exv4w2



 





Exhibit 4.2














ATLANTIC COAST AIRLINES HOLDINGS, INC.




To




U.S. BANK NATIONAL ASSOCIATION

as Trustee














INDENTURE




Dated as of




February 25, 2004














6% Convertible Notes Due 2034
















 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page

	ARTICLE 1
	 	 	 	 
	Definitions
	 	 	 	 
	Section 1.01. Definitions
	 	 	2	 
	ARTICLE 2
	 	 	 	 
	Issue, Description, Execution, Registration and Exchange of Notes
	 	 	 	 
	Section 2.01. Designation Amount and Issue of Notes
	 	 	9	 
	Section 2.02. Form of Notes
	 	 	9	 
	Section 2.03. Date and Denomination of Notes; Payments of Interest
	 	 	10	 
	Section 2.04. Execution of Notes
	 	 	12	 
	Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer
	 	 	13	 
	Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes
	 	 	18	 
	Section 2.07. Temporary Notes
	 	 	19	 
	Section 2.08. Cancellation of Notes
	 	 	20	 
	Section 2.09. CUSIP Numbers
	 	 	20	 
	ARTICLE 3
	 	 	 	 
	Redemption and Repurchase of Notes
	 	 	 	 
	Section 3.01. Redemption of Notes
	 	 	20	 
	Section 3.02. Notice of Optional Redemption; Selection of Notes
	 	 	21	 
	Section 3.03. Payment of Notes Called for Redemption by the Company
	 	 	23	 
	Section 3.04. Conversion Arrangement on Call for Redemption
	 	 	24	 
	Section 3.05. Repurchase at Option of Holders upon a Designated Event
	 	 	24	 
	Section 3.06. Repurchase of Notes by the Company at Option of the Holders
	 	 	28	 
	Section 3.07. Company Repurchase Notice
	 	 	29	 
	Section 3.08. Effect of Repurchase Notice
	 	 	30	 
	Section 3.09. Deposit of Repurchase Price
	 	 	31	 
	Section 3.10. Notes Repurchased in Part
	 	 	32	 







 









 






	 	 	 	 	 
	 	 	Page

	ARTICLE 4
	 	 	 	 
	[Reserved.]
	 	 	 	 
	ARTICLE 5
	 	 	 	 
	[Reserved.]
	 	 	 	 
	ARTICLE 6
	 	 	 	 
	Particular Covenants of the Company
	 	 	 	 
	Section 6.01. Payment of Principal and Interest
	 	 	32	 
	Section 6.02. Maintenance of Office or Agency
	 	 	32	 
	Section 6.03. Appointments to Fill Vacancies in Trustee’s Office
	 	 	33	 
	Section 6.04. Provisions as to Paying Agent
	 	 	33	 
	Section 6.05. Existence
	 	 	34	 
	Section 6.06. Rule 144A Information Requirement
	 	 	34	 
	Section 6.07. Stay, Extension and Usury Laws
	 	 	35	 
	Section 6.08. Compliance Certificate
	 	 	35	 
	Section 6.09. Liquidated Damages Notice
	 	 	35	 
	ARTICLE 7
	 	 	 	 
	Noteholders’ Lists and Reports by the Company and the Trustee
	 	 	 	 
	Section 7.01. Noteholders’ Lists
	 	 	36	 
	Section 7.02. Preservation and Disclosure of Lists
	 	 	36	 
	Section 7.03. Reports by Trustee
	 	 	37	 
	Section 7.04. Reports by Company
	 	 	37	 
	ARTICLE 8
	 	 	 	 
	Remedies of the Trustee and Noteholders on an Event of Default
	 	 	 	 
	Section 8.01. Events of Default
	 	 	37	 
	Section 8.02. Payments of Notes on Default; Suit Therefor
	 	 	39	 
	Section 8.03. Application of Monies Collected by Trustee
	 	 	41	 
	Section 8.04. Proceedings by Noteholder
	 	 	42	 
	Section 8.05. Proceedings by Trustee
	 	 	43	 
	Section 8.06. Remedies Cumulative and Continuing
	 	 	43	 
	Section 8.07. Direction of Proceedings and Waiver of Defaults by Majority of Noteholders
	 	 	43	 
	Section 8.08. Notice of Defaults
	 	 	44	 
	Section 8.09. Undertaking to Pay Costs
	 	 	44	 
	ARTICLE 9
	 	 	 	 
	The Trustee
	 	 	 	 
	Section 9.01. Duties and Responsibilities of Trustee
	 	 	44	 
	Section 9.02. Reliance on Documents, Opinions, Etc
	 	 	46	 







ii









 






	 	 	 	 	 
	 	 	Page

	Section 9.03. No Responsibility for Recitals, Etc
	 	 	47	 
	Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes
	 	 	47	 
	Section 9.05. Monies to be Held in Trust
	 	 	48	 
	Section 9.06. Compensation and Expenses of Trustee
	 	 	48	 
	Section 9.07. Officers’ Certificate as Evidence
	 	 	49	 
	Section 9.08. Conflicting Interests of Trustee
	 	 	49	 
	Section 9.09. Eligibility of Trustee
	 	 	49	 
	Section 9.10. Resignation or Removal of Trustee
	 	 	49	 
	Section 9.11. Acceptance by Successor Trustee
	 	 	51	 
	Section 9.12. Succession by Merger
	 	 	51	 
	Section 9.13. Preferential Collection of Claims
	 	 	52	 
	Section 9.14. Trustee’s Application for Instructions from the Company
	 	 	52	 
	ARTICLE 10
	 	 	 	 
	The Noteholders
	 	 	 	 
	Section 10.01. Action by Noteholders
	 	 	53	 
	Section 10.02. Proof of Execution by Noteholders
	 	 	53	 
	Section 10.03. Who Are Deemed Absolute Owners
	 	 	53	 
	Section 10.04. Company-owned Notes Disregarded
	 	 	53	 
	Section 10.05. Revocation of Consents, Future Holders Bound
	 	 	54	 
	ARTICLE 11
	 	 	 	 
	Meetings of Noteholders
	 	 	 	 
	Section 11.01. Purpose of Meetings
	 	 	54	 
	Section 11.02. Call of Meetings by Trustee
	 	 	55	 
	Section 11.03. Call of Meetings by Company or Noteholders
	 	 	55	 
	Section 11.04. Qualifications for Voting
	 	 	55	 
	Section 11.05. Regulations
	 	 	56	 
	Section 11.06. Voting
	 	 	56	 
	Section 11.07. No Delay of Rights by Meeting
	 	 	57	 
	ARTICLE 12
	 	 	 	 
	Supplemental Indentures
	 	 	 	 
	Section 12.01. Supplemental Indentures Without Consent of Noteholders
	 	 	57	 
	Section 12.02. Supplemental Indenture With Consent of Noteholders
	 	 	59	 
	Section 12.03. Effect of Supplemental Indenture
	 	 	60	 
	Section 12.04. Notation on Notes
	 	 	60	 
	Section 12.05. Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee
	 	 	60	 
	ARTICLE 13

	 	 	 	 
	
Consolidation, Merger, Sale, Conveyance and Lease
	 	 	 	 
	Section 13.01. Company May Consolidate on Certain Terms
	 	 	60	 







iii









 






	 	 	 	 	 
	 	 	Page

	Section 13.02. Successor to be Substituted
	 	 	61	 
	Section 13.03. Opinion of Counsel to be Given to Trustee
	 	 	62	 
	Section 13.04. Payment of Additional Amounts
	 	 	62	 
	ARTICLE 14
	 	 	 	 
	Satisfaction and Discharge of Indenture
	 	 	 	 
	Section 14.01. Discharge of Indenture
	 	 	64	 
	Section 14.02. Deposited Monies to be Held in Trust by Trustee
	 	 	64	 
	Section 14.03. Paying Agent to Repay Monies Held
	 	 	65	 
	Section 14.04. Return of Unclaimed Monies; Repayment to the Company
	 	 	65	 
	Section 14.05. Reinstatement
	 	 	65	 
	ARTICLE 15
	 	 	 	 
	Immunity of Incorporators, Stockholders, Officers and Directors
	 	 	 	 
	Section 15.01. Indenture and Notes Solely Corporate Obligations
	 	 	65	 
	ARTICLE 16
	 	 	 	 
	Conversion of Notes
	 	 	 	 
	Section 16.01. Right to Convert
	 	 	66	 
	Section 16.02. Conversion Procedures
	 	 	69	 
	Section 16.03. Cash Payments in Lieu of Fractional Shares
	 	 	72	 
	Section 16.04. Conversion Rate
	 	 	72	 
	Section 16.05. Adjustment of Conversion Rate
	 	 	72	 
	Section 16.06. Effect of Reclassification, Consolidation, Merger or Sale
	 	 	82	 
	Section 16.07. Taxes on Shares Issued
	 	 	83	 
	Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements; Listing of Common Shares
	 	 	83	 
	
Section 16.09. Responsibility of Trustee
	 	 	84	 
	Section 16.10. Notice to Holders Prior to Certain Actions
	 	 	85	 
	Section 16.11. Shareholder Rights Plans
	 	 	86	 
	Section 16.12. Issuer Determination Final
	 	 	86	 
	ARTICLE 17
	 	 	 	 
	Miscellaneous Provisions
	 	 	 	 
	Section 17.01. Provisions Binding on Company’s Successors
	 	 	86	 
	Section 17.02. Official Acts by Successor Corporation
	 	 	86	 
	Section 17.03. Addresses for Notices, Etc
	 	 	86	 
	Section 17.04. Governing Law
	 	 	87	 
	Section 17.05. Evidence of Compliance with Conditions Precedent, Certificates to Trustee
	 	 	87	 
	
Section 17.06. Legal Holidays
	 	 	88	 
	Section 17.07. Trust Indenture Act
	 	 	88	 
	Section 17.08. No Security Interest Created
	 	 	88	 
	Section 17.09. Benefits of Indenture
	 	 	88	 







iv









 






	 	 	 	 	 
	 	 	Page

	Section 17.10. Table of Contents, Headings, Etc
	 	 	88	 
	Section 17.11. Authenticating Agent
	 	 	89	 
	Section 17.12. Execution in Counterparts
	 	 	90	 
	Section 17.13. Severability
	 	 	90	 
	Exhibit A Form of Note
	 	 	A-1	 







v









 






INDENTURE




     INDENTURE dated as of February 25, 2004 between Atlantic Coast Airlines
Holdings, Inc., a Delaware corporation (hereinafter called the “Company”),
having its principal office at 45200 Business Court, Dulles, VA 20166 and U.S.
Bank National Association, as trustee hereunder (hereinafter called the
“Trustee”).



WITNESSETH:



     WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its 6% Convertible Notes Due 2034 (hereinafter
called the “Notes”), in an aggregate principal amount not to initially exceed
$125,000,000, or $150,000,000 if the Initial Purchaser’s options set forth in
the Purchase Agreement are exercised in full, and to provide the terms and
conditions upon which the Notes are to be authenticated, issued and delivered,
the Company has duly authorized the execution and delivery of this Indenture;
and



     WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of Designated Event Purchase Notice and a
form of conversion notice to be borne by the Notes are to be substantially in
the forms hereinafter provided for; and



     WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized,



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration
of the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:



 









 





ARTICLE 1

Definitions




     Section 1.01 . Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the respective meanings assigned to such terms in the Trust
Indenture Act and in the Securities Act as in force at the date of the
execution of this Indenture. The term “principal” when used herein, shall
include applicable premium, if any. The words “herein”, “hereof”, “hereunder”
and words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.



     “Additional Amounts” has the meaning set forth in Section 13.04(a).



     “Adjustment Event” has the meaning specified in Section 16.05(m).



     “Affiliate” of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, “control”, when used with
respect to any Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.



     “Agent Members” has the meaning specified in Section 2.05(b)(v).



     “applicable taxes” has the meaning set forth in Section 13.04(a).



     “Blackout Date” means February 15, 2029.



     “Board of Directors” means either the Board of Directors of the Company or
any duly authorized committee of such Board.



     “Business Day” means any day except a Saturday, Sunday or legal holiday on
which banking institutions in The City of New York are authorized or obligated
by law, regulation or executive order to close.



     “Closing Sale Price” of the Common Shares or other capital stock or
similar equity interests on any date means the closing sale price per share (or
if no closing sale price is reported, the average of the closing bid and ask
prices or, if more than one in either case, the average of the average closing
bid and the average closing ask prices) on such date as reported in composite
transactions for



2









 





the principal United States securities exchange on which the Common Shares
are traded or, if the Common Shares or such other capital stock or similar
equity interests are not listed on a United States national or regional
securities exchange, as reported by Nasdaq or by the National Quotation Bureau
Incorporated. In the absence of such quotations, the Company shall be entitled
to determine the Closing Sale Price on the basis it considers appropriate.



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



     “Common Share Legend” has the meaning specified in Section 2.05(c).



     “Common Shares” means any shares of stock of any class of the Company that
have no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
Company and that are not subject to redemption by the Company. Subject to the
provisions of Section 16.06, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the
Company at the date of this Indenture (namely, the common stock, par value $.02
per share) or shares of any class or classes resulting from any
reclassification or reclassifications thereof and that have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and that are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable on conversion shall be substantially in the proportion that the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.



     “Company” means the corporation named as the “Company” in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.



     “Company Repurchase Notice” has the meaning specified in Section 3.07(b).



     “Company Repurchase Notice Date” has the meaning specified in Section
3.07(b).



     “Conversion Date” has the meaning specified in Section 16.02.



     “Conversion Price” per Note means, on any date, $1,000 divided by the
Conversion Rate in effect on such date.



     “Conversion Rate” has the meaning specified in Section 16.04.



3









 





     “Corporate Trust Office” or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office
is, at the date as of which this Indenture is dated, located at: Goodwin
Square, 225 Asylum Drive, 23rd Floor, Hartford, Connecticut 06103.



     “Current Market Price” has the meaning specified in Section 16.05(h).



     “Custodian” means U.S. Bank National Association and its successors and
assigns, as custodian for the Depositary with respect to the Notes in global
form, or any successor entity thereto.



     “Default” means any event that is, or after notice or passage of time, or
both, would be, an Event of Default.



     “Defaulted Interest” has the meaning specified in Section 2.03.



     “Depositary” means DTC or its successor depositary.



     “Designated Event” means a Fundamental Change or a Termination of Trading.



     “Designated Event Notice” has the meaning specified in Section 3.05(b).



     “Designated Event Purchase Date” has the meaning specified in Section
3.05(a).



     “Designated Event Purchase Notice” has the meaning set forth in Section
3.05(a)(i).



     “Designated Event Purchase Price” has the meaning set forth in Section
3.05(a).



     “Determination Date” has the meaning specified in Section 16.05(m).



     “Distributed Property” has the meaning specified in Section 16.05(d).



     “Distribution Notice Date” has the meaning specified in Section 16.01(e).



     “DTC” means the Depository Trust Company.



     “Event of Default” means any event specified in Section 8.01 as an Event
of Default.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Ex-Dividend Date” has the meaning specified in Section 16.05(d).



4









 





     “Expiration Time” has the meaning specified in Section 16.05(g).



     “Fair Market Value” has the meaning specified in Section 16.05(h).



     “Final Distribution Date” has the meaning specified in Section 16.01(e).



     “Fundamental Change” means any transaction or event (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection
with which all or substantially all of the Common Shares are exchanged for,
converted into, acquired for or constitute solely the right to receive,
consideration that is not all or substantially all common shares that (a) are
listed on, or immediately after the transaction or event will be listed on, a
United States national securities exchange, or (b) are approved, or immediately
after the transaction or event will be approved, for quotation on the Nasdaq
National Market or any similar United States system of automated dissemination
of quotations of securities prices.



     “Global Note” has the meaning specified in Section 2.02.



     “Indenture” means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented.



     “Interest Payment Date” means February 15 and August 15 of each year,
commencing August 15, 2004.



     “Initial Purchaser” means Morgan Stanley & Co. Incorporated.



     “Issue Date” means the date the Notes are initially issued pursuant to
this Indenture.



     “Liquidated Damages” has the meaning specified for “Liquidated Damages
Amount” in Section 2(e) of the Registration Rights Agreement.



     “Liquidated Damages Notice” has the meaning specified in Section 6.09.



     “Maturity Date” means February 15, 2034.



     “Merger Conversion Period” has the meaning specified in Section 16.01(f).



     “Nasdaq” means the National Association of Securities Dealers Automated
Quotation System.



     “Non-Electing Share” has the meaning specified in Section 16.06.



     “Note” or “Notes” means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.



     “Note Register” has the meaning specified in Section 2.05(a).



5









 





     “Note Registrar” has the meaning specified in Section 2.05(a).



     “Noteholder” or “holder” as applied to any Note, or other similar terms,
means any Person in whose name at the time a particular Note is registered on
the Note Registrar’s books.



     “Notice Date” means the date of mailing of the notice of redemption
pursuant to Section 3.02.



     “Officers’ Certificate”, when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer, the President, any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title “Vice President”), the Treasurer or any Assistant Treasurer, or the
Secretary or Assistant Secretary of the Company.



     “Opinion of Counsel” means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.



     “Outstanding”, when used with reference to Notes and subject to the
provisions of Section 10.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:



     (a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;



     (b) Notes, or portions thereof, (i) for the redemption of which monies in
the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or (ii) that shall have been
otherwise discharged in accordance with Article 14;



     (c) Notes in lieu of which, or in substitution for which, other Notes
shall have been authenticated and delivered pursuant to the terms of Section
2.06; and



     (d) Notes converted into Common Shares pursuant to Article 16 and Notes
deemed not Outstanding pursuant to Article 3.



     “Person” means an individual, a corporation, an association, a
partnership, a limited liability company, a joint venture, a joint stock
company, a trust, an unincorporated organization or a government or political
subdivision or an agency or instrumentality thereof.



     “Predecessor Note” of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be



6









 





deemed to evidence the same debt as the lost, destroyed or stolen Note
that it replaces.



     “Purchase Agreement” means the Purchase Agreement dated as of February 19,
2004 between the Company and the Initial Purchaser.



     “Purchased Shares” has the meaning specified in Section 16.05(g)(i).



     “Record Date” has the meaning, (i) with respect to any Interest Payment
Date, as set forth in Section 2.03 and (ii) 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, as set
forth in Section 16.05(h).



     “Redemption Date” means a date that is fixed for redemption of the Notes
by the Company in accordance with Section 3.02 hereof.



     “Redemption Price” has the meaning set forth in Section 3.01.



     “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of February 25, 2004, by and between the Company and the Initial
Purchaser, as amended from time to time in accordance with its terms.



     “Repurchase Date” has the meaning specified in Section 3.06.



     “Repurchase Notice” has the meaning specified in Section 3.06.



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



     “Restricted Note Legend” has the meaning specified in Section 2.05(c).



     “Restricted Securities” has the meaning specified in Section 2.05(c).



     “Rights” has the meaning specified in Section 16.11.



     “Rights Agreement” means the Rights Agreement dated as of January 27, 1999
between the Company and Continental Stock Transfer & Trust Company, as Rights
Agent.



     “Rights Plan” shall have the meaning specified in Section 16.11.



     “Rule 144A” means Rule 144A as promulgated under the Securities Act.



7









 





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



     “Subsidiary” means, with respect to any Person, (i) any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of capital stock or other equity interest
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is 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 (ii) any partnership
(a) the sole general partner or 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).



     “Termination of Trading” will be deemed to have occurred if the Common
Shares (or other Common Shares into which the Notes are then convertible) are
neither listed for trading on a United States national or regional securities
exchange nor approved for quotation on the Nasdaq National Market or any
similar United States system of automated dissemination of quotations of
securities prices that is a successor thereto.



     “Trading Day” has the meaning specified in Section 16.05(h)(iv).



     “Trading Price” means, on any date of determination, the average of the
secondary market bid quotations per $1,000 principal amount of Notes obtained
by a calculation agent to be appointed by the Company or, if such agent has not
been appointed, by the Company for $2,500,000 principal amount of Notes at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers that the Company
selects (or that such calculation agent selects upon request of the Company);
provided that if at least three such bids cannot reasonably be obtained by such
calculation agent or the Company, but two such bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by such calculation agent or the Company, that one bid shall be
used; provided further that if such calculation agent or the Company cannot
reasonably obtain at least one bid for $2,500,000 principal amount of Notes
from a nationally recognized securities dealer, then the Trading Price per
$1,000 principal amount of Notes shall be deemed to be less than ninety-eight
percent (98%) of the product of (a) the Conversion Rate on such date and (b)
the Closing Sale Price of the Common Shares on such date.



     “transfer” has the meaning set forth in Section 2.05(c).



     “Trigger Event” has the meaning specified in Section 16.05(d).



     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended,
as it was in force at the date of this Indenture, except as provided in Section
12.03; provided that if the Trust Indenture Act of 1939 is amended after



8









 





the date hereof, the term “Trust Indenture Act” shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.



     “Trustee” means U.S. Bank National Association and its successors and
assigns and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee
at the time serving as successor trustee hereunder.



ARTICLE 2

Issue, Description, Execution, Registration and Exchange of Notes




     Section 2.01 . Designation Amount and Issue of Notes. The Notes shall be
designated as “6% Convertible Notes Due 2034”. Notes, not to initially exceed
the aggregate principal amount of $125,000,000 or $150,000,000 if the Initial
Purchaser’s option set forth in the Purchase Agreement is exercised in full
(except as otherwise provided in the Indenture) upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the
Company, signed by its Chairman of the Board, its Vice Chairman of the Board,
Chief Executive Officer, President or any Vice President, the Treasurer or any
Assistant Treasurer or the Secretary or Assistant Secretary, without any
further action by the Company hereunder.



     The Company may from time to time, without the consent of the Noteholders,
create and issue further Notes under this Indenture having the same terms and
conditions as the Notes in all respects (including the same CUSIP numbers as
the Notes offered hereby) in an unlimited aggregate principal amount, so that
such further issue shall be consolidated and form a single series with the
Outstanding Notes or upon such terms as the Company may determine at the time
of their issue; provided that no such additional Notes may be issued unless
such Notes are fungible with the Outstanding Notes for U.S. federal income tax
purposes. The Company may also from time to time repurchase the Notes in open
market purchases or negotiated transactions without prior notice to the
Noteholders.



     Section 2.02 . Form of Notes. The Notes and the Trustee’s certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A. The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.



     Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers



9









 





executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by
the National Association of Securities Dealers, Inc. in order for the Notes to
be tradable on The PORTAL Market operated by the National Association of
Securities Dealers, Inc. (or any successor thereto) or as may be required for
the Notes to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange or automated quotation system on
which the Notes may be listed, or to conform to usage, or to indicate any
special limitations or restrictions to which any particular Notes are subject.



     So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(a), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a “Global Note”). The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with this Indenture and the applicable procedures of the Depositary.
Except as provided in Section 2.05(a), beneficial owners of a Global Note
shall not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Global Note.



     Any Global Note shall represent such aggregate amount of the Outstanding
Notes as shall be specified therein and shall provide that it shall represent
the aggregate amount of Outstanding Notes from time to time endorsed thereon
and that the aggregate amount of Outstanding Notes represented thereby may from
time to time be increased or reduced to reflect redemptions, repurchases,
conversions, transfers or exchanges permitted hereby. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the amount of
Outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest on any Global Note shall be
made to the holder of such Note.



     Section 2.03 . Date and Denomination of Notes; Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Each Note shall be
dated the date of its authentication and the principal of each Note shall be
due at the Maturity Date (unless earlier converted, redeemed or purchased by
the Company). The unpaid principal amount of the Notes shall bear interest at
the rate of 6% per annum, until paid or duly provided for, and such interest
shall accrue from February 25, 2004 or the most recent Interest Payment Date to
which



10









 





interest has been paid or duly provided for. Interest on the Notes shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.



     The Person in whose name any Note (or its Predecessor Note) is registered
on the Note Register at the close of business on any Record Date with respect
to any Interest Payment Date shall be entitled to receive the interest payable
on such Interest Payment Date, except that the interest payable upon redemption
or repurchase will be payable to the Person to whom principal is payable
pursuant to such redemption or repurchase (unless the Redemption Date or the
Designated Event Purchase Date, as the case may be, falls after a Record Date
and on or prior to the corresponding Interest Payment Date, in which case the
semi-annual payment of interest becoming due on such Interest Payment Date
shall be payable to the holders of such Notes registered as such on the
applicable Record Date).



     Interest shall be payable at the Corporate Trust Office or at the office
of the paying agent maintained by the Company for such purposes in the Borough
of Manhattan, The City of New York, which shall initially be the Corporate
Trust Office or one of its affiliates. The Company shall pay interest (i) on
any Notes in certificated form by check mailed to the address of the Person
entitled thereto as it appears in the Note Register (or upon written notice, by
wire transfer in immediately available funds, if such Person is entitled to
interest on aggregate principal in excess of $2 million) or (ii) on any Global
Note by wire transfer of immediately available funds to the account of the
Depositary or its nominee. The term “Record Date” with respect to any Interest
Payment Date shall mean the February 1 or August 1 preceding the applicable
Interest Payment Date.



     Any interest on any Note that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Noteholder on the
relevant Record Date by virtue of his having been such Noteholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:



     (1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes) are
registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed payment (which
shall be not less than twenty-five (25) calendar days after the receipt by the
Trustee of such notice, unless the Trustee shall consent to an earlier date),
and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix
a special record date for the payment of



11









 





such Defaulted Interest which shall be not more than fifteen (15) calendar
days and not less than ten (10) calendar days prior to the date of the proposed
payment, and not less than ten (10) calendar days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each holder at his address as it appears in the
Note Register, not less than ten (10) calendar days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.03.



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



     Section 2.04 . Execution of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, the Vice Chairman of the Board, Chief Executive Officer,
President or any Vice President. Only such Notes as shall bear thereon a
certificate of authentication substantially in the form set forth on the form
of Note attached as Exhibit A hereto, manually executed by the Trustee (or an
authenticating agent appointed by the Trustee as provided by Section 17.11),
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Trustee (or such an authenticating
agent) upon any Note executed by the Company shall be conclusive evidence that
the Note so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture.



     In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons
as, at the actual date of the execution of such Note, shall be the proper
officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.



12









 





     Section 2.05 . Exchange and Registration of Transfer of Notes;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and
in any other office or agency of the Company designated pursuant to Section
6.02 being herein sometimes collectively referred to as the “Note Register”) in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The
Note Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed “Note Registrar” for the purpose of registering
Notes and transfers of Notes as herein provided. The Company may appoint one or
more co-registrars in accordance with Section 6.02.



     Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.



     Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 6.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.



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



     All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, duly
executed by the Noteholder thereof or his attorney duly authorized in writing.



     No service charge shall be made to any holder for any registration of,
transfer or exchange of Notes, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes.



13









 





     Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) calendar days next preceding any selection of Notes to be
redeemed, (b) any Notes or portions thereof called for redemption pursuant to
Section 3.02, (c) any Notes or portions thereof surrendered for conversion
pursuant to Article 16 or (d) any Notes or portions thereof tendered for
repurchase (and not withdrawn) pursuant to Section 3.05.



     (b) The following provisions shall apply only to Global Notes:




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




     (ii) Notwithstanding any other provision in this Indenture, no
Global Note may be exchanged in whole or in part for Notes registered,
and no transfer of a Global Note in whole or in part may be registered,
in the name of any Person other than the Depositary or a nominee
thereof, unless (A) the Depositary (i) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Note
and a successor depositary has not been appointed by the Company within
ninety (90) calendar days or (ii) has ceased to be a clearing agency
registered under the Exchange Act and no successor clearing agency has
been appointed by the Company within ninety (90) calendar days, (B) an
Event of Default has occurred and is continuing or (C) the Company, in
its sole discretion, notifies the Trustee in writing that it no longer
wishes to have all the Notes represented by Global Notes. Any Global
Note exchanged pursuant to clause (A) or (B) above shall be so exchanged
in whole and not in part and any Global Note exchanged pursuant to
clause (C) above may be exchanged in whole or from time to time in part
as directed by the Company. Any Note issued in exchange for a Global
Note or any portion thereof shall be a Global Note; provided that any
such Note so issued that is registered in the name of a Person other
than the Depositary or a nominee thereof shall not be a Global Note.




     (iii) Securities issued in exchange for a Global Note or any
portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Note or
portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder. Any Global
Note to be exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Note Registrar. With regard to any Global Note to be
exchanged in part, either such Global Note shall be so surrendered for
exchange or, if the Trustee is



14









 






acting as Custodian for the Depositary or its nominee with respect
to such Global Note, the principal amount thereof shall be reduced, by
an amount equal to the portion thereof to be so exchanged, by means of
an appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Note issuable on such exchange to or upon the
written order of the Depositary or an authorized representative thereof.




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




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




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



     (c) Every Note that bears or is required under this Section 2.05(c) to
bear the legend (the “Restricted Note Legend”) set forth in this Section
2.05(c) (together with any Common Shares issued upon conversion of the Notes
and required to bear the Common Share Legend, collectively, the “Restricted
Securities”) shall be subject to the restrictions on transfer set forth in this
Section



15









 





2.05(c) (including those set forth in the Restricted Note Legend below)
unless such restrictions on transfer shall be waived by written consent of the
Company, and the holder of each such Restricted Security, by such Note holder’s
acceptance thereof, agrees to be bound by all such restrictions on transfer.
As used in this Section 2.05(c), the term “transfer” encompasses any sale,
pledge, loan, transfer or other disposition whatsoever of any Restricted
Security or any interest therein.



     Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof) and any stock certificate representing Common
Shares issued upon conversion of any Note shall bear a legend (the “Common
Share Legend”) in substantially the following form, unless such Note or such
Common Shares have been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or pursuant to Rule 144 under the
Securities Act or any similar provision then in force, or such Common Shares
have been issued upon conversion of Notes that have been transferred pursuant
to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act, or unless
otherwise agreed by the Company in writing, with written notice thereof to the
Trustee:



     THIS SECURITY AND THE SHARES OF ATLANTIC COAST AIRLINES HOLDINGS, INC.
(THE “COMPANY”) COMMON STOCK (“COMMON STOCK”) ISSUABLE UPON CONVERSION OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY,
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.



     THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED



16









 





INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVE THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE RIGHTS OF THE COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF
THIS SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION
TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.



     Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the Restricted Note Legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to
the Note Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the Restricted Note Legend. If the Restricted
Security surrendered for exchange is represented by a Global Note bearing the
Restricted Note Legend, the principal amount of the legended Global Note shall
be reduced by the appropriate principal amount and the principal amount of a
Global Note without the Restricted Note Legend shall be increased by an equal
principal amount. If a Global Note without the Restricted Note Legend is not
then outstanding, the Company shall execute and the Trustee shall authenticate
and deliver an unlegended Global Note to the Depositary.



     Any such Common Shares as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the Common Share Legend set forth therein have been satisfied may,
upon surrender of the certificates representing such Common Shares for exchange
in accordance with the procedures of the transfer agent for the Common Shares,
be exchanged for a new certificate or certificates for a like number of Common
Shares, which shall not bear the Common Share Legend required by this Section
2.05(c).



17









 





     (d) Any Note or Common Shares issued upon the conversion of a Note that
are purchased or owned by the Company or any Affiliate thereof may not be
resold by the Company or such Affiliate unless registered under the Securities
Act or resold pursuant to an exemption from the registration requirements of
the Securities Act in a transaction that results in such Notes or Common
Shares, as the case may be, no longer being “Restricted Securities” (as defined
under Rule 144 under the Securities Act).



     (e) The Trustee shall have no responsibility or obligation to any Agent
Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Notes or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Notes. All notices
and communications to be given to the Noteholder and all payments to be made to
Noteholders under the Notes shall be given or made only to or upon the order of
the registered Noteholders (which shall be the Depository or its nominee in the
case of a Global Note). The rights of beneficial owners in any Global Note
shall be exercised only through the Depository subject to the customary
procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Agent Members.



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



     Section 2.06 . Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon the Company’s written request the Trustee or
an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case,
the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.



18









 





     Following receipt by the Trustee or such authenticating agent, as the case
may be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Note and make available for delivery such Note. Upon the
issuance of any substituted Note, the Company may require the payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has
been called for redemption or has been tendered for repurchase upon a
Designated Event (and not withdrawn) or is to be converted into Common Shares
shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Note, pay or authorize the payment of or
convert or authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if the applicant
for such payment or conversion shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent, such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or in connection with such substitution, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company, the Trustee and, if applicable, any paying agent or conversion
agent evidence to their satisfaction of the destruction, loss or theft of such
Note and of the ownership thereof.



     Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations
set forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall
be held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or
redemption or repurchase of mutilated, destroyed, lost or stolen Notes and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment or conversion or redemption or repurchase of negotiable
instruments or other securities without their surrender.



     Section 2.07 . Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in
the form of the Notes in certificated form, but with such omissions, insertions
and variations as may be appropriate for temporary Notes, all as may be
determined by the Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the



19









 





Notes in certificated form. Without unreasonable delay, the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form and thereupon any or all temporary Notes may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 6.02 and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered hereunder.



     Section 2.08 . Cancellation of Notes. All Notes surrendered for the
purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Note Registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall
be promptly canceled by it, and no Notes shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of such canceled Notes in accordance with its customary
procedures. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.



     Section 2.09 . CUSIP Numbers. The Company in issuing the Notes may use
“CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use
“CUSIP” numbers in notices of redemption or repurchases as a convenience to
Noteholders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption or a repurchase and that reliance may
be placed only on the other identification numbers printed on the Notes, and
any such redemption or repurchase shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the “CUSIP” numbers.



ARTICLE 3

Redemption and Repurchase of Notes




     Section 3.01 . Redemption of Notes. The Company may not redeem any Notes
prior to February 20, 2007. Beginning February 20, 2007, the Company shall
have the option to redeem some or all the Notes at the following prices (each a
“Redemption Price”) expressed as a percentage of the principal amount:



     (a) beginning on February 20, 2007 and ending on February 14, 2008, 102.4%
of the principal amount;



20









 





     (b) beginning on February 15, 2008 and ending on February 14, 2009, 101.2%
of the principal amount; and



     (c) beginning on February 15, 2009 and thereafter, 100% of the principal
amount.



In each case, the Company will pay interest and Liquidated Damages, if any, to,
but excluding, the Redemption Date, unless the Redemption Date falls after a
Record Date but on or prior to the next succeeding Interest Payment Date, in
which case the Company instead will pay the full amount of accrued and unpaid
interest and Liquidated Damages, if any, on such Interest Payment Date to the
holder of record on the close of business on the corresponding Record Date.



     Section 3.02 . Notice of Optional Redemption; Selection of Notes. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Notes pursuant to Section 3.01, it shall fix a
date for redemption and it or, at its written request received by the Trustee
not fewer than thirty-five (35) calendar days prior (or such shorter period of
time as may be acceptable to the Trustee) to the Redemption Date, the Trustee
in the name of and at the expense of the Company, shall mail or cause to be
mailed a notice of such redemption not fewer than thirty (30) nor more than
sixty (60) calendar days prior to the Redemption Date to each holder of Notes
so to be redeemed as a whole or in part at its last address as the same appears
on the Note Register; provided that if the Company shall give such notice, it
shall also give written notice of the Redemption Date, the current Conversion
Rate, current Conversion Price and the date on which the right to convert the
Notes expires, to the Trustee. Such mailing shall be by first class mail. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice. In
any case, failure to give such notice by mail or any defect in the notice to
the holder of any Note designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Note. Concurrently with the mailing of any such notice of redemption, the
Company shall (i) issue a press release announcing such redemption, (ii)
publish such information once in a daily newspaper printed in the English
language and of general circulation in the Borough of Manhattan, City of New
York, and (iii) publish such information on the Company’s website; it being
understood that the form and content of such press release and such
publications shall be determined by the Company in its sole discretion. None
of the failure to issue any such press release nor make such publications nor
any defect therein shall affect the validity of the redemption notice or any of
the proceedings for the redemption of any Note called for redemption.



     Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the Redemption Date (which shall be a Business Day), the Redemption
Price at which Notes are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such



21









 





Notes, that interest accrued and unpaid to the Redemption Date will be
paid as specified in said notice, and that on and after said date interest
thereon or on the portion thereof to be redeemed will cease to accrue. Such
notice shall also state the current Conversion Rate and Conversion Price and
the date on which the right to convert such Notes or portions thereof into
Common Shares will expire. If fewer than all the Outstanding Notes are to be
redeemed, the notice of redemption shall identify the Notes to be redeemed
(including CUSIP numbers, if any). In case any Note is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that, on and after the Redemption Date,
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion thereof will be issued.



     Prior to 10:00 a.m. (New York City time) on the Redemption Date specified
in the notice of redemption given as provided in this Section 3.02, the Company

will deposit with the Trustee or with one or more paying agents (or, if the
Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 6.04) an amount of money in immediately available
funds sufficient to redeem all the Notes (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate Redemption Price, together with accrued and unpaid
Interest to, but excluding, the Redemption Date. The Company shall be entitled
to retain any interest, yield or gain on amounts deposited with the Trustee or
any paying agent pursuant to this Section 3.02 in excess of amounts required
hereunder to pay the Redemption Price. Payment of the Redemption Price for the
Notes will be made (i) if book-entry transfer of or physical delivery of the
Notes has been made by or on the Redemption Date, on the Redemption Date or
(ii) if book-entry transfer of or physical delivery of the Notes has not been
made by or on such date, at the time of book-entry transfer or of physical
delivery of the Notes. If any Note called for redemption is converted pursuant
to Section 16.01 hereto prior to such Redemption Date, any money or Common
Shares deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Note shall be paid or delivered to the
Company upon its written request, or, if then held by the Company, shall be
discharged from such trust. Whenever any Notes are to be redeemed, the Company
will give the Trustee written notice in the form of an Officers’ Certificate
not fewer than thirty-five (35) calendar days (or such shorter period of time
as may be acceptable to the Trustee) prior to the Redemption Date as to the
aggregate principal amount of Notes to be redeemed.



     If fewer than all of the Outstanding Notes are to be redeemed, the Trustee
shall select, pro rata or by lot, the Notes or portions thereof of the Global
Note or the Notes in certificated form to be redeemed (in principal amounts of
$1,000 or multiples thereof) in such manner as the Trustee deems fair and
appropriate. If any Note selected for partial redemption is submitted for
conversion in part after such selection, the portion of such Note submitted for
conversion shall be deemed (so far as may be possible) to be the portion to be
selected for redemption. The Notes (or portions thereof) so selected shall be
deemed duly selected for



22









 





redemption for all purposes hereof, notwithstanding that any such Note is
submitted for conversion in part before the mailing of the notice of
redemption.



     Upon any redemption of less than all of the Outstanding Notes, the Company
and the Trustee may, solely for purposes of determining the pro rata allocation
among such Notes as are unconverted and Outstanding at the time of redemption,
treat as Outstanding any Notes surrendered for conversion during the period of
fifteen (15) calendar days next preceding the mailing of a notice of redemption
and may treat as Outstanding any Note authenticated and delivered during such
period in exchange for the unconverted portion of any Note converted in part
during such period.



     Section 3.03 . Payment of Notes Called for Redemption by the Company. If
notice of redemption has been given as provided in Section 3.02, the Notes or
portion of Notes with respect to which such notice has been given shall, unless
converted into Common Shares pursuant to the terms hereof, become due and
payable on the Redemption Date and at the place or places stated in such notice
at the applicable Redemption Price, and on and after said date (unless the
Company shall default in the payment of such Notes at the Redemption Price).
Interest on the Notes or portion of Notes so called for redemption shall cease
to accrue and, after the close of business on the Business Day immediately
preceding the Redemption Date (unless the Company shall default in the payment
of such Notes at the Redemption Price) such Notes shall cease to be convertible
into Common Shares and, except as provided in Section 9.05 and Section 14.04,
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to
receive the Redemption Price thereof. On presentation and surrender of such
Notes at a place of payment in said notice specified, the said Notes or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable Redemption Price, provided that if the Redemption Date falls after a
Record Date and on or prior to the corresponding Interest Payment Date, then
the interest payable on such Interest Payment Date shall be paid to the holders
of record of such Notes on the applicable Record Date instead of the holders
surrendering such Notes for redemption on such date.



     Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion
of the Notes so presented.



     Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of redemption during the continuance of an acceleration in
payment of principal or interest on the Notes, of which the Trustee has
knowledge or has received notice as provided in this Indenture. If any Note
called for redemption shall not be so paid upon surrender thereof for
redemption, such Note



23









 





shall remain convertible into Common Shares until the principal and
interest shall have been paid or duly provided for.



     Section 3.04 . Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more
investment banks or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Noteholders, on or before the Redemption Date, an
amount not less than the applicable Redemption Price of such Notes.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Notes shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which will be
filed with the Trustee prior to the Redemption Date, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 16) surrendered by such purchasers for conversion, all as
of the time immediately prior to the close of business on the Redemption Date
(and the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by the Company for the
redemption of Notes. Without the Trustee’s prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Notes shall increase or otherwise affect any of the powers,
duties, responsibilities or obligations of the Trustee as set forth in this
Indenture.



     Section 3.05 . Repurchase at Option of Holders upon a Designated Event.
(a) If there shall occur a Designated Event at any time prior to the Maturity
Date, then each Noteholder shall have the right, at such holder’s option, to
require the Company to repurchase such holder’s Notes in whole or in part, only
in multiples of $1,000 principal amount, as of a date (the “Designated Event
Purchase Date”) specified by the Company that is not less than twenty (20) nor
more than thirty-five (35) Business Days after the date on which the Designated
Event Notice with respect to such Designated Event has been mailed to holders
of the Notes pursuant to Section 3.05(b) at a repurchase price equal to
one-hundred percent (100%) of the principal amount thereof, together with
accrued and unpaid interest and Liquidated Damages, if any, to but excluding,
the Designated Event Purchase Date (the “Designated Event Purchase Price”);
provided that if such Designated Event Purchase Date falls after a Record Date
and on or prior the corresponding Interest Payment Date, then the full amount
of interest payable on such Interest Payment Date shall be paid to the holders
of record of the Notes on the applicable Record Date instead of the holders
surrendering the Notes for repurchase on the Designated Event Purchase Date.
Repurchases of Notes under this Section 3.05 shall be made, at the option of
the holder thereof, upon:



24









 






     (i) delivery to the Trustee (or other paying agent appointed by the
Company) by a holder of a duly completed and executed notice (the
“Designated Event Purchase Notice”) in the form set forth on the reverse
of the Note prior to the close of business on the Designated Event
Purchase Date; and




     (ii) delivery or book-entry transfer of the Notes to the Trustee
(or other paying agent appointed by the Company) at any time
simultaneous with or after delivery of the Designated Event Purchase
Notice (together with all necessary endorsements) at the Corporate Trust
Office of the Trustee (or other paying agent appointed by the Company),
such delivery being a condition to receipt by the holder of the
Designated Event Purchase Price therefor; provided that such Designated
Event Purchase Price shall be so paid pursuant to this Section 3.05 only
if the Note so delivered to the Trustee (or other paying agent appointed
by the Company) shall conform in all respects to the description thereof
in the related Designated Event Purchase Notice.



     The Company shall purchase from the holder thereof, pursuant to this
Section 3.05, a portion of a Note, if the principal amount of such portion is
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Note also apply to the purchase of such portion of
such Note.



     Notwithstanding anything herein to the contrary, any holder delivering to
the Trustee (or other paying agent appointed by the Company) the Designated
Event Purchase Notice contemplated by this Section 3.05 shall have the right to
withdraw such Designated Event Purchase Notice at any time prior to the close
of business on the Designated Event Purchase Date by delivery of a written
notice of withdrawal to the Trustee (or other paying agent appointed by the
Company) in accordance with Section 3.05(c) below.



     The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Purchase Notice or written notice of withdrawal thereof.



     (b) Within fifteen (15) calendar days after the occurrence of a Designated
Event, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the “Designated Event Notice”) provided
by the Company of the occurrence of such Designated Event and of the repurchase
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.02 (without regard for the time limits set forth
therein). If the Company shall give such notice, the Company shall also
deliver a copy of the Designated Event



25









 





Notice to the Trustee at such time as it is mailed to Noteholders.
Concurrently with the mailing of any Designated Event Notice, the Company shall
issue a press release announcing such Designated Event referred to in the
Designated Event Notice and publish such information on its website, the form
and content of which press release and publication shall be determined by the
Company in its sole discretion. The failure to issue any such press release or
any defect therein shall not affect the validity of the Designated Event Notice
or any proceedings for the repurchase of any Note which any Noteholder may
elect to have the Company repurchase as provided in this Section 3.05. The
Trustee shall have no responsibilities whatsoever with respect to the contents
of the Designated Event Notice.



     Each Designated Event Notice shall specify the events causing the
Designated Event, the date of such Designated Event, the Designated Event
Purchase Date, the Designated Event Purchase Price that will be payable with
respect to the Notes as of the Designated Event Purchase Date, the last date on
which the purchase right may be exercised, the name and address of the Trustee
or other Paying Agent, the applicable Conversion Rate and any adjustments
thereto, the requirement that any Designated Event Purchase Notice delivered
with respect to a Note must be withdrawn in accordance with the terms of this
Section 3.05 prior to conversion of the relevant Note, the procedures that a
Noteholder must follow to exercise such repurchase right (including a form of
Designated Event Purchase Notice) and to withdraw any surrendered Notes
(including a form of withdrawal notice), and the CUSIP number or numbers of the
Notes (if then generally in use).



     No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this Section
3.05.



     (c) Notwithstanding anything herein to the contrary, any holder of Notes
delivering to the office of the Trustee (or other paying agent appointed by the
Company) the Designated Event Purchase Notice shall have the right to withdraw
such Designated Event Purchase Notice in whole or as to a portion thereof that
is an integral multiple of $1,000 of outstanding principal amount of the Notes
thereof at any time prior to the close of business on the Designated Event
Purchase Date by delivery of a written notice of withdrawal to the Trustee (or
other paying agent appointed by the Company) in accordance with provisions of
this Section 3.05(c). The Trustee (or other paying agent appointed by the
Company) shall promptly notify the Company of the receipt by it of any
Designated Event Purchase Notice or written withdrawal thereof. A Designated
Event Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Designated Event Purchase
Notice at any time prior to the close of business on the applicable Designated
Event Purchase Date specifying:



26









 






     (i) the certificate number, if any, of the Note in respect of which
such notice of withdrawal is being submitted, or the appropriate
Depositary information if the Note in respect of which such notice of
withdrawal is being submitted is represented by a Global Note,




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




     (iii) the principal amount, if any, of such Note that remains
subject to the original Designated Event Purchase Notice and that has
been or will be delivered for purchase by the Company.



     The Trustee (or other paying agent appointed by the Company) will promptly
return to the respective holders thereof any Notes with respect to which a
Designated Event Purchase Notice has been withdrawn in compliance with this
Indenture, in which case, upon such return, the Designated Event Purchase
Notice with respect thereto shall be deemed to have been withdrawn.



     (d) Prior to 10:00 a.m. New York City time on the Business Day immediately
following the Designated Event Purchase Date, the Company will deposit with the
Trustee (or other paying agent appointed by the Company or if the Company is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 6.04) an amount of money sufficient to repurchase all the
Notes tendered for repurchase on or prior to the Designated Event Purchase Date
(and not withdrawn) at the appropriate repurchase price, together with accrued
and unpaid interest to, but excluding, the Designated Event Purchase Date.
Subject to receipt of funds and/or Notes by the Trustee (or other paying agent
appointed by the Company), payment for Notes surrendered for repurchase (and
not withdrawn) prior to the Designated Event expiration time will be made
promptly (but in no event more than five (5) Business Days) following the later
of (x) the Designated Event Purchase Date with respect to such Note (provided
the holder has satisfied the conditions in Section 3.05 and (y) the time of
delivery of such Note to the Trustee (or other paying agent appointed by the
Company) by the holder thereof in the manner required by Section 3.05) by
mailing checks for the amount payable to the holders of such Notes entitled
thereto as they shall appear in the Note Register.



     If the Trustee (or other paying agent appointed by the Company) holds
funds sufficient to pay the Designated Event Purchase Price of any Notes for
which a Designated Event Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture on the Designated Event Purchase Date then, on
and after the Business Day following such Designated Event Purchase Date, such
Notes will cease to be Outstanding, interest will cease to accrue thereon and
the rights of the holder in respect thereof shall terminate, whether or not
book-entry transfer or physical delivery of such Notes has been made, as the
case may be (other than the right to receive the Designated Event Purchase
Price as aforesaid). The Company shall publicly announce the number of Notes
repurchased as a



27









 





result of such Designated Event on or as soon as practicable after the
Designated Event Purchase Date.



     (e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 16.06 applies, in which the
Common Shares of the Company issuable upon conversion of the Notes changed or
exchanged as a result into the right to receive stock, securities or other
property or assets (including cash), which includes Common Shares of the
Company or common shares of another Person that are, or upon issuance will be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United
States and such shares constitute at the time such change or exchange becomes
effective in excess of fifty percent (50%) of the aggregate Fair Market Value
of such stock, securities or other property or assets (including cash) (as
determined by the Company, which determination shall be conclusive and
binding), then the Person formed by such consolidation or resulting from such
merger or that acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture (accompanied by an Officers’
Certificate and an Opinion of Counsel that such supplemental indenture complies
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of holders of the Notes to cause the Company to repurchase the Notes
following a Designated Event, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Shares and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common shares
issued by such Person (in lieu of the Company and the Common Shares of the
Company).



     (f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act (including, without limitation,
filing a Schedule TO or other schedule) to the extent then applicable in
connection with the repurchase rights of the holders of Notes in the event of a
Designated Event.



     Section 3.06 . Repurchase of Notes by the Company at Option of the
Holders. Notes shall be purchased by the Company pursuant to the terms of the
Notes at the option of the holder on February 15 of 2009, 2014, 2019, 2024 and
2029 (each a “Repurchase Date”), at a repurchase price of 100% of the principal
amount, plus any accrued and unpaid interest and Liquidated Damages, if any, to
but excluding the Repurchase Date, subject to the provisions of Section
3.07(a); provided that no Notes may be repurchased by the Company pursuant to
this Section 3.06 if the principal amount of the Notes has been accelerated and
such acceleration has not been rescinded on or prior to the Repurchase Date.
Repurchases of Notes under this Section 3.06 shall be made, at the option of
the holder thereof, upon:



28









 





     (a) delivery to the Trustee (or other paying agent appointed by the
Company) by a holder of a duly completed and executed notice (the “Repurchase
Notice”) in the form set forth on the reverse of the Note during the period
beginning at any time from the opening of business on the date that is twenty
(20) Business Days prior to the Repurchase Date until the close of business on
the Repurchase Date; and



     (b) delivery or book-entry transfer of the Notes to the Trustee (or other
paying agent appointed by the Company) at any time after delivery of the
Repurchase Notice (together with all necessary endorsements) at the Corporate
Trust Office of the Trustee (or other paying agent appointed by the Company),
such delivery being a condition to receipt by the holder of the repurchase
price therefor; provided that such repurchase price shall be so paid pursuant
to this Section 3.06 only if the Note so delivered to the Trustee (or other
paying agent appointed by the Company) shall conform in all respects to the
description thereof in the related Repurchase Notice.



     The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Note, if the principal amount of such portion is
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Note also apply to the purchase of such portion of
such Note.



     Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Note.



     Notwithstanding anything herein to the contrary, any holder delivering to
the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the Repurchase
Date by delivery of a written notice of withdrawal to the Trustee (or other
paying agent appointed by the Company) in accordance with Section 3.08.



     The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.



     Section 3.07 . Company Repurchase Notice.



     (a) The Notes to be repurchased as of the Repurchase Date pursuant to
Section 3.06 will be paid for in cash.



     Unless the Company has elected to redeem all of the Notes on or before the
Repurchase Date in accordance with Section 3.01, at least three Business Days
before the Company Repurchase Notice Date, the Company shall deliver an
Officers’ Certificate to the Trustee specifying:



29









 






     (i) the information required by Section 3.07(b) in the Company
Repurchase Notice, and




     (ii) whether the Company desires the Trustee to give the Company
Repurchase Notice required by Section 3.07(b).



     (b) Unless the Company has elected to redeem all of the Notes on or before
the Repurchase Date in accordance with Section 3.01, in connection with any
repurchase of Notes, the Company shall, no less than twenty (20) Business Days
prior to the Repurchase Date (the “Company Repurchase Notice Date”), give
notice to holders at their addresses shown in the Note Register setting forth
information specified in this Section 3.07(b) (the “Company Repurchase
Notice”). The Company will also give notice to beneficial owners as required
by applicable law.



     The Company Repurchase Notice shall:




     (1) state the repurchase price and the Repurchase Date to which the
Company Repurchase Notice relates;




     (2) include a form of Repurchase Notice;




     (3) state the name and address of the Trustee (or other paying
agent or conversion agent appointed by the Company);




     (4) state that Notes must be surrendered to the Trustee (or other
paying agent appointed by the Company) to collect the repurchase price;




     (5) if the Notes are then convertible, state that Notes as to which
a Repurchase Notice has been given may be converted only if the
Repurchase Notice is withdrawn in accordance with the terms of this
Indenture; and




     (6) state the CUSIP number of the Notes.



The Company Repurchase Notice may be given by the Company or, at the Company’s
written request, the Trustee shall give such Company Repurchase Notice in the
Company’s name and at the Company’s expense. The Trustee shall have no
responsibilities whatsoever with respect to the contents of the Company
Repurchase Notice.



     (c) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act (including, without limitation,
filing a Schedule TO or other schedule) to the extent then applicable in
connection with the repurchase rights of the holders of Notes.



     Section 3.08 . Effect of Repurchase Notice. Upon receipt by the Trustee
(or other paying agent appointed by the Company) of the Repurchase Notice



30









 





specified in Section 3.06, the holder of the Note in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is validly
withdrawn) thereafter be entitled to receive solely the repurchase price with
respect to such Note. Such repurchase price shall be paid to such holder,
subject to receipt of funds and/or Notes by the Trustee (or other paying agent
appointed by the Company), promptly following the later of (x) the Repurchase
Date (provided the holder has satisfied the conditions in Section 3.06) and (y)
the time of delivery of such Note to the Trustee (or other paying agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.06. Notes in respect of which a Repurchase Notice has been given by
the holder thereof may not be converted pursuant to Article 16 hereof on or
after the date of the delivery of such Repurchase Notice unless such Repurchase
Notice has first been validly withdrawn.



     A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Repurchase Notice at any time
prior to the close of business on the Repurchase Date, specifying:



     (a) the certificate number, if any, of the Note in respect of which such
notice of withdrawal is being submitted, or the appropriate Depositary
information if the Note in respect of which such notice of withdrawal is being
submitted is represented by a Global Note,



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



     (c) the principal amount, if any, of such Note which remains subject to
the original Repurchase Notice and which has been or will be delivered for
purchase by the Company.



	 
	     Section 3.09 . Deposit of Repurchase Price. (a) Prior to 10:00 a.m. New
York City time on the Business Day immediately following the Repurchase Date,
the Company shall deposit with the Trustee (or other paying agent appointed by
the Company, 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 6.04) an amount of cash (in immediately available funds if
deposited on such Business Day), sufficient to pay the aggregate repurchase
price of all the Notes or portions thereof that are to be repurchased as of the
Repurchase Date.







     (a) If the Trustee or other paying agent appointed by the Company, or the
Company or a Subsidiary or Affiliate of either of them, if such entity is
acting as the paying agent, holds cash sufficient to pay the aggregate
repurchase price of all the Notes, or portions thereof that are to be
repurchased as of the Repurchase Date, on or after the Repurchase Date (i) the
Notes will cease to be outstanding, (ii) interest on the Notes will cease to
accrue, and (iii) all other rights of the holders of such Notes will terminate,
whether or not book-entry transfer of the



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Notes has been made or the Notes have been delivered to the Trustee or
paying agent, other than the right to receive the repurchase price upon
delivery of the Notes.



     Section 3.10 . Notes Repurchased in Part. Upon presentation of any Note
repurchased pursuant to Section 3.05 only in part, the Company shall execute
and the Trustee shall authenticate and make available for delivery to the
holder thereof, at the expense of the Company, a new Note or Notes, of any
authorized denomination, in aggregate principal amount equal to the
unrepurchased portion of the Notes presented.



ARTICLE 4

[Reserved.]




ARTICLE 5

[Reserved.]




ARTICLE 6

Particular Covenants of the Company




     Section 6.01 . Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and interest, on each of the Notes (including the Redemption Price
upon redemption or the Designated Event Purchase Price upon repurchase, in each
case pursuant to Article 3), at the places, at the respective times and in the
manner provided herein and in the Notes.



     Section 6.02 . Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York
(which may be an office of the Trustee or an affiliate of the Trustee), where
the Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
corporate trust office of the affiliate of the Trustee in the Borough of
Manhattan, U.S. Bank Trust National Association.



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     The Company may also from time to time designate co-registrars and one or
more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or
agency.



     The Company hereby initially designates the Trustee as paying agent, Note
Registrar, Custodian and conversion agent and each of the Corporate Trust
Office and the office of agency of the Trustee in the Borough of Manhattan,
shall be considered as one such office or agency of the Company for each of the
aforesaid purposes.



     So long as the Trustee is the Note Registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 9.10(a) and the third
paragraph of Section 9.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.



     Section 6.03 . Appointments to Fill Vacancies in Trustee’s Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 9.10, a Trustee, so
that there shall at all times be a Trustee hereunder.



     Section 6.04 . Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:




     (1) that it will hold all sums held by it as such agent for the
payment of the principal of or interest on the Notes (whether such sums
have been paid to it by the Company or by any other obligor on the
Notes) in trust for the benefit of the holders of the Notes;




     (2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of
the principal of or interest on the Notes when the same shall be due and
payable; and




     (3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.



     The Company shall, on or before each due date of the principal of or
interest on the Notes, deposit with the paying agent a sum (in funds which are
immediately available on the due date for such payment) sufficient to pay such
principal or interest and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action; provided
that if



33









 





such deposit is made on the due date, such deposit shall be received by
the paying agent by 10:00 a.m. New York City time, on such date.



     (b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of or interest on the Notes, set aside,
segregate and hold in trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal or interest so becoming due and will promptly
notify the Trustee of any failure to take such action and of any failure by the
Company (or any other obligor under the Notes) to make any payment of the
principal of or interest on the Notes when the same shall become due and
payable.



     (c) Anything in this Section 6.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by the Company or any paying agent
hereunder as required by this Section 6.04, such sums to be held by the Trustee
upon the trusts herein contained and upon such payment by the Company or any
paying agent to the Trustee, the Company or such paying agent shall be released
from all further liability with respect to such sums.



     (d) Anything in this Section 6.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 6.04 is subject to
Sections 14.03 and 14.04.



     The Trustee shall not be responsible for the actions of any other paying
agents (including the Company if acting as its own paying agent) and shall have
no control of any funds held by such other paying agents.



     Section 6.05 . Existence. Subject to Article 13, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Noteholders.



     Section 6.06 . Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) under the Exchange Act, upon three (3) Business
Days’ prior notice, make available to any holder or beneficial holder of Notes
or any Common Shares issued upon conversion thereof that continue to be
Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Shares designated by such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Notes or such Common Shares, all to the



34









 





extent required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Shares without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A
under the Securities Act, as such Rule may be amended from time to time. Upon
the request of any holder or any beneficial holder of the Notes or such Common
Shares, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.



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



     Section 6.08 . Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) calendar days after the end of each
fiscal year of the Company, a certificate signed by either the principal
executive officer, principal financial officer or principal accounting officer
of the Company, stating whether or not to the best knowledge of the signer
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
the status thereof of which the signer may have knowledge. The first such
certificate to be delivered by the Company pursuant to this Section 6.08 shall
be for the fiscal year ending December 31, 2004.



     The Company will promptly deliver to the Trustee, forthwith upon becoming
aware of (i) any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or (ii) any Event of
Default, an Officers’ Certificate specifying with particularity such default or
Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.



     Any notice required to be given under this Section 6.08 shall be delivered
to a Responsible Officer of the Trustee at its Corporate Trust Office.



     Section 6.09 . Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice



35









 





(“Liquidated Damages Notice”) to the Trustee of its obligation to pay
Liquidated Damages no later than fifteen (15) calendar days prior to the
proposed payment date for the Liquidated Damages, and the Liquidated Damages
Notice shall set forth the amount of Liquidated Damages to be paid by the
Company on such payment date. The Trustee shall not at any time be under any
duty or responsibility to any holder of Notes to determine whether the Company
is liable for Liquidated Damages, the Liquidated Damages, or with respect to
the nature, extent or calculation of the amount of Liquidated Damages when
made, or with respect to the method employed in such calculation of the
Liquidated Damages.



ARTICLE 7

Noteholders’ Lists and Reports by the Company and the Trustee




     Section 7.01 . Noteholders’ Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) calendar days after each January 1 and July 1 in each year
beginning with July 1, 2004, and at such other times as the Trustee may request
in writing, within thirty (30) calendar days after receipt by the Company of
any such request (or such lesser time as the Trustee may reasonably request in
order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Notes as of a date not more than fifteen
(15) calendar days (or such other date as the Trustee may reasonably request in
order to so provide any such notices) prior to the time such information is
furnished, except that no such list need be furnished by the Company to the
Trustee so long as the Trustee is acting as the sole Note Registrar.



     Section 7.02 . Preservation and Disclosure of Lists. The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as
to the names and addresses of the holders of Notes contained in the most recent
list furnished to it as provided in Section 7.01 or maintained by the Trustee
in its capacity as Note Registrar or co-registrar in respect of the Notes, if
so acting. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.



     (a) The rights of Noteholders to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.



     (b) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.



36









 





     Section 7.03 . Reports by Trustee. (a) Within sixty (60) calendar days
after May 15 of each year commencing with the year 2005, the Trustee shall
transmit to holders of Notes such reports dated as of May 15 of the year in
which such reports are made concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. Except to the extent required by
the Trust Indenture Act, in the event that no events have occurred under the
applicable sections of the Trust Indenture Act the Trustee shall be under no
duty or obligation to provide such reports.



     (b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Notes are listed on any stock exchange or automated quotation system or
delisted therefrom.



     Section 7.04 . Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes
qualified under the Trust Indenture Act), and transmit to holders of Notes,
such information, documents and other reports and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act, whether or not the Notes are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within fifteen (15) calendar days after the
same is so required to be filed with the Commission. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officers’
Certificates).



ARTICLE 8

Remedies of the Trustee and Noteholders on an Event of Default




     Section 8.01 . Events of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:



     (a) default in the payment of the principal of any of the Notes as and
when the same shall become due and payable either at maturity, upon redemption
or repurchase pursuant to Article 3 or otherwise; or



37









 





     (b) default in the payment of any installment of interest or Liquidated
Damages, if any, upon any of the Notes as and when the same shall become due
and payable, and continuance of such default for a period of thirty (30)
calendar days; or



     (c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in the
performance or breach of which is elsewhere in this Section 8.01 specifically
dealt with) continued for a period of sixty (60) calendar days after the date
on which written notice of such failure, requiring the Company to remedy the
same, shall have been given to the Company by the Trustee, or the Company and a
Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate principal amount of the Notes at the time
Outstanding determined in accordance with Section 10.04; or



     (d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to the Company
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to generally to pay its debts as they become due; or



     (e) an involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization or other relief with respect to the
Company or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive calendar days;



then, and in each and every such case (other than an Event of Default specified
in Section 8.01(d) or 8.01(e)), unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the holders of not
less than twenty-five percent (25%) in aggregate principal amount of the Notes
then Outstanding hereunder determined in accordance with Section 10.04, by
notice in writing to the Company (and to the Trustee if given by Noteholders),
may declare the principal of all the Notes and the interest accrued and unpaid
thereon and Liquidated Damages, if any, to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Notes contained to the
contrary notwithstanding. If an Event of Default specified in Section 8.01(d)
or 8.01(e)



38









 








occurs, the principal of all the Notes and the interest accrued and unpaid
thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all Notes and the
principal of any and all Notes and all Liquidated Damages, if any, which shall
have become due otherwise than by acceleration (with interest on overdue
installments of interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal at the default rate
provided for in the Notes, to the date of such payment or deposit) and amounts
due to the Trustee pursuant to Section 9.06, and if any and all defaults under
this Indenture, other than the nonpayment of principal of and accrued and
unpaid interest on Notes which shall have become due by acceleration, shall
have been cured or waived pursuant to Section 8.07, then and in every such case
the holders of a majority in aggregate principal amount of the Notes then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences so long as such action does not conflict with any judgment or
decree of any court of competent jurisdiction; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event
of Default, or shall impair any right consequent thereon.



     In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case, subject to any orders entered in such proceedings the Company, the
holders of Notes, and the Trustee shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the Company, the holders of Notes, and the Trustee shall continue as though no
such proceeding had been taken.



     Section 8.02 . Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes or Liquidated Damages as and when
the same shall become due and payable, and such default shall have continued
for a period of thirty (30) calendar days, or (b) in case default shall be made
in the payment of the principal of any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes, in connection
with any redemption or repurchase pursuant to Article 3, by declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole amount that
then shall have become due and payable on all such Notes for principal,
interest or Liquidated Damages, as the case may be, with interest upon the
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of



39









 





interest at the rate provided for in the Note, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other amounts due the Trustee under Section
9.06. Until such demand by the Trustee, the Company may pay the principal of
and interest on the Notes to the registered holders, whether or not the Notes
are overdue.



     In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.



     In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator
or similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such other obligor upon the Notes, or to the creditors or property
of the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 8.02, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Noteholders allowed in such judicial proceedings relative to the Company or any
other obligor on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of any
amounts due the Trustee under Section 9.06, and to take any other action with
respect to such claims, including participating as a member of any official
committee of creditors, as it reasonably deems necessary or advisable, and,
unless prohibited by law or applicable regulations, and any receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including reasonable counsel fees and expenses incurred by it up to the date of
such distribution. To



40









 





the extent that such payment of reasonable compensation, expenses,
advances and disbursements out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a senior lien
on, and shall be paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.



     All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.



     In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.



     Section 8.03 . Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon
the payment, if only partially paid, and upon surrender thereof, if fully paid:



     FIRST: To the payment of all amounts due the Trustee under Section 9.06;



     SECOND: In case the principal of the Outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the Notes in default in
the order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the default rate provided for in the Notes,
such payments to be made ratably to the Persons entitled thereto;



     THIRD: In case the principal of the Outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for principal and interest, with
interest on the overdue principal and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest at the
default rate provided for in the Notes, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon the Notes,
then to the payment of such principal and interest without preference or
priority of principal over interest, or of interest over principal or of any
installment of interest over any other



41









 





installment of interest, or of any Note over any other Note, ratably to
the aggregate of such principal and accrued and unpaid interest; and



     FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.



     Section 8.04 . Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under
or with respect to this Indenture, or for the appointment of a receiver,
trustee, liquidator, custodian or other similar official, or for any other
remedy hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Notes then Outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) calendar days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to take reasonable
efforts to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 8.07, and the Trustee has not received an inconsistent
direction from the holders of a majority in aggregate principal amount of the
Notes; it being understood and intended, and being expressly covenanted by the
taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any
manner whatever by virtue of or by reference to any provision of this Indenture
to affect, disturb or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). For the protection and enforcement of
this Section 8.04, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.



     Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of (including the Redemption Price upon redemption pursuant to
Article 3), and accrued and unpaid interest on such Note, on or after the
respective due dates expressed in such Note or in the event of redemption, or
to institute suit for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired or affected without
the consent of such holder.



     Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may



42









 





institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.



     Section 8.05 . Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity
or by action at law or by proceeding in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.



     Section 8.06 . Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 8 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or any acquiescence therein, and, subject to the provisions of
Section 8.04, every power and remedy given by this Article 8 or by law to the
Trustee or to the Noteholders may be exercised from time to time, and as often

as shall be deemed expedient, by the Trustee or by the Noteholders.



     Section 8.07 . Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority in aggregate principal
amount of the Notes at the time Outstanding determined in accordance with
Section 10.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such
direction, (c) the Trustee may decline to take any action that would benefit
some Noteholder to the detriment of other Noteholders and (d) the Trustee may
decline to take any action that would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the
Notes at the time Outstanding determined in accordance with Section 10.04 may,
on behalf of the holders of all of the Notes, waive any past default or Event
of Default hereunder and its consequences except (i) a Default in the payment
of interest on, or the principal of, the Notes, (ii) a failure by the Company
to convert any Notes into Common Shares, (iii) a Default in the payment of the
Redemption Price pursuant to Article 3, (iv) a Default in the payment of the
Designated Event Purchase Price pursuant to Article 3 or (v) a Default in
respect of a covenant or provisions hereof that under Article 12 cannot be
modified or amended without the consent of the holders of each or all Notes



43









 





then Outstanding or affected thereby. Upon any such waiver, the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon. Whenever any Default or Event of Default hereunder shall have been
waived as permitted by this Section 8.07, said Default or Event of Default
shall for all purposes of the Notes and this Indenture be deemed to have been
cured and to be not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.



     Section 8.08 . Notice of Defaults. The Trustee shall, within ninety (90)
calendar days after a Responsible Officer of the Trustee has knowledge of the
occurrence of a Default, mail to all Noteholders, as the names and addresses of
such holders appear upon the Note Register, notice of all Defaults known to a
Responsible Officer, unless such Defaults shall have been cured or waived
before the giving of such notice; provided that except in the case of Default
in the payment of the principal, interest or Liquidated Damages, if any, on any
of the Notes, the Trustee shall be protected in withholding such notice if and
so long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Noteholders.



     Section 8.09 . Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 8.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group
of Noteholders, holding in the aggregate more than ten percent (10%) in
principal amount of the Notes at the time Outstanding determined in accordance
with Section 10.04, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or interest on any Note on or
after the due date expressed in such Note or to any suit for the enforcement of
the right to convert any Note in accordance with the provisions of Article 16.



ARTICLE 9

The Trustee




     Section 9.01 . Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default



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which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.



     No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct, except that:



     (a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:




     (i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Indenture and no implied covenants, duties or obligations shall
be read into or imposed under this Indenture and the Trust Indenture Act
against the Trustee; and




     (ii) in the absence of bad faith and willful misconduct on the part
of the Trustee, the Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Indenture;



     (b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless the Trustee
was negligent in ascertaining the pertinent facts but need not verify the
contents thereof;



     (c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time Outstanding determined as provided in Section 10.04 relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;



     (d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section;



45









 





     (e) the Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters relating to
payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes;



     (f) if any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such
notice as reason to act as if no such event occurred; and



     (g) the Trustee shall not be deemed to have knowledge of any Event of
Default hereunder unless a Responsible Officer shall have been notified in
writing of such Event of Default by the Company or the holders of at least ten
percent (10%) in aggregate principal amount of the Notes.



     None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.



     Section 9.02 . Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 9.01:



     (a) the Trustee may conclusively rely and shall be protected in acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, note, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;



     (b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers’ Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;



     (c) the Trustee may consult with counsel of its own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;



     (d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders pursuant to the provisions of this Indenture, unless
such Noteholders shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred therein or thereby;



46









 





     (e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or
other paper or document, but the Trustee may make such further inquiry or
investigation into such facts or matters if and as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;



     (f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder;



     (g) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;



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



     (i) the Trustee may request that the Company deliver an Officers’
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers’ Certificate may be signed by any person authorized to sign an
Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and



     (j) any permissive right or authority granted to the Trustee shall not be
construed as a mandatory duty.



     Section 9.03 . No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee’s certificate of
authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for the accuracy or correctness of the same.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any Notes or the proceeds of any Notes.



     Section 9.04 . Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note Registrar.



47









 





     Section 9.05 . Monies to be Held in Trust. Subject to the provisions of
Section 14.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no obligation or liability to invest or pay interest on any money
received by it hereunder except as may be agreed in writing from time to time
by the Company and the Trustee.



     Section 9.06 . Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) as mutually
agreed to from time to time in writing between the Company and the Trustee, and
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances reasonably incurred or made by
the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable and documented compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from the
Trustee’s own negligence, willful misconduct, recklessness or bad faith. The
Company also covenants to indemnify the Trustee and any predecessor Trustee (or
any officer, director or employee of the Trustee), in any capacity under this
Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense
including taxes (other than franchise taxes and taxes based on the income of
the Trustee) incurred without negligence, willful misconduct, recklessness or
bad faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, any holder or any other
Person) of liability in connection with the exercise or performance of any of
its or their powers or duties hereunder. If the Company fails to compensate or
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances under this Section 9.06, the Trustee’s claim shall
be secured by a lien prior to that of the Notes upon all property and funds
held or collected by the Trustee as such. The obligation of the Company under
this Section shall survive the satisfaction and discharge of this Indenture.



     The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee as a result of its own negligence or
willful misconduct.



     When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(d) or Section 8.01(e) with respect to the Company occurs, the expenses and
the



48









 





compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.



     Section 9.07 . Officers’ Certificate as Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or omitting any action hereunder, such
matter may, in the absence of bad faith or willful misconduct on the part of
the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee.



     Section 9.08 . Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall (i) eliminate such conflicting interest within ninety
(90) calendar days, (ii) apply to the Commission for permission to continue as
trustee hereunder or (iii) resign, in each case to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.



     Section 9.09 . Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $100,000,000 (or if such Person is a member of a bank holding company
system, its bank holding company shall have a combined capital and surplus of
at least $100,000,000). If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of any supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.09, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.



     Section 9.10 . Resignation or Removal of Trustee.



     (a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) calendar days
after the mailing of such notice of resignation to the Noteholders, the
resigning Trustee may, upon ten (10) Business Days’ notice to the Company and
the Noteholders, appoint a successor identified in such notice or may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, if any Noteholder who has been a bona
fide holder of a Note or Notes for at least six (6) months may, subject to the
provisions of Section 8.09, on behalf of himself



49









 





and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.



     (b) In case at any time any of the following shall occur:




     (i) the Trustee shall fail to comply with Section 9.08 after
written request therefor by the Company or by any Noteholder who has
been a bona fide holder of a Note or Notes for at least six (6) months;
or




     (ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.09 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; or




     (iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;



then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 8.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided
that if no successor Trustee shall have been appointed and have accepted
appointment sixty (60) calendar days after either the Company or the
Noteholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the expense of the Company, any court of competent
jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.



     (c) The holders of a majority in aggregate principal amount of the Notes
at the time Outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) calendar days after notice to the Company of such nomination,
the Company objects thereto, in which case the Trustee so removed or any
Noteholder, or if such Trustee so removed or any Noteholder fails to act, the
Company, upon the terms and conditions and otherwise as in Section 9.10(a)
provided, may petition any court of competent jurisdiction for an appointment
of a successor trustee.



50









 





     (d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.



     (e) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company’s obligations under Section 9.06 shall continue for the
benefit of the retiring Trustee.



     Section 9.11 . Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect
as if originally named as trustee herein; but, nevertheless, on the written
request of the Company or of the successor trustee, the trustee ceasing to act
shall, upon payment of any amount then due it pursuant to the provisions of
Section 9.06, execute and deliver an instrument transferring to such successor
trustee all the rights and powers of the trustee so ceasing to act. Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a lien upon all property and funds held or
collected by such trustee as such, except for funds held in trust for the
benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 9.06.



     No successor trustee shall accept appointment as provided in this Section
9.11 unless, at the time of such acceptance, such successor trustee shall be
qualified under the provisions of Section 9.08 and be eligible under the
provisions of Section 9.09.



     Upon acceptance of appointment by a successor trustee as provided in this
Section 9.11, the Company (or the former trustee, at the expense and written
direction of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note Register. If the Company fails to mail such
notice within ten (10) calendar days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Company.



     Section 9.12 . Succession by Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this



51









 





Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and
eligible under the provisions of Section 9.09.



     In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee or authenticating
agent appointed by such predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Notes in the name of
the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Notes or in this Indenture; provided that
the right to adopt the certificate of authentication of any predecessor Trustee
or authenticate Notes in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.



     Section 9.13 . Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or
any such other obligor).



     Section 9.14 . Trustee’s Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes under this
Indenture) may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the
date on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on
or after the date specified in such application (which date shall not be less
than three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to
be taken or omitted, which shall conform to the terms and conditions set forth
in this Indenture.



52









 





ARTICLE 10

The Noteholders




     Section 10.01 . Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Noteholders in person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Notes voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with the provisions of Article
11, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of Noteholders. Whenever the Company or the Trustee
solicits the taking of any action by the holders of the Notes, the Company or
the Trustee may fix in advance of such solicitation, a date as the record date
for determining holders entitled to take such action. The record date shall be
not more than fifteen (15) calendar days prior to the date of commencement of
solicitation of such action.



     Section 10.02 . Proof of Execution by Noteholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note Registrar.



     The record of any Noteholders’ meeting shall be proved in the manner
provided in Section 11.06.



     Section 10.03 . Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Note Registrar may deem
the Person in whose name such Note shall be registered upon the Note Register
to be, and may treat it as, the absolute owner of such Note (whether or not
such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by any Person other than the Company or any Note
Registrar) for the purpose of receiving payment of or on account of the
principal of and interest on such Note, for conversion of such Note and for all
other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Note Registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being,
or upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for monies payable upon
any such Note.



     Section 10.04 . Company-owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have



53









 





concurred in any direction, consent, waiver or other action under this
Indenture, Notes which are owned by the Company or any other obligor on the
Notes or any Affiliate of the Company or any other obligor on the Notes shall
be disregarded and deemed not to be Outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent, waiver or
other action, only Notes which a Responsible Officer of the Trustee knows are
so owned shall be so disregarded. Notes so owned which have been pledged in
good faith may be regarded as Outstanding for the purposes of this Section
10.04 if the pledgee shall establish to the satisfaction of the Trustee the
pledgee’s right to vote such Notes and that the pledgee is not the Company, any
other obligor on the Notes or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the
Trustee taken upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers’ Certificate listing and identifying all Notes, if any,
known by the Company to be owned or held by or for the account of any of the
above described Persons, and, subject to Section 9.01, the Trustee shall be
entitled to accept such Officers’ Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Notes not listed therein are
Outstanding for the purpose of any such determination.



     Section 10.05 . Revocation of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Notes specified in this Indenture in
connection with such action, any holder of a Note which is shown by the
evidence to be included in the Notes the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 10.02, revoke
such action so far as concerns such Note. Except as aforesaid, any such action
taken by the holder of any Note shall be conclusive and binding upon such
holder and upon all future holders and owners of such Note and of any Notes
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Note or any Note issued in
exchange or substitution therefor.



ARTICLE 11

Meetings of Noteholders




     Section 11.01 . Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:




     (1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and
its



54









 






consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article 8;




     (2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article 9;




     (3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 12.02; or




     (4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.



     Section 11.02 . Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 11.01, to
be held at such time and at such place as the Trustee shall determine, at the
expense of the Company. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 10.01, shall be mailed to holders of Notes at their
addresses as they shall appear on the Note Register. Such notice shall also be
mailed to the Company. Such notices shall be mailed not less than twenty (20)
nor more than ninety (90) calendar days prior to the date fixed for the
meeting.



     Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then Outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes Outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.



     Section 11.03 . Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Notes then Outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) calendar days after receipt of such
request, then the Company or such Noteholders may determine the time and the
place for such meeting and may call such meeting to take any action authorized
in Section 11.01, by mailing notice thereof as provided in Section 11.02.



     Section 11.04 . Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to



55









 





vote at such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.



     Section 11.05 . Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.



     The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 11.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to
vote at the meeting.



     Subject to the provisions of Section 10.04, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each $1,000 principal amount
of Notes held or represented by him; provided that no vote shall be cast or
counted at any meeting in respect of any Note challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 11.02 or 11.03 may be adjourned from time
to time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.



     Section 11.06 . Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the Outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 11.02. The record shall show the principal
amount of the Notes voting in favor of



56









 





or against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee
to be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.



     Any record so signed and verified shall be conclusive evidence of the
matters therein stated.



     Section 11.07 . No Delay of Rights by Meeting. Nothing contained in this
Article 11 shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise
of any right or rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of the Notes.



ARTICLE 12

Supplemental Indentures




     Section 12.01 . Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:



     (a) make provision with respect to the conversion rights of the holders of
Notes pursuant to the requirements of Section 16.06 and the repurchase
obligations of the Company pursuant to the requirements of Section 3.05(e);



     (b) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Notes, any property or assets;



     (c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;



     (d) to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Notes, and to make
the occurrence, or the occurrence and continuance, of a Default in any such
additional covenants, restrictions or conditions a Default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such Default;



57









 





     (e) to provide for the issuance under this Indenture of uncertificated
Notes in addition to or in place of certificated Notes;



     (f) to provide for the issuance under this Indenture of certificated
Notes;



     (g) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;



     (h) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Notes;



     (i) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal statute
hereafter enacted;



     (j) to conform the Indenture to the terms disclosed in the Offering
Memorandum; or



     (k) make other changes to the Indenture or forms or terms of the Notes,
provided no such change individually or in the aggregate with all other such
changes has or will have an adverse effect on the interests of the Noteholders.



     Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
shall join with the Company in the execution of any such supplemental
indenture, and is hereby authorized to make any further appropriate agreements
and stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, provided that the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture that affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.



     Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time Outstanding, notwithstanding any of the
provisions of Section 12.02.



     Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may only be amended, modified or waived in accordance with the
provisions of the Registration Rights Agreement.



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     Section 12.02 . Supplemental Indenture With Consent of Noteholders. With
the consent (evidenced as provided in Article 10) of the holders of at least a
majority in aggregate principal amount of the Notes at the time Outstanding,
the Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of interest or Liquidated Damages, if any, thereon, or reduce the
principal amount thereof or reduce any amount payable on redemption or
repurchase thereof, or change the obligation of the Company to redeem any Note
on a Redemption Date in a manner adverse to the holders of Notes, or change the
obligation of the Company to repurchase any Note at the option of a Noteholder
in a manner adverse to the holders of Notes, or change the obligation of the
Company to repurchase any Note upon the happening of a Designated Event in a
manner adverse to the holders of Notes, or impair the right of any Noteholder
to institute suit for the payment thereof, or make the principal thereof or
interest payable in any coin or currency other than that provided in the Notes,
or impair the right to convert the Notes into Common Shares or reduce the
number of Common Shares or any other property receivable by a Noteholder upon
conversion subject to the terms set forth herein, including Section 16.06, in
each case, without the consent of the holder of each Note so affected, or
modify any of the provisions of this Section 12.02 or Section 8.07, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the holder
of each Note so affected, or change any obligation of the Company to maintain
an office or agency in the places and for the purposes set forth in Section
6.01, or reduce the quorum or voting requirements set forth in Article 11 or
(ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then Outstanding.



     Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.



     It shall not be necessary for the consent of the Noteholders under this
Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.



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     Section 12.03 . Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
12.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture
has been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that
any such qualification is required prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article 12, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.



     Section 12.04 . Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 12 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may, at the Company’s
expense, be prepared and executed by the Company, authenticated by the Trustee
(or an authenticating agent duly appointed by the Trustee pursuant to Section
17.11) and delivered in exchange for the Notes then Outstanding, upon surrender
of such Notes then Outstanding.



     Section 12.05 . Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article 12 and is
otherwise authorized or permitted by this Indenture.



ARTICLE 13

Consolidation, Merger, Sale, Conveyance and Lease




     Section 13.01 . Company May Consolidate on Certain Terms. Subject to the
provisions of Section 13.02, the Company shall not consolidate or merge with or
into any other Person (whether or not affiliated with the Company), nor shall
the Company sell, convey, transfer or lease the properties and assets of the
Company substantially as an entirety, to any other Person (whether or not



60









 





affiliated with the Company), unless: (i) the Company is the surviving
Person, or the resulting, surviving or transferee Person, if other than the

Company, is organized and existing under the laws of the United States, any
state thereof, or the District of Columbia; (ii) upon any such consolidation,
merger, sale, conveyance, transfer or lease, the due and punctual payment of
the principal of and interest on all of the Notes, according to their tenor and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company, shall be expressly
assumed, by supplemental indenture satisfactory in form and substance to the
Trustee, executed and delivered to the Trustee by the Person (if other than the
Company and other than a Person who is a successor to the Company’s obligations
hereunder and under the Note by operation of law) formed by such consolidation,
or into which the Company shall have been merged, or by the Person that shall
have acquired or leased such properties and assets, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 16.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have occurred and be
continuing.



     Section 13.02 . Successor to be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the party of this first part. Such successor Person thereupon
may cause to be signed, and may issue either in its own name or in the name of
Atlantic Coast Airlines Holdings, Inc. any or all of the Notes, issuable
hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or
cause to be authenticated and delivered, any Notes that previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes that such successor Person thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All the Notes so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance, transfer or lease, the Person named as the “Company” in the first
paragraph of this Indenture or any successor that shall thereafter have become
such in the manner prescribed in this Article 13 may be dissolved, wound up and
liquidated at any time thereafter and such Person shall be released from its
liabilities as obligor and maker of the Notes and from its obligations under
this Indenture.



61









 





     In case of any such consolidation, merger, sale, conveyance, transfer or
lease, such changes in phraseology and form (but not in substance) may be made
in the Notes thereafter to be issued as may be appropriate.



     Section 13.03 . Opinion of Counsel to be Given to Trustee. If a
supplemental indenture as contemplated pursuant to Section 13.01 is to be
executed in connection with any such consolidation, merger, sale, conveyance,
transfer or lease, the Trustee shall receive an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or lease and any such assumption complies with the
provisions of this Article 13.



     Section 13.04 . Payment of Additional Amounts. (a) If (i) the Company
consolidates or merges with or into another Person (other than a Subsidiary),
(ii) the Company sells, conveys, transfers or leases all or substantially all
of its properties and assets to any Person (other than a Subsidiary), or (iii)
any Person (other than a Subsidiary) consolidates with or merges with or into
the Company, and as a result of such transaction any payments made under or
with respect to the Notes (including any payment made in Common Shares) will
become subject to any deduction or withholding in respect of any tax, duty,
levy, impost, assessment or governmental charge of whatever nature, which we
refer to as the “applicable taxes,” imposed by or on behalf of any political
subdivisions or taxing authorities outside of the United States, the Company
shall pay additional amounts to the holders so that the net amount received by
each holder of Notes will equal the amount that such holder would have received
if any applicable taxes had not been required to be withheld or deducted. The
amounts that the Company is required to pay to preserve the net amount
receivable by the holders of Notes shall be calculated by the Company and are
referred to as “Additional Amounts.”



     (b) Additional Amounts shall not be payable with respect to a payment made
to a holder of the Notes to the extent:




     (i) that any applicable taxes would not have been so imposed but
for the existence of any present or former connection between the holder
and the jurisdiction imposing such applicable taxes, other than the mere
receipt of the payment, acquisition, ownership or disposition of the
Notes or the exercise or enforcement of rights under the Notes or this
Indenture;




     (ii) of any estate, inheritance, gift, sales, transfer or personal
property taxes imposed with respect to the Notes, except described below
or as otherwise provided in this Indenture; or




     (iii) that any such applicable taxes would not have been imposed
but for the presentation of the Notes, where presentation is required,
for payment on a date more than fifteen (15) calendar days after the
date on which the payment became due and payable or the date on



62









 






which payment thereof is duly provided for, whichever is later,
except to the extent that the beneficiary or holder thereof would have
been entitled to Additional Amounts had the Notes been presented for
payment on any date during such 15-day period.



     (b) The Company shall also:




     (i) withhold or deduct such applicable taxes as required;




     (ii) remit the full amount of taxes deducted or withheld to the
relevant taxing authority in accordance with all applicable laws;




     (iii) use its best efforts to obtain from each relevant taxing
authority imposing the applicable taxes certified copies of tax receipts
evidencing the payment of any taxes deducted or withheld; and




     (iv) upon request, make available to the holders of the Notes,
within sixty (60) calendar days after the date the payment of any taxes
deducted or withheld is due pursuant to applicable law, certified copies
of tax receipts evidencing such payment by the Company and,
notwithstanding its efforts to obtain the receipts, if the same are not
obtainable, other evidence of such payments.



     (d) At least thirty (30) calendar days prior to each date on which any
payment under or with respect to the Notes is due and payable, if the Company
is obligated to pay Additional Amounts with respect to such payment, the
Company shall deliver to the Trustee an Officer’s Certificate stating the fact
that such Additional Amounts shall also be payable, the amounts so payable, and
such other information as is necessary to enable the Trustee to pay such
Additional Amounts to holders of the Notes on the payment date.



     (e) The foregoing provisions shall survive any termination or discharge of
this Indenture and will apply to any jurisdiction in which any successor to the
Company is organized or is engaged in business for tax purposes or any
political subdivisions or taxing authority or agency thereof or therein.



     (f) Whenever in this Indenture or the Notes there is mentioned, in any
context, the payment of principal, interest, Redemption Price, Designated Event
Purchase Price or any other amount payable under or with respect to any Note,
such mention shall be deemed to include the payment of Additional Amounts to
the extent payable in the particular context.



63









 





ARTICLE 14

Satisfaction and Discharge of Indenture




     Section 14.01 . Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of
or in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for
which other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
interest due or to become due to such date of maturity or Redemption Date, as
the case may be, accompanied by a verification report, as to the sufficiency of
the deposited amount, from an independent certified accountant or other
financial professional satisfactory to the Trustee, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
including without limitation sums payable to the Trustee for its costs and
expenses, then this Indenture shall cease to be of further effect (except as to
(i) remaining rights of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to receive payments
of principal of and interest on, the Notes and the other rights, duties and
obligations of Noteholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee, (iii) rights hereunder of
Noteholders to convert their Notes into Common Shares and (iv) the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel as required by Section 9.02 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agrees to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes.



     Section 14.02 . Deposited Monies to be Held in Trust by Trustee. Subject
to Section 14.04, all monies deposited with the Trustee pursuant to Section
14.01, shall be held in trust for the sole benefit of the Noteholders, and such
monies shall be applied by the Trustee to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Notes for the payment or redemption of
which such monies have been deposited with the Trustee, of all sums due and to
become due thereon for principal and interest.



64









 





     Section 14.03 . Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of
the Notes (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall
be released from all further liability with respect to such monies.



     Section 14.04 . Return of Unclaimed Monies; Repayment to the Company.
Subject to the requirements of applicable law, any monies deposited with or
paid to the Trustee for payment of the principal of or interest on Notes and
not applied but remaining unclaimed by the holders of Notes for two years after
the date upon which the principal of or interest on such Notes, as the case may
be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter
look only to the Company for any payment that such holder may be entitled to
collect unless an applicable abandoned property law designates another Person.



     To the extent that the aggregate amount of cash or money deposited by the
Company with the Trustee pursuant to Article 3 exceeds the aggregate price of
the Notes or portions thereof which the Company is obligated to pay to the
holders, then, unless otherwise agreed in writing with the Company, promptly
after the Business Day following the applicable payment date the Trustee shall
return any such excess to the Company together with interest, if any, thereon.



     Section 14.05 . Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 14.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 14.01 until such time as the Trustee or the
paying agent is permitted to apply all such money in accordance with Section
14.02; provided that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.



ARTICLE 15

Immunity of Incorporators, Stockholders, Officers and Directors




     Section 15.01 . Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of, or interest on any Note, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company in this Indenture
or in any supplemental indenture or in any Note, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer, director or subsidiary, as such, past,
present



65









 





or future, of the Company or of any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such liability
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.



ARTICLE 16

Conversion of Notes




     Section 16.01 . Right to Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, prior to 5:00 p.m., New York City time,
on the Maturity Date, the holder of any Note shall have the right, at such
holder’s option, to convert the principal amount of the Note, or any portion of
such principal amount that is a multiple of $1,000, into fully paid and
non-assessable Common Shares (as such common shares shall then be constituted)
at the Conversion Rate in effect at such time, solely upon the occurrence of
one or more events and for the periods described in Section 16.01(b), Section
16.01(c), Section 16.01(d), Section 16.01(e) or Section 16.01(f), by surrender
of the Note to be so converted in whole or in part, together with any required
funds, in the manner provided in Section 16.02. If a record date for a meeting
of shareholders of the Company to be held after a holder of the Notes converts
his Notes has been fixed and falls before the Conversion Date, such holder
shall not have any voting rights at such meeting of shareholders with respect
to the Common Shares into which his Notes are converted.



     Whenever the Notes shall become convertible pursuant to this Section
16.01, the Company or, at the Company’s request, the Trustee in the name and at
the expense of the Company, shall notify the holders of the event triggering
such convertibility in the manner provided in Section 17.03, and the Company
shall also issue a press release and publish the information on the Company’s
website on the World Wide Web. Any notice so given shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice.



     A Note in respect of which a holder is electing to exercise its option to
require the Company to repurchase such holder’s Notes upon a Designated Event
pursuant to Section 3.05, or at the option of the holder pursuant to Section
3.06, may be converted only if such holder withdraws its election in accordance
with Section 3.05 or Section 3.06, respectively. Except as set forth in
Section 16.05, a holder of Notes is not entitled to any rights of a holder of
Common Shares until such holder has converted its Notes into Common Shares, and
only to the extent such Notes are deemed to have been converted into Common
Shares under this Article 16.



     (b) During any fiscal quarter of the Company commencing after March 31,
2004 (and only during such fiscal quarter), the Notes may be surrendered for



66









 





conversion into Common Shares, if, as of the last day of the immediately
preceding fiscal quarter of the Company, the Closing Sale Price of the Common
Shares for at least 20 Trading Days in a period of 30 consecutive Trading Days
ending on the last Trading Day of such fiscal quarter is more than 120% of the
Conversion Price as of the last day of such preceding fiscal quarter. If this
condition is not satisfied at the end of any fiscal quarter of the Company,
then conversion pursuant to this Section 16.01(b) will not be permitted in the
following fiscal quarter.



     The calculation agent appointed by the Company, or if such agent has not
been appointed, the Company, shall determine for each Trading Day during the 30
consecutive Trading Day period specified in this Section 16.01(b) whether the
Closing Sale Price of the Common Shares exceeds one-hundred-twenty percent
(120%) of the Conversion Price and whether the Notes shall be convertible as a
result of the occurrence of the event specified in this Section 16.01(b) and,
if the Notes shall be so convertible, the Company or such calculation agent
shall promptly deliver to the Trustee (and to the Company if such calculation
agent has been appointed) written notice thereof.



     If a calculation agent has been appointed, such calculation agent shall be
entitled at its sole discretion to consult with the Company and to request the
assistance of the Company in connection with such calculation agent’s duties
and obligations pursuant to this Section 16.01(b) (including without limitation
the calculation or determination of the Conversion Price and the Closing Sales
Price), and the Company agrees, if requested by such calculation agent, to
cooperate with, and provide assistance to, such calculation agent in carrying
out its duties under this Section 16.01(b); provided that nothing herein shall
be construed to relieve such calculation agent of its duties pursuant to this
Section 16.01(b).



     (c) Notes may be converted during the five Business Day period after any
five consecutive Trading Day period (the “Measurement Period”) in which the
Trading Price per $1,000 principal amount of the Notes for each day of such
Measurement Period was less than ninety-eight percent (98%) of the product of
the Closing Sale Price of the Common Shares and the Conversion Rate in effect
on each such Trading Day; provided that no conversion pursuant to this Section
16.01(c) may be made on or after the Blackout Date if on any Trading Day during
the Measurement Period the Closing Sale Price of the Common Shares is more than
one-hundred percent (100%), but less than one-hundred-twenty percent (120%) of
the Conversion Price on such Trading Day.



     The Company shall determine whether the Notes may be converted pursuant to
Section 16.01(c) based on Trading Prices as defined in this Indenture. The
Company shall appoint a calculation agent and shall provide such calculation
agent with the names of three independent nationally known securities dealers
to be used for determining the Trading Price. Such calculation agent shall
have no obligation to determine the Trading Price under this Section 16.01(c)
unless the Company has requested such a determination; and the Company shall
have no



67









 





obligation to make such request unless a holder of Notes provides it with
reasonable evidence that the Trading Price per $1,000 principal amount of Notes
would be less than ninety-eight percent (98%) of the product of the Closing
Sale Price of the Common Shares and the then current Conversion Rate. If such
evidence is provided, the Company shall instruct such calculation agent to
determine the Trading Price of the Notes beginning on the next Trading Day and
on each successive Trading Day until the Trading Price per $1,000 principal
amount of Notes is greater than or equal to ninety-eight percent (98%) of the
product of the Closing Sale Price of the Common Shares and the then current
Conversion Rate; provided that, except for the determination of the Trading
Prices, such calculation agent shall be under no duty or obligation to make the
calculations described in this Section 16.01(c) or to determine whether the
Notes are convertible pursuant to such section.



     Such calculation agent shall be entitled at its sole discretion to consult
with the Company and to request the assistance of the Company in connection
with such calculation agent’s duties and obligations pursuant to this Section
16.01(c) (including without limitation the calculation or determination of the
Conversion Rate, the Closing Sales Price and the Trading Price), and the
Company agrees, if requested by such calculation agent, to cooperate with, and
provide assistance to, such calculation agent in carrying out its duties under
this Section 16.01(c); provided that nothing herein shall be construed to
relieve such calculation agent of its duties pursuant to this Section 16.01(c).



     (d) If any Notes have been called for redemption pursuant to Section 3.02,
such Notes may be converted, at any time on or after the date the notice of
redemption has been given under Section 3.02 until 5:00 p.m., New York City
time, on the Business Day immediately preceding the Redemption Date, unless the
Company defaults in the payment of the Redemption Price with respect to such
Notes.



     (e) If the Company distributes to all holders of its Common Shares (1)
rights or warrants entitling them to purchase for a period expiring within 45
calendar days of the Record Date for the determination of the stockholders
entitled to receive such distribution, Common Shares, at less than the average
of the Closing Sale Prices of the Common Shares for the 10 consecutive Trading
Days immediately preceding the declaration date for such distribution, or (2)
assets, debt securities or rights to purchase its securities, where the Fair
Market Value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors)
of such distribution per Common Share exceeds fifteen percent (15%) of the
Closing Sale Price of the Common Shares on the Trading Day immediately
preceding the declaration date for such distribution, then, in either case, the
Notes may be converted at any time on and after the date (the “Distribution
Notice Date”) that the Company gives notice to the holders of such right, which
shall be not less than twenty (20) calendar days prior to the Ex-Dividend Date
for such distribution, and the Notes may be surrendered for conversion at any
time thereafter until the



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earlier of the close of business on the Business Day immediately preceding
the Ex-Dividend Date or the date the Company publicly announces that such
distribution will not take place (the “Final Distribution Date”).
Notwithstanding the foregoing, the Notes may not be converted pursuant to this
Section 16.01(e), and no adjustment to the Conversion Rate will be made, if all
holders of the Notes will otherwise participate, on the same basis as a holder
of Common Shares, in the distribution without first converting its Notes into
Common Shares.



     (f) If the Company is a party to a consolidation, merger, binding share
exchange or sale of all or substantially all of its assets, in each case,
pursuant to which Common Shares would be converted into cash, securities or
other property, then the Notes may be surrendered for conversion at any time
during the period (the “Merger Conversion Period”) from and after the date that
is 15 days prior to the anticipated effective date of the transaction until 15
days after the actual date of the transaction and, at the effective time, the
right to convert the Notes into Common Shares shall be changed into a right to
convert such Notes into the kind and amount of cash, securities or other
property of the Company or another Person that the holder would have received
if the holder had converted such Notes immediately prior to the transaction.



     Section 16.02 . Conversion Procedures. In order to exercise the
conversion privilege with respect to any Note in certificated form, the Company
must receive at the office or agency of the Company maintained for that purpose
or, at the option of such holder, the Corporate Trust Office, such Note with
the original or facsimile of the form entitled “Conversion Notice” on the
reverse thereof, duly completed and manually signed, together with such Notes
duly endorsed for transfer, accompanied by the funds, if any, required by this
Section 16.02. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for Common Shares which
shall be issuable on such conversion shall be issued, and shall be accompanied
by transfer or similar taxes, if required pursuant to Section 16.07.



     In order to exercise the conversion privilege with respect to any interest
in a Global Note, the beneficial holder must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Note, furnish appropriate
endorsements and transfer documents if required by the Company or conversion
agent, and pay the funds, if any, required by this Section 16.02 and any
transfer taxes if required pursuant to Section 16.07.



     Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date (the “Conversion Date") on which the
requirements set forth above in this Section 16.02 have been satisfied as to
such Note (or portion thereof).



69









 





     Within two (2) Business Days following the Conversion Date, the Company
shall deliver to the holder, through the Trustee, written notice of whether
such Notes shall be converted into Common Shares or paid in cash (unless the
Company shall have already done so pursuant to a notice of redemption pursuant
to Section 3.02 in respect of a Conversion Date occurring before the Redemption
Date set forth in such notice). If the Company shall have notified the holder
that all of such Notes shall be converted into Common Shares, the Company shall
deliver to the holder, no later than the fifth (5th) Business Day following the
Conversion Date, a certificate for the number of whole shares of Common Shares
issuable upon the conversion. If the Company shall have notified the holder
that all of such Notes shall be converted solely into cash, the Company shall
deliver to the holder, no later than the tenth (10th) Business Day following
the Conversion Date, the cash payment. Except as otherwise provided in this
Article 16, if the Company shall have notified the holder that all or a portion
of such Note shall be paid solely in cash, the Company shall deliver to the
holder surrendering such Note the amount of cash per Note (or a portion of a
Note) equal to the average sale price of the Common Shares for the five (5)
consecutive Trading Days immediately following either (a) the date of the
Company’s notice of its election to deliver cash as described above if it has
not given its notice of redemption, or (b) the Conversion Date, in the case of
conversion following the Company’s notice of redemption specifying its election
to deliver cash upon conversion, in either case multiplied by the Conversion
Rate in effect on that date.



     Except as otherwise provided in this Article 16, the Company may not
change its election with respect to the consideration to be delivered upon
conversion of a Note once the Company has notified the holder in accordance
with this paragraph. Anything herein to the contrary notwithstanding, in the
case of Global Notes, conversion notices may be delivered and such Notes may be
surrendered for conversion in accordance with the applicable procedures of the
Depositary as in effect from time to time. The holder in whose name the Common
Share certificate is registered shall be deemed to be a shareholder of record
at the close of business on the date on which the applicable price is
determined with respect to the applicable Conversion Date; provided, however,
that if any such date is a date when the stock transfer books of the Company
are closed, such Person shall be deemed a shareholder of record as of the next
date on which the stock transfer books of the Company are open.



     No payment or adjustment shall be made for dividends on, or other
distributions with respect to, any Common Shares except as provided in this
Article. On conversion of a Note, except for conversion during the period from
the close of business on any record date immediately preceding any Interest
Payment Date to the close of business on the Business Day immediately preceding
such Interest Payment Date, in which case the holder on such record date shall
receive the interest payable on such Interest Payment Date, that portion of
accrued and unpaid interest on the converted Note attributable to the period
from the most recent Interest Payment Date (or, if no Interest Payment Date has



70









 





occurred, from the Issue Date) through the Conversion Date shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the holder thereof through delivery of the Common Shares (together with
the cash payment, if any, in lieu of fractional shares), or cash in lieu
thereof, in exchange for the Note being converted pursuant to the provisions
hereof, and the fair market value of such Common Shares (together with any such
cash payment in lieu of fractional shares), or cash in lieu thereof, shall be
treated as issued, to the extent thereof, first in exchange for accrued and
unpaid interest and Liquidated Damages, if any, accrued through the Conversion
Date and the balance, if any, of such fair market value of such Common Shares
(and any such cash payment), or cash in lieu thereof, shall be treated as
issued in exchange for the principal amount of the Note being converted
pursuant to the provisions hereof.



     If a holder converts more than one Note at the same time, the number of
shares of Common Shares issuable upon the conversion shall be based on the
aggregate principal amount of Notes converted.



     Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the holder, a new
Note equal in principal amount to the principal amount of the unconverted
portion of the Note surrendered.



     Notes or portions thereof surrendered for conversion during the period
from the close of business on any record date immediately preceding any
Interest Payment Date to the close of business on the Business Day immediately
preceding such Interest Payment Date shall be accompanied by payment to the
Company or its order, in funds reasonably acceptable to the Company, of an
amount equal to the interest payable on such Interest Payment Date with respect
to the principal amount of Notes or portions thereof being surrendered for
conversion; provided that no such payment need be made (1) if the Company has
specified a Redemption Date that is after a Record Date and on or prior to the
next Interest Payment Date, (2) if the Company has specified a Designated Event
Purchase Date following a Designated Event that is after a Record Date and on
or prior to the next succeeding Interest Payment Date or (3) to the extent of
any overdue interest, if any overdue interest exists at the time of conversion
with respect to such Note.



     The holders’ rights to convert Notes into Common Shares are subject to the
Company’s right to elect instead to pay each such holder the amount of cash
determined pursuant to this Article, in lieu of delivering such Common Shares;
provided, however, that if an Event of Default (other than a default in a cash
payment upon conversion of the Notes) shall have occurred and be continuing,
the Company shall deliver Common Shares in accordance with this Article,
whether or not the Company has delivered a notice pursuant to this Section
16.02 to the effect that the Notes would be paid in cash or a combination of
cash and Common Shares.



71









 





     Section 16.03 . Cash Payments in Lieu of Fractional Shares. In
connection with the conversion of the Notes, no fractional Common Shares shall
be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current market price
thereof to the holder of Notes. The current market price of a Common Share
shall be the Closing Sale Price of such Common Shares on the date the Notes (or
specified portions thereof) are surrendered for conversion.



     Section 16.04 . Conversion Rate. Each $1,000 principal amount of the
Notes shall be convertible into the number of Common Shares specified in the
form of Note (herein called the “Conversion Rate”) attached as Exhibit A
hereto, subject to adjustment as provided in this Article 16.



     Section 16.05 . Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:



     (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Shares in Common Shares,
the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction,




     (i) the numerator of which shall be the sum of the number of Common
Shares outstanding at the close of business on the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution plus the total number of Common Shares constituting such
dividend or other distribution; and




     (ii) the denominator of which shall be the number of Common Shares
outstanding at the close of business on the date fixed for such
determination,



such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 16.05(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.



     (b) In case the Company shall issue rights or warrants to all holders of
its outstanding Common Shares entitling them (for a period expiring within
forty-five (45) calendar days after the date fixed for determination of
stockholders



72









 





entitled to receive such rights or warrants) to subscribe for or purchase
Common Shares at a price per share less than the average of the Closing Sale
Prices of the Common Shares for the ten (10) consecutive Trading Days
immediately preceding the declaration date for such distribution, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the date fixed for determination of stockholders entitled to receive such
rights or warrants by a fraction,




     (i) the numerator of which shall be the number of Common Shares
outstanding at the close of business on the date fixed for determination
of stockholders entitled to receive such rights or warrants plus the
total number of additional Common Shares offered for subscription or
purchase, and




     (ii) the denominator of which shall be the sum of the number of
Common Shares outstanding at the close of business on the date fixed for
determination of stockholders entitled to receive such rights or
warrants plus the number of shares that the aggregate offering price of
the total number of shares so offered would purchase at a price equal to
the average of the Closing Sale Prices of the Common Shares for the ten
(10) consecutive Trading Days immediately preceding the declaration date
for such distribution.



     Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening
of business on the day following the date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
Common Shares are not delivered after the expiration of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate that
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
Common Shares actually delivered. If such rights or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed.
In determining whether any rights or warrants entitle the holders to subscribe
for or purchase Common Shares at a price less than the average of the Closing
Sale Prices of the Common Shares for the ten (10) consecutive Trading Days
immediately preceding the declaration date for such distribution, and in
determining the aggregate offering price of such Common Shares, there shall be
taken into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.



     (c) In case outstanding Common Shares shall be subdivided into a greater
number of Common Shares, the Conversion Rate in effect at the opening of
business on the day following the day upon which such subdivision becomes



73









 





effective shall be proportionately increased, and conversely, in case
outstanding Common Shares shall be combined into a smaller number of Common
Shares, the Conversion Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.



     (d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares of any class of capital stock (other than Common
Shares) of the Company or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section
16.05(b), and excluding any dividend or distribution (x) paid in cash or (y)
referred to in Section 16.05(a)) (any of the foregoing hereinafter in this
Section 16.05(d), called the “Distributed Property”), then, in each such case
(unless the Company elects to reserve such Distributed Property for
distribution to the Noteholders upon the conversion of the Notes so that any
such holder converting Notes will receive upon such conversion, in addition to
the Common Shares to which such holder is entitled, the amount and kind of such
Distributed Property which such holder would have received if such holder had
converted its Notes into Common Shares immediately prior to the Record Date for
such distribution of the Distributed Property) the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction,




     (i) the numerator of which shall be the Current Market Price on
such Record Date; and




     (ii) the denominator of which shall be the Current Market Price on
such Record Date less the Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in
a resolution of the Board of Directors) on the Record Date of the
portion of the Distributed Property so distributed applicable to one
Common Share,



such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then Fair
Market Value (as so determined) of the portion of the Distributed Property so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right
to receive on the date of such dividend or distribution the amount of
Distributed Property such holder would have received had such holder converted
each Note on the Record Date. If such dividend or distribution is not so paid
or made, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors



74









 








determines the Fair Market Value of any distribution for purposes of this
Section 16.05(d) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price on the applicable Record
Date.



     Notwithstanding the foregoing, if the Distributed Property distributed by
the Company to all holders of its Common Shares consists of capital stock of,
or similar equity interests in, a Subsidiary or other business unit (unless
such capital stock or similar equity interests are distributed to the
Noteholders in such distribution as if such holders had converted their Notes
into Common Shares), the Conversion Rate shall be increased so that the same
shall be equal to the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date with
respect to such distribution by a fraction,




     (i) the numerator of which shall be the sum of (A) the average of
the Closing Sale Prices of the Common Shares for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading
Day after the date on which “ex-dividend trading” commences for such
dividend or distribution on the New York Stock Exchange, Nasdaq or such
other national or regional exchange or market on which such securities
are then listed or quoted (the “Ex-Dividend Date”) plus (B) the average
of the Closing Sale Prices of the securities distributed in respect of
each Common Share for the ten (10) consecutive Trading Days commencing
on and including the fifth Trading Day after the Ex-Dividend Date; and




     (ii) the denominator of which shall be the average of the Closing
Sale Prices of the Common Shares for the ten (10) consecutive Trading
Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date,



such adjustment to become effective the later of (x) ten (10) Trading Days
after the effective date of such distribution of capital stock of, or similar
equity interests in, a Subsidiary or other business unit or (y) after the ten
(10) consecutive Trading Days commencing on and including the fifth Trading Day
after the Ex-Dividend Date; provided that the Company may in lieu of the
foregoing adjustment make adequate provision so that each Noteholder shall have
the right to receive upon conversion the amount of Distributed Property such
holder would have received had such holder converted each Note on the Record
Date with respect to such distribution; and provided further that if (x) the
average of the Closing Sale Prices of the Common Shares for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading Day
after the Ex-Dividend Date minus (y) the average of the Closing Sale Prices of
the securities distributed in respect of each share Common Share for the ten
(10) consecutive Trading Days commencing on and including the fifth Trading Day
after the Ex-Dividend Date is less than $1.00, then the adjustment provided by
for by this



75









 








paragraph shall not be made and in lieu thereof the provisions of the first
paragraph of this Section 16.05(d) shall apply to such distribution. In any
case in which this paragraph is applicable, Section 16.05(a), Section 16.05(b)
and the first paragraph of this Section 16.05(d) shall not be applicable.



     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 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 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 16.05(d). 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 securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution 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 16.05 was made, (1) in the
case of any such rights or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Rate shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common 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
(2) in the case of such rights or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate shall
be readjusted as if such rights and warrants had not been issued.



     No adjustment of the Conversion Rate shall be made pursuant to this
Section 16.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Shares.



76









 





     For purposes of this Section 16.05(d) and Section 16.05(a) and (b), any
dividend or distribution to which this Section 16.05(d) is applicable that also
includes Common Shares, or rights or warrants to subscribe for or purchase
Common Shares (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets or shares of capital
stock other than such Common Shares or rights or warrants (and any Conversion
Rate adjustment required by this Section 16.05(d) with respect to such dividend
or distribution shall then be made) immediately followed by (2) a dividend or
distribution of such Common Shares or such rights or warrants (and any further
Conversion Rate adjustment required by Sections 16.05(a) and 16.05(b) with
respect to such dividend or distribution shall then be made), except (A) the
Record Date of such dividend or distribution shall be substituted as “the date
fixed for the determination of stockholders entitled to receive such dividend
or other distribution”, “the date fixed for the determination of stockholders
entitled to receive such rights or warrants” and “the date fixed for such
determination” within the meaning of Section 16.05(a) and 16.05(b) and (B) any
Common Shares included in such dividend or distribution shall not be deemed
“outstanding at the close of business on the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution” or
“outstanding at the close of business on the date fixed for such determination”
within the meaning of Section 16.05(a).



     (e) The reclassification of Common Shares into securities including
securities other than Common Shares (other than any reclassification upon an
event to which Section 16.06 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Shares to all holders of
Common Shares (and the effective date of such reclassification shall be deemed
to be the “Record Date” within the meaning of Section 16.05(d)), and (b) a
subdivision or combination, as the case may be, of the number of Common Shares
outstanding immediately prior to such reclassification into the number of
Common Shares outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be “the day upon which such
subdivision becomes effective” or “the day upon which such combination becomes
effective,” as the case may be, and “the day upon which such subdivision or
combination becomes effective” within the meaning of Section 16.05(c)).



     (f) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares cash (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on such Record Date by a fraction,




     (i) the numerator of which shall be the Current Market Price on
such Record Date; and



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     (ii) the denominator of which shall be the Current Market Price on
such Record Date less the amount of cash so distributed applicable to
one Common Share,



such adjustment to be effective immediately prior to the opening of business on
the day following the Record Date; provided that if the portion of the cash so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right
to receive on the date of such dividend or distribution the amount of cash such
holder would have received had such holder converted each Note on the Record
Date. If such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.



     (g) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Shares shall expire and such
tender or exchange offer (as amended up to the expiration thereof) shall
require the payment to stockholders of consideration per Common Share having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the “Expiration Time”) tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Closing Sale Price of a Common Share on the Trading Day next succeeding the
Expiration Time, the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction,




     (i) the numerator of which shall be the sum of (x) the Fair Market
Value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the
            shares deemed so accepted up to any such maximum, being referred to as
the “Purchased Shares”) and (y) the product of the number of Common
Shares outstanding (less any Purchased Shares) at the Expiration Time
and the Closing Sale Price of a Common Share on the Trading Day next
succeeding the Expiration Time, and




     (ii) the denominator of which shall be the number of Common Shares
outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Closing Sale Price of a Common Share
on the Trading Day next succeeding the Expiration Time,



such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender or exchange offer, but the
Company




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is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or
exchange offer had not been made.



     (h) For purposes of this Section 16.05, the following terms shall have the
meaning indicated:




     (i) “Current Market Price” shall mean the average of the daily
Closing Sale Prices per Common Share for each of the ten (10)
consecutive Trading Days ending on the earlier of the day in question
and the day before the “ex date” with respect to the issuance,
distribution, subdivision or combination requiring such computation.
For purposes of this paragraph, the term “ex date” (1) when used with
respect to any issuance or distribution, means the first date on which
the Common Shares trade, regular way, on the relevant exchange or in the
relevant market from which the Closing Sale Price per Common Share was
obtained without the right to receive such issuance or distribution, and
(2) when used with respect to any subdivision or combination of Common
Shares, means the first date on which the Common Shares trade, regular
way, on such exchange or in such market after the time at which such
subdivision or combination becomes effective.




     If another issuance, distribution, subdivision or combination to which
Section 16.05 applies occurs during the period applicable for
calculating “Current Market Price” pursuant to the definition in the
preceding paragraph, “Current Market Price” shall be calculated for such
period in a manner determined by the Board of Directors to reflect the
impact of such issuance, distribution, subdivision or combination on the
Closing Sale Price of the Common Shares during such period.




     (ii) “Fair Market Value” shall mean the amount which a willing
buyer would pay a willing seller in an arm’s-length transaction.




     (iii) “Record Date” shall mean, 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 stockholders
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).




     (iv) “Trading Day” shall mean a day during which trading in
securities generally occurs on the New York Stock Exchange or, if the
applicable security is not listed on the New York Stock Exchange, on the
principal other national or regional securities exchange on which the



79









 






applicable security is then listed or, if the Common stock is not
listed on a national or regional securities exchange, on the Nasdaq or,
if the applicable security is not quoted on Nasdaq, on the principal
other market on which the applicable security is then traded.



     (i) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 16.05(a), (b), (c), (d), (e), (f) or (g),
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Shares or rights to purchase Common Shares
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes, which
determination shall be conclusive.



     To the extent permitted by applicable law, the Company from time to time
may increase the Conversion Rate by any amount if the Board of Directors shall
have made a determination that such increase would be in the interests of the
Company, which determination shall be conclusive. Whenever the Conversion Rate
is increased pursuant to the preceding sentence, the Company shall mail to
holders of record of the Notes and file with the Trustee and any conversion
agents other than the Trustee a notice of the increase, and such notice shall
state the increased Conversion Rate and the period during which it will be in
effect.



     (j) All calculations under this Article 16 shall be made by the Company
and shall be made to the nearest cent or to the nearest one-ten thousandth
(1/10,000) of a share (or if there is not a nearest one-ten thousandth of a
share, to the next lower one-ten thousandth of a share), as the case may be.
No adjustment to the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) therein;
provided, however, that any adjustments that by reason of this subparagraph are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment.



     (k) No adjustment need be made:




     (1) upon the issuance of Common Shares pursuant to any present or
future plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of additional
optional amounts in Common Shares under any plan;




     (2) upon the issuance of Common Shares or options or rights to
purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by the
Company or any Subsidiary;




     (3) upon the issuance of Common Shares pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security not
described in (2) above and outstanding as of the date the Notes were
first issued;



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     (4) for a change in the par value of the Common Shares;




     (5) any repurchases by the Company of the Common Shares not
expressly described in this Section 16.05;




     (6) for accrued and unpaid interest; or




     (7) for any transaction which Noteholders are to participate on a
basis and with notice that the Board of Directors determines to be fair
and appropriate in light of the basis and notice on which holders of
Common Shares participate in the transaction. Such participation by
Noteholders may include participation upon conversion provided that an
adjustment shall be made at such time as the Noteholders are no longer
entitled to participate.



     To the extent the Notes become convertible into cash, assets, property or
securities (other than capital stock of the Company or any other Person), no
adjustment need be made thereafter as to the cash, assets, property or
securities. Interest will not accrue on any cash into which the Notes are
convertible.



     (l) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers’ Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Unless and until a Responsible Officer of the
Trustee shall have received such Officers’ Certificate, the Trustee shall not
be deemed to have knowledge of any adjustment of the Conversion Rate and may
assume that the last Conversion Rate of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare
a notice of such adjustment of the Conversion Rate setting forth the adjusted
Conversion Rate and the date on which each adjustment becomes effective and
shall promptly mail such notice of such adjustment of the Conversion Rate to
each Noteholder at its last address appearing on the Note Register provided for
in Section 2.05 of this Indenture. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.



     (m) In any case in which this Section 16.05 provides that an adjustment
shall become effective immediately after (1) a Record Date for an event, (2)
the date fixed for the determination of stockholders entitled to receive a
dividend or distribution pursuant to Section 16.05(a), (3) a date fixed for the
determination of stockholders entitled to receive rights or warrants pursuant
to Section 16.05(b), or (4) the Expiration Time for any tender or exchange
offer pursuant to Section 16.05(g), (each a “Determination Date”), the Company
may elect to defer until the occurrence of the applicable Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Note converted after such
Determination Date and before the occurrence of such Adjustment Event the
additional Common Shares or other securities issuable upon such conversion by
reason of the adjustment



81









 





required by such Adjustment Event over and above the Common Shares
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 16.03. For purposes of this Section 16.05(m), the term “Adjustment
Event” shall mean:




     (i) in any case referred to in clause (1) hereof, the occurrence of
such event,




     (ii) in any case referred to in clause (2) hereof, the date any
such dividend or distribution is paid or made,




     (iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and




     (iv) in any case referred to in clause (4) hereof, the date a sale
or exchange of Common Shares pursuant to such tender or exchange offer
is consummated and becomes irrevocable.



     (n) For purposes of this Section 16.05, the number of Common Shares at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of Common Shares. The Company will not pay any dividend or
make any distribution on Common Shares held in the treasury of the Company.



     Section 16.06 . Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding Common Shares (other than a change in par value or as
a result of a subdivision or combination to which Section 16.05(c) applies),
(ii) any consolidation, merger or combination of the Company with another
Person as a result of which holders of Common Shares shall be entitled to
receive stock, other securities or other properties or assets (including cash)
with respect to or in exchange for such Common Shares, or (iii) any sale or
conveyance of all or substantially all of the properties and assets of the
Company to any other Person as a result of which holders of Common Shares shall
be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Shares, then
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Note shall be convertible into the kind and
amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of Common
Shares issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized Common Shares are available to convert all such
Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Shares
did not exercise his rights of election, if



82









 





any, as to the kind or amount of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that, if the
kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance is not the same for each Common Share
in respect of which such rights of election shall not have been exercised
(“Non-Electing Share”), then for the purposes of this Section 16.06 the kind
and amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 16.



     The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note Register provided for in Section 2.05 of this Indenture, within twenty
(20) calendar days after execution thereof. Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.



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



If this Section 16.06 applies to any event or occurrence, Section 16.05 shall
not apply.



     Section 16.07 . Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to
pay any such tax which may be payable in respect of any transfer involved in
the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting
the issue thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.



	 
	     Section 16.08 . Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Shares. The
Company shall:









     (i) at all times reserve and keep available, free from preemptive
rights, for issuance upon the conversion of the Notes such number of its
authorized but unissued Common Shares as shall from time to time be
sufficient to permit the conversion of all Outstanding Notes;



83









 






     (ii) ensure that all Common Shares delivered upon conversion of the
Notes, upon delivery, be duly and validly issued and fully paid and
nonassessable, free of all taxes, liens and charges and not subject to
any preemptive rights.



     Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the Common Shares issuable upon
conversion of the Notes, the Company will take all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Shares at such adjusted
Conversion Rate.



     The Company covenants that, if any Common Shares to be provided for the
purpose of conversion of Notes hereunder require registration with or approval
of any governmental authority under any federal or state law before such shares
may be validly issued upon conversion, the Company will in good faith and as
expeditiously as possible, to the extent then permitted by the rules and
interpretations of the Commission (or any successor thereto), endeavor to
secure such registration or approval, as the case may be.



     The Company further covenants that, if at any time the Common Shares shall
be listed on the New York Stock Exchange, Nasdaq or any other national
securities exchange or automated quotation system, the Company will, if
permitted by the rules of such exchange or automated quotation system, list and
keep listed, so long as the Common Shares shall be so listed on such exchange
or automated quotation system, all Common Shares issuable upon conversion of
the Notes; provided that if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Shares until the
first conversion of the Notes into Common Shares in accordance with the
provisions of this Indenture, the Company covenants to list such Common Shares
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.



     Section 16.09 . Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine any right to convert under Section 16.01, the
Conversion Rate, conversion procedures or whether any facts exist which may
require any adjustment of the Conversion Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. The Trustee and any other conversion agent shall
not be accountable with respect to the validity or value (or the kind or
amount) of any Common Shares, or of any securities or property, which may at
any time be issued or delivered upon the conversion of any Note; and the
Trustee and any other conversion agent make no representations with respect
thereto. Neither the Trustee nor any conversion agent shall be responsible for
any failure of the



84









 





Company to issue, transfer or deliver any Common Shares or stock
certificates or other securities or property or cash upon the surrender of any
Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article 16.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 16.06 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 16.06 or
to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 9.01, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, any
Officers’ Certificate and an Opinion of Counsel (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.



     Section 16.10 . Notice to Holders Prior to Certain Actions. In case:



     (a) the Company shall declare a dividend (or any other distribution) on
its Common Shares that would require an adjustment in the Conversion Rate
pursuant to Section 16.05; or



     (b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Shares of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or



     (c) of any reclassification or reorganization of the Common Shares of the
Company (other than a subdivision or combination of its outstanding Common
Shares, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or



     (d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;



the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note Register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) calendar days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Shares of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is



85









 








expected that holders of Common Shares of record shall be entitled to exchange
their Common Shares for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.



     Section 16.11 . Shareholder Rights Plans. Each Common Share issued upon
conversion of Notes shall be entitled to receive the appropriate number of
common stock or preferred stock purchase rights, as the case may be, including
without limitation, the rights under the Rights Agreement (collectively, the
“Rights”), if any, that Common Shares are entitled to receive and the
certificates representing the Common Shares issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to time (in each case, a “Rights Plan”). Provided that such Rights
Plan requires that each Common Share issued upon conversion of Notes at any
time prior to the distribution of separate certificates representing the Rights
be entitled to receive such Rights, then, notwithstanding anything else to the
contrary in this Subdivision, there shall not be any adjustment to the
conversion privilege or Conversion Rate as a result of the issuance of Rights,
but an adjustment to the Conversion Rate shall be made pursuant to Section
16.05(d) upon the separation of the Rights from the Common Shares.



     Section 16.12 . Issuer Determination Final. Any determination that the
Company or Board of Directors of the Company must make pursuant to Section
16.01, Section 16.02, Section 16.03, Section 16.04, Section 16.05 or Section
16.06 shall, absent manifest error, be conclusive.



ARTICLE 17

Miscellaneous Provisions




     Section 17.01 . Provisions Binding on Company’s Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.



     Section 17.02 . Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of
the Company.



     Section 17.03 . Addresses for Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to



86









 





have been sufficiently given or made, for all purposes, if given or served
by being deposited postage prepaid by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows: to
Atlantic Coast Airlines Holdings, Inc., 45200 Business Court, Dulles, Virginia,
20166, Telephone No.: 703-650-6000, Attention: Corporate Secretary. Any
notice, direction, request or demand hereunder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being deposited, postage prepaid, by registered or certified mail in
a post office letter box or sent by telecopier transmission addressed as
follows: to U.S. Bank National Association, Corporate Trust Services, 225
Asylum Drive, 23rd Floor, Hartford, Connecticut 06103, Facsimile No.:(860)
241-6881, Attention: Vice President.



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



     Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
Register and shall be sufficiently given to him if so mailed within the time
prescribed.



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



     Section 17.04 . Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.



     Section 17.05 . Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers’ Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with; provided, that with respect to matters of fact, an Opinion of
Counsel may rely on an Officer’s Certificate or certificate of public
officials.



     Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include: (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or



87









 





investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and (4)
a statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with.



     Section 17.06 . Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Notes, the Redemption Date of any
Note or a Designated Event Purchase Date will not be a Business Day, then
payment of such interest on or principal of the Notes need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the Redemption Date, and no
interest shall accrue for the period from and after such date.



     Section 17.07 . Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Notes issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; and provided further that this Section 17.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the
time such qualification is in fact required under the terms of the Trust
Indenture Act. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.



     Section 17.08 . No Security Interest Created. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property
of the Company or its subsidiaries is located.



     Section 17.09 . Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note Registrar and
their successors hereunder and the holders of Notes any benefit or any legal or
equitable right, remedy or claim under this Indenture.



     Section 17.10 . Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the terms or
provisions hereof.



88









 





     Section 17.11 . Authenticating Agent. The Trustee is hereby appointed
the Authenticating Agent. The Trustee may appoint an authenticating agent that
shall be authorized to act on its behalf, and subject to its direction, in the
authentication and delivery of Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including under
Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes “by the Trustee” and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee’s certificate of
authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 9.09.



     Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.



     Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or
itself assume the duties and obligations of the former authenticating agent
under this Indenture and, upon such appointment of a successor authenticating
agent, if made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment
of a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note Register.



     The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in
writing between the Company and the authenticating agent.



     The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.



89









 





     Section 17.12 . Execution in Counterparts. This 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 17.13 . Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.



     U.S. Bank National Association hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.



[The remainder of this page is intentionally left blank]




90









 








     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.



	 	 	 	 	 
	 	 	ATLANTIC COAST AIRLINES
	 	 	     HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	U.S. BANK NATIONAL
	 	 	     ASSOCIATION, as Trustee
	 
	 	 	 	 
	

	 	By:
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:








 









 





EXHIBIT A




[FORM OF NOTE]




[Include the following legend only for Global Notes




     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.



     TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.]



[Include the following legend only for Notes that are Restricted Securities]




     THIS SECURITY AND THE SHARES OF ATLANTIC COAST AIRLINES HOLDINGS, INC.
(THE “COMPANY”) COMMON STOCK (“COMMON STOCK”) ISSUABLE UPON CONVERSION OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY,
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.



 









 





     THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVE THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND
THE WITHIN MENTIONED TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS SECURITY IS REQUIRED, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST
OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR
OTHER INFORMATION SATISFACTORY TO THE COMPANY.



A-2









 






ATLANTIC COAST AIRLINES HOLDINGS, INC.




6% CONVERTIBLE NOTE DUE 2034




CUSIP:




	 	 	 	 	 
	No.          

	 	 	$	                              







     Atlantic Coast Airlines Holdings, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware (herein called the
“Company”, which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received hereby promises to payto
          
or its registered assigns, [the principal sum of
           DOLLARS]1 [the principal sum set forth on Schedule I hereto]2 on the Maturity
Date at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest, semiannually on
February 15 and August 15 of each year, commencing August 15, 2004, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum of 6%, from the February 15 or August 15, as the case may be, next
preceding the date of this Note to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Note, or unless no
interest has been paid or duly provided for on the Notes, in which case from
February 25, 2004, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
February 1 or August 1, as the case may be, and before the following February
15 or August 15, this Note shall bear interest from such February 15 or August
15; provided that if the Company shall default in the payment of interest due
on such February 15 or August 15, then this Note shall bear interest from the
next preceding February 15 or August 15 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such
Note, from February 25, 2004. Except as otherwise provided in the Indenture,
the interest payable on the Note pursuant to the Indenture on any February 15
or August 15 will be paid to the Person entitled thereto as it appears in the
Note Register at the close of business on the Record Date, which shall be the
February 1 or August 1 (whether or not a Business Day) next preceding such
February 15 or August 15, as provided in the Indenture; provided that any such
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. The Company shall pay interest (i) on any Notes in
certificated form by check mailed to the address of the Person entitled thereto
as it appears in the Note Register (provided that the holder of Notes with









	 	 	1 Include for definitive Notes.
	 
	 	 	2 Include for Global Note.




A-3








 









an aggregate principal amount in excess of $2 million shall, at the
written election of such holder, be paid by wire transfer of immediately
available funds) or (ii) on any Global Note by wire transfer of immediately
available funds to the account of the Depositary or its nominee.




     The Company promises to pay interest on overdue principal, premium, if
any, interest and Liquidated Damages, if any (to the extent that payment of
such interest is enforceable under applicable law) at the rate of 1% per annum
above the then applicable interest rate for the Notes.



     Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions giving the holder of
this Note the right to convert this Note into, at the Company’s election,
Common Shares of the Company or cash or cause the Company to purchase this Note
at the option of the holder or upon the occurrence of a Designated Event and
provisions giving the Company the right to redeem this Note for cash, each on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place.



     This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to conflicts
of laws principles thereof.



     This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.



A-4









 





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


	 	 	 	 	 
	 	ATLANTIC COAST AIRLINES

       HOLDINGS, INC.

 	 
	 	By:		 
	 	 	
	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




Dated:





     TRUSTEE’S CERTIFICATE OF AUTHENTICATION



This is one of the Notes described in the within-named Indenture.




U.S. BANK NATIONAL ASSOCIATION,

     as Trustee




	 	 	 
	By:
	 	 
	

	 	

Authorized Signatory








	 	 	, or





	 	 	 
	By:
	 	 
	

	 	

	

	 	As Authenticating Agent
	

	 	(if different from Trustee)







	 	 	 
	By:
	 	 
	

	 	

	

	 	Authorized Signatory







A-5









 






REVERSE OF NOTE




ATLANTIC COAST AIRLINES HOLDINGS, INC.




6% CONVERTIBLE NOTE DUE 2034




     This Note is one of a duly authorized issue of Notes of the Company,
designated as its 6% Convertible Notes Due 2034 (herein called the “Notes”),
unlimited in aggregate principal amount, issued and to be issued under and
pursuant to an Indenture dated as of February 25, 2004 (herein called the
“Indenture”), between the Company and U.S. Bank National Association, as
trustee (herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.



     In case an Event of Default shall have occurred and be continuing, the
principal of and accrued and unpaid interest on all Notes may be declared by
either the Trustee or the holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Notes then Outstanding, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.



     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of at least a majority in aggregate principal
amount of the Notes at the time Outstanding, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or any supplemental indenture or of modifying in
any manner the rights of the holders of the Notes; provided that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest or Liquidated
Damages, if any, thereon, or reduce the principal amount thereof or reduce any
amount payable on redemption or repurchase thereof, or change the obligation of
the Company to redeem any Note on a Redemption Date in a manner adverse to the
holders of Notes, or change the obligation of the Company to repurchase any
Note at the option of a Noteholder in a manner adverse to the holders of Notes,
or change the obligation of the Company to repurchase any Note upon the
happening of a Designated Event in a manner adverse to the holders of Notes, or
impair the right of any Noteholder to institute suit for the payment thereof,
or make the principal thereof or interest payable in any coin or currency other
than that provided in the Notes, or impair the right to convert the Notes into
Common Shares or reduce the number of Common Shares or any other property
receivable by a Noteholder upon conversion subject to the terms set forth
therein, including Section 16.06 thereof, in each case, without the consent of
the holder of each Note so affected, or modify any of the provisions of Section
12.02 or Section 8.07 thereof, except to increase any such percentage or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the holder of each



A-6









 




Note so affected, or change any obligation of the Company to maintain an
office or agency in the places and for the purposes set forth in Section 6.01
thereof, or reduce the quorum or voting requirements set forth in Article 11 or
(ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then Outstanding. Subject to the provisions of the
Indenture, the holders of a majority in aggregate principal amount of the Notes
at the time Outstanding may on behalf of the holders of all of the Notes waive
any past default or Event of Default under the Indenture and its consequences
except (A) a default in the payment of principal of, or the interest on, the
Notes, (B) a failure by the Company to convert any Notes into Common Shares of
the Company, (C) a default in the payment of the Redemption Price pursuant to
Article 3 of the Indenture, (D) a default in the payment of the Designated
Event Purchase Price pursuant to Article 3 of the Indenture, or (E) a default
in respect of a covenant or provisions of the Indenture that under Article 12
of the Indenture cannot be modified or amended without the consent of the
holders of each or all Notes then Outstanding or affected thereby. Any such
consent or waiver by the holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange
or substitution hereof, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.




     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the place, at the respective times, at the rate and in
the coin or currency herein prescribed.



     Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.



     The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without
payment of any service charge but with payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in connection
with any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.



     At any time on or after February 20, 2007 and prior to maturity, the Notes
may be redeemed at the option of the Company, in whole or in part, in multiples
of $1,000 principal amount, upon mailing a notice of such redemption not less
than thirty (30) calendar days but not more than sixty (60) calendar days
before the Redemption Date to the holders of Notes at their last registered
addresses, all as provided in the Indenture, at the applicable Redemption
Prices as specified in the Indenture, together with accrued and unpaid interest
and Liquidated Damages,



A-7









 




if any, to, but excluding, the Redemption Date; provided that if the
Redemption Date falls after a Record Date and on or prior the corresponding
Interest Payment Date, then the full amount of interest payable on such
Interest Payment Date shall be paid to the holders of record of such Notes on
the applicable Record Date instead of the holders surrendering such Notes for
redemption on such date.




     The Company may not give notice of any redemption of the Notes if an
acceleration in the payment of interest on the Notes has occurred and is
continuing.



     The Notes are not subject to redemption through the operation of any
sinking fund.



     If a Designated Event occurs at any time prior to maturity of the Notes,
the Company shall become obligated to purchase, at the option of the holder,
all or any portion of the Notes held by such holder on a date not less than
twenty (20) nor more than thirty-five (35) Business Days after notice thereof
at a repurchase price of one-hundred percent (100%) of the principal amount,
together with accrued and unpaid interest and Liquidated Damages, if any, on
such Note up to, but excluding, the Designated Event Purchase Date (the
“Designated Event Purchase Price”); provided that if the Designated Event
Purchase Date falls after a Record Date and on or prior to the corresponding
Interest Payment Date, then the full amount of interest payable on such
Interest Payment Date shall be paid to the holders of record of such Notes on
the applicable Record Date instead of the holders surrendering such Notes for
repurchase on such date. The Notes will be subject to repurchase in multiples
of $1,000 principal amount. The Company shall mail to all holders of record of
the Notes a notice of the occurrence of a Designated Event and of the
repurchase right arising as a result thereof on or before the 15th calendar day
after the occurrence of such Designated Event. To exercise such right, a
holder shall deliver to the Company such Note with the form entitled
“Designated Event Purchase Notice” on the reverse thereof duly completed,
together with the Note, duly endorsed for transfer, at any time prior to the
close of business on the Designated Event Purchase Date, and shall deliver the
Notes to the Trustee (or other paying agent appointed by the Company) as set
forth in the Indenture.



     Holders have the right to withdraw any Designated Event Purchase Notice by
delivering to the Trustee (or other paying agent appointed by the Company) a
written notice of withdrawal any time prior to the close of business on the
Designated Event Purchase Date, all as provided in the Indenture.



     If cash sufficient to pay the Designated Event Purchase Price of all Notes
or portions thereof to be purchased as of the Designated Event Purchase Date is
deposited with the Trustee (or other paying agent appointed by the Company), on
the Designated Event Purchase Date, interest will cease to accrue on such Notes
(or portions thereof) as of such Designated Event Purchase Date, and the holder



A-8









 




thereof shall have no other rights as such other than the right to receive
the Designated Event Purchase Price upon surrender of such Note.




     Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Notes, the
holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Notes into 90.2690 shares of the Company’s common stock (a
conversion price of approximately $11.08 per share), as such shares shall be
constituted on the Conversion Date and subject to adjustment from time to time
as provided in the Indenture, upon surrender of this Note, duly endorsed for
transfer, with the form entitled “Conversion Notice” on the reverse thereof
duly completed and manually signed, to the Company at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the Corporate Trust Office, and,
unless the shares issuable on conversion are to be issued in the same name as
this Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. The Company will notify the holder thereof of any event
triggering the right to convert the Notes as specified above in accordance with
the Indenture.



     No adjustment in respect of interest on any Note converted or dividends on
any shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence. If this Note (or portion hereof) is
surrendered for conversion during the period from the close of business on any
Record Date for the payment of interest to the close of business on the
Business Day preceding the immediately following Interest Payment Date, this
Note (or portion hereof being converted) must be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such Interest Payment Date on
the principal amount being converted; provided that no such payment shall be
required (1) if the Company has specified a Redemption Date that is after a
Record Date and on or prior to the next Interest Payment Date, (2) if the
Company has specified a Designated Event Purchase Date following a Designated
Event that is after a Record Date and on or prior to the next Interest Payment
Date or (3) to the extent of any overdue interest, if any overdue interest
exists at the time of conversion with respect to such Note.



     No fractional shares will be issued upon any conversion, but an adjustment
and payment in cash will be made, as provided in the Indenture, in respect of
any fraction of a share which would otherwise be issuable upon the surrender of
any Note for conversion.



     A Note in respect of which a holder is exercising its right to require
repurchase upon a Designated Event may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of
the Indenture.



A-9









 





     Any Notes called for redemption, unless surrendered for conversion by the
holders thereof on or before the close of business on the Business Day
preceding the Redemption Date, may be deemed to be redeemed from the holders of
such Notes for an amount not less than the applicable Redemption Price by one
or more investment banks or other purchasers who may agree with the Company (i)
to purchase such Notes from the holders thereof and convert them into shares of
the Company’s Common Shares and (ii) to make payment for such Notes as
aforesaid to the Trustee in trust for the holders.



     Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in
exchange thereof, subject to the limitations provided in the Indenture, without
charge except for any tax, assessment or other governmental charge imposed in
connection therewith.



     The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note Registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any Note Registrar) for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any paying agent nor other conversion agent
nor any Note Registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.



     No recourse for the payment of the principal of or interest on this Note,
or for any claim based hereon or otherwise in respect hereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in the
Indenture or any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released.



     To the extent that any provisions of this Note conflict with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling. Terms used in this Note and defined in the Indenture are used
herein as therein defined.



A-10









 





ABBREVIATIONS




     The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations.



	 	 	 	 	 
	TEN COM -

	 	as tenants in common
	 	UNIF GIFT MIN ACT -   Custodian    
	TEN ENT -

	 	as tenant by the entireties
	 	(Cust) (Minor)
	JT TEN -

	 	as joint tenants with
right of survivorship and
not as tenants in common
	 	under Uniform Gifts to Minors
Act






	

	 	 	 	(State)            








Additional abbreviations may also be used though not in the above list.




 









 








CONVERSION NOTICE




TO: ATLANTIC COAST AIRLINES HOLDINGS, INC.
        U.S.
BANK NATIONAL ASSOCIATION



     The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, into Common Shares of Atlantic Coast
Airlines Holdings, Inc. in accordance with the terms of the Indenture referred
to in this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest, accompanies this Note.



Dated:





	 	 	 
	 

	 	

	 
	 	 
	

	 	

Signature(s)
	 
	 	 
	

	 	Signature(s) must be guaranteed by
an “eligible guarantor institution”
meeting the requirements of the Note
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program (“STAMP”) or such
other “signature guarantee program”
as may be determined by the Note
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
	 
	 	 
	

	 	

Signature Guarantee







 









 






     Fill in the registration of Common Shares if to be issued, and Notes if to
be delivered, other than to and in the name of the registered holder:






(Name)







(Street Address)







(City, State and Zip Code)







Please print name and address




Principal amount to be converted

(if less than all):




$





Social Security or Other Taxpayer

Identification Number:








 









 





DESIGNATED EVENT PURCHASE NOTICE




TO: ATLANTIC COAST AIRLINES HOLDINGS, INC.
        U.S.
BANK NATIONAL ASSOCIATION


The undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Atlantic Coast Airlines Holdings, Inc. (the “Company”)
regarding the right of holders to elect to require the Company to repurchase
the Notes upon the occurrence of a Designated Event with respect to the Company
and requests and instructs the Company to repurchase this Note, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, in
accordance with the terms and conditions of the Indenture at the price of
one-hundred percent (100%) of such entire principal amount or portion thereof,
together with accrued and unpaid interest to, but excluding, the Designated
Event Purchase Date, to the registered holder hereof. Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the
Indenture.




     Dated:



     Signature(s):



     NOTICE: The above signatures of the holder(s) hereof must correspond with
the name(s) as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.



     Note Certificate Number (if applicable):



     Principal amount to be repurchased (if less than all):



     Social Security or Other Taxpayer Identification Number:



 









 





REPURCHASE NOTICE




TO: ATLANTIC COAST AIRLINES HOLDINGS, INC.
         U.S.
BANK NATIONAL ASSOCIATION


The undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Atlantic Coast Airlines Holdings, Inc. (the “Company”)
regarding the right of holders to elect to require the Company to repurchase
the Notes and requests and instructs the Company to repurchase this Note, or
the portion thereof (which is $1,000 or a multiple thereof) below designated,
in accordance with the terms and conditions of the Indenture at the price of
100% of such entire principal amount or portion thereof, together with accrued
and unpaid interest to, but excluding, the Repurchase Date, to the registered
holder hereof. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture.




     Dated:



     Signature(s):



     NOTICE: The above signatures of the holder(s) hereof must correspond with
the name(s) as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.



     Note Certificate Number (if applicable):



     Principal amount to be repurchased (if less than all):



     Social Security or Other Taxpayer Identification Number:



 









 





ASSIGNMENT




     For
value received
                    hereby sell(s) assign(s)
and transfer(s) unto
                    (Please insert social
security or other Taxpayer Identification Number of assignee) the within Note,
and hereby irrevocably constitutes and appoints
                    attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.



     In connection with any transfer of the Note prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant
to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Note is being transferred:



	 	 	 
	o

	 	To Atlantic Coast Airlines Holdings, Inc.; or
	 
	o

	 	To a “qualified institutional buyer” in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
	 
	o

	 	Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended; or
	 
	o

	 	Pursuant to a Registration Statement that has been declared
effective under the Securities Act of 1933, as amended, and that
continues to be effective at the time of transfer;






and unless the Note has been transferred to Atlantic Coast Airlines Holdings,
Inc., the undersigned confirms that such Note is not being transferred to an
“affiliate” of the Company as defined in Rule 144 under the Securities Act of
1933, as amended.




     Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof.



Dated:    







	 	 	 
	 

	 	

	 
	 	 
	

	 	

Signature(s)
	 
	 	 
	

	 	Signature(s) must be guaranteed by an
“eligible guarantor institution” meeting
the requirements of the Note Registrar,
which requirements







 









 






	 	 	 
	

	 	include membership or participation in the
Security Transfer Agent Medallion Program
(“STAMP”) or such other “signature
guarantee program” as may be determined by
the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934,
as amended.
	 
	 	 
	

	 	

Signature Guarantee






NOTICE: The signature on the Conversion Notice, the Designated Event Purchase
Notice or the Assignment must correspond with the name as written upon the face
of the Note in every particular without alteration or enlargement or any change
whatever.




 









 









Schedule I




ATLANTIC COAST AIRLINES HOLDINGS, INC.




6% Convertible Note Due 2034




     No. R-1





	 	 	 
	 	 	 	 	 	Notation Explaining Principal	 	 	Authorized Signature
	Date
	 	Principal Amount
	 	 	Amount Recorded
	 	 	of Trustee or Custodian