The Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.



     If this Section applies, Section 4.2 does not apply.



     If the Company makes a distribution to all holders of its Common Shares of
any of its assets, or debt Convertible Notes or any rights, warrants or options
to purchase Convertible Notes of the Company that, but for the provisions of
the last paragraph of Section 4.4, would otherwise result in an adjustment in
the Conversion Rate pursuant to the provisions of Section 10.8, then, from and
after the record date for determining the holders of Common Shares entitled to
receive the distribution, a Holder of a Convertible Note that converts such
Convertible Note in accordance with the provisions of this Indenture shall upon
such conversion be entitled to receive, in addition to the shares of Common
Shares into which the Convertible Note is convertible, the kind and amount of
Convertible Notes, cash or other assets comprising the distribution that such
Holder would have received if such Holder had converted the Convertible Note
immediately prior to the record date for determining the holders of Common
Shares entitled to receive the distribution.



     SECTION 4.9 Company Determination Final.



     Any determination that the Company or its Board of Directors must make
pursuant to Section 4.1(d), 4.2, 4.3, 4.4, 4.8 or 4.11 is conclusive, absent
manifest error.



     SECTION 4.10 Trustee’s Adjustment Disclaimer.



     The Trustee has no duty to determine when an adjustment under this Article
IV should be made, how it should be made or what it should be. The Trustee has
no duty to determine whether a supplemental indenture under Section 4.8 need be
entered into or whether any provisions of any supplemental indenture are
correct. The Trustee shall not be accountable for and makes no representation
as to the validity or value of any Convertible Notes or assets delivered upon
conversion of Convertible Notes. The Trustee shall not be responsible for the
Company’s failure to comply with this Article IV. Each Conversion Agent shall
have the same protection under this Section 4.10 as the Trustee. Unless and
until the Trustee receives a certificate from the Company setting forth the
particulars of an adjustment under this Article IV, the Trustee may assume
without inquiry that no such adjustment has been, or is required to be, made.



-28-









 





     SECTION 4.11 Simultaneous Adjustments.



     In the event that this Article IV requires adjustments to the Conversion
Rate under more than one circumstance set forth in Sections 4.2 and the record
dates for the distributions giving rise to such adjustments shall occur on the
same date, then such adjustments shall be made by applying the provisions of
Section 4.2.



     SECTION 4.12 Successive Adjustments.



     After an adjustment to the Conversion Rate under this Article IV, any
subsequent event requiring an adjustment under this Article IV shall cause an
adjustment to the Conversion Rate as so adjusted.



     SECTION 4.13 Additional Events of Default; Inapplicability of Certain
Events of Default; Withholding Notice; Rescission.



     (a) In addition to those matters set forth in Section 5.1 of the Base
Indenture, an “Event of Default” with respect to the Convertible Notes shall
also mean any of the following events:




     (i) default in the payment of any interest upon the Convertible
Notes when it becomes due and payable, and continuance of such default
for a period of 30 days; or




     (ii) default in the Company’s obligation to repurchase Convertible
Notes upon the Company’s exercise of its repurchase option pursuant to
Section 3.1, upon the occurrence of a Change in Control pursuant to
Section 3.4 or upon the exercise by a holder of its option to require the
Company to repurchase such holder’s Convertible Notes pursuant to Section
3.3; or




     (iii) default in the Company’s obligation to convert the Convertible
Notes upon exercise of a Holder’s conversion right; or




     (iv) default in the performance, or breach, of any covenant of the
Company or any Guarantor in this Indenture, and continuance of such
default or breach for a period of 90 days after there has been given, by registered or certified mail,
to the Company or any Guarantor by the Trustee or to the Company or any
Guarantor and the Trustee by the Holders of at least 25% in principal
amount of the Convertible Notes a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is
a “Notice of Default” hereunder, unless the Holders of a principal amount
of Convertible Notes not less than the principal amount of Convertible
Notes the Holders of which gave such notice, as the case may be, shall
agree in writing to an extension of such period prior to its expiration;
provided, however, that the Holders of such principal amount of
Convertible Notes, as the case may be, shall be deemed to have agreed to
an extension of such period if corrective action is initialized by the
Company within such period and is being pursued; or



     (b) The Trustee may withhold from the Holders notice of any continuing
default or Event of Default (except a default or Event of Default in the
payment of principal of, interest or



-29-









 







Liquidated Damages, if any, on the
Convertible Notes) if it determines in good faith that withholding notice is in
the Holders’ interest.



     (c) The Holders of a majority in aggregate principal amount of the
Convertible Notes then outstanding by notice to the Trustee may rescind any
acceleration of the Convertible Notes and its consequences if all existing
Events of Default (other than the nonpayment of principal of, interest and
liquidated damages, if any, on the Convertible Notes that has become due solely
by virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree of any court of competent
jurisdiction. No such rescission will affect any subsequent default or Event
of Default or impair any right consequent thereto.



ARTICLE V




COVENANTS




     SECTION 5.1 Limitations on Incurrence of Debt.



     (a) The Company will not, and will not permit any Subsidiary to incur
additional Indebtedness if, immediately after the incurrence of such additional
Indebtedness the Company’s Debt to Total Assets Ratio, calculated on a
consolidated basis, would exceed seventy percent (70%), measured as of the end
of the most recent fiscal year or calendar quarter.



     (b) The Company shall not, and shall not permit any Subsidiary to, incur
any Indebtedness if the Company’s Debt Service Coverage Ratio for the four
consecutive fiscal quarters most recently ended prior to the date on which such
additional Indebtedness is to be incurred shall have been less than 1.4 to 1,
calculated on a pro forma basis after giving effect to the issuance of the
Convertible Notes and the application of the proceeds therefrom, and calculated
on the assumption that the Convertible Notes and any other Indebtedness
incurred by the Company since the first day of the four-quarter period and the
application of the proceeds therefrom (including to refinance other
Indebtedness since the first day of the four-quarter period) had occurred on
the first day of the period.



     SECTION 5.2 Maintenance of Unencumbered Total Assets.



     The Company and its Subsidiaries shall at all times maintain an
Unencumbered Total Assets in an amount not less than one-hundred fifty percent
(150%) of the aggregate outstanding principal amount of the Company’s and its
Subsidiaries’ consolidated unsecured Indebtedness.



     SECTION 5.3 Restriction on Subsidiary Indebtedness and Preferred
Stock.



     (a) The Company shall not permit the Partnership or any Subsidiary (i) to
incur unsecured Indebtedness, except for (A) Indebtedness payable to the
Company and (B) Indebtedness (not to exceed $4.4 million) issued in exchange
for, or the net proceeds of which are used to refinance, refund, repay or
defease, currently outstanding unsecured Indebtedness payable to third parties
in the amount of $4.4 million, or any refinancings thereof in an amount not to
exceed the amount so refinanced, refunded, repaid or defeased (plus premiums,
accrued interest, fees and expenses) or (ii) to guarantee unsecured
Indebtedness, unless in each case the Convertible Notes will rank pari passu,
with such Indebtedness.



-30-









 





     (b) The Company shall not permit the Partnership to issue, other than to
the Company, preferred units of partnership interest in the Partnership, unless
the Convertible Notes will rank senior to any such preferred units.



     (c) If the Partnership issues its Guarantee of the Convertible Notes in
accordance with the Section 3.1 of the Base Indenture, such Guarantee shall be
deemed to satisfy the foregoing conditions. Notwithstanding the foregoing, the
Company and the Trustee agree that the satisfaction of the provisions of the
immediately preceding sentence shall not be the exclusive means of satisfying
the restrictions set forth in Section 5.3(a) and 5.3(b) of this Supplemental
Indenture.



     SECTION 5.4 Provision of Financial Information.



     (a) If the Company shall be required to file reports with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act, it will file such reports by the
required date and, within 15 days of such date, deliver copies of all such
reports to the Trustee for, and transmit a copy to, each holder of the
Convertible Notes. If the Company is not required to file reports with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act, it will deliver to the
Trustee and transmit to each holder of the Convertible Notes reports that
contain substantially the same kind of information that would have been
included in annual and quarterly reports filed with the SEC had the Company
been required to file such reports, such information to be delivered or
transmitted within 15 days after the same would have been required to be filed
with the SEC had the Company been required to file such reports.



     (b) Notwithstanding the foregoing, if the Company is not required to file
reports with the SEC because information about the Company is contained in the
reports filed by another entity with the SEC, the delivery to the Trustee for
the Convertible Notes of the reports filed by such entity with the SEC and the
transmittal by mail to all holders of the Convertible Notes of each annual and
quarterly report filed with the SEC by such entity within the time periods set
forth in the preceding sentence shall be deemed to satisfy the Company’s
obligations to provide financial information under the applicable provisions of
the Base Indenture.



ARTICLE VI




MISCELLANEOUS PROVISIONS




     SECTION 6.1 Ratification and InCompany of Base Indenture.



     As supplemented by this Supplemental Indenture, the Base Indenture is in
all respects ratified and confirmed, and the Base Indenture together with this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.



     SECTION 6.2 Governing Law.



     This Supplement and the Convertible Notes shall be governed by, and
construed in accordance with, the laws of the state of New York (without
giving effect to the conflicts of laws principles thereof).



-31-









 





     SECTION 6.3 Counterparts.



     This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.



     SECTION 6.4 Entire Agreement.



     This Supplemental Indenture, together with the Base Indenture, constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof, and fully supersedes any prior of contemporaneous agreements
relating to such subject matter.



-32-









 





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


	 	 	 	 	 
	 	Capital Automotive REIT,
as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	 	 	 	 
	 	Wells Fargo Bank, National Association,

as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




[SECOND SUPPLEMENTAL TRUST INDENTURE]